Universal Athletic Sales Co. v. Salkeld

• Citation: 376 F. Supp. 514
• Decision Date: 24 May 1974
• Docket Number: Civ. A. No. 71-1113.
• Parties: UNIVERSAL ATHLETIC SALES CO. v. Larry SALKELD et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

376 F. Supp. 514

UNIVERSAL ATHLETIC SALES CO. v. Larry SALKELD et al.

Civ. A. No. 71-1113.

United States District Court, W. D. Pennsylvania.

May 24, 1974.

Robert D. Yeager, Pittsburgh, Pa., Lewis M. Dalgarn, Los Angeles, Cal.

Thomas H. Murray, Lawrence Zurawsky, Pittsburgh, Pa., Larry Salkeld, Robert A. Galanter, Pittsburgh, Pa.

MEMORANDUM AND ORDER HOLDING DEFENDANTS SUPER ATHLETICS CORPORATION AND S. DAVID BRODSKY IN CIVIL CONTEMPT.

KNOX, District Judge.

On April 13, 1972, this court issued a preliminary injunction holding that certain wall charts circulated by the defendant in connection with the sales of its gymnasium exercise equipment were in violation of plaintiff's copyright on such charts.¹ Matters concerning the equipment itself and patents with respect thereto are the subject of a separate suit at Civil Action No. 71-166. There is presently before the court a petition to hold two defendants in contempt for violation of the injunction.

The preliminary injunction was conditioned upon plaintiff's giving bond in the sum of $5,000. The bond in question was presented to the Clerk's Office of this court on April 21, 1972, at approximately 3:30 p. m., a Friday, when this member of the court had left for Erie to transact business at the Erie Federal Courthouse. As a result, the bond itself was not approved by the court until Monday morning April 24, 1972.

The testimony with respect to the alleged contempt is conflicting and contradictory, although two violations of the injunction involving distribution of the wall charts after the injunction was issued are rather clearly proved. One of these was admitted by the defendants and the other proved by testimony of an impartial witness which the court finds credible. Plaintiffs in addition contend that, based upon the testimony of defendant Larry Salkeld, approximately four to five hundred other wall charts were distributed to dealers and customers following the entry of the order for preliminary injunction on April 13, 1972. The defendants, on the other hand, admit only one such mailing of a wall chart and dispute even the other one, a distribution to a high school in the vicinity of Rochester, New York on April 21, 1972.

One legal question has caused the court some trouble, that is, the question of the effective date of this injunction. Can defendants be held in contempt for any violations or distributions of the wall charts which occurred prior to April 24, 1972, when the bond accompanying the injunction was approved?

It is obvious under Rule 65 of the Federal Rules of Civil Procedure that the bond was a necessary condition for the issuance of the injunction and on the face of things one would consider that the injunction was not effective until its terms were complied with, that is the bond was filed and approved and that the defendants could not be held in contempt for any violations which occurred before that date. (See 43 C.J.S. Injunctions page 928).

It is, however, also the rule that any violations after actual notice of an injunction justify holding a party for civil contempt regardless of the want of service. It is immaterial how a party acquires information as to the existence of the injunction. A party having knowledge of the same who deliberately violates it, although it has not yet been formally issued or served, is liable for contempt. See Radio Corp. of Amer. v. Cable Radio Tube Corp., 66 F.2d 778 (2d cir. 1933); See also United States v. Onan, 190 F.2d 1 (8th cir. 1951).

It is clear that this must be the rule because otherwise there would be races against the law to engage in as many violations of the injunction as possible before the marshal arrives with the papers for service. In this case, it is admitted that as soon as the injunction was ordered to be issued on April 13, 1972, defendants' counsel, Mr. Murray, having received a copy of the court order, immediately called the officers of defendant Super Athletics Corporation, Salkeld and Brodsky, and informed them of the issuance of the injunction (See page 12 of 8/23/73 and testimony of Salkeld 556). We therefore find that any violations of the court order after April 13, 1972, would subject the defendants to liability for civil contempt since they had actual notice of the same on that date.

The court is not convinced of the total credibility of any of the witnesses who have testified in connection with this contempt proceeding. It is noted originally defendant Brodsky stated under oath dated August 1, 1972, in answer to interrogatory 1.53 in Civil Action No. 71-166 that no wall charts had been supplied after April 13, 1972, to any customers or dealers although previously they went with each machine. See plaintiff's contempt Exhibit 3. See also revised answers of August 31, 1972. On the other hand, it was later admitted by Mr. Brodsky on June 29, 1973, that a wall chart was distributed to Green High-School at Uniontown, Ohio, in May or June 1972. (Brodsky 481)

In addition to this, we find that the testimony of Mr. Walzer, Football Coach at Greece Olympia High School, near Rochester, New York, as to receipt of a wall chart from defendants' agents at the time of delivery of a machine to the highschool on April 21, 1972, is also true, he being an impartial and disinterested witness. (See Walzer's deposition, page 42)

Aside from this, while we are not impressed as the result of observation and the circumstances with the total credibility of defendant Salkeld, he having been discharged as President of Super Athletics on April 24, 1972, and being at odds with defense counsel, nevertheless, we find that there is considerable truth in his testimony. (See Salkeld depositions, pages 554-561) It appears that 2,000 of these wall charts had been printed, (see answer to interrogatory 1.5) and 800 to 1000 of these remained at the Super Athletics Office. He claims that the secretary was aware that they were on the premises and stored there. The whereabouts and distribution of this quantity of wall charts has never been satisfactorily accounted for by the defendants. It is inconceivable that this number would just disappear. Allowing for sales and copies to three distributors not over 150 would have been used up prior to April 13, 1972. If these wall charts were still there, it would be simple to produce them in court or allow inspection of them by plaintiff's attorneys. If they were destroyed, proof of their destruction should have been offered but instead the record is silent as to what happened to them and whether they are still in existence.

We find in this a partial corroboration of Salkeld's statement that a quantity of them were mailed out after the issuance of the injunction in an attempt to beat the service of the court order and to place them in the hands of every possible prospect, one was mailed out with each machine sold and that large quantities of between 10 to 25 per dealer were placed in the hands of dealers so that they could ignorantly pass them out to prospects or customers. But there were only three dealers.

As a result of the above, the court has had great difficulty in making a determination. Salkeld himself is not certain whether 400 or 500 were mailed out. As stated, the court is not impressed with his total credibility. Considering all the circumstances, bearing in mind the burden of proof resting on plaintiff and reducing all the claims to the minimum that have been proved, it is the court's conclusion at least thirty were mailed out or otherwise distributed which were damaging to the plaintiffs. This calculation is based largely on the list attached to revised answers to plaintiff's interrogatory 1.53 which shows twenty two machines were sold in the period April 13 through July 1, 1972. The new super trainer charts of defendant Super Athletics were received some time in July 1972 according to Carleo and some time in September according to Conn. We will take Carleo at his minimum word that thirty to fifty were sold in the interval between the injunction and receipt of the new charts.

We note that Salkeld was discharged as President of Super Athletics on April 24 and would therefore only know about the actual number of mailings between April 12 and 24. He says, however, that they were being mailed out up until the day he left. Defendant Brodsky claims that none were mailed but for reasons above set forth, we discount his testimony. Mrs. Humbert, the secretary of defendant and employee, of course, has an obvious interest in the case and for this reason, we discount her testimony as to lack of knowledge of these mailings.

We bear in mind that plaintiff has the burden of proof by clear and convincing evidence of showing just what contempt has occurred. Benner v. Philadelphia Musical Society, 233 F.Supp. 108 (E.D.Pa.1964); Hart, Schaffner & Marx v. Alexander's Department Stores, 341 F.2d 101 (2d cir. 1965).

"A heavy burden of proof rests upon a party urging contempt to show the facts establishing the contempt by clear and convincing evidence." 233 F.Supp. 111.

On the other hand, considering all the evidence in the case, we think the evidence at a minimum shows that approximately thirty wall charts were mailed out or distributed with machines. The whereabouts of the balance has not been satisfactorily explained.

The law is clear that in finding a defendant to be in civil contempt of an injunction or restraining order issued by the court, the court's powers are remedial and are limited either (a) to compulsion to compel compliance with the injunction or (b) to award compensation and damages to the injured party. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 69 S.Ct. 497, 93 L.Ed. 599 (1949) (holding wilfulness is not an element); Franklin Mint, Inc. v. Franklin Mint, Ltd., 331 F.Supp. 827 (E.D.Pa. 1971). In this case, there is no need at this time to compel the defendants to do any affirmative act and therefore the court is limited to compensation. The ...