Craters & Freighters v. Daisychain Enterprises et al

Filing 250

ORDER DENYING CIVIL AND CRIMINAL CONTEMPT HOLDING by Judge Claudia Wilken denying 228 Motion for Order to Show Cause; denying 240 Motion for Order to Show Cause. (Attachments: # 1 Certificate/Proof of Service) (jebS, COURT STAFF) (Filed on 2/2/2016)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 5 CRATERS & FREIGHTERS, a Colorado Corporation, and CRATERS & FREIGHTERS FRANCHISE COMPANY, 6 7 8 9 United States District Court For the Northern District of California 10 11 12 Plaintiff, v. No. C 09-4531 CW ORDER DENYING CIVIL AND CRIMINAL CONTEMPT HOLDING (Docket Nos. 228 and 240) DAISYCHAIN ENTERPRISES, a California Corporation, dba FREIGHT & CRATE; CATHY BENZ, an individual; and FRED BENZ, an individual, Defendants. ________________________________/ Plaintiff Craters & Freighters moves for an order to show 13 cause as to why Defendants Cathy Benz and Fred Benz should not be 14 held in criminal contempt. Plaintiff also moves for the 15 appointment of a prosecutor to seek the imposition of criminal 16 penalties for willful violations of the Court’s orders. Docket 17 No. 228. On November 30, 2015, the Court ordered that Defendants 18 show cause in writing and at a hearing why they should not be held 19 in civil or criminal contempt, or both. Subsequently, Defendant 20 Fred Benz filed an Application for an Order to Show Cause Why 21 [Plaintiff’s attorney] John P. Schmitz Should Not Be Held in 22 Contempt of Court and Prosecuted for False Filing, 23 Misrepresentation, Trespass, Theft, Identity Theft and Money 24 Laundering. 25 26 27 28 Docket No. 240. Fred Benz and Cathy Benz each later 1 filed a financial affidavit.1 2 Tuesday, January 12, 2016. 3 hearing, the parties’ filings and the record in this case, the 4 Court DENIES Plaintiff’s motion to appoint a prosecutor for the 5 alleged criminal contempt, declines to sanction Defendants based 6 on this motion and DENIES Defendants’ application for an order to 7 show cause. 8 9 The Court held a hearing on Having considered arguments at the “The standard for finding a party in civil contempt is well settled: ‘The moving party has the burden of showing by clear and United States District Court For the Northern District of California 10 convincing evidence that the [non-moving party] violated a 11 specific and definite order of the court. 12 to the [non-moving party] to demonstrate why they were unable to 13 comply.’” 14 Cir. 1999) (quoting Stone v. City & Cty. of San Francisco, 968 15 F.2d 850, 856 n.9 (9th Cir. 1992)). 16 The burden then shifts FTC v. Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Plaintiff asserts that Defendants have violated the Court’s 17 permanent injunction and prior orders by (1) failing to file 18 financial affidavits; (2) failing to pay amounts due; (3) paying 19 only eighteen of twenty-eight required weekly payments of ten 20 dollars per week (as of December 10, 2015); (4) directing their 21 sons to file, in August 2015, a Statement of Reservation of Name 22 for “Craters & Freighters, a Colorado Corporation;” and 23 (5) directing one of their sons to transfer a Statement of 24 Reservation of Name for “Craters & Freighters, a Colorado 25 26 27 1 One affidavit is signed “Kathy Benz,” but other filings with the Court list “Cathy Benz.” The Court uses the spelling that appears in Defendants’ prior motion for leave to file a motion to reconsider. See Docket No. 227. 28 2 1 Corporation” to a “Steve Barnard,” who then filed Articles of 2 Incorporation for the entity—actions Plaintiff characterizes as a 3 “straw man transaction to reincorporate Freighters & Craters, a 4 Colorado Corporation.” 5 Docket No. 233 at 2.2 The Court declines to find Defendants in civil contempt for 6 failure to file a financial affidavit, as ordered by this Court on 7 May 22, 2015 and June 11, 2015. 8 filed financial affidavits with the Court. 9 Fred Benz and Cathy Benz now have The Court denies Plaintiff’s motion to appoint a prosecutor United States District Court For the Northern District of California 10 to initiate criminal contempt proceedings. 11 injunction prohibits the use of “Freight & Crate” and the use of 12 “the registered trademark ‘Craters & Freighters’ for any purpose 13 whatsoever.” 14 with the Colorado Secretary of State that include the names Tyler 15 Frederick Benz and Alexander Richard Benz, Plaintiff has not 16 submitted evidence that Defendants Cathy Benz and Fred Benz are 17 associated with those filings. 18 they are unable to pay amounts previously ordered, and Plaintiff 19 has not produced evidence that Defendants are able to pay or that 20 they are evading the execution of the judgment. 21 indicated at the hearing, it will order a settlement conference 22 regarding outstanding amounts due to Plaintiff, if the parties so Docket No. 104. The permanent Although Plaintiff submits filings Defendants have indicated that As the Court 23 24 25 26 27 2 Plaintiff indicates that Defendants have obeyed the Court’s orders to “dissolve ‘Craters & Freighters, a Colorado Corporation’ with the Secretary of State of Colorado,” Docket No. 232 at 3 n.1, and to ask the United States Patent and Trademark Office to “remove Freight & Crate from the company line,” id. at 3. 28 3 1 request. 2 infringing marks in advertising. 3 Plaintiff has not alleged that Defendants are using the The Court reiterates that violations of the Court’s orders, 4 including the permanent injunction, may lead to contempt sanctions 5 that may include incarceration until compliance is obtained. 6 Lasar v. Ford Motor Co., 399 F.3d 1101, 1110 (9th Cir. 2005). 7 Court does not condone Fred Benz’s and Cathy Benz’s delay in 8 filing their financial affidavits, and notes that their affidavits 9 lack detail. See The Plaintiff may continue to pursue its civil remedies United States District Court For the Northern District of California 10 to execute the judgment. 11 preventing Defendants’ use of Plaintiff’s trademarks in violation 12 of the permanent injunction. 13 The Court’s primary concern is Separately, the Court denies Fred Benz’s application for an 14 order to show cause. 15 Defendants’ subject matter jurisdiction arguments. 16 Nos. 214, 222. 17 attorney has violated an order of this Court. The Court reiterates that it has rejected Defendants present no evidence that Plaintiff’s 18 19 See Docket CONCLUSION For the reasons stated above, the Court DENIES Plaintiff’s 20 request for the appointment of a prosecutor to seek the imposition 21 of criminal penalties for willful violations of the Court’s orders 22 (Docket No. 228), declines to hold Defendants in civil contempt 23 and DENIES Defendants’ application for an order to show cause 24 (Docket No. 240). 25 IT IS SO ORDERED. 26 Dated: February 2, 2016 27 CLAUDIA WILKEN United States District Judge 28 4

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