SunEarth Inc. et al v. Sun Earth Solar Power Co., Ltd. et al

Filing 162

ORDER by Judge Claudia Wilken AWARDING ATTORNEYS FEES IN CONNECTION WITH PLAINTIFFS 90 SECOND MOTION FOR CONTEMPT AND DENYING PLAINTIFFS THIRD 113 MOTION FOR CIVIL CONTEMPT. (ndr, COURT STAFF) (Filed on 8/23/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SUNEARTH, INC.; and THE SOLARAY
CORPORATION,

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v.
SUN EARTH SOLAR POWER CO., LTD.;
NBSOLAR USA, INC.; and DOES 1-10,

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United States District Court
For the Northern District of California

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ORDER AWARDING
ATTORNEYS’ FEES IN
CONNECTION WITH
PLAINTIFFS’ SECOND
MOTION FOR
CONTEMPT (Docket
No. 90) AND
DENYING
PLAINTIFFS’ THIRD
MOTION FOR CIVIL
CONTEMPT
(Docket No. 113)

Plaintiffs,

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No. C 11-4991 CW

Defendants.
________________________________/

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Plaintiffs SunEarth, Inc. and The Solaray Corporation move,

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for the third time, to hold Defendants Sun Earth Solar Power

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Company, Limited (SESP) and NBSolar USA, Inc. in civil contempt

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for violation of the preliminary injunction entered in this case.

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Defendants oppose Plaintiffs’ motion.

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arguments presented by the parties in their papers and at the

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hearing, the Court DENIES Plaintiffs’ motion.

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GRANTS Plaintiffs’ request for attorneys’ fees and costs incurred

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to bring their second motion for contempt, which was previously

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granted.

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Having considered the

The Court also

BACKGROUND
On October 11, 2011, Plaintiffs initiated this trade name and

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trademark infringement action, alleging that Defendants have

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misappropriated and infringed upon Plaintiffs’ “Sun Earth”

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trademark, service mark and trade name.

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On February 2, 2012, the Court granted Plaintiffs’ motion for
a preliminary injunction, generally enjoining Defendants from

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using the “Sun Earth” name and mark within the United States

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during the pendency of this action.

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initial preliminary injunction went into effect on February 17,

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2012 upon Plaintiffs’ payment of a $5,000 bond.

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At the time, instead of enjoining Defendants’ use of the Sun-

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earth.com, SunEarthpower.com, and SunEarthpower.net domain names,

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the Court ordered the parties to attempt to reach an agreement on

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this issue, or to move for a modification to address it, along

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with one other issue.

United States District Court
For the Northern District of California

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Docket Nos. 60, 63.

The

Docket No. 67.

Docket No. 63, 37-38.

On February 24, 2012, Defendants filed a motion to amend the

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preliminary injunction, among other things, to add terms

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addressing the use of the domain names.

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Docket No. 69.

On March 6, 2012, Plaintiffs filed a motion to hold

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Defendants in civil contempt for continuing to use the “Sun Earth”

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name and mark on its websites.

Docket No. 77.

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On March 13, 2012, the Court granted in part Defendants’

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motion to modify the initial preliminary injunction and entered a

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modified preliminary injunction, which took effect immediately.

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Docket Nos. 79, 80.

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in part, that Defendants were enjoined

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The modified preliminary injunction provided,

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From using or continuing to use the words “SUN
EARTH” (with or without a space or capitalization or
hyphen), either alone or in conjunction with any other
words or symbols, or any phonetically or visually
similar words or symbols in any combination, as a
trademark, service mark or trade name within the United
States, its territories or possessions (the
“Territory”), provided that:
A.
for goods branded as NBSolar rather than Sun
Earth, Defendants shall be permitted to identify SESP as
the manufacturer, importer or seller of the goods to the
minimum extent necessary as required by law or ordinary
business customs to operate within the United States
under the NBSolar name; and
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United States District Court
For the Northern District of California

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B.
for equipment purchased by Defendants from
sellers within the United States for export to SESP in
China, Defendants shall be permitted to identify SESP as
the buyer of the equipment, to the minimum extent
necessary as required by law or ordinary business
customs.
C.
Under subsections A and B above, wherever
possible, Defendants shall identify themselves as
NBSolar and/or an acronym, such as SESP, that avoids the
use of the words “SUN EARTH” (with or without a space or
capitalization or hyphen). Where Defendants do use the
words “SUN EARTH” under the terms of these subsections,
Defendants shall not display the words “SUN EARTH” in a
distinctive manner of presentation that makes them stand
out in any way from other words on the relevant document
and shall not use the “Sun Earth” logo.
. . .
4.
From importing into the Territory any goods upon
which the words “SUN EARTH” (with or without a space or
capitalization or hyphen), either alone or in
conjunction with any other words or symbols, or any
phonetically or visually similar words or symbols in any
combination, appears or are shown on the packaging for
such goods.
Modified Preliminary Injunction, Docket No. 80, 1-3.

The

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injunction further required Defendants to take certain affirmative
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steps, including that
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10. Defendants shall file with the Court and serve on
Plaintiffs, within thirty-five (35) days after the
effective date of the original Preliminary Injunction, a
report in writing and under oath, setting forth in
detail the manner and form in which Defendants have
complied.
Id. at 3-4.
On March 16, 2012, Plaintiffs withdrew their first motion for
civil contempt.

Docket No. 82.

On March 23, 2012, Defendants filed their report pursuant to
paragraph 10 of the preliminary injunction.

Docket No. 83.

On April 24, 2012, Plaintiffs filed a second motion asking

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the Court to find Defendants in civil contempt for violating the

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modified preliminary injunction.

Docket No. 90.
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On June 12,

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201
12, the Court gra
C
anted the motion in part and took under
e

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sub
bmission Plaintif
ffs’ requ
uest for attorney
ys’ fees incurred in

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con
nnection with the motion.
e
.

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the Court found tha Defend
e
f
at
dants’ re
eport was non-compliant with the
s

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req
quirement of the modifie prelim
ts
e
ed
minary in
njunction because it

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mad conclu
de
usory and vague statement about the steps they had
d
s
ts

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tak
ken to co
omply wit the in
th
njunction and fai
n
iled to address

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wha
atsoever a number of the material terms o the injunction.
r
l
of

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Cou
urt requi
ired Defe
endants to file a correct and complete
t
t

United States District Court
For the Northern District of California

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Docket No. 106
t
6.

Among other things,

The

com
mpliance report thereafte
t
er.
On Jul 5, 201
ly
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ndants fi
iled thei amended report.
ir
Doc
cket No. 109.

Am
mong othe things Defend
er
s,
dants stated,

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Follow
wing the court’s modifica
ation of the preliminary
y
injunc
ction on March 13 (permit
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tting Def
fendants “to
identi
ify SESP as the manufactu
m
urer, imp
porter or seller of
the go
oods”), Defendant have i
D
ts
imported, sold and
,
distri
ibuted in the Uni
n
ited Stat
tes photo
ovoltaic panels
under the NBSo
olar bran
nd, as pi
ictured b
below, which bear a
small label on the bac of eac panel displaying the
n
ck
ch
NBSola mark and logo, but als identi
ar
a
,
so
ifying SESP as the
manufa
acturer.

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. . .

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Doc
cket No. 109, 2-3
3.

Defen
ndants al
lso inclu
uded a photograph of the

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pac
ckaging of their solar pa
o
anels:
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United States District Court
For the Northern District of California

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Id. at 3.
.
On Jul 18, 20
ly
013, afte the pa
er
arties we
ere unable to reach a

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set
ttlement at a cou
urt-order
red media
ation, De
efendants sent

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Pla
aintiffs a propos
sed perma
anent inj
junction.
.

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Doc
cket No. 121-5.

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pro
oposed ve
ersion of their labels:
f
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Foster Decl., Ex. B,

They att
tached to this de
o
eclaration the following
g

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United States District Court
For the Northern District of California

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Id. at 8.
.

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app
pl[ied] to all NB
t
BSolar-br
randed pa
anels shi
ipped to the United

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Sta
ates.”

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Defendan
nts repre
esent tha these labels are “now
at
w

Dong Decl
D
l., Docke No. 12
et
21-1, ¶ 3
3.
LEGAL ST ANDARD

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A dist
trict cou
urt has the inher
t
rent auth
hority to enforce

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com
mpliance with its orders through a civil contempt proceeding.
s

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Int
ternation
nal Union UMWA v. Bagwel
n,
v
ll, 512 U
U.S. 821, 827–28 (1994).

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A contempt sanction is cons
c
n
sidered c
civil if it “is remedial, and

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for the ben
r
nefit of the comp
plainant.
.”

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Id.

A contempt fine is

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considered remedial if it either “coerce[s] the defendant into

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compliance with the court’s order, [or] ... compensate[s] the

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complainant for losses sustained.”

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Workers, 330 U.S. 258, 303–304 (1947).

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v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992).

United States v. United Mine
See also Whittaker Corp.

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“The standard for finding a party in civil contempt is well

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settled: The moving party has the burden of showing by clear and

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convincing evidence that the [non-moving party] violated a

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specific and definite order of the court.”

FTC v. Affordable

United States District Court
For the Northern District of California

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Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v.

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City & County of San Francisco, 968 F.2d 850, 856 n.9 (9th Cir.

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1992)).

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faith exception to the requirement of obedience to a court order.”

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In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d

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693, 695 (9th Cir. 1993).

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contempt if his action appears to be based on a good faith and

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reasonable interpretation of the court’s order.”

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formatting and quotations omitted).

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with the court order is a defense to civil contempt, and is not

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vitiated by ‘a few technical violations’ where every reasonable

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effort has been made to comply.”

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Inc. v. Falcon Foam Plastics, Inc., 689 F.2d 885, 891 (9th Cir.

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1982)).

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The contempt “need not be willful, and there is no good

“But a person should not be held in

Id. (internal

“‘Substantial compliance’

Id. (citing Vertex Distrib.,

Thus, the Court may grant a motion for an order of contempt

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if it finds that Defendants (1) violated the court order,

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(2) beyond substantial compliance, (3) not based on a good faith

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and reasonable interpretation of the order, (4) by clear and

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convincing evidence.

Id.

Once the moving party has met its
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burden, the burden “shifts to the contemnors to demonstrate why

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they were unable to comply” with the court order.

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at 856 n.9 (citing Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th

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Cir. 1983)).

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comply.”

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(9th Cir. 1976)).

Stone, 968 F.2d

“They must show they took every reasonable step to

Id. (citing Sekaquaptewa v. MacDonald, 544 F.2d 396, 406

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When a court imposes civil sanctions, “[g]enerally, the

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minimum sanction necessary to obtain compliance is to be imposed.”

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Id.

However, “the district court retains discretion to establish

United States District Court
For the Northern District of California

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appropriate sanctions.”

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695–96 (9th Cir. 2010) (citing Richmark Corp. v. Timber Falling

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Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992)).

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remedial purpose of the sanction, a finding of contempt must be

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accompanied by conditions by which contempt may be purged, spelled

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out in either the original order or the contempt order.”

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United States v. Bright, 596 F.3d 683,

“Given the

Id.

DISCUSSION
I.

Attorneys’ fees and costs for the second motion for contempt

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In their second motion for contempt, Plaintiffs sought

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recovery of the reasonable attorneys’ fees that they incurred in

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pursuing that motion.

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when ruling on the remainder of the motion and directed the

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parties to attempt to settle the issue.

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represented to the Court that they have reached a resolution of

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this issue.

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The Court took this issue under submission

The parties have not

The Court finds that Plaintiffs are entitled to recover the

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reasonable attorneys’ fees and costs that they incurred in

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bringing the motion for contempt.

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order, Plaintiffs’ counsel shall submit an application to the

Within fourteen days of this

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Court documenting their reasonable attorneys’ fees and costs

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incurred in connection with the motion for contempt, and a

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proposed order.

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amount only within seven days.

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seven days.

Defendants may file a response directed to the
Plaintiffs may file a reply within

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Plaintiffs’ third motion for contempt

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In their motion, Plaintiffs argue that the version of the

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label included in the amended status report violates paragraph one

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of the modified preliminary injunction.

In their reply, they

United States District Court
For the Northern District of California

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argue that both the original and modified versions of the label

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violate sections one and four of the injunction.

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The Court finds that Plaintiffs have not shown by clear and

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convincing evidence that disclosing on product labels that SESP is

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the manufacturer violates the terms of the modified preliminary

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injunction.

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the manufacturer to the “minimum extent necessary as required by

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law or ordinary business customs to operate within the United

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States under the NBSolar name.”

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evidence that, in order to sell the products within the United

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States under the NBSolar name, they need to disclose that SESP is

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the ultimate manufacturer for a variety of reasons, including to

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United States Customs and Border Patrol for payment of appropriate

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tariffs and to allow customers to obtain financial incentives from

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government agencies for installation of renewable energy sources.

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Although Plaintiffs argue that Defendants could sell their

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products in the United States under “a private label” or showing

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only the acronym, Defendants have offered evidence that this would

The injunction permits Defendants to identify SESP as

Defendants have presented

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not be feasible and would not comply with ordinary business

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customs.

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On its face, the original label violated paragraph one,

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subsection C of the modified preliminary injunction.

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Earth Solar Power Co., Ltd. is pictured at the top of the label

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separate from other text in a conspicuous way that draws attention

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to it, which violates the clear terms of the injunction.

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the modified version comports with the Court’s direction that

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these words, where they are required to be used, should not be set

The name Sun

However,

United States District Court
For the Northern District of California

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out in a distinctive manner from the other portion of the text.

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Because Defendants voluntarily came into compliance with the terms

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of the injunction, civil sanctions are not required to coerce

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compliance and could serve only punitive purposes, which are not

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permitted for such sanctions.

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these sanctions at this time for this violation.

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Thus, the Court declines to impose

Finally, Plaintiffs have not shown by clear and convincing

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evidence that Defendants violated the terms of paragraph four of

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the modified injunction.

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the labels that were affixed to the products themselves violated

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this section, by its terms this provision in fact addresses what

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may not be shown on the product packaging, not the labels.

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photographs in the record do not show that Defendants used the

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words “Sun Earth” on the packaging.

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Although Plaintiffs appear to argue that

The

Accordingly, Plaintiffs’ third motion for contempt is denied.
CONCLUSION
For the reasons set forth above, Plaintiffs’ third motion to

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hold Defendants in contempt for violation of the preliminary

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injunction is DENIED (Docket No. 113).
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The Court GRANTS Plaintiffs’ request for reasonable

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attorneys’ fees and costs incurred in bringing the motion for

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contempt that was granted on June 20, 2012 (Docket No. 90).

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Within fourteen days of this order, Plaintiffs’ counsel shall

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submit an application to the Court documenting their reasonable

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attorneys’ fees and costs incurred in connection with the motion

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for contempt, and a proposed order.

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response directed to the amount only within seven days.

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Plaintiffs may file a reply within seven days.

United States District Court
For the Northern District of California

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Defendants may file a

IT IS SO ORDERED.

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Dated: 8/23/2013

CLAUDIA WILKEN
United States District Judge

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