Emerson Electric Co. v. Emerson Quiet Kool Co. Ltd. et al

Filing 103

MEMORANDUM ORDER: Defendants' Motion to Consolidate Through Trial under Federal Rule of Civil Procedure 42 or Join a Required Party under Federal Rule of Civil Procedure 19 (D.I. 82 ) is GRANTED-IN-PART and DENIED-IN-PART. The parties shall file a joint status report on or before March 5, 2021. The hearing scheduled for February 23, 2021 is CANCELLED. (*See Order for complete details). Signed by Judge Jennifer L. Hall on 2/19/2021. (ceg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
EMERSON ELECTRIC CO.,
Plaintiff,
v.

C.A. No. 17-1846-LPS-JLH

EMERSON QUIET KOOL CO. LTD., and
HOME EASY LTD.,
Defendants.
MEMORANDUM ORDER
Pending before the Court is Defendants’ Motion to Consolidate Through Trial under
Federal Rule of Civil Procedure 42 or Join a Required Party under Federal Rule of Civil Procedure
19. (D.I. 82.) For the reasons summarized below, Defendants’ motion is GRANTED-IN-PART
and DENIED-IN-PART.
I.

BACKGROUND
A.

The 17-1846 Action

Plaintiff Emerson Electric Co. (“Emerson Electric”) filed a complaint in this Court on
December 22, 2017 against Defendants Emerson Quiet Kool Co. Ltd. and Home Easy Ltd.
(“Defendants”). (D.I. 1.) Emerson Electric alleges that it uses a number of registered trademarks
containing the word “Emerson” for a wide range of products, including products that regulate
indoor air, such as air circulators, fans, air conditioning compressors, HVAC controls, humidifiers,
and thermostats. (Id. ¶¶ 5, 7.)
According to Emerson Electric’s complaint, Defendants sell and market air conditioning
and dehumidifying products under the mark “Emerson Quiet Kool.” (Id. ¶ 5.) Emerson Electric’s
complaint asserts various federal and Delaware state trademark and unfair competition claims

against Defendants (Counts I-VII). The complaint also asserts a breach of contract claim involving
a Consent Agreement regarding use of the mark “Emerson Quiet Kool” (Count VIII). The
complaint seeks cancellation of the “Emerson Quiet Kool” trademark registration (Count IX), as
well as injunctive relief, monetary damages, punitive damages, and attorney’s fees and costs. The
case is still in the discovery stage, with fact discovery scheduled to close on March 3, 2021. (D.I.
37.)
B.

The 20-1652 Action

A separate entity, Emerson Radio Corporation (“Emerson Radio”), filed its own trademark
infringement complaint against Defendants on July 21, 2017 in the United States District Court
for the District of New Jersey. (See C.A. No. 20-1652, D.I. 1.) 1 According to the complaint,
Emerson Radio sells household appliances such as compact refrigerators, microwave ovens, wine
coolers, coffee makers, toaster and convection ovens, clock radios, audio and video equipment,
and other consumer electronic products that bear one of Emerson Radio’s registered distinctive
marks containing the name “Emerson.” (Id. ¶¶ 4, 25.)
Emerson Radio’s amended complaint alleges various federal and New Jersey state
trademark and unfair competition claims against Defendants in connection with their use of the
“Emerson Quiet Kool” mark (Counts I-IX). Emerson Radio also seeks cancellation of Defendants’
“Emerson Quiet Kool” trademark registration (Count X), as well as injunctive relief, monetary
damages, punitive damages, and attorney’s fees and costs.

1

The complaint was amended on September 19, 2017. It alleges the same claims. (Id.,

D.I. 30.)
2

The Emerson Radio case was transferred to this Court on December 3, 2020. (C.A. No.
20-1652, D.I. 141.) Fact and expert discovery is purportedly complete in that case, but it has not
yet been scheduled for trial. (See C.A. No. 17-1846, D.I. 83 at 11.)
C.

Defendants’ Motion in the 17-1846 Action

Shortly after the Emerson Radio case was transferred to this district, Defendants filed the
pending motion seeking to consolidate the two cases for trial. In support of its motion, Defendants
point out that Emerson Electric and Emerson Radio are parties to a “2004 General Trademark
Agreement” that defines the rights and obligations of Emerson Electric and Emerson Radio with
respect to trademarks containing the word “Emerson.” (D.I. 83, Ex. A.) The agreement specifies
the nature and form of the marks that can be used by each company, the products for which they
may use the marks, and licensing rights. (Id.)
II.

ARGUMENT
A.

Consolidation under Rule 42

Defendants first argue that the Court should exercise its discretion under Federal Rule of
Civil Procedure 42(a) to consolidate the Emerson Electric and Emerson Radio actions through
trial. I disagree.
Rule 42(a) authorizes a court to consolidate actions if they involve a common question of
law or fact. It provides:
(a) Consolidation. If actions before the court involve a common
question of law or fact, the court may:
(1) join for hearing or trial any or all matters at issue in the
actions;
(2) consolidate the actions; or
(3) issue any other orders to avoid unnecessary cost or delay.

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Fed. R. Civ. P. 42(a).
“While decisions to consolidate are discretionary, the court should ‘balance considerations
of efficiency, expense, and fairness.’” Bos. Sci. Scimed, Inc. v. Edwards Lifesciences Corp., No.
16-275-JFB-SRF, 2018 WL 6040261, at *1 (D. Del. Nov. 9, 2018) (quoting Resnik v. Woertz, 774
F. Supp. 2d 614, 624 (D. Del. 2011)). “The court must weigh ‘the savings of time and effort gained
through consolidation . . . against the inconvenience, delay or expense that might result from
simultaneous disposition of the separate actions.’” Id. (quoting Outten v. Wilmington Tr. Corp.,
281 F.R.D. 193, 196–97 (D. Del. 2012)). The moving party bears the burden to demonstrate that
consolidation is appropriate. Borough of Olyphant v. PPL Corp., 153 F. App’x 80, 82 (3d Cir.
2005).
I conclude that Defendants have failed to demonstrate that considerations of efficiency and
fairness outweigh the inconvenience, prejudice, and potential delay that Emerson Electric would
suffer if the actions were consolidated for trial. As an initial matter, I disagree with Defendants
regarding the extent of the efficiencies that could be realized through consolidation. Defendants
make much of the fact that their own products and marks are the same in each action and that both
plaintiffs are asserting trademark and unfair competition claims. But just because the cases involve
similar legal theories doesn’t mean that it would be efficient to try them together. For example,
whether Emerson Electric’s trademarks are infringed is a distinct question from whether Emerson
Radio’s marks are infringed, and the two trials will involve separate proofs. To succeed on a claim
of federal trademark infringement, “a plaintiff must prove that: (1) it owns the mark; (2) the mark
is valid and legally protectable; and (3) defendant’s use of the mark to identify goods or services
is likely to create confusion.” New Balance Athletics, Inc. v. USA New Bunren Int’l Co. Ltd. LLC,
424 F. Supp. 3d 334, 346 (D. Del. 2019) (citing A & H Sportswear, Inc. v. Victoria’s Secret Stores,

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Inc., 237 F.3d 198, 210 (3d Cir. 2000), recons. den. in part, No. 17-1700-MN, 2020 WL 5593928
(D. Del. Sept. 18, 2020)). With respect to the first two elements, there will be little or no factual
overlap between the two cases. As for the third, courts typically assess ten factors to determine
whether there is a likelihood of confusion between the plaintiff’s mark and the allegedly infringing
mark. Id. While it is true that there will be some factual overlap because Emerson Electric and
Emerson Radio are each accusing Defendants’ same products and marks of infringement,
assessment of the ten factors for each plaintiff is a distinct inquiry and will involve different
evidence. 2
The cases have other differences too. For example, Emerson Electric is asserting a breach
of contract claim that (at least as far as I know) has no relevance to Emerson Radio or its claims.
The two actions also involve different states’ laws. And the defenses in the two cases are different.
Any limited efficiencies that might be gained by consolidating the trials do not outweigh
the inconvenience and potential prejudice to Emerson Electric. Emerson Electric and Emerson
Radio are represented by different counsel. Emerson Electric does not want another plaintiff at its
trial, and it is concerned that a consolidated trial might give jurors the mistaken impression that

2

I note that Emerson Electric and Defendants are each taking positions that are not entirely
consistent with those they took in an earlier discovery dispute. (See D.I. 61, 62, 64.) There,
Emerson Electric asserted that certain of its communications with Emerson Radio were protected
by the common interest privilege, which extends the attorney-client privilege to parties with a
shared legal interest. Defendants, at that time, argued that no common legal interest existed
between Emerson Electric and Emerson Radio.
Although the judge that originally presided over the Emerson Radio action in New Jersey
found a common legal interest, contrary to Defendants’ assertions, this Court did not. (D.I. 84, Ex.
F. 15:2-6 (The Court: “As an initial matter, I’m skeptical about the application of attorney-client
privilege to the communications at issue, particularly because I’m not convinced that the parties
have the same legal interest in that they had different trademarks.”).) The Court concluded that
the communications were nevertheless protected by the work product doctrine. (Id. 15:6-14.)
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the parties are co-owners of the asserted marks. I agree that, given the nature of the claims, there
is a real chance of juror confusion if the cases were tried together.
I also take into account that consolidating the two actions for trial could delay Emerson
Electric’s trial. Emerson Electric’s case is currently scheduled for trial in January 2022. Emerson
Radio’s recently transferred case has not been scheduled for trial, nor has an updated scheduling
order been filed or entered in this district. The ongoing COVID-19 pandemic has created a backlog
for trial time, and finding time to try the two actions together would carry a risk that Emerson
Electric’s day in court could be considerably delayed.
I have taken into account Defendants’ concern that trying these cases separately might
subject it to inconsistent adjudications, for example, if one jury found that Defendants’ use of the
Emerson Quiet Kool mark on its products infringed Emerson Electric’s trademarks and another
jury found that Defendants’ use on the same products infringed Emerson Radio’s trademarks. That
speculative possibility does not, in my view, tip the scales in favor of consolidation.
In sum, applying the principles of Rule 42(a), and in the exercise of the Court’s discretion
with respect to matters of case management, I find that consolidation is inappropriate. The
differences between the cases are considerable enough to cancel any benefit gained by
consolidation. Accordingly, I deny the request to consolidate through trial.
All that said, I cannot rule out the possibility that some efficiencies could be realized by
coordinating the remaining pretrial proceedings for the two actions. See Fed. R. Civ. P. 42(a)(3)
(authorizing the court to issue “any other orders to avoid unnecessary cost or delay”). Accordingly,
I will order Emerson Electric to meet and confer with Defendants regarding whether it would be
appropriate to coordinate any remaining pretrial proceedings in the two actions.

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B.

Joinder under Rule 19
Defendants next argue that Emerson Radio should be joined as a plaintiff in this action

under Federal Rule of Civil Procedure 19(a)(1). I disagree.
Rule 19(a)(1)(B)(ii) provides, in pertinent part:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of
process and whose joinder will not deprive the court of
subject-matter jurisdiction must be joined as a party if:
...
(B) that person claims an interest relating to the
subject of the action and is so situated that disposing
of the action in the person’s absence may:
...
(ii) leave an existing party subject to a
substantial risk of incurring double, multiple,
or otherwise inconsistent obligations because
of the interest.
Fed. R. Civ. P. 19(a)(1)(B)(ii). Defendants argue that Emerson Radio has “an interest” in
protecting its marks containing the word Emerson. While that is true, it is a different interest than
that of Emerson Electric. The two entities sell different products. Although Emerson Electric and
Emerson Radio have a trademark agreement that is alleged to define their respective rights to use
marks containing the word Emerson on their products, Emerson Radio’s interests are specific to
its own products, marks, and rights. This is not a case where two entities share an ownership
interest in a single intellectual property right.
I am also unpersuaded by Defendants’ argument that, absent joinder, they face a
“substantial risk” of incurring double damages obligations.

Any damages awarded against

Defendants for trademark infringement will be tied to the specific infringement at issue in that
action. Defendants’ argument seems to rely on the possibility (discussed above) that one jury
might find that Defendants’ use of the Emerson Quiet Kool mark on its products infringed Emerson
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Electric’s trademarks and another jury might find that Defendants’ use on the same products
infringed Emerson Radio’s trademarks. Even if such a situation were contemplated by Rule
19(a)(1)(B)(ii)’s reference to “double . . . or otherwise inconsistent obligations”—and Defendants
haven’t cited any authority that it is—I’m unpersuaded that such a risk is “substantial” absent
joinder. Nor would joinder necessarily eliminate that risk. 3
In sum, I find unpersuasive Defendants’ argument that Emerson Radio has such an interest
in this action that, absent joinder, Defendants will be subject to a substantial risk of incurring
multiple or inconsistent obligations. Accordingly, I deny Defendants’ request to join Emerson
Radio as a plaintiff.

3

Additionally, Emerson Electric has represented to the Court that it is no longer seeking
disgorgement of Defendants’ profits. (D.I. 87 at 1-2, Ex. A.)
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III.

CONCLUSION
NOW, THEREFORE, IT IS HEREBY ORDERED:
Defendants’ Motion to Consolidate Through Trial under Federal Rule of Civil Procedure

42 or Join a Required Party under Federal Rule of Civil Procedure 19 (D.I. 82) is GRANTEDIN-PART and DENIED-IN-PART as follows:
1. Defendants’ request to consolidate this action with Emerson Radio Corp. v. Emerson
Quiet Kool Co. Ltd., et. al., C.A. No. 20-1652-LPS is DENIED;
2. Defendants’ request to join Emerson Radio as a plaintiff in this action is DENIED;
3. Defendants’ request to consolidate pretrial proceedings is GRANTED-IN-PART only
to explore the possibility of pretrial coordination. Emerson Electric is ordered to meet and confer
with Defendants regarding whether it would be appropriate to coordinate any remaining pretrial
proceedings in the two actions. The parties shall file a joint status report on or before March 5,
2021.

Dated: February 19, 2021

___________________________________
Jennifer L. Hall
UNITED STATES MAGISTRATE JUDGE

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