Advantus Corp. v. T2 International, LLC et al
Filing
70
ORDER denying 53 Defendant T2 International, LLC and T2 Products, LLC's Motion for Summary Judgment. Signed by Judge Marcia Morales Howard on 10/7/2015. (JW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
ADVANTUS, CORP., et al.,
Plaintiffs,
vs.
Case No. 3:13-cv-240-J-34MCR
T2 INTERNATIONAL, LLC,
Defendant.
______________________________________
ADVANTUS, CORP.,
Plaintiff,
vs.
Case No. 3:14-cv-484-J-34PDB
T2 INTERNATIONAL, LLC, et al.,
Defendants.
_____________________________________/
ORDER
THIS CAUSE is before the Court on Defendants T2 International, LLC and T2
Products, LLC’s Motion for Summary Judgment and Memorandum in Support (Doc. 53;
Motion), filed on May 8, 2015.1 In the Motion, Defendants T2 International, LLC and T2
Products, LLC (collectively, T2) request that the Court enter summary judgment in their favor
on Counts I and III of the Complaint (Doc. 1). See Motion at 2. On June 1, 2015, Plaintiff
Advantus, Corp. (Advantus) filed a response in opposition to the Motion. See Plaintiff
1
Unless the Court indicates otherwise, document numbers refer to the docket in Advantus, Corp.
v. T2 International, LLC, et al., (Advantus II), 3:14-cv-484-J-34PDB.
Advantus, Corp.’s Response in Opposition to Defendants’ Motion for Summary Judgment
(Doc. 59; Response). Accordingly, this matter is ripe for review.
I.
Standard of Review
Under Rule 56, Federal Rules of Civil Procedure (Rule(s)), “[t]he court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Rule 56(a). The record to
be considered on a motion for summary judgment may include “depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those made
for purposes of the motion only), admissions, interrogatory answers, or other materials.”
Rule 56(c)(1)(A).2 An issue is genuine when the evidence is such that a reasonable jury
could return a verdict in favor of the nonmovant. See Mize v. Jefferson City Bd. of Educ.,
93 F.3d 739, 742 (11th Cir. 1996) (quoting Hairston v. Gainesville Sun Publ’g Co., 9 F.3d
913, 919 (11th Cir. 1993)). “[A] mere scintilla of evidence in support of the non-moving
party’s position is insufficient to defeat a motion for summary judgment.” Kesinger ex rel.
Estate of Kesinger v. Herrington, 381 F.3d 1243, 1247 (11th Cir. 2004).
2
Rule 56 was revised in 2010 “to improve the procedures for presenting and deciding summaryjudgment motions.” Rule 56 advisory committee’s note 2010 Amendments.
The standard for granting summary judgment remains unchanged. The
language of subdivision (a) continues to require that there be no genuine
dispute as to any material fact and that the movant be entitled to judgment as
a matter of law. The amendments will not affect continuing development of
the decisional law construing and applying these phrases.
Id. Thus, case law construing the former Rule 56 standard of review remains viable and is applicable here.
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The party seeking summary judgment bears the initial burden of demonstrating to the
court, by reference to the record, that there are no genuine issues of material fact to be
determined at trial. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
“When a moving party has discharged its burden, the non-moving party must then go beyond
the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and
admissions on file, designate specific facts showing that there is a genuine issue for trial.”
Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir. 1995) (internal citations
and quotation marks omitted). Substantive law determines the materiality of facts, and
“[o]nly disputes over facts that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). In determining whether summary judgment is appropriate, a court
“must view all evidence and make all reasonable inferences in favor of the party opposing
summary judgment.” Haves v. City of Miami, 52 F.3d 918, 921 (11th Cir. 1995) (citing Dibrell
Bros. Int’l, S.A. v. Banca Nazionale Del Lavoro, 38 F.3d 1571, 1578 (11th Cir. 1994)).
II.
Procedural History
The dispute between these parties first came to this Court on March 6, 2013, when
Advantus
initiated
Advantus,
Corp.
v.
T2
International,
LLC
(Advantus
I),
3:13-cv-240-J-34MCR by filing a Complaint for Damages and Injunctive Relief and Demand
for Jury Trial (Doc. 1). The following month, Advantus filed an amended complaint and a
motion for preliminary injunction premised on alleged trademark and patent infringement.
See Amended Complaint for Damages and Injunctive Relief and Demand for Jury Trial
(Advantus I, Doc. 9), filed April 12, 2013; Plaintiffs’ Motion for Preliminary Injunction and
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Incorporated Memorandum of Law (Advantus I, Doc. 10), filed April 17, 2013. The Court
granted Advantus’ request for a preliminary injunction as to the patent infringement claim,
and denied, without prejudice, the same request as to the trademark infringement claim.
See Order (Advantus I, Doc. 35) at 26. The parties later settled the matter and, at their
request, the Court entered a Final Judgment of Permanent Injunction (Advantus I, Doc. 86;
Permanent Injunction) on October 22, 2013. The Court’s Permanent Injunction directs that:
Defendant T2 International, LLC and all of its agents, successors, assigns, and
persons in active concert or participation with any of them, who received actual
notice of this Order by personal service or otherwise, are ENJOINED from
manufacturing, distributing, selling, offering for sale, and/or advertising the
Luxury Lounger, Skye Float Disc, Pure Sky Float, and Pure Skye Float XL
products, the ‘Spuncrylic & Mesh’ and ‘Sunbrella & Mesh’ versions of the
Maggie Blue and Neo Papasan products, and any renamed or reconfigured
versions of these floats as to size or shape.
See Permanent Injunction at 5-6. This Injunction remains in full force and effect until
September 21, 2029. Id. at 6.
Six months after the entry of the Permanent Injunction, Advantus filed Plaintiffs’
Motion for T2 International, LLC, T2 Products, LLC, and Todd Youngblood to be Held in
Contempt for Violation of Permanent Injunction (Advantus I, Doc. 88; Motion for Contempt)
alleging that T2 International, LLC, the Defendant in Advantus I, and T2 Products, its related
entity, as well as Todd Youngblood, the president of both entities, violated the Court’s
Permanent Injunction. In addition, on April 24, 2014, Advantus initiated a new action against
T2 International and T2 Products, Advantus II, premised on substantially the same alleged
conduct that forms the basis of the Motion for Contempt. See generally Complaint. In the
Complaint, Advantus asserts claims for breach of contract, false advertising under the
Lanham Act, 15 U.S.C. § 1125(a), misleading advertising under section 817.41 of the Florida
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Statutes, violation of Florida’s Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.20,
and unfair competition under Florida common law. See Complaint at 8-15. At the request
of Advantus, and without opposition from T2, the Court consolidated the two cases.
See Order (Doc. 14), entered June 12, 2014. On April 27, 2015, the Court granted the
Motion for Contempt to the extent that the Court directed T2 International, LLC, T2 Products,
LLC and Todd Youngblood to show cause at a hearing before the undersigned why they
should not be held in civil contempt for failure to comply with the requirements of the Court’s
Permanent Injunction. See Order (Advantus I, Doc. 110) at 7-8. In doing so, the Court
determined that the show cause hearing would take place contemporaneously with the trial
on the merits in Advantus II. Id. T2 now moves for summary judgment on Counts I and III
of the Complaint filed in Advantus II.
III.
Factual Background
The current dispute between the parties centers on T2's sale of a “Maggie Blue” pool
float to Costco. Pursuant to the Permanent Injunction, T2 is enjoined from offering for sale,
selling, or advertising a “Sunbrella & Mesh” version of the Maggie Blue. See Permanent
Injunction at 5-6. However, after the entry of the Permanent Injunction, Advantus entered
into a sublicensing agreement with T2. See Declaration of Kevin Carpenter (Doc. 59-1;
Carpenter Decl.), Ex. 1: Sublicense Agreement (the Agreement).
In the Agreement,
Advantus authorized T2 to “manufacture and sell” specific Buoyant Cushion Products,3
3
“Buoyant Cushion Products” are defined in the Agreement as “any products now or hereafter
sublicensed under this Agreement and any other products that are the embodiment of any of the claims of the
Buoyant Cushion Patent.” See Agreement at 1, 13-15. The Buoyant Cushion Patent is United States Patent
8,167,672 BS, and was the subject of Advantus I. The details surrounding this Patent and the parties’ initial
dispute over pool floats utilizing this Patent are set forth in the Permanent Injunction.
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including the “Maggie Blue,” under specific circumstances. See Agreement at 2-3, 13-15.
T2 contracted, in relevant part, that it would not
directly or indirectly:
(i) Import, use, make, have made, sell or offer to sell any Sublicense Products
in any way or manner whatsoever except in strict compliance with this
Agreement.
(ii) Import, use, make, have made, sell or offer to sell any Buoyant Cushion
Products within the United States, except to the extent that the sale of such
products is explicitly authorized under Schedules A, B, or C.
See Agreement at 6. T2 also agreed that it would not “directly or indirectly circumvent or
attempt to circumvent the intent of this Agreement, whether though [sic] other entities or
otherwise.” Id. at 7. The Agreement required T2 to pay monthly royalties to Advantus
constituting a percentage of the gross sales of these products. Id. at 5.
Pursuant to Schedule C of the Agreement, Advantus authorized T2 to sell a Sunbrella
& Mesh Maggie Blue to Costco. See Agreement at 15; Carpenter Decl. ¶ 7. As such, in
2013, T2 sold 96 Sunbrella & Mesh Maggie Blue pool floats to Costco and paid Advantus
a royalty for these sales. See Carpenter Decl. ¶ 8; Ex. 3. In 2014, T2 continued to sell to
Costco a “Maggie Blue” pool float in packaging which specifically advertised an “easy-drain
mesh bottom” and depicted a pool float with a Sunbrella top and a mesh bottom.
See Motion, Ex. C; Carpenter Decl. ¶ 10; Declaration of Charles Frohman in Support of
[Motion for Contempt] (Doc. 60-7 at 23; Frohman Decl.) ¶¶ 4-5. However, despite the
representations on the packaging, the product actually contained therein was “an all fabric
bottom Maggie Blue (the Hornwood).” See Carpenter Decl. ¶ 10; Frohman Decl. ¶¶ 5-6.
Indeed, T2's President Todd Youngblood admits that, as opposed to the “spacer mesh
bottom” used in the 2013 Maggie Blue product, the Maggie Blue product sold to Costco in
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2014 had “a Hornwood mesh bottom.” See May 29, 2015 30(b)(6) Video Deposition of Todd
Youngblood (Doc. 62-1; 2015 Youngblood Dep.) at 12. However, Advantus presents
evidence that the fabric bottom on the Hornwood Maggie Blue is neither a “mesh” nor easy
draining. See Deposition of Dianne Burr (Doc. 60-5) ¶¶ 47-49; Declaration of Jon Paul Rust,
Ph.D. (Doc. 59-2), Ex. 1 at 4. T2 sold approximately 8,000 of the Hornwood Maggie Blue
products to Costco, see 2015 Youngblood Dep. at 26; Notice of Filing Financial Spreadsheet
Under Seal Pursuant to June 4, 2015 Order [D.E. 61] (Doc. 63), but did not pay any royalty
to Advantus for the sale of these products. See Carpenter Decl. ¶ 10. Notably, other than
the “Sunbrella & Mesh” or “Suncrylic & Mesh” versions of the Maggie Blue that are governed
by the Agreement, T2 has not commercially sold any other variety of the Maggie Blue pool
float with a Sunbrella top and a mesh bottom. See December 4, 2014 Deposition of Todd
R. Youngblood (Doc. 60-1; 2014 Youngblood Dep.) at 14.
IV.
Discussion
A.
Breach of Contract
T2 contends that it is entitled to summary judgment on Advantus’ breach of contract
claim because the Hornwood version of the Maggie Blue does not utilize the Patent and is
not a Buoyant Cushion Product within the meaning of the Agreement. See Motion at 7. As
such, T2 asserts that “the only product T2 offered for sale was not a product covered by the
patent, and therefore was not prohibited by the contract.” See id. at 8. T2 further maintains
that even if depicting a product on the packaging constitutes an “offer for sale,” regardless
of the product actually in the box, there is no evidence that the product shown on the 2014
Maggie Blue packaging is a pool float covered under the Agreement. Id. at 8-10. Upon due
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consideration, the Court finds that T2 has failed to meet its burden to show the absence of
a material issue of fact with respect to Advantus’ breach of contract claim. Indeed, Advantus
has presented sufficient evidence from which a reasonable juror could conclude that T2 has
“used” or “offered for sale” the Sunbrella & Mesh Maggie Blue pool float in a manner that
failed to strictly comply with the terms of the Agreement and/or circumvented the intent of
the Agreement. While T2 disputes that the Maggie Blue product depicted on the packaging
is the same Maggie Blue pool float subject to the Agreement, the Court finds that there is a
question of fact on this issue. See 2014 Youngblood Dep. at 14, 170-71. As such, the Court
determines that T2's arguments are unavailing, and therefore its request for summary
judgment as to Count I of the Complaint is due to be denied.
B.
Misleading Advertising
With respect to Advantus’ claim for misleading advertising pursuant to section 817.41
of the Florida Statutes, T2 argues that it is entitled to summary judgment because Advantus
cannot present any evidence that it relied on an alleged misrepresentation to its detriment.
See Motion at 10-12. Generally, to prevail on a claim for misleading advertising under
Florida law, a plaintiff must establish the elements of common law fraudulent inducement,
including that “the plaintiff suffered injury in justifiable reliance on the representation.” See
Third Party Verification, Inc. v. Signaturelink, Inc., 492 F. Supp. 2d 1314, 1322 (M.D. Fla.
2007). However, “when the party alleging misleading advertising is a competitor of the
defendant in selling the goods or services to which the misleading advertisement relates, an
allegation of competition is permitted to ‘stand-in’ for the element of direct reliance that a
consumer is obligated to plead.” Id. Because it is undisputed that “Advantus and T2 are
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competitors in the market for pool floats, and they compete for a common pool of
customers,” see Complaint ¶ 52; First Amended Answer (Doc. 23) ¶ 52, T2's contention that
Advantus must establish reliance is without merit. T2 makes no other challenge to Advantus’
misleading advertising claim, and therefore, T2's request for summary judgment on Count
III of the Complaint is due to be denied as well. In light of the foregoing, it is
ORDERED:
Defendant T2 International, LLC and T2 Products, LLC’s Motion for Summary
Judgment and Memorandum in Support (Doc. 53) is DENIED.
DONE AND ORDERED at Jacksonville, Florida on October 7, 2015.
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Copies to:
Counsel of Record
Pro Se Parties
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