The American Automobile Association, Inc. v. Teague et al

Filing 17

MEMORANDUM DECISION AND ORDER AND ORDER TO SHOW CAUSE It is hereby ORDERED that AAA's Motion for an Order to Show Cause (Dkt. 14 ) is GRANTED. ( Show Cause Hearing set for 7/11/2018 03:00 PM in Boise - Courtroom 1 before Judge David C. Nye.) Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

THE AMERICAN AUTOMOBILE
ASSOCIATION, INC.,

Case No.: 1:16-cv-00475-DCN

MEMORANDUM DECISION AND
ORDER and ORDER TO SHOW
CAUSE

Plaintiff,
v.
AAA ANYTIME TOWING &
RECOVERY, and CHRIS K. TEAGUE,

Defendants.

I. INTRODUCTION
Pending before the Court is Plaintiff, The American Automobile Association,
Inc.’s (“AAA”) Motion for Order to Show Cause. Dkt. 14. Having carefully considered
the record and otherwise being fully advised, the Court enters the following order
GRANTING the Motion. Additionally, the Court hereby orders that Defendants AAA
Anytime Towing and Recovery (“AAA Anytime”) and Chris Teague appear and show
cause why they should not be held in contempt for failure to comply with the Court’s
prior order.
II. BACKGROUND
AAA initiated this action on October 25, 2016, claiming that AAA Anytime and
Chris Teague (collectively “Defendants”) knowingly and willfully infringed on its
famous and distinctive trademarks (the “AAA Marks”). AAA asserted that AAA

MEMORANDUM DECISION AND ORDER AND ORDER TO SHOW CAUSE- 1

Anytime violated the law by “us[ing] and continu[ing] to use the AAA Marks in
connection with a business offering towing and other emergency roadside services . . .
without authorization and with full knowledge that they are not authorized to use those
marks.” Dkt. 1, ¶ 2.
AAA’s Complaint included claims against Defendants for trademark infringement,
false designation of origin, unfair competition, dilution, and cybersquatting in violation of
Sections 32, 43(a), 43(c), 43(d) of the Federal Trademark Act (the “Lanham Act”), 15
U.S.C. §§ 1114, 1125(a), 1125(c), and 1125(d). Additionally, AAA alleged various state
law and common law violations. Dkt. 1, ¶¶ 1-2, 35-69. AAA sought injunctive relief,
monetary damages, restitution, and all other appropriate relief, including an order (1)
enjoining Defendants from using the AAA Marks in the business name “AAA Anytime
Towing & Recovery,” and (2) transferring the domain name
AAAANYTIMETOWING.COM. See id.
On October 27, 2016, AAA served Defendants with the Summons and copy of
AAA’s Complaint. Dkt. 4. To date, Defendants have neither answered nor otherwise
responded to AAA’s Complaint. On November 23, 2016, AAA moved for entry of
default. Dkt. 8. Defendants never responded. On December 20, 2016, the Clerk of the
Court entered default against Defendants. Dkt. 9. On January 19, 2017, AAA moved for
entry of Default Judgment against Defendants. Dkt. 10. Defendants never responded. On
June 7, 2017, the Court granted AAA’s Motion for Default Judgment, and ordered that
“Plaintiff shall have Judgment against Defendants” as follows:

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1.

Final Judgment is hereby entered in favor of Plaintiff AAA
against Defendants AAA Anytime Towing & Recovery and
Chris K. Teague, jointly and severally, in the amount of
$10,640.20, representing recoverable costs and attorneys’ fees
incurred in this matter.

2.

Pursuant to the Court’s authority under 15 U.S.C. § 1116(a),
Defendants, their agents, servants, employees, attorneys, and
any and all persons in active concert or participation with any
of them, are hereby permanently enjoined and restrained from:
a.

Using without the authorization of AAA any of AAA’s
Marks, logos, and trade names, including, but not
limited to, the designation “AAA” or any other name,
logo, or Mark that includes the designation “AAA” or
that is confusingly or deceptively similar to any of
AAA’s Marks, logos, and trade names, either alone or
in conjunction with other words or symbols, as part of
any trademark, service mark, logo, trade name,
corporate name, assumed name, domain name, on or in
relation to any goods or services sold or distributed by
Defendants, or in any other manner; and

b.

Using any combination of multiple letter “A’s” in any
form or manner that would tend to identify or associate
Defendants or their business or services with AAA,
including, without limitation, in the marketing,
promotion, advertising, identification, sale or
distribution of goods or services, or in any other
manner.

3.

Defendants must transfer to AAA any and all domain names in
their or their agents’ possession, custody, or control that
include the AAA Marks, including but not limited to the
domain name AAAANYTIMETOWING.COM.

4.

Defendants must destroy all literature, signs, labels, prints,
packages, wrappers, containers, advertising materials, Internet
content, stationery, software, and any other items in their
possession or control which contain the infringing designations
“AAA,” or any term confusingly similar to “AAA,” either
alone or in combination with other words or symbols and to

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destroy all plates, molds, matrices, masters, and other means of
making any of those infringing items.
5.

Defendants must cancel or amend any assumed business
names, any business name, trade name, or corporate
registrations or applications, and any other public filings that
contain the AAA Marks, or any other confusingly similar
name, logo, or mark, including, but not limited to, those filings
for AAA Anytime Towing & Recovery.

6.

Within 30 days of entry of this Order Granting Motion for
Default Judgment and Permanent Injunction, Defendants must
file with the Court and serve on AAA a report, in writing and
under oath, setting forth in detail the manner in which
Defendants have complied with the above-referenced terms of
the Permanent Injunction.

7.

This Court shall retain jurisdiction over this action for the
purpose of supervising Defendants’ compliance with this
Permanent Injunction.

Dkt. 11, at 2-4.
On August 2, 2017, the Court entered final judgment in AAA’s favor and against
Defendants, jointly and severally, in the amount of $10,640.20. Dkt. 13. On August 6,
2017, AAA served copies of the Court’s June 7, 2017, Order Granting Motion for Default
Judgment and Permanent Injunction on Defendants. Dkt. 14-2.
As of September 11, 2017, Defendants had not transferred to AAA the
AAAANYTIMETOWING.COM domain name, and Defendants continue to use a
Facebook account named AAAAnytimeTowing. Dkt. 14-2. In addition, a review of the
website for the Idaho Secretary of State confirms that the assumed business name for
AAA Anytime remains active as of September 11, 2017. See id. at ¶ 7. Finally,
Defendants have never filed with the Court the above-referenced report “setting forth in

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detail” the manner in which Defendants have complied with the terms of the Permanent
Injunction.
On September 22, 2017, AAA filed the instant Motion for Order to Show Cause.
Dkt. 14. In its Motion, AAA requests an order directing Defendants to appear and to
show cause why (1) they should not be held in contempt and sanctioned for violations of
the Court’s June 7, 2017 Order Granting Motion for Default Judgment and Permanent
Injunction; and (2) why they should not be required to pay the costs and attorneys’ fees
associated with AAA’s efforts to enforce the same. Defendants never responded.
III. DISCUSSION
A court’s power of contempt is regarded as an “inherent” power that is “necessary
to the exercise of all others.” Int’l Union, United Mine Workers of Am. v. Bagwell, 512
U.S. 821, 831 (1994). A party may be held in civil contempt when, after receiving notice,
it fails to take all reasonable steps within its power to comply with a specific and definite
judicial order. See 18 U.S.C. § 401(3) (“A court of the United States shall have power to
punish by fine or imprisonment, or both, at its discretion, such contempt of its authority,
and none other, as . . . [d]isobedience or resistance to its lawful writ, process, order, rule,
decree, or command.”); Stone v. City & Cnty. of San Francisco, 968 F.2d 850, 856 (9th
Cir. 1992) (finding that a district court has “wide latitude in determining whether there
has been a contemptuous defiance of its order[s].”). The Ninth Circuit’s rule regarding
contempt “has long been whether defendants have performed ‘all reasonable steps within
their power to insure compliance’ with the court’s orders.” Stone, 968 F.2d at 856
(quoting Sekaquaptewa v. MacDonald, 544 F.2d 396, 404 (9th Cir. 1976)); see also In re
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Dual-Deck Video Cassette Record Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993).
“Intent is not an issue in civil contempt proceedings. The sole question is whether a party
complied with the district court’s order.” Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th
Cir. 1983).
The party alleging civil contempt bears the initial burden of establishing by clear
and convincing evidence that the opposing party violated a specific and definite order of
the court. See Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 466 (9th Cir. 1989);
In re Dual-Deck, 10 F.3d at 695. The burden then shifts to the alleged contemnors to
produce evidence explaining their noncompliance. See Donovan, 716 F.2d at 1240. The
alleged contemnors must show that they took every reasonable step to comply. See
Sekaquaptewa, 544 F.2d at 406. A contemnor’s good faith in attempting to comply with
the order is immaterial. See Stone, 968 F.2d at 856-67.
Ultimately, a Court may impose sanctions to coerce compliance with a court order
or to compensate the party pursuing the contempt action for losses sustained because of
the contemptuous behavior, or both. See United States v. United Mine Workers, 330 U.S.
258, 303-04 (1947). In determining the amount of a civil contempt sanction, the Court
should consider: (1) the harm from noncompliance; (2) the probable effectiveness of the
sanction; and (3) the burden the sanctions may impose on the contemnor’s financial
resources. Id.; see also United States v. Bright, 596 F.3d 683, 696-97 (9th Cir. 2010).
Against this standard, AAA has clearly made out is prima facie case, as (1)
Defendants have failed to comply with the Court’s June 7, 2017, Order Granting Default

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Judgment and Permanent Injunction (Dkt. 11), and (2) there is no evidence that
Defendants are incapable of complying with the same.
IV. ORDER
Finding good cause therefore,
1. IT IS HEREBY ORDERED that AAA’s Motion for an Order to Show Cause
(Dkt. 14) is GRANTED.
2. IT IS FURTHER ORDERED that, on July 11, 2018, at 3:00 PM, AAA
Anytime and Chris Teague must appear before the United States District
Court for the District of Idaho at 550 W. Fort Street, Suite 400, Boise, Idaho
83724, Courtroom 1. Defendants will be required to show cause, if any exists,
why they should not be held in contempt of court for failing to comply with the
terms of the June 7, 2017, Order Granting Default Judgment and Permanent
Injunction (Dkt. 11.) – to wit:
A.

Failing to transfer to AAA the domain name
AAAANYTIMETOWING.COM;

B.

Failing to cancel or amend the AAA Anytime Towing & Recovery
assumed business name;

C.

Failing to file a report, in writing and under oath, setting forth in detail the
manner in which Defendants have complied with the terms of the June 7,
2017, Order Granting Default Judgment and Permanent Injunction (Dkt.
11); and

D.

Failing to pay to AAA the entire amount of $10,640.20.

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Defendants shall also show cause why they should not be required to pay AAA’s
costs and attorneys’ fees incurred in attempting to enforce the June 7, 2017, Order
Granting Default Judgment and Permanent Injunction (Dkt. 11), including preparing the
Motion for an Order to Show Cause.
3. IT IS ORDERED that AAA shall immediately serve this Order upon
Defendants by certified mail and by the Clerk of the Court in conformity with
this Court’s Local Civil Rules for service of orders.

DATED: May 18, 2018
_________________________
David C. Nye
U.S. District Court Judge

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