Lakeview Cheese Company, LLC v Nelson-Ricks Creamery Co et al

Filing 41

MEMORANDUM DECISION AND ORDER granting in part and denying in part 27 Motion for Preliminary Injunction. Lakeview shall post security in the amount of $25,000 no later than 48 hours after this order issues. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)(Emailed to hg and jd in Finance.)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

LAKEVIEW CHEESE COMPANY,
LLC, a Nevada corporation,

Case No. 4:13-cv-00361-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
NELSON-RICKS CREAMERY
COMPANY, a Utah corporation;
NELSON-RICKS CHEESE COMPANY,
INC., an Idaho corporation; and
GREENBERG CHEESE COMPANY, a
California corporation,
Defendants.

INTRODUCTION
Plaintiff Lakeview Cheese Company, LLC moves for a preliminary injunction
against two defendants – Greenberg Cheese Company and Nelson-Ricks Cheese
Company. 1 See Dkt. 27. These defendants do not oppose Lakeview’s motion, but they
say that the terms of any injunction must precisely mirror the language used in

1

Lakeview does not move for injunctive relief against a third defendant, Nelson-Ricks Creamery
Company. All shorthand references to “Nelson-Ricks” in this decision refer only to Nelson-Ricks Cheese
Company.

MEMORANDUM DECISION AND ORDER - 1

Lakeview’s motion, without regard to the more precise language Lakeview used in its
supporting memorandum of points and authorities. See Non-Opposition, Dkt. 33. The
Court is unpersuaded. For the reasons explained below, the Court will enjoin Greenberg
and Nelson-Ricks from selling cheese products under the BANQUET trademark. The
precise terms of the injunction are set out below.
FACTS 2
In November 2012, Lakeview purchased assets from Nelson-Ricks Creamery
Company, including the right to use the BANQUET trademark. The BANQUET mark is
a well-known mark used in connection with cheese products. After purchasing these
assets, Lakeview discovered that defendant Greenberg Cheese Company, operating as
Nelson-Ricks Cheese or Greenberg Cheese, was using the BANQUET mark on its cheese
products.
When Lakeview’s counsel confronted these defendants, they agreed to stop using
the mark if Lakeview would refrain from seeking injunctive relief from a Court. The
terms of the parties’ agreement were memorialized as follows:
2. Greenberg Cheese and Nelson‐Ricks Cheese agree to immediately
stop selling BANQUET labeled cheese.
3. Based on your agreement to #2, Lakeview will not pursue a
temporary restraining order or preliminary injunction with the Court
in Idaho.

2

A more complete recitation of the facts is contained in Lakeview’s moving papers. See Mot.
Memo., Dkt. 27-1, at 1-9. Greenberg and Nelson-Ricks did not challenge any of Lakeview’s evidence or
factual assertions. The Court therefore adopts Lakeview’s fact statement as its own for purposes of ruling
on this motion.

MEMORANDUM DECISION AND ORDER - 2

4. I [Lakeview’s counsel] will send you a proposed agreement to settle
this matter . . .
Aug. 26, 2013 email, Ex. A to Jackson Dec., Dkt. 13-1, at 1. After this agreement was
reached, a dispute erupted about whether Greenberg and Nelson-Ricks needed to do
anything else to accomplish a broader settlement of the parties’ dispute. The defendants
said that since they had agreed to stop selling BANQUET-marked cheese, the entire
dispute was over. Lakeview disagreed, saying that the parties’ agreement was simply to
forestall injunctive relief and that other terms remained to accomplish a full settlement.
Specifically, Lakeview contended that Greenberg and Nelson-Ricks not only needed to
stop selling BANQUET-marked cheese, but that there had to be some settlement relating
to the damages Lakeview had already sustained by their past use of the BANQUET mark.
The parties made some headway on this issue, but settlement discussions stalled in
October 2013. Additionally, Lakeview says Greenberg and Nelson-Ricks have continued
to sell BANQUET-marked cheese. See Mot. Mem., Dkt. 27-1, ¶ 20.
THE LEGAL STANDARD
A plaintiff seeking a preliminary injunction must establish that: 1) it is likely to
succeed on the merits; 2) it is likely to suffer irreparable harm in the absence of
preliminary relief; 3) the balance of equities tips in its favor; and 4) an injunction is in the
public interest. See Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20
(2008). A preliminary injunction is “an extraordinary remedy never awarded as of right.”
Id. at 24. “In each case, courts ‘must balance the competing claims of injury and must

MEMORANDUM DECISION AND ORDER - 3

consider the effect on each party of the granting or withholding of the requested relief.’”
Id. (citation omitted).
ANALYSIS
1.

Defendants Concede that Injunctive Relief is Proper
In its moving papers, Lakeview established the prerequisites for obtaining a

preliminary injunction. Greenberg and Nelson-Ricks conceded as much by failing to
oppose the motion, and by explicitly stating that they “do not oppose the relief requested
in Plaintiff’s Motion.” Non-Opposition, Dkt. 33, at 1. Accordingly, based on plaintiff’s
evidence and argument, the Court finds Lakeview has shown it is likely to succeed on the
merits of its trademark infringement claim, and that it will likely suffer irreparable harm
in the absence of injunctive relief. The Court also finds that the balance of harms tips in
Lakeview’s favor and that the public interest supports injunctive relief.
2.

The Scope of the Injunction
The next task is to define the precise terms of the injunction. Greenberg and

Nelson-Ricks say the Court should refer only to Lakeview’s motion – and not the
supporting memorandum of points and authorities – when defining the injunction. This
argument is based on Federal Rule of Civil Procedure 7(b)(1)(C), 3 which says that
motions must:
(A) be in writing unless made during a hearing or trial;

3

The Court presumes defendants meant to cite this rule, rather than Rule 7.1, which deals with
corporate disclosure statements.

MEMORANDUM DECISION AND ORDER - 4

(B) state with particularity the grounds for seeking the order; and
(C) state the relief sought.
Fed. R. Civ. P. 7(b)(1)(C).
In compliance with Rule 7, and with this Court’s Local Rule 7.1, Lakeview filed
two documents when it moved for a preliminary injunction: (1) a motion; and (2) a
separate memorandum of points and authorities. See Dkts. 27, 27-1; see generally D.
Idaho Local R. 7.1 (b)(1). As is typical in this district, Lakeview’s motion is a brief
document, containing just the following two sentences:
Lakeview Cheese Co., LLC . . . respectfully requests, pursuant to
Federal Rule of Civil Procedure 65, that this Court enter a preliminary
injunction against defendants Nelson-Ricks Cheese Company, Inc. and
Greenberg Cheese Company (collectively, “Greenberg”) enjoining any
use of Lakeview’s BANQUET trademark in connection with its
business. A memorandum of points and authorities accompanies this
motion.
Mot., Dkt. 27, at 1-2 (emphasis added). Lakeview’s supporting memorandum of points
and authorities fleshes out this request. There, Lakeview asked the Court to enter this
injunction:
[T] he Court should grant Lakeview’s Motion and enter a preliminary
injunction as follows: Greenberg, including all officers, directors,
principals, agents, servants, employees, successors and assigns, and all
others aiding, abetting, or acting in concert or active participation
therewith, is enjoined from selling and offering to sell cheese products
under the BANQUET Mark. The requested injunction should (1)
preclude Greenberg from making any further sales of the Infringing
Goods, (2) order Greenberg to contact its customers and instruct them to
stop its sales and return all such products to Greenberg, (3) order
Greenberg to stop all advertising, including all Internet advertising, that
depicts, promotes, or otherwise mentions the BANQUET Mark, and (4)
preclude Greenberg from representing that it is the owner of any
goodwill in the BANQUET Mark.

MEMORANDUM DECISION AND ORDER - 5

Mot. Mem., Dkt. 27-1, at 25.
Greenberg and Nelson-Ricks balk at these more specific terms. Based solely on
Rule 7, they say the Court should ignore the more precise directives in favor of the
generic language used in Lakeview’s motion. The Court is not persuaded.
First, Rule 65, which governs injunctions and restraining orders, states that every
order granting an injunction must:
(A)

state the reasons why it is issued;

(B)

state its terms specifically; and

(C)

describe in reasonable detail – and not by referring to the
complaint or other document – the act or acts restrained or
required.

Fed. R. Civ. P. 65(d)(1). In accordance with this directive, the Court will employ more
specific language than that used in Lakeview’s motion.
Second, the Court is not persuaded that Rule 7 prevents it from granting an
injunction that is more specific than the one requested in the motion. The overriding
function of Rule 7’s motion requirement “is to afford notice of the grounds and the prayer
of the motion to both the court and to the opposing party, providing that party with a
meaningful opportunity to respond and the court with enough information to process the
motion correctly.” Registration Control Sys., Inc. v. Compusystems, Inc., 922 F.2d 805,
807 (Fed. Cir. 1990) (commenting on Rule 7(b)(1)(B)’s particularity requirement); see
also Hinz v. Neuroscience, Inc., 538 F.3d 979, 983 (8th Cir. 2008) (Rule 7’s particularity
requirement “should not be applied in an overly technical fashion when the purpose
behind the rule is not jeopardized.”) Lakeview’s motion served this function. It

MEMORANDUM DECISION AND ORDER - 6

informed Greenberg and Nelson-Ricks that Lakeview would seek to enjoin them from
using the BANQUET trademark in their business. The supporting memorandum
provided the more specific means to accomplish that general injunction, and those
specifics are consistent with the motion’s more general request.
Additionally, the Court is bound to interpret Rule 7 through the lens of Rule 1 –
that “first and greatest of the Rules.” Woodham v. Am. Cystoscope Co., 335 F.2d 551,
557 (5th Cir. 1964) (Wisdom, J.). Under Rule 1, this Court must construe and administer
all the procedural rules “to secure the just, speedy, and inexpensive determination of
every action.” Fed. R. Civ. P. 1. Rule 1’s force would be seriously blunted if defendants
could avoid the relief Lakeview sought by doing nothing more than invoking Rule 7 and
turning a blind eye to the specific relief Lakeview sought within its memorandum of
points and authorities. If defendants opposed the more specific terms of the requested
injunction, they should have explained why in a response brief.
Accordingly, and for good cause appearing, the Court will enter an injunction that
is consistent with, but more detailed than, the injunction Lakeview requested in its
motion. The Court will, however, modify some terms of the requested injunction, as
explained in the following line-item analysis of Lakeview’s requested injunction.
A.

Sales. As requested, the Court will enjoin Greenberg and Nelson-Ricks from

selling or offering to sell cheese products under the BANQUET mark.
B.

Representations as to Ownership. Likewise, on the strength of the moving

papers, the Court will enjoin these defendants from representing that they are the owners
of any goodwill in the BANQUET mark.

MEMORANDUM DECISION AND ORDER - 7

C.

Advertising. Regarding advertisements, Lakeview asks the Court to order

Greenberg and Nelson-Ricks to “stop all advertising, including all Internet advertising,
that depicts, promotes, or otherwise mentions the BANQUET Mark.” The Court will
enjoin the defendants from offering BANQUET-marked cheese for sale in its advertising,
but it will tailor this part of the injunction more narrowly than Lakeview suggests. For
example, the Court will not enjoin defendants from “otherwise mentioning” BANQUET
in their advertisements; the key point is to prevent defendants from selling BANQUET
cheese products; the Court will not prevent these defendants from even mentioning
BANQUET in their advertisements.
D.

Notice to Third Parties; Product Returns. Finally, the Court will deny

Lakeview’s request for an order directing Nelson-Ricks and Greenberg to “contact
[Greenberg’s and Nelson-Ricks’] . . . customers and instruct such customers to stop their
sales of BANQUET-marked cheese products and return any such products to
defendants.” With this request, Lakeview is asking the Court to issue a mandatory
injunction. The other requests were prohibitory. A prohibitory injunction prevents a
party from taking action and thus preserves the status quo pending a determination on the
merits. See generally Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571
F.3d 873, 878-79 (9th Cir. 2009). A mandatory injunction goes further by ordering a
party to do something. Id.
Lakeview did not cite authority or provide argument to support a mandatory
injunction. See generally id. at 877 (discussing additional factors district courts must
consider when a moving party in a trademark infringement case seeks a product recall).

MEMORANDUM DECISION AND ORDER - 8

In view of this, and because mandatory injunctions are “‘particularly disfavored,’” the
Court declines to issue this part of the requested injunction. Id. (citation omitted).
3.

Security
Finally, the Court will address security. Federal Rule of Civil Procedure 65(c)

provides that “[t]he court may issue a preliminary injunction . . . only if the movant gives
security in an amount that the court considers proper to pay the costs and damages
sustained by any party found to have been wrongfully enjoined . . . .” Because the
defendants have not challenged the plaintiff’s entitlement to injunctive relief, the Court
finds that security in the amount of $25,000 is sufficient under the circumstances of this
case. This amount may be increased, if necessary, based upon an appropriately filed
motion by defendants supporting such an increase.
ORDER
IT IS ORDERED that:
(1) Lakeview’s motion for a preliminary injunction (Dkt. 27) is GRANTED in
part and DENIED in part for the reasons stated above.
(2) Greenberg Cheese Company and Nelson-Ricks Cheese Company, including all
officers, directors, principals, agents, servants, employees, successors and
assigns, and all others aiding, abetting, or acting in concert or active
participation with either or both of these entities, are enjoined from selling and
offering to sell cheese products under the BANQUET Mark.
(3) Greenberg Cheese Company and Nelson-Ricks Cheese Company shall not
make any further sales of BANQUET-marked cheese products.

MEMORANDUM DECISION AND ORDER - 9

(4) Greenberg Cheese Company and Nelson-Ricks Cheese Company shall stop all
advertising, including all Internet advertising, which promotes or offers
BANQUET products for sale, or which indicates that either Greenberg Cheese
Company or Nelson-Ricks Cheese Company are authorized to sell
BANQUET-marked cheese; and
(5) Greenberg Cheese Company and Nelson-Ricks Cheese Company shall not
represent that they are the owner of any goodwill in the BANQUET mark.
(6) Lakeview shall post security in the amount of $25,000 no later than 48 hours
after this order issues.

DATED: February 12, 2014

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER - 10