Republic Technologies (NA), LLC et al v. BBK Tobacco & Foods, LLP d/b/a HBI International

Filing 941

MEMORANDUM Opinion and Order: For the foregoing reasons, Republic's motion for a new trial 937 is denied. Signed by the Honorable Thomas M. Durkin on 9/22/2023. Mailed notice. (kp, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
REPUBLIC TECHNOLOGIES (NA), LLC,
and REPUBLIC TOBACCO, L.P.,

No. 16 C 3401

Plaintiffs,

Judge Thomas M. Durkin

v.
BBK TOBACCO & FOODS, LLP, d/b/a HBI
INTERNATIONAL,
Defendant.

MEMORANDUM OPINION AND ORDER
In this seven-year-long contest between competitors in the tobacco rolling
paper industry, Plaintiffs Republic Technologies (NA), LLC and Republic Tobacco,
L.P. (collectively, “Republic”) move for a new trial on their unsuccessful Lanham Act
false advertising claim against Defendant BBK Tobacco & Foods, LLP (“HBI”). R.
937. Republic alleges that it was prejudiced during trial by this Court’s refusal to
provide a supplemental jury instruction in response to a question it received from the
jury during deliberations. For the following reasons, Republic’s motion is denied.
Background
In this case, Republic alleged that HBI engaged in violations of the Illinois
Uniform Deceptive Trade Practices Act (“IUDTPA”), common law unfair competition,
and false advertising under Section 43 of the Lanham Act, 15 U.S.C. § 1125(a).
Republic’s Lanham Act claim focused on HBI’s alleged false and/or misleading
statements that HBI’s RAW Organic Hemp rolling papers are the world’s first or only

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organic hemp papers, that they are made with natural hemp gum, that they are made
in Alcoy, Spain, that they are “100% wind powered,” that purchases of the papers
benefit a charitable foundation known as the “RAW Foundation,” and that Republic’s
brand of rolling papers are knock-offs or fake versions of RAW. R. 801 at 2. HBI
counterclaimed that Republic infringed its copyrights and trade dress. R. 800, 802.
The parties proceeded to a jury trial in June 2021. It is undisputed that the
evidence at trial demonstrated that HBI’s sales are made exclusively to distributors
or wholesalers, not end users, and that HBI’s annual catalogs (which contained some
of the misleading statements) are distributed only to wholesale customers, not the
public. R. 937 at 2; R. 939. At the trial’s close, the jury received the following
instruction regarding Republic’s Lanham Act claim:
For Republic to succeed on its claim of false advertising, Republic must
prove five things by a preponderance of the evidence:
1. HBI made a false or misleading statement of fact in a commercial
advertisement about the nature; quality; characteristic; or geographic
origin of its own product or Republic’s product. A statement is
misleading if it conveys a false impression and actually misleads a
consumer. A statement can be misleading even if it is literally true or
ambiguous.
2. The statement actually deceived or had the tendency to deceive a
substantial segment of HBI’s audience.
3. The deception was likely to influence the purchasing decisions of
consumers.
4. HBI caused the false statement to enter interstate commerce. A false
or misleading statement enters interstate commerce if HBI’s products
are transferred, advertised, or sold across state lines. The parties agree
that HBI’s products are transferred, advertised, and sold in interstate
commerce.

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5. Republic has been or is likely to be injured as a result of the false
statement. Injury includes direct diversion of sales from itself to HBI; or
a loss of goodwill associated with its products. . . .
R. 801 at 3. This instruction quotes verbatim the Seventh Circuit’s Pattern Civil Jury
Instruction for false advertising under the Lanham Act. Fed. Civ. Jury Instructions
of the 7th Cir., § 13.3.1 (2017 ed.), available at https://www.ca7.uscourts.gov/patternjury-instructions/7th_cir_civil_instructions.pdf. The jury was further instructed that,
to be found liable, HBI must have acted “willfully,” that is, knowing that the
advertising was false or misleading or indifferent to that fact. R. 801 at 8. The
instructions did not define “consumer.”
As to the IUDTPA claim, the jury instructions stated that Republic was
required to show that HBI represented that its goods have “characteristics, uses, or
benefits that they do not have,” or that its goods are “of a particular standard, quality,
or grade” that they are not, or that HBI engaged in any other conduct that “creates a
likelihood of confusion or misunderstanding.” R. 801 at 9–11. Further, the jury was
instructed that the IUDTPA does not require proof of actual confusion or
misunderstanding. Id. at 10. Finally, the instructions stated that “[t]he evidence
necessary to establish unfair competition is the same as that needed to establish a
violation of the [IUDTPA].” Id. at 11.
On the first day of deliberations, the Court received a question from the jury
requesting a copy of the profit apportioning report prepared by HBI’s expert, Francis
Burns. R. 799 at 2. This report, which analyzed what portion of HBI’s profits were
attributable to each of the alleged false and misleading statements, was only relevant

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to the Lanham Act claim, because it was the only claim that required the jury to
apportion profits. R. 801 at 6–7. The parties conferred, and the Court provided a copy
of Burns’s report to the jury. R. 857 at 2692.
On the second day of deliberations, the Court received two notes from the jury.
One asked a question regarding HBI’s trade dress claim. R. 799 at 4. The other said:
Regarding Page 3 on Jury Instructions of FALSE ADVERTISING,
Statement 1 says “A statement is misleading if it conveys a false
impression AND actually misleads a consumer.” Is this meaning there
needs to be evidence of a misled statement [sic]? Does the plaintiff
NEED to show an actual misled consumer? Can we make inference [sic]
here? Is there a definition of “consumer”? Is that only the End User 1 of
the product or including anyone who purchases the product?
Id. at 3 (emphases in original). Substantive discussions regarding this note occurred
off the record. R. 857 at 2776. According to Republic’s counsel, the Court purportedly
made an off the record suggestion that “consumer” could be any purchaser, not just
an end user, a position that Republic agreed with. Tanner Dec., R. 937-3. HBI
allegedly stated that it had researched the issue and that the misled party must be
an end user. Id. Nonetheless, on the record, the Court decided to refer the jurors to
the original instructions without providing supplemental instructions, noting:
These answers, I believe, are contained within the instructions. And I
think to highlight and get into a colloquy with the jury about what
certain instructions mean could be prejudicial to either side, because
they may put undue weight on the answer and undue weight on a
particular instruction. They’re instructed to refer to and consider all the
instructions, not to ignore any of them. And I think for me to answer
some, defer on some, or answer just these, at least at this point, is
inappropriate. If we get another question back from them saying they’re
really stumped on a particular question, which is why I'm saying “at this
time” in the language, then I might reconsider this position. But I think
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The term “End User” was never referenced in the jury instructions.
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right now, the way these questions are phrased, the answers are
contained in the instructions.
R. 857 at 2777. Republic objected that because there was ambiguity on the definition
of “consumer,” and an allegedly clear answer, the Court “ought to give [that answer]
to the jury.” Id. at 2776–77. The Court sent the following response to the jury: “As to
your questions, I can only advise you (at this time) to refer to and review all the
instructions, including cautionary instructions.” Id. at 2778 (emphasis in original).
The jury returned a verdict the following morning, ruling against Republic on
its Lanham Act false advertising claim, but in its favor on its claims for violations of
the IUDTPA and common law unfair competition. 2 After lengthy post-trial briefing,
HBI agreed to cease making the statements objected to by Republic, and the Court
entered permanent injunctive relief. R. 925. The Court also granted a portion of
Republic’s request for attorneys’ fees but denied its request for disgorgement. R. 930.
Final judgment was entered on June 5, 2023. R. 935, 936. On June 21, 2023, Republic
filed a motion for a new trial under Federal Rule of Civil Procedure 59, R. 937, which
the Court now considers.
Legal Standard
A trial court “has great discretion in determining whether to grant a new trial.”
Valbert v. Pass, 866 F.2d 237, 239 (7th Cir. 1989) (quoting Forrester v. White, 846
F.2d 29, 31 (7th Cir. 1988)). A new trial may be granted “on all or some of the issues,”

The jury also ruled for HBI on one of its copyright infringement claims and one of
its trade dress claims against Republic and awarded HBI lost profits and statutory
damages. R. 805.

2

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Fed. R. Civ. P. 59(a)(1), if the court finds that “the verdict is against the weight of the
evidence, or if the trial was unfair to the moving party for some other reason.”
Forrester, 846 F.2d at 31. Republic denies that it is seeking a new trial on the weight
of the evidence, and instead contends that a new trial on its Lanham Act claim is
warranted because the jury might have found in its favor had the Court provided a
substantive answer to the jury’s question on the definition of a “consumer.” 3 R. 940
at 2–4.
A court has “broad discretion” in its response to a question received from the
jury during deliberations. United States v. Young, 316 F.3d 649, 661 (7th Cir. 2002)
(citing United States v. Watts, 29 F.3d 287, 291 (7th Cir. 1994)). A court may properly
instruct the jury “to re-read the instructions in response to a question, so long as the
original jury charge clearly and correctly states the applicable law.” United States v.
Durham, 645 F.3d 883, 893–94 (7th Cir. 2011). But the Court does have an
“obligation” to “dispel[ ] any confusion quickly and with concrete accuracy.” Id. at 893
(quoting United States v. Carani, 492 F.3d 867, 874 (7th Cir. 2007)). Therefore, when
“it is clear that the jury is having difficulty with the original instructions, a
supplemental instruction is appropriate.” Young, 316 F.3d at 661 (citing United
States v. Lakich, 23 F.3d 1203, 1208 (7th Cir. 1994)).

The Court therefore declines to adopt HBI’s suggestion to apply the “against the
manifest weight of the evidence standard” in deciding Republic’s motion. United
States v. Nunes, 889 F.2d 1564, 1568–69 (6th Cir. 1989) (holding that “the deference
due a properly supported verdict” when challenged on sufficiency of evidence is not
applicable when the challenge is “specifically and solely [based] on the trial court’s
failure to make a proper response to a jury’s inquiry”).
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Failure to dispel juror confusion (as evidenced by a juror question) with
concrete accuracy is a proper basis for granting a motion for a new trial, so long as
that failure prejudiced the movant. Cook v. IPC Intern. Corp., 673 F.3d 625, 629 (7th
Cir. 2012) (granting new trial where there were errors in the jury instructions and in
the trial court’s response to a jury question such that “a properly instructed jury
might well have found in the plaintiff’s favor”) Fields v. City of Chicago, No. 10 C
1168, 2015 WL 13578989, at *5–6 (N.D. Ill. Apr. 7, 2015), aff’d on other grounds, 981
F.3d 534 (7th Cir. 2020) (granting motion for new trial where the trial court
responded to a jury question by redirecting the jurors to the confusing original
instructions, which prejudiced the plaintiff); cf. United States v. Fisher, 648 F.3d 442,
448 (6th Cir. 2011) (holding that the trial court’s refusal to answer juror questions
was not prejudicial and did not require new trial because the questions submitted by
the jury “were not relevant”).
Discussion
Republic argues that the jury was confused on whether a “consumer” must be
an end user. The jury was instructed that Republic needed to prove that HBI made a
false or misleading statement of fact, and, in order for a statement to be considered
misleading, it must actually mislead a consumer. R. 801 at 3. In context, the jury’s
question regarding the definition of “consumer” focused on this portion of the
instructions. 4 See R. 799 at 3 (“Regarding Page 3 on Jury Instructions of FALSE

The instructions also required that Republic show that the statement(s) were likely
to influence the purchasing decisions of consumers, R. 801 at 3, but the juror question
did not reference this section of the instructions.
4

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ADVERTISING, Statement 1 says ‘A statement is misleading if it conveys a false
impression AND actually misleads a consumer.’ . . . Is there a definition of ‘consumer’?
Is that only the End User of the product or including anyone who purchases the
product?” (emphases in original)). It is true that the jury instructions themselves did
not provide an express definition of “consumer.” It is not clear, however, that the
Court could have answered the jury’s question with “concrete accuracy.” And even if
the correct answer was what Republic proposed, this Court did not err, and Republic
was not prejudiced, by redirecting the jurors to the instructions.
This Court decided not to provide a supplemental instruction because the
parties disagreed on the correct answer to the question and because this Court felt
that doing so would have improperly emphasized certain instructions over others. R.
857 at 2777. Even now, neither party cites, nor could this Court find, any case law in
this Circuit that directly answers the jury’s question. The cases cited by Republic in
its brief are largely from other circuits. And those from this circuit do not define who
the “misled consumer” is, but rather, answer a different question—whether the
commercial advertisement or promotion at issue was “disseminated sufficiently to the
relevant purchasing public.” Republic Tobacco, L.P. v. N. Atl. Trading Co., No. 09 C
4011, 1999 WL 261712, at *8 (N.D. Ill. April 9, 1999) (“The Lanham Act does not
require allegedly false statements to reach the ultimate consumer before they are
actionable.”); Am. Needle & Novelty, Inc. v. Drew Pearson Marketing, Inc., 820 F.
Supp. 1072, 1077 (N.D. Ill. 1993) (holding that a single letter to a non-consuming
licensor did not constitute “commercial advertising and promotion,”) (“Nothing in the

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language of § 43(a) . . . specifically requires a false representation be intended to
influence the ultimate consumer, whoever that might be.”). Though the language in
Republic’s cited cases sheds light on the likely definition of a “consumer,” those cases
are far from controlling on the jury’s exact question. Since, even now, this Court does
not discern a concrete answer to the jury’s question, it does not believe it could have
given a supplemental instruction with “concrete accuracy.” Durham, 645 F.3d at 893.
And critically, the jury instructions were not confusing or an inaccurate
statement of the law. In the Fields case, in which a new trial was granted because
the court failed to supply a supplemental instruction in response to a juror question,
the deciding factor was that the original instructions were themselves confusing and
defective. Fields, 2015 WL 13578989, at *5–6. This made the district court’s “plain
vanilla approach” of redirecting the jury to the original instructions an abuse of
discretion. Id. That is not the case here. The instruction for false advertising given to
the jury, which quoted verbatim the Seventh Circuit’s pattern instruction for false
advertising claims, is “presumed to accurately state the law.” United States v. Freed,
921 F.3d 716, 721 (7th Cir. 2019) (citing United States v. Marr, 760 F.3d 733, 744 (7th
Cir. 2014)). Republic did not object to the language of the original instructions when
this Court adopted them or at the time of the question. R. 609-5 at 50; R. 793-3 at 5.
United States v. Mealy, 851 F.2d 890, 902 (7th Cir. 1988) (“Because the defendants
did not challenge the correctness of the instructions that the jury received, it was
within the judge’s discretion to direct the jury to reread the original instructions[.]”).
And because there is no controlling law in this Circuit regarding who qualifies as a

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“consumer,” the instructions were not deficient for not providing a definition of that
term. Therefore, the Court did not err by referring the jury to the original
instructions. Durham, 645 F.3d at 894 (holding that a court does not abuse its
discretion by directing a jury to read the jury instructions in response to a question
where the instructions “clearly and correctly state[ ] the applicable law.”); Mealy, 851
F.2d at 901–02 (collecting cases). 5
Also fatal to Republic’s argument is that, even assuming Republic is correct
that a “consumer” includes any purchaser, this Court’s refusal to provide a
supplemental instruction on that issue did not prejudice Republic. Republic argues
that “a properly instructed jury might well have found in [its] favor.” Cook, 673 F.3d
at 629–30. Republic makes a number of leaps in logic in support of its argument.
First, it contends that because the jury’s sole prior communication with the Court
was a request for Burns’s report, which was only relevant to apportioning profits for
Republic’s Lanham Act claim, the jury was considering ruling in Republic’s favor.
Second, because the Court refused to supply a supplemental instruction, Republic
reasons that the jury must have inferred that “consumers” means “end users.” And

And even assuming Republic is correct that a “consumer” can include any purchaser,
the jury instructions themselves, when read in their entirety, impliedly contain that
definition. After the section that was the subject of the jury’s question, the next
requirement was that the false or misleading statement deceive or potentially deceive
a “substantial segment of HBI’s audience.” R. 801 at 3. HBI’s audience, according to
the evidence presented at trial, included HBI’s direct purchasers, such as wholesalers
and distributors. See Durham, 645 F.3d at 894 (Trial court did not err by directing
jury to read the jury instructions where closely rereading the instructions would have
answered the jury’s question.).
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finally, because the question was the final communication from the jury before its
verdict, this inference must have been “decisive” to its verdict. R. 937 at 12.
Republic’s arguments are pure speculation. There is no reason to believe that
the jury requested Burns’s report for any purpose other than a desire to have a copy
of all evidence presented at trial, and there is no evidence that the jury must have
decided “consumers” only means “end users,” rather than that “consumers” includes
wholesalers or distributors. Additionally, Republic ignores that the final juror note
also included questions regarding whether there needed to be evidence of a “misled
statement” and whether Republic needed to show “an actual misled consumer.” These
questions may just as well have been “decisive” based on their timing. In the end,
such speculation is irrelevant. United States v. Cherek, 734 F.2d 1248, 1252 (7th Cir.
1984) (“It would be speculative to endeavor to articulate . . . just what motivated the
jury to ask this question.”).
Republic also claims that the jury’s verdict—ruling in Republic’s favor on its
IUDTPA and unfair competition claims, but against Republic on its false advertising
claim—is “strongly suggestive” that its confusion on the definition of a “consumer”
was dispositive. Republic argues that “the single most critical distinction between the
Lanham Act claim and the other two claims” is the Lanham Act’s requirement that a
misleading statement actually mislead a consumer. 6 R. 801 at 3, 10–11. This is not,

Notably, this Court previously declined to adopt a similar inference proposed by HBI
in its response to Republic’s motion for disgorgement. According to HBI, the split
verdict implied that the jury found that the statements at issue did not or were not
likely to influence consumers’ purchasing decisions. But, as this Court explained,

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however, the only “critical” distinction between these claims. The numerous
differences are summarized in the chart below:
Lanham Act false advertising
elements (R. 801 at 3, 8)
False or misleading statement of fact.
To be misleading, statement must have
actually misled a consumer.

The statement was made in a
commercial advertisement.
The statement actually deceived or had
the tendency to deceive a substantial
segment of the defendant’s audience.
The deception was likely to influence
the purchasing decisions of consumers.
The statement entered interstate
commerce.
The claimant has been or is likely to be
injured as a result of the false or
misleading statement.
The defendant acted willfully, knowing
the statement was false or misleading,
or indifferent to the fact that the
statement was false or misleading.

IUDTPA/unfair competition
elements (R. 801 at 9–11)
Representation that goods have
“characteristics, uses, or benefits that
they do not have,” or that goods are “of
a particular standard, quality, or grade”
that they are not, or any other conduct
that “creates a likelihood of confusion or
misunderstanding.”
Not required.
The conduct creates a likelihood of
confusion or misunderstanding.
Not required.
The advertising occurred primarily and
substantially within the State of
Illinois.
Not required.
Not required.

The jury may have distinguished between Republic’s false advertising claim and its
IUDTPA claim for any one of these differences. For example, the jury may have found
that HBI did not act willfully (a requirement of under the Lanham Act, but not under
the IUDTPA), or that Republic was not injured by the false or misleading statements

“this is reading too much into the jury’s verdict. . . . The Court will not speculate on
the basis of the jury’s verdict without a special finding.” R. 930 at 9.
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(a requirement under the Lanham Act, but not under the IUDTPA). Without a special
finding, it would be improper for this Court to speculate on the reason for the jury’s
verdict. See Melendez v. Ill. Bell Tel. Co., 79 F.3d 661, 670 (7th Cir. 1996) (“We see no
reason to pluck from the verdict speculative findings not necessarily reached by the
jury.”).
Finally, even if the Court had told the jury that the term “consumer” included
all purchasers of HBI products, and even if this were a dispositive issue, Republic did
not provide evidence at trial outside of the opinions of its own founder and corporate
officer 7 that a single consumer (whether end user or distributor) was misled. Republic
did not, for example, present any survey evidence or expert testimony establishing a
misled purchaser, nor did it call a single distributor, wholesaler, or end user to testify
about whether they were misled. Republic’s former Executive Vice President and
Chief Legal Officer, Seth Gold, testified as such:
Q: “You did not testify that a single end-user customer will testify in this
case for Republic, right?”
A: “. . . [T]hat’s correct.”
Q: “You are well aware that there are going to be no surveys introduced
by Republic in this lawsuit to demonstrate deception, correct?”

Republic founder, Don Levin, testified that, in his opinion, “the stores at the trade
shows” and “distributors at the trade shows . . . are affected by these things.” R. 848.
But this testimony goes to materiality of the statements and does not prove that any
trade show attendee was actually misled, a requirement in order to prove a
misleading statement. Other statements at trial included Levin testifying that, in his
experience, HBI’s advertising claims “matter” to “customers,” id. at 355–60, and Gold
stating that “people who purchased natural hemp gum” would “be deceived” if they
found out that the gum was not made with natural hemp, R. 851 at 1064. Neither of
these statements attempted to differentiate wholesalers from end users.
7

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A: “That’s correct.”
Q: “You are also aware that there won’t be a single customer witness . .
. who will testify for Republic how they interpret a single one of these
statements, right?”
A: “That’s correct.”
R. 851 at 1115–16. This lack of evidence may well have been the basis for the jury’s
verdict, and the supplemental instruction requested by Republic would not have
made a difference.
In sum, there is simply no indication that this Court’s refusal to provide a
supplemental instruction to the jury was prejudicial to Republic, and its motion for a
new trial on this basis fails.
CONCLUSION
For the foregoing reasons, Republic’s motion for a new trial [937] is denied.

ENTERED:

__________________________________
Honorable Thomas M. Durkin
United States District Judge
Dated: September 22, 2023

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