Exel North America, Incorporated v. Integrated Dispense Solutions LLC et al

Filing 41

ORDER Denying Plaintiff's 37 Motion to Find Defendants in Contempt. Signed by District Judge Matthew F. Leitman. (Monda, H)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
EXEL NORTH AMERICA, INC.,
Plaintiff,

Case No. 14-cv-12646
Hon. Matthew F. Leitman

v.
INTEGRATED DISPENSE
SOLUTIONS LLC, et al.,
Defendants.
_________________________________/
ORDER DENYING PLAINTIFF’S MOTION
TO FIND DEFENDANTS IN CONTEMPT (ECF #37)
This is a trade secret and Lanham Act case. On October 23, 2014, this Court
entered an Agreed Preliminary Injunction that, among other things, prohibited
Defendants from using Plaintiff’s so-called “Diamond Design.” (See ECF #29.)
On or about December 18, 2014, Plaintiff’s counsel contacted Defendants’ counsel
complaining that the website of Defendant Integrated Dispense Solutions LLC
(“IDS”) was displaying the Diamond Design in violation of the Agreed
Preliminary Injunction and demanding that the design be removed. (See ECF #373.) It is undisputed that IDS removed the Diamond Design from its website by
noon on December 19, 2014. (See Declaration of David Ritchie, ECF #39-2 at ¶7.)
Nonetheless, on that same day, with full knowledge that IDS had already removed
the Diamond Design from its website within 24 hours of Plaintiff’s demand,
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Plaintiff filed a motion to hold Defendants in civil contempt. (See ECF #37.)
Plaintiff seeks as relief: (1) an order from this Court requiring a “principal of IDS
to provide a statement under oath affirming[,]” among other things, that “IDS and
all of its employees have ceased using the Diamond Design”; (2) payment from
IDS “in the amount of $50 per day for each day since October 23, 2014 through the
date of removal of the Diamond Design from IDS’s website”; and (3) attorneys
fees incurred as a result of filing its motion for contempt. (See ECF #37 at 2, Pg.
ID 354.)
In response to Plaintiff’s motion, the Defendants have submitted evidence –
a sworn declaration from Defendant David Ritchie, IDS’s General Manager –
showing that the violation of the Agreed Preliminary Injunction was inadvertent
and was promptly corrected. (See ECF #37-3.) Plaintiff has not submitted any
evidence that suggests a contrary conclusion.
There is no basis to hold Defendants in contempt. The purposes of civil
contempt are “to coerce an individual to perform an act or to compensate an
injured complainant.” United States v. Bayshore Assoc., Inc., 934 F.2d 1391, 1400
(6th Cir. 1991). Here, a contempt order is not necessary to coerce compliance with
the Agreed Preliminary Injunction; Defendants are already complying with that
order. Indeed, in one of the primary cases cited by Plaintiff in its reply brief, this
Court declined to hold a defendant in contempt with respect to certain violations of
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a judgment that had already been cured by the time the Court ruled. See Belfor
USA Group, Inc. v. Insurance Reconstruction, LLC, 755 F.Supp.2d 812, 818 (E.D.
Mich. 2010) (declining to issue “affirmative order” of contempt where it was not
“necessary to achieve” compliance because defendant had already cured the
relevant non-compliance). In the primary cases cited by Plaintiff, the courts that
entered contempt orders did so in order to remedy violations that remained
outstanding at the time the court ruled. See, e.g., Glover v. Johnson, 934 F.2d 703,
708 (6th Cir. 1991) (affirming order holding state prison officials in contempt for
continued non-compliance with order requiring implementation of educational
programs in prisons); Belfor USA Group, Inc., 755 F.Supp.2d at 817-818 (granting
relief on that portion of plaintiff’s contempt motion that sought to remedy
outstanding non-compliance with judgment); N.L.R.B. v. Cincinnati Bronze, Inc.,
829 F.2d 585, 590 (6th Cir. 1987) (affirming contempt order issued to compel
subpoena recipient to provide testimony and information that it was refusing to
provide).1
Next, Defendants correctly argue that Plaintiff has offered no reasonable
basis for assessing $50 per day of violation as damages. There is no evidence that
Plaintiff suffered any damages as a result of the inadvertent violation of the Agreed
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This Court does not mean to suggest that a contempt order is never appropriate
where a violation of a court order has been cured. For purposes of resolving this
motion, it is sufficient to hold, as the Court does, that Plaintiff is not entitled to a
contempt order on the basis of the cured violation here.
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Preliminary Injunction. For the same reason, there is no basis for an award of
attorneys fees. See Belfor USA Group, Inc., 755 F.Supp.2d at 818 (declining to
award costs or attorneys fees or compensation for other losses where moving party
failed to present evidence to establish or support alleged losses).
Finally, Plaintiff does not need an order from this Court to obtain
confirmation from Defendants that they are not using the Diamond Design. (See
Plaintiff’s request for relief.) Plaintiff may serve Defendants with interrogatories
and/or requests to admit inquiring as to whether Defendants are using the Diamond
Design. Plaintiff may also inquire into this matter during a deposition pursuant to
Rule 30(b)(6) of the Federal Rules of Civil Procedure.

At this stage in the

litigation, Plaintiff has access to substantial discovery tools that will allow Plaintiff
to assess Defendants’ compliance with the Agreed Preliminary Injunction.
Plaintiff does not need a court order to test Defendants’ compliance.
The Court shares Defendants’ view of this motion: “Ultimately, Plaintiff did
not need to spend the time and money to draft and file the present motion – this
matter was resolved with a simple [letter] to Defendants’ counsel.” (ECF #39 at 2,
Pg ID 373.) Accordingly, for all of the reasons stated above, Plaintiff’s motion to
find Defendants in contempt is DENIED.
s/Matthew F. Leitman
MATTHEW F. LEITMAN
UNITED STATES DISTRICT JUDGE
Dated: January 13, 2015
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I hereby certify that a copy of the foregoing document was served upon the
parties and/or counsel of record on January 13, 2015, by electronic means and/or
ordinary mail.
s/Holly A. Monda
Case Manager
[phone]

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