North Atlantic Operating Company, Inc., et al. v. Babenko, et al.
Filing
101
ORDER Granting Preliminary Injunction. Signed by District Judge Terrence G. Berg. (KJac)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NORTH ATLANTIC OPERATING
COMPANY, INC., and NATIONAL
TOBACCO COMPANY, L.P.,
Plaintiffs,
v.
Case No. 15-14013
HON. TERRENCE G. BERG
HON. DAVID R. GRAND
DIMITRIY BABENKO, et al.,
Defendants.
/
ORDER GRANTING PRELMINARY INJUNCTION
On November 16, 2015, Plaintiffs North Atlantic Operating Company, Inc.,
and National Tobacco Company, L.P. filed a Complaint alleging that Defendants
are engaged in manufacturing, distributing, or selling counterfeit ZIG-ZAG®
cigarette paper products. (See Dkt. 1 at ¶¶ 6, 13-14.) In addition to their
Complaint, Plaintiffs filed an ex-parte motion for a temporary restraining order
(“TRO”), preliminary injunction, and other relief. (Dkt. 4.) The Court held an ex
parte hearing on November 18, 2015 in the matter of the TRO (Dkt. 11), and
granted a TRO, asset restraining order1, expedited discovery order, and order
permitting service by alternative means on November 19, 2015 (Dkt. 12).2
With respect to the restraint on certain assets, the order provides that Defendants can, upon three
business days’ written notice to the Court and Plaintiffs’ counsel and upon proper showing, appear
and move for the dissolution or modification of that provision. (Dkt. 12, p. 21.)
1
This Court detailed the facts and procedural circumstances of this case in its November 19, 2015
order, familiarity with which is assumed. (Dkt. 12). Moreover, with respect to the application of the
four factors used by the Sixth Circuit to determine whether injunctive relief is appropriate, the Court
relies on its analysis and findings in its November 19, 2015 order granting Plaintiffs a TRO. (Id. at
3-13.) At the November 18, 2015 hearing and in their filings, Plaintiffs presented substantial
2
The Court also issued an order directing all Defendants to show cause in
person on December 3, 2015, in Detroit, Michigan, “why a preliminary injunction
pursuant to Federal Rule of Civil Procedure 65 should not be issued” against them.
(Id. at 13.) Defendants were thus notified that “failure to attend the show cause
hearing scheduled [in the order] shall result in the issuance of a preliminary
injunction”. (Dkt. 12, p. 22.) Defendants were served on November 23, 2015 via
email. (Dkts. 19-89.)
The hearing on the preliminary injunction was held as scheduled on
December 3, 2015, at 10:00 am in Courtroom 861 of the United States District
Court for the Eastern District of Michigan in Detroit, Michigan. At the hearing,
Plaintiffs’ Counsel presented a report to the Court summarizing the efforts made to
serve each of the Defendants, as well as all communications between Plaintiffs and
Defendants, since the TRO was entered. The Court conducted a detailed review of
this report on the record, questioning Plaintiffs’ Counsel as to the circumstances
pertaining to each named Defendant. The Court is satisfied that Plaintiffs’ Counsel
has made good faith efforts to serve and to communicate with each of the
Defendants, that a number of the Defendants have already settled the case or
otherwise responded, and that Plaintiffs’ Counsel is pursuing a process which
adequately respects the due process rights of the Defendants.
evidence in support of injunctive relief. This preliminary injunction relies on that same evidence,
which has not been controverted, though Defendants were invited to do so. Although injunctive relief
is an extraordinary remedy, there is a sufficient basis for granting it in this case and Defendants
offer no evidence, or response of any kind, that would suggest otherwise.
2
Prior to the hearing, Defendants Matthew Yahes, Planet Earth, eBay Seller
travellingmatt834, Aliaksandr Zhelezniak, Alex Shvarz, eBay Seller
123zhelezniak, Voltcandy, eBay Seller voltcandy, Dhawal Soni, eBay Seller
dhaw_us2014, Defonseca LLC, Laszlo Tolgyes, and eBay Seller pompanobeach all
entered separate stipulations with North Atlantic agreeing to be bound to
preliminary injunctions. (Dkts. 94-99.) Accordingly, these Defendants were not
required to appear in person.
None of the remaining Defendants or their representatives appeared,
however, or otherwise responded to Plaintiffs’ motion. With respect to these
remaining Defendants, having read and considered the papers and arguments of
counsel, and good cause appearing, IT IS HEREBY ORDERED that, pursuant to
Federal Rule of Civil Procedure 65, any Defendants, their respective agents,
servants, employees, and officers, and all other persons in active concert or
participation with them, who receive actual notice of this order by personal service
or otherwise, are hereby enjoined and restrained, pending the final resolution of
this action, from directly or indirectly, anywhere in the world:
1.
Importing, shipping, manufacturing, distributing, delivering,
advertising, promoting, making, purchasing, offering for sale, selling, or otherwise
disposing of, in any manner, any counterfeit or infringing ZIG--ZAG® brand
cigarette paper products, including, but not limited to, ZIG-ZAG® 11/4 Size French
Orange (“ZIG-ZAG® Orange”), or any cigarette paper products bearing:
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(i)
infringing or counterfeit versions of the ZIG-ZAG® Trademarks, the
NAOC® Trademarks, the NAOC© Copyright, and/or the ZIG-ZAG® Orange Trade
Dress (as these terms are defined in North Atlantic’s Complaint in the abovecaptioned action), which appear alone or in combination on all cartons and booklets
of ZIG-ZAG® Orange cigarette paper products distributed by North Atlantic in the
United States; and/or
(ii)
the false statement that such products are “Distributed by North
Atlantic Operating Company, Inc.” or otherwise under the control or supervision of
North Atlantic, when they are not;
2.
Importing, shipping, manufacturing, distributing, delivering,
advertising, promoting, making, purchasing, offering for sale, selling, passing off,
or otherwise disposing of, in any manner, any purported North Atlantic products
that are not actually produced, imported, or distributed under the control or
supervision of North Atlantic and/or approved for sale in the United States by
North Atlantic, in connection with the ZIG-ZAG® or NAOC® Trademarks or the
NAOC© Copyright, or inducing or enabling others to commit any of the aforesaid
actions;
3.
Committing any acts calculated to cause purchasers to believe that
counterfeit or infringing ZIG-ZAG® cigarette paper products, including ZIG¬ZAG® Orange, originate with North Atlantic, when they do not;
4.
In any way infringing or damaging the ZIG-ZAG® or NAOC®
Trademarks, the NAOC© Copyright, or the ZIG-ZAG® Orange Trade Dress;
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5.
Otherwise unfairly competing with North Atlantic in any way;
6.
Forming or causing to be formed any corporation or other entity that
engages in any of the above-described acts;
7.
Attempting, causing, or assisting in any of the above-described acts,
including, but not limited to, enabling others in the above-described acts, or
passing on information to others to allow them to do so;
8.
Moving, destroying, altering, deleting, or otherwise disposing of any
documents, records, communications, and/or electronically stored information
concerning the import, manufacture, distribution, advertisement, promotion,
making, purchase, offer to sell, or sale of any product that has been or is intended
to be sold in packaging containing the ZIG-ZAG® or NAOC® Trademarks, the
NAOC© Copyright, or the ZIG-ZAG® Orange Trade Dress, including such
information stored within Defendants’ eBay, PayPal, and other related online
marketplace and/or financial accounts;
9.
Accessing, using, linking to, transferring, selling, exercising control
over, or otherwise owning an eBay account or any other online marketplace
account that is used to offer, sell, and distribute any counterfeit or infringing ZIGZAG® Orange products;
10.
Accessing, using, linking to, transferring, selling, exercising control
over, or otherwise owning a PayPal account or other online payment processing
account linked to Defendants’ above-referenced online marketplace accounts
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through which Defendants are or have been offering, selling, and distributing
counterfeit or infringing ZIG-ZAG® Orange products; and
11.
Accessing, transferring, or disposing of any assets obtained as
proceeds of Defendants’ unauthorized sales of infringing or counterfeit ZIG-ZAG®
Orange.
SO ORDERED.
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: December 4, 2015
Certificate of Service
I hereby certify that this Order was electronically submitted on December 4, 2015,
using the CM/ECF system, which will send notification to each party.
By: s/A. Chubb
Case Manager
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