Select Comfort Corporation v. Baxter et al

Filing 997

MEMORANDUM OPINION AND ORDER. Regarding Motion 823 and Motions in Limine 838 847 848 849 850 851 852 853 854 855 856 857 873 877 881 885 889 893 897 901 913 916 919 922 926 929 932 935 938 941 948 951 .(Written Opinion) Signed by Judge Donovan W. Frank on 6/16/2023.(See Order for Specifics) (las)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Select Comfort Corporation and Select
Comfort SC Corporation,

Civil No. 12-2899 (DWF/TNL)

Plaintiffs,
v.

MEMORANDUM
OPINION AND ORDER

John Baxter; Dires, LLC d/b/a Personal
Touch Beds and Personal Comfort Beds;
Digi Craft Agency, LLC; Direct
Commerce, LLC d/b/a Personal Touch
Beds; Scott Stenzel; and Craig Miller,
Defendants.
This matter came before the Court for a pretrial hearing on May 31, 2023. Except
to the extent modified herein the Court incorporates into this Order its prior Motion in
Limine rulings filed on December 5, 2016 (Doc. No. 510). Consistent with, and in
addition to the Court’s rulings and remarks from the bench, and based upon the
memoranda, pleadings, and arguments of counsel, and the Court being otherwise duly
advised in the premises, the Court hereby enters the following:
ORDER
1.

Plaintiffs’ motion for an order amending the case caption to substitute the

two currently-named Plaintiffs (Doc. No. [823]), both of whose names have been
changed, with a single Plaintiff: “Sleep Number Corporation,” is respectfully DENIED.
Given the pending jury trial, pursuant to Fed. R. Civ. P. 15 and 25, the Court concludes
that this evidence does not survive the Court’s Article 4 analysis including Rule 403. In

the event either party wishes to address the case caption and substitution of parties during
the trial, the Court will require a Rule 104 offer of proof outside the presence of the jury.
PLAINTIFFS’ MOTIONS IN LIMINE
1.

Plaintiffs’ Motion in Limine No. 1 (Doc. No. [838]) is GRANTED. Except

to the extent modified herein the Court incorporates into this Order its prior Motion in
Limine rulings filed on December 5, 2016 (Doc. No. 510).
2.

Plaintiffs’ Motion in Limine No. 2 (Doc. No. [847]) that the Court instruct

the jury that the “Sleep Number” mark is strong and famous is GRANTED. The Court
will permit each party to submit a proposed instruction to the Court at the next hearing in
this matter. The instruction will be utilized at voir dire and in the preliminary instructions
to the jury. Evidence, testimony, and argument at trial attacking the strength or
awareness of the “Sleep Number” mark or otherwise contesting that the “Sleep Number”
mark is strong and famous is presumptively inadmissible, absent further ruling of the
Court. The Court will address at the next hearing the issue of whether the Court will
permit the use of the word “incontestable” in any instruction to the jury.
3.

Plaintiffs’ Motion in Limine No. 3 (Doc. No. [848]) for an order that actual

confusion has amply been established and that Defendants are precluded from contesting
the actual confusion is DENIED. Such evidence is presumptively inadmissible absent
further ruling of the Court.
4.

Plaintiffs’ Motion in Limine No. 4 (Doc. No. [849]) to exclude Defendants

from conducting a bed demonstration similar to the first trial is respectfully DENIED.
The Court will also permit “Sleep Number” to do a bed demonstration if they so choose.
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Finally, the Court will address any limitations by way of a Rule 104 offer of proof on
whether the testimony should be limited in any way during the bed demonstrations.
5.

Plaintiffs’ Motion in Limine No. 5 (Doc. No. [850]) to exclude evidence

and testimony of the prior trial in this case and of other actions between the parties and
related allegations is GRANTED IN PART and DENIED IN PART as follows:
a.

Any evidence of the procedural history of this case including the

prior trial and the Eighth Circuit Decision is presumptively inadmissible. The
Court concludes that this evidence does not survive the Court’s Article 4 analysis,
including Rule 403.
b.

Any evidence of Defendants’ antitrust claims and allegations of anti-

competitive conduct is presumptively inadmissible. The Court concludes that this
evidence does not survive its Article 4 analysis.
c.

Any evidence of other litigation or enforcement actions is

presumptively inadmissible. The Court concludes that other litigation or
enforcement actions do not survive the Court’s Article 4 analysis, including
Rule 403.
d.

Assuming proper foundation is laid, evidence of Plaintiffs’ cease-

and-desist letters to the Defendants is presumptively admissible. The Court
concludes this evidence survives its Article 4 analysis.
e.

Defendants’ Exhibits 443-460 are presumptively inadmissible. This

evidence does not survive the Court’s Article 4 analysis.

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f.

Plaintiffs’ request to prohibit any derogatory, disparaging or

pejorative references in regard to “Sleep Number,” including anything that
suggests “Sleep Number” is anticompetitive or anything that references the
financial status of the parties is respectfully DENIED as premature. The Court
will require both parties to make a Rule 104 offer of proof in the event there is an
issue, whether on direct or cross-examination of a witness or an exhibit that relates
to this issue.
6.

Plaintiffs’ Motion in Limine No. 6 (Doc. No. [851]) to exclude evidence,

testimony, and argument regarding whether “Sleep Number” has trademark rights in
“Number Bed” is GRANTED. Specifically, neither party shall make any reference to
the prior jury verdict on “Number Bed” or present evidence that “Sleep Number” does
not possess trademark rights in “Number Bed,” or that “Sleep Number” has trademark
rights in “Number Bed.” The Court concludes that this evidence does not survive the
Court’s Article 4 analysis, including Rule 403. Moreover, the key issue for both parties
is whether Defendants’ use of the phrase “Number Bed” is done in a way that confuses
customers and infringes in any way upon “Sleep Number’s” mark vis-a-vis whether
anyone has trademark rights in the phrase “Number Bed” or whether Defendants’ use of
the phrase constitutes false advertising.
7.

Plaintiffs’ Motion in Limine No. 7 (Doc. No. [852]) to exclude evidence,

testimony, and argument of fair use or that “Number Bed” is generic or descriptive is
GRANTED. The Court concludes that this evidence does not survive the Court’s

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Article 4 analysis, including Rule 403, and relies on the procedural history of the case
and the Eighth Circuit’s decision.
8.

Plaintiffs’ Motion in Limine No. 8 (Doc. No. [853]) to exclude argument,

evidence, and testimony regarding lost profits and damages causation is GRANTED IN
PART and DENIED IN PART as follows:
a.

Given the fact that Select Comfort has not limited itself to seeking

only disgorgement of profits of the Defendants and is seeking damages in the form
of its “saved advertising cost” model, the Court finds that there has to be an initial
showing of causation as a measure of actual damages. Admittedly, once that is
established, it becomes the infringer’s burden to prove that any proportion of its
total profits may not have been due to the use of the infringing mark. In light of
the Court’s decision, the Court will address this issue at the next hearing in part as
it relates to instructions to the jury, with the necessity of any further rulings of the
Court.
9.

Plaintiffs’ Motion in Limine No. 9 (Doc. No. [854]) to exclude evidence

and testimony postdating the liability and damages period is GRANTED. However, in
the event either party asserts other evidence, by way of testimony or exhibit,
demonstrating that the door has been opened on this issue and that testimony should be
received, the Court will require a Rule 104 offer of proof outside of the presence of the
jury.
10.

Plaintiffs’ Motion in Limine No. 10 (Doc. No. [855]) to allow use of partial

call recordings of Defendants’ customers is GRANTED. The Court has made this ruling
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based upon its analysis of Article 4 and in the context of the issues raised by Defendants
regarding the Rule of Completeness pursuant to Rule 106. The Court will require
Plaintiffs’ counsel to disclose what call recordings of Defendants’ customers they will be
using at least 6 weeks prior to trial, but the Court’s ruling does not require the Plaintiffs
to provide the actual clips or portions of the recordings that they will play from the
particular customer or customers. This also survives the Court’s Article 4 analysis and
the Court’s 102 and 106 analyses.
11.

Plaintiffs’ Motion in Limine No. 11 (Doc. No. [856]) to prohibit any

misrepresentation about “Sleep Number’s” brand awareness survey and to preclude
evidence of awareness of “Number Bed” is GRANTED IN PART and DENIED IN
PART as follows:
a.

Assuming proper foundation is laid, the Court will permit the

admission of Defendants’ Trial Exhibit 83. The Court concludes that the
admission of Trial Exhibit 83, and the issues related to that based upon the Court’s
review of the first trial, survives its Article 4 analysis in large part because the
evidence goes to weight versus admissibility. However, the Court will address at
the next hearing issues raised by Plaintiffs about direct or cross examination
directed at the misrepresentation of the brand awareness survey. Given the fact
that, as the Court noted in its order filed on July 26, 2022 (Doc. No. 775), the key
issue is the Defendants’ use of the phrase “Number Bed” which is separate and
distinct from whether Plaintiffs have trademark rights in “Number Bed” because
Plaintiffs do not have trademark rights in “Number Bed.” Consequently, while it
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has been determined that Plaintiffs do not have trademark rights in “Number Bed”,
whether Defendants’ use of the phrase in a way that is confusingly similar to
Plaintiffs’ marks and advertisements remains an open question in the upcoming
trial. Plaintiffs’ trademark infringement claim encompasses allegations that
Defendants used advertisements with phrases that are confusingly similar to the
“Sleep Number” mark, including phrases containing the words “Number Bed”.
The fact that Plaintiffs do not have trademark rights in the phrase “Number Bed”
does not preclude a finding that Defendants’ use of that term is confusingly similar
to the “Sleep Number” mark.
b.

The Court will address any remaining issues with respect to

Defendants’ Trial Exhibit 83 and the scope of direct and cross examination at the
next hearing in light of the Court’s ruling on both Plaintiffs’ and Defendants’
motions in limine.
12.

Plaintiffs’ Motion in Limine No. 12 (Doc. No. [857]) to preclude improper

impeachment evidence is GRANTED IN PART and DENIED IN PART as follows:
a.

The motion is GRANTED to the extent the Court will address any

concerns either at the next hearing in this case or requiring a Rule 104 offer of
proof during the trial of the Defendants depending upon the request of Plaintiffs to
be conducted, of course, outside of the presence of the jury.
b.

It is DENIED to the extent that it is premature and as the Court

noted above, the Court will require a Rule 104 offer of proof if there are specific
concerns, whether it is related to prior trial testimony, deposition testimony, or
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other prior statements, and whether by the witness who is called to the stand or
other witnesses, including corporate representatives.
DEFENDANTS’ MOTIONS IN LIMINE
1.

Defendants’ Motion in Limine No. 1 (Doc. No. [913]) to preclude Select

Comfort from introducing the jury verdict regarding strength and fame of the “Sleep
Number” mark is GRANTED IN PART and DENIED IN PART consistent with the
Court’s ruling on Plaintiffs’ motion in limine No. 2. The Court will be instructing the
jury that the “Sleep Number” mark is strong and famous but will not be reading the jury
verdict or informing the jury that a prior jury has made this finding.
a.

The Court will address at the next hearing, consistent with its

Article 4 analysis, the specific language of the instruction to the jury that “Sleep
Number” is a strong and famous mark, as well as discuss what evidence or
testimony will no longer be needed, or as Defendants say, would be otherwise
cumulative.
2.

Defendants’ Renewed Motion in Limine No. 2 (Doc. No. [873]) to admit

the Rappeport Survey is respectfully DENIED consistent with the Court’s ruling in the
first trial. The Court concluded and continues to conclude that the Rappeport Report
itself is presumptively inadmissible pursuant to its Article 4 analysis; however, the facts
of the survey are presumptively admissible based upon the Court’s Article 4 analysis,
assuming the proper foundation for the facts of the survey are established.
3.

Defendants’ Renewed Motion in Limine No. 3 (Doc. No. [877]) to exclude

documents containing Defendants’ internal communications regarding conversations with
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consumers is respectfully DENIED consistent with the Court’s ruling in the first trial
(Doc. No. 510 at 7).
4.

Defendants’ Motion in Limine No. 4 (Doc. No. [916]) to exclude Plaintiffs’

secondary meaning survey expert Sarah Butler is GRANTED IN PART and DENIED
IN PART as follows:
a.

The Court will not permit the use of the word or phrase “secondary

meaning” by Sarah Butler.
b.

However, the way in which Defendants used “Number Bed” is

relevant to the issue of confusion and the unfair competition and trademark
infringement claims. Specifically, whether Defendants’ use of the phrase
“Number Bed” is to remain a part of “Sleep Number’s” claims survives the
Court’s Article 4 analysis.
5.

Defendants’ Renewed Motion in Limine No. 5 (Doc. No. [881]) to establish

the relevancy of Plaintiffs’ enforcement actions is respectfully DENIED consistent with
the Court’s earlier ruling except for the cease-and-desist letters sent to the Defendants.
The Court has previously ruled and continues to rule that any evidence of other litigation
or enforcement actions is presumptively inadmissible. The Court continues to conclude
that other litigation or enforcement actions do not survive the Court’s Article 4 analysis,
including Rule 403.
6.

Defendants’ Renewed Motion in Limine No. 6 (Doc. No. [885]) to bar

Plaintiffs’ use of “incontestable” is respectfully DENIED as premature. The issue will

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be addressed at the next hearing in this matter consistent the Court’s ruling in Plaintiffs’
motion in limine No. 2.
7.

Defendants’ Motion in Limine No. 7 (Doc. No. [889]) to admit Defendants’

Rule 1006 charts and related exhibits is DENIED as premature. The Court will address
this issue at the next hearing, including exhibits related to the Defendants’ motion. Once
the Court has made an additional ruling at the next hearing, it is likely the Court will
permit a Rule 104 offer of proof on the admission of summary charts under Rule 1006
during the trial.
8.

Defendants’ Motion in Limine No. 8 (Doc. No. [919]) to exclude prior acts

of Scott Stenzel is GRANTED IN PART and DENIED IN PART as follows consistent
with the Court’s ruling during the first trial:
a.

Plaintiffs will not be allowed to reference or submit evidence of

bankruptcy, and Plaintiffs’ Trial Exhibit 663 (October 22, 2012 email) is excluded,
on Rule 403 grounds.
b.

All other evidence is presumptively admissible, assuming proper

foundation is laid, under the Court’s Article 4 analysis including Rule 403.
9.

Defendants’ Renewed Motion in Limine No. 9 (Doc. No. [893]) to exclude

testimony and evidence related to MattressQuote or MattressQuote.com is DENIED.
Such evidence, consistent with the Court’s ruling during the first trial, is presumptively
admissible, assuming proper foundation is laid, under the Court’s Article 4 analysis,
including Rule 403.

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10.

Defendants’ Renewed Motion in Limine No. 10 (Doc. No. [897]) to exclude

testimony and evidence related to Zero Gravity is DENIED. Such evidence is
presumptively admissible, assuming proper foundation is laid under the Court’s Article 4
analysis, including Rule 403.
11.

Defendants’ Motion in Limine No. 11 (Doc. No. [922]) to exclude or limit

reference to Defendants’ use of pseudonyms is DENIED. Such evidence is
presumptively admissible, assuming proper foundation is laid under the Court’s Article 4
analysis, including Rule 403.
12.

Defendants’ Renewed Motion in Limine No. 12 (Doc. No. [901]) to exclude

evidence of liability insurance is DENIED as premature. However, no reference to
liability insurance will be permitted unless the “door is opened” and Plaintiffs first
approach the Court and make a Rule 104 offer of proof.
13.

Defendants’ Motion in Limine No. 13 (Doc. No. [926]) to exclude

testimony of Plaintiffs’ secret shoppers is GRANTED IN PART and DENIED IN
PART as follows:
a.

Such evidence is presumptively admissible, assuming proper

foundation is laid, under the Court’s Article 4 analysis, including Rule 403.
b.

However, neither party has offered secret shoppers as trial witnesses.

In the event that either party wishes to address the existence or issue of secret
shoppers with direct or cross examination of a witness, or the secret shoppers
program, a Rule 104 offer of proof must be made to the Court outside the presence
of the jury. Plaintiffs have indicated they do not intend to submit secret shopper
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evidence at trial, but the issue did come up with respect to the secret shopper
program in the first trial which the Court will not permit as noted absent a Rule
104 offer of proof.
14.

Defendants’ Renewed Motion in Limine No. 14 (Doc. No. [929]) to exclude

expert’s testimony and reports regarding surveys conducted by others is GRANTED IN
PART and DENIED IN PART as follows:
a.

Assuming proper foundation is laid, the facts of the survey evidence

are presumptively admissible if they survive the Court’s Article 7 analysis,
including Rule 703. Whether a Rule 104 offer of proof will be necessary prior to
an inquiry on direct or cross examination of such a survey will be addressed at the
time of trial.
b.
15.

The expert reports themselves, however, are inadmissible.

Defendants’ Motion in Limine No. 15 (Doc. No. [932]) to exclude

spreadsheets identifying Defendants allegedly infringing and/or false online
advertisements is DENIED. Assuming proper foundation is laid, such spreadsheets will
be presumptively admissible under the Court’s Article 4 analysis, including Rule 403.
However, given the issue raised by Defendants with respect to Plaintiffs’
Exhibit 990(1)(2), in addition to Plaintiffs’ concern about Defendants’ cross examination
of “Sleep Number’s” witness in the first trial about the way the interrogatory was
prepared, the Court is willing to address this issue at the next hearing in this matter or a
Rule 104 offer of proof at trial.

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16.

Defendants’ Renewed Motion in Limine No. 16 (Doc. No. [948]) to exclude

testimony and evidence related to Defendants that have defaulted is GRANTED.
However, consistent with the Court’s ruling during the first trial, the Court allowed
evidence related to the conduct of John Baxter and Scott Stenzel while operating the
defaulted Defendants because the Court found that it was relevant to their potential
individual liability, which remains an issue in the upcoming trial. The Court will not
permit Plaintiffs to offer evidence that certain Defendants defaulted and that was not
offered or admitted in the first trial either. In so ruling, the Court also reviewed the Joint
Statement of the Case and the requests and objections of each party. The Court’s ruling
survives its Article 4 analysis, including Rule 403.
17.

Defendants’ Motion in Limine No. 17 (Doc. No. [935]) to admit the jury’s

verdict that Select Comfort has no rights in “Number Bed” and precludes Select Comfort
from arguing it has rights in “Number Bed” is GRANTED IN PART and DENIED IN
PART as follows:
a.

The Court DENIES the motion to the extent that it will not permit

any reference to the jury verdict or use of the phrase “no rights in Number Bed.”
The Court finds that pursuant to its Article 4 analysis, the phrase of no trademark
rights or no rights in “Number Bed” does not pass its Article 4 analysis, including
Rule 403.
b.

However, Plaintiffs cannot claim that it has rights in “Number Bed”

and cannot refer to “secondary meaning” in “Number Bed” at the upcoming trial.
As the Court has noted in its previous summary judgment order (Doc. No. 775),
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the issue before the jury will be the way in which the Defendants use the phrase
“Number Bed.”
18.

Defendants’ Motion in Limine No. 18 (Doc. No. [938]) to exclude the

testimony of Plaintiffs’ damages expert, Renee Marino is DENIED consistent with the
Court’s ruling in the first trial (Doc. No. 332 at 11-16). However, given the issues
relating to the scope of remand and the damages now alleged by Plaintiffs, the Court will
address any remaining issues with respect to Renee Marino at the next hearing in this
case. To the extent that Plaintiffs have suggested that the Court should not and cannot
consider this as a strictly Daubert matter given the dispositive motion nature of the case,
given the procedural history of the case and the issues now before the Court, that is
respectfully DENIED.
19.

Defendants’ Motion in Limine No. 19 (Doc. No. [941]) to exclude

previously alleged false statements on which Defendants prevailed during the first trial is
GRANTED IN PART and DENIED IN PART as follows:
a.

Given the assertion by both parties in their respective memoranda to

the Court and the asserted probative value that Plaintiffs assert on “admittedly
false statements” as relates to the confusion factors and, given the effect of these
on the potential change in the jury instructions and verdict forms, the Court will
address the specifics of this motion at the next hearing of the Court.
20.

Defendants’ Motion in Limine No. 20 (Doc. No. [951]) to exclude

Plaintiffs’ late-disclosed witness David Jordan-Huffman is provisionally DENIED,
which the Court will explain.
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The Court would like to know at the next hearing prior to trial whether Heather
Somers has been asked to testify and has refused to participate in any capacity in this
trial. Secondly, in the event the Court permits David Jordan-Huffman to testify, the
Plaintiffs shall make David Jordan-Huffman available for a deposition prior to trial, even
though the Court will not be continuing the trial, and the Court assumes that both parties
are aware that the prior testimony of Heather Somers will be available to both parties.
Consequently, in the event there is an issue regarding what either party intends to offer or
not offer with respect to Heather Somers’s trial testimony or deposition testimony, that
issue can be addressed at the next hearing as well.
EXHIBIT ISSUES
In light of the Court’s order on the parties’ motions in limine, the Court will
address at the next hearing any remaining issues on the admissibility of exhibits.
Dated: June 16, 2023

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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