Justia Civil Procedure Opinion Summaries

A clothing company filed a lawsuit against multiple e-commerce vendors, including a Chinese company, alleging trademark infringement, counterfeiting, unfair competition, and related claims under the Lanham Act. The defendants were identified in a document attached to the complaint. Because the defendants were primarily Chinese entities operating online, the plaintiff asserted it was difficult to determine their exact identities and addresses. The plaintiff sought and was granted permission by the United States District Court for the Northern District of Illinois to serve the defendants by email, which included sending a link to the complaint and other documents. The defendant, Hangzhou, engaged in settlement discussions but did not appear in court, leading to a default judgment. The court’s order also allowed the plaintiff to collect funds from third parties, including from Hangzhou’s Amazon account.After the plaintiff collected a portion of the judgment, Hangzhou appeared and moved to vacate the default judgment, primarily arguing that service by email in China was prohibited under the Hague Service Convention and thus the judgment was void for lack of proper service. The district court denied this motion, concluding that the Convention permits email service in China, and rejected other arguments related to Illinois post-judgment procedures.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s rulings. The appellate court held that the Hague Service Convention prohibits service by email in China, contrary to the district court’s conclusion. However, the appellate court determined that the district court must first decide whether the Convention applies to this case, specifically whether the defendant’s address was “not known,” which would render the Convention inapplicable. The Seventh Circuit therefore reversed the district court’s decision denying the motion to vacate the default judgment and remanded the case for further proceedings to resolve this threshold issue. View "Kangol LLC v Hangzhou Chuanyue Silk Import & Export Co., Ltd." on Justia Law

A holding company and its North Carolina insurance agency subsidiary, which function as intermediaries between clients and insurance carriers, experienced significant employee dissatisfaction after a shift in commission structure and a pay freeze in early 2020. This led to multiple employees, including both producers and account managers, leaving over several months to join a direct competitor, a new agency formed by a former employee. The departing employees had signed agreements with non-solicitation and confidentiality clauses. During their departures, some employees forwarded company documents to personal accounts, and, after litigation began, engaged in extensive deletion of electronic evidence.Previously, in Guilford County Superior Court, the plaintiffs had sued a former producer, with most claims dismissed except for breach of employment agreement, and that suit was later settled. In the current litigation, after discovery, both sides sought partial summary judgment in the North Carolina Business Court (Superior Court for Complex Business Cases). The Business Court granted summary judgment in part for both parties, including a grant of adverse inference against defendants for spoliation of evidence, but did not specify how that inference would apply to each claim.The Supreme Court of North Carolina reviewed the interlocutory appeal. It affirmed the adverse inference ruling but remanded for the Business Court to clarify its specific application. The Court reversed the Business Court’s summary judgment that two client lists could not be trade secrets, holding there were genuine issues of fact. It clarified the standard for misappropriation of trade secrets under state law, requiring evidence of a specific opportunity to acquire trade secrets without authorization. The Court remanded claims related to trade secrets, enforcement of non-solicitation provisions (pending factual findings on the scope of the employer and affiliates), and certain computer fraud claims for further proceedings. Summary judgment for defendants on unjust enrichment was affirmed, and the Business Court was directed to issue a written opinion for claims it disposed of in a summary order. The disposition was thus affirmed in part, reversed in part, and remanded for further proceedings. View "Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC" on Justia Law

An engineer who had worked for more than two decades at a manufacturing company resigned after a demotion and accepted a leadership position at a competitor. As he was leaving, the company discovered that he had potentially printed several documents containing confidential information about its products. Although forensic analysis could not confirm that he actually printed these documents, the company concluded he had taken trade secrets and sued him and his new employer, alleging breach of a confidentiality agreement and misappropriation of trade secrets. The company sought a preliminary injunction to prevent disclosure of the alleged secrets and to restrict the engineer’s work with the competitor.The United States District Court for the Northern District of Ohio denied the preliminary injunction. The district court ruled that the company failed to meet its burden by not providing “clear and convincing” evidence for each of the four required factors for a preliminary injunction: likelihood of success on the merits, risk of irreparable harm, risk of harm to others, and the public interest. The court treated each factor as a separate prerequisite, each requiring clear and convincing proof.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision for abuse of discretion, clarifying that the district court had committed a legal error. The appellate court held that the correct approach is to weigh all four preliminary injunction factors together in a sliding-scale analysis, not to require clear and convincing evidence for each factor individually. It explained that a heightened standard of proof is not mandated unless required by statute, the Constitution, or in rare cases involving unusually coercive government action, none of which applied here. The Sixth Circuit reversed the district court’s decision and remanded the case for reconsideration under the appropriate standard. View "PCC Airfoils, LLC v. Daugherty" on Justia Law

Adidas America, Inc. brought a lawsuit against Thom Browne, Inc., alleging trademark infringement, trademark dilution, and unfair competition, based on Thom Browne’s use of certain stripe motifs on its apparel. Adidas’s claims focused on Thom Browne’s Four-Bar Signature and Grosgrain designs, which adidas argued infringed on its well-known Three-Stripe Mark, particularly in a new line of activewear. At trial, the jury heard extensive evidence, including testimony from sixteen witnesses and more than four hundred exhibits, and ultimately found Thom Browne not liable on all counts.Subsequently, during related litigation in the United Kingdom, adidas discovered that Thom Browne had failed to disclose several relevant emails during discovery in the U.S. action. These emails contained internal discussions among Thom Browne employees acknowledging the potential for confusion between Thom Browne’s stripe designs and adidas’s mark. Adidas moved in the United States District Court for the Southern District of New York for relief from the final judgment under Federal Rules of Civil Procedure 60(b)(2) (newly discovered evidence) and 60(b)(3) (misconduct), arguing that the emails warranted a new trial. The district court denied the motion, finding that the emails probably would not have changed the verdict and that Thom Browne’s discovery violation was, at most, negligent rather than intentional misconduct.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s order. The Second Circuit held that adidas failed to demonstrate that the newly discovered emails probably would have altered the outcome at trial, as required under Rule 60(b)(2). The court further held that “misconduct” under Rule 60(b)(3) does not include merely negligent discovery violations; only intentional or reckless conduct could justify such relief. Therefore, adidas was not entitled to a new trial. View "Adidas America, Inc. v. Thom Browne, Inc." on Justia Law

This case involves a dispute over the rights to the name, image, and trademarks associated with the late artist Frida Kahlo. Two Panamanian corporations with principal places of business in Florida, Frida Kahlo Corporation and Frida Kahlo Investments, manage and license numerous Frida Kahlo trademarks. Mara Cristina Teresa Romeo Pinedo, Frida Kahlo’s grandniece and a resident of Mexico, is an owner and former officer of Familia Kahlo S.A. de C.V., a Mexican company. The parties’ relationship became contentious, leading to litigation in several countries over the intellectual property rights. Plaintiffs alleged that, beginning in 2017 and specifically targeting Florida in 2021 and 2022, the defendants sent cease-and-desist letters to plaintiffs’ business partners in Florida, threatening legal action based on what plaintiffs contend were false claims to trademark ownership. Plaintiffs claimed these actions constituted tortious interference under Florida law and the Lanham Act.The United States District Court for the Southern District of Florida dismissed the lawsuit for lack of personal jurisdiction. The court found that Florida’s long-arm statute was satisfied for Familia Kahlo, but the corporate shield doctrine protected Pinedo because she was not acting in her personal capacity. The court further concluded that the minimum contacts required by due process were not established for either defendant, as sending cease-and-desist letters alone was insufficient.On appeal, the United States Court of Appeals for the Eleventh Circuit reversed the district court’s decision. The Eleventh Circuit held that the corporate shield doctrine did not apply to Pinedo because the cease-and-desist letters were sent on her behalf in her personal capacity. The court also held that due process permitted the exercise of personal jurisdiction over both defendants, as the “effects test” was satisfied and a tortious cease-and-desist letter can meet the minimum contacts requirement. The case was remanded for further proceedings. View "Frida Kahlo Corporation v. Pinedo" on Justia Law

A company that designs and manufactures interactive technology products entered into reseller agreements with another company, granting the latter exclusive rights to sell its products in certain territories. Several years later, the manufacturer revoked the exclusivity, after which the reseller’s owner and his son developed a competing product. The manufacturer then terminated the reseller relationship. Subsequently, the reseller sued the manufacturer in South Carolina state court for various business torts and contract claims. The parties settled and executed a written agreement that broadly released and dismissed any and all claims and counterclaims that could have been brought in the litigation, including through a specific handwritten provision. Nevertheless, shortly after, the manufacturer initiated a federal lawsuit, alleging intellectual property violations related to the competing product.The state court dismissed the original action with prejudice, including all possible claims and counterclaims. In the federal action, the defendants argued that the settlement agreement and res judicata barred the new claims. The United States District Court for the District of South Carolina initially allowed certain claims to proceed, but after further evidence and reconsideration, it granted summary judgment for the defendants, finding the claims precluded by the settlement and the state court’s dismissal. A jury was then impaneled for trial on the defendants’ counterclaims.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s rulings. The Court of Appeals held that the manufacturer’s claims were barred by res judicata based on the settlement and state court order, as the language of the agreement and the parties’ intent encompassed the intellectual property claims. The appellate court also found no abuse of discretion in the district court’s evidentiary rulings, its reconsideration of summary judgment, or the conduct of the trial, and affirmed the judgment in full. View "Clear Touch Interactive, Inc. v. The Ockers Company" on Justia Law

A trademark holder brought an action against numerous foreign online vendors, alleging that they infringed her registered mark by selling counterfeit goods through e-commerce platforms such as Walmart.com and eBay.com. The vendors, all based in China, operated online storefronts that were accessible from the United States and offered shipping to U.S. customers, including those in Illinois. The plaintiff attached a “Schedule A” list to her complaint identifying the vendors. The defendants did not initially appear in the case.The United States District Court for the Northern District of Illinois, Eastern Division, entered a default judgment against the defendants. The court found personal jurisdiction over them on the basis that they operated online stores targeting U.S. consumers, offered shipping to Illinois, and had allegedly sold infringing products to Illinois residents. The evidence supporting the finding of Illinois sales included website screenshots showing that a product could be ordered and shipped to a Chicago address, but did not show that any actual sales to Illinois occurred. After the default judgment, the defendants appeared and moved to vacate the judgment, arguing lack of personal jurisdiction and improper service. The district court denied the motion, reaffirming its prior findings.Upon appeal, the United States Court of Appeals for the Seventh Circuit found that there was no evidence of any actual sales to Illinois residents. The court held that merely operating an online store accessible in Illinois and offering shipping to Illinois, without completed sales in the forum, is insufficient to establish personal jurisdiction. The district court’s findings to the contrary were clearly erroneous. The Seventh Circuit vacated the default judgment and remanded the case with instructions to dismiss for lack of personal jurisdiction. View "Liu v. Monthly" on Justia Law

Two pharmaceutical companies developing treatments for achondroplasia, a genetic disorder, became involved in litigation after one company (Ascendis) filed a New Drug Application (NDA) for its product. The other company (BioMarin), holding a relevant patent, filed a complaint with the United States International Trade Commission (ITC) alleging patent infringement by Ascendis’s product. Shortly afterward, Ascendis filed a declaratory judgment action in the United States District Court for the Northern District of California, seeking a judgment of non-infringement and arguing that its activities were protected under the statutory “safe harbor” for regulatory approval.More than thirty days after filing its district court complaint, Ascendis moved for an expedited hearing. BioMarin responded by seeking to dismiss or stay the district court action pending the ITC’s investigation. Ascendis voluntarily dismissed its complaint without prejudice and promptly refiled a nearly identical complaint, this time moving for a mandatory stay under 28 U.S.C. § 1659(a)(2), which requires a district court to stay its proceedings if requested within thirty days of the action’s filing or of being named as a respondent in the ITC. BioMarin opposed, contending Ascendis’s request was untimely, and sought a discretionary stay instead.The United States District Court for the Northern District of California granted BioMarin’s motion for a discretionary stay and denied Ascendis’s motion for a mandatory stay as moot. On appeal, the United States Court of Appeals for the Federal Circuit held that § 1659(a)(2) does not permit a litigant to restart the thirty-day period for a mandatory stay by voluntarily dismissing and refiling a substantially identical action. The court reasoned that the statutory deadline applies to the original action and that allowing refiling would circumvent the statute’s purpose. The Federal Circuit affirmed the district court’s decision. View "ASCENDIS PHARMA A/S v. BIOMARIN PHARMACEUTICAL INC. " on Justia Law

A group of nine professional models brought suit against a nightclub in Greenville, South Carolina, alleging that the club took images from the models’ social media pages and used them in its promotional materials without their knowledge, consent, or compensation. The models claimed the advertising falsely implied their association, employment, or endorsement of the club. They asserted two claims under the Lanham Act as well as seven state law claims, including misappropriation of likeness.The defendant responded with a motion to dismiss all counts for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), but did not challenge the sufficiency of the misappropriation of likeness claim. The plaintiffs did not respond to the motion within the time set by the District of South Carolina’s local rules. The United States District Court for the District of South Carolina granted the motion to dismiss as unopposed, dismissing the federal and most state law claims with prejudice and dismissing the misappropriation of likeness claim without prejudice, declining to exercise supplemental jurisdiction. The plaintiffs’ postjudgment motions for relief were denied by the district court.On appeal, the United States Court of Appeals for the Fourth Circuit held that a court may not grant a Rule 12(b)(6) motion solely because it is unopposed. The court emphasized that Rule 12(b)(6) requires an independent determination of whether the complaint states a plausible claim for relief, regardless of the parties’ failure to respond. Finding that the district court had not made such a determination, the Fourth Circuit vacated the judgment and remanded the case for further proceedings. The court did not reach the merits of the parties’ other arguments or the postjudgment orders. View "Guzman v. Acuarius Night Club LLC" on Justia Law

The plaintiff, a New Hampshire-based corporation, acquired patents and software from a military contractor and sought to adapt the technology for consumer telecommunications. The defendant, a Finnish multinational, manufactures cellular base stations. In 2015, the parties began discussions about integrating the plaintiff’s software into the defendant’s products. By February 2017, negotiations focused on two main points: a fee for integration work and a lump sum for a perpetual software license. On June 6, 2017, the plaintiff alleges both parties orally agreed to a $3 million integration fee and a $20 million license fee. The defendant disputes whether such an oral agreement occurred. The plaintiff continued work based on this understanding. Later, the defendant offered a lower license fee in a draft written contract, which the plaintiff rejected. Eventually, the defendant canceled the project.After cancellation, the plaintiff sued the defendant in the United States District Court for the District of New Hampshire. Following a ten-day trial, the jury found in favor of the plaintiff on breach of contract and promissory estoppel, awarding $23 million in damages. The district court, considering the defendant’s statute-of-frauds defense, determined that the core issue was whether the perpetual license agreement could be performed within one year. The court found this, along with other issues, raised novel questions of New Hampshire law without binding precedent, and certified three questions to the Supreme Court of New Hampshire.The Supreme Court of New Hampshire reviewed the certified questions. It held that, under New Hampshire law, obligations imposed by a perpetual intellectual property license can be performed within one year, because, absent express language to the contrary, the licensor’s obligations are fulfilled upon granting the license. The court declined to answer the other two certified questions, as its answer to the first resolved the determinative legal issue. The case was remanded to the district court. View "Collision Commc'ns v. Nokia Solutions and Networks OY" on Justia Law