Continuing a line of cases involving careful scrutiny of injunctions by the Fifth Circuit, the Court again took issue with an order in Scott v. Schedler. The district court required Tom Schedler, Louisiana’s Secretary of State, to “maintain in force and effect his or her policies, procedures, and directives, as revised, relative to the implementation of the [National Voter Registration Act of 1993] with respect [to] coordination of the [Act] within Louisiana.” Schedler objected that the order was not sufficiently specific and the Fifth Circuit agreed: “[T]he injunction refers generally to the defendant’s policies without defining what those policies are or how they can be identified.” Noting that “[w]e are sensitive, of course, to the district court’s difficult position” in drafting a specific injunction without “dictating with intricate precision” state policy, the Court reviewed case law in the area and offered some guidance for remand. No. 15-30652 (June 15, 2016). While arising in the civil rights context, and not involving an effort to hold the Secretary in contempt, this opinion follows naturally from several other recent cases (link above) that have found insufficient specificity to justify sanctions.
After the EEOC sent two inconsistent letters about a claimant’s case – one in June, and one in July – a confusing limitations problem arose. The Fifth Circuit found that equitable tolling applied and prevented a bar to filing suit. It agreed with the district court that testimony about what the EEOC told counsel on the phone was inadmissible for the truth of the matter asserted, but disagreed that it was completely inadmissible — when offered to prove why counsel acted as he did, the conversation was not offered for a hearsay purpose. The Court also noted that counsel, and his client, had proceeded diligently throughout the matter, noting: “Th[e] desire to have an EEOC letter with all the t’s crossed and i’s dotted is a sign of diligence rather than dawdling.” Alvarado v. Mine Service, Ltd., No. 14-50668 (July 30, 2015, unpublished).
Pennzoil has several well-known trademarks for its motor oil products. It sued Miller Oil, which operates a quick-stop oil change facility in Houston, for infringing those marks. Miller defended on the ground that after its original contract with Pennzoil lapsed in 2003, Pennzoil’s dealings with Miller amounted to an acquiescence in Miller’s use of the marks. The district court agreed but the Fifth Circuit reversed. Pennzoil-Quaker State Co. v. Miller Oil & Gas Operations, No. 13-20558 (Feb. 23, 2015).
The Court thoroughly reviewed its own, and other Circuits’, approaches to the elements of the acquiescence defense, as well as the relationship of that defense to laches. The Court concluded that an element of the defense was undue prejudice to the defendant from the plaintiff’s conduct, which usually involves “some form of ‘business building.'” Here, the defendant’s expenses associated with removing Pennzoil’s marks did not satisfy that requirement, because they would not be related to business expansion. While the defendant’s claim about a “loss of identity” from removing Pennzoil’s marks could qualify, on this record: “Miller Oil does not proffer evidence of, for example, changes in its customer base, higher profits, or new business opportunities it was able to exploit because of the re-brand.” Accordingly, Miller Oil did not meet its burden of proof.
Among other issues in Farkas v. GMAC Mortgage LLC, a borrower disputed whether he had received proper notice of the servicer’s identity, arguing that only the current mortgagee could send effective notice. No. 12-20668 (Dec. 2, 2013, unpublished). The Fifth Circuit affirmed a judgment against him on the grounds of quasi-estoppel, noting: “The duration and regularity of these continued payments to mortgage servicers who had not been identified by current mortgagees constitute acquiescence to the validity of notice of transfer from one mortgage servicer to the next. The equitable relief afforded by quasi-estoppel assures that a party’s position on a given issue is more than a matter of mere convenience but is instead a stance to which it is bound.”
Paddle Tramps Manufacturing made wooden paddles with the emblems of several fraternities, a group of 32 fraternities sued to enjoin it for trademark infringement and unfair competition, and the company defended with unclean hands and laches. Abraham v. Alpha Chi Omega, No. 12-10525 (revised Feb. 7, 2013). The district court entered partial injunctive relief after a jury trial found for the company on the defenses. The Fifth Circuit affirmed the instructions given, finding that the appellant’s arguments about unclean hands conflated elements of trademark liability with elements of the defense and that the laches instruction fairly handled the concept of “progressive encroachment.” The Court also found sufficient evidence to support the “undue prejudice” element of laches, although calling it a “close question,” and found that the district court properly balanced the equities — especially injury to the alleged infringer — in crafting the injunction. The opinion discusses and distinguishes other cases denying relief in related situations. Professor Rebecca Tushnet further analyzes the case on her intellectual property blog.