Scholz v. Goudreau ( 2018 )

United States Court of Appeals
For the First Circuit
Nos. 17-1264,
17-1316
DONALD THOMAS SCHOLZ,
Plaintiff/Counterclaim-Defendant, Appellant/Cross-Appellee,
v.
BARRY GOUDREAU,
Defendant/Counterclaim-Plaintiff, Appellee/Cross-Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Torruella, Lynch, and Kayatta,
Circuit Judges.
Susan E. Stenger, with whom Lawrence G. Green, Laura Lee
Mittelman, and Burns & Levinson LLP were on brief, for
appellant/cross-appellee.
Jeffrey S. Baker, with whom Baker and Associates, P.C.,
Daniel P. Tarlow, Copani, Tarlow & Cranney, LLC, David M. Given,
and Phillips, Erlewine, Given & Carlin LLP were on brief, for
appellee/cross appellant.
August 21, 2018
TORRUELLA, Circuit Judge. Donald Thomas Scholz, a
member of the rock band BOSTON, sued former BOSTON guitarist Barry
Goudreau for various trademark infringement and breach of contract
claims relating to impermissible references that Goudreau had
allegedly made regarding his former association with the band.
Goudreau counterclaimed with his own breach of contract and abuse
of process claims. After the district court granted in part and
denied in part both parties' respective motions for summary
judgment, the extant claims proceeded to trial. The jury found in
favor of the respective defendant on each of the remaining claims.
Scholz and Goudreau now cross-appeal the district court's summary
judgment findings, evidentiary rulings, and denials of the various
motions detailed in this opinion. For the reasons stated below,
we affirm the district court and deny both parties' appeals.
I. Background
A. Factual Background
In 1976, Scholz and Goudreau were members of the rock-
band BOSTON, along with Fran Sheehan, Sib Hashian and Brad Delp.
Goudreau played the guitar in the band's first two albums and
performed with the band from approximately 1976 to 1979. After
Goudreau left BOSTON in 1981, he and the remaining members of the
band executed a settlement agreement (the "Settlement Agreement")
in 1983, pursuant to which Goudreau would receive a one-fifth share
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of the band's royalties for the first two BOSTON albums. The
Settlement Agreement also stated that Goudreau "shall have no
interest, right nor title to the name of 'BOSTON', nor to any
recording royalties, performing rights royalties, performance
income, copyright interests or payments, or financial interest
therein, except as provided herein." The agreement clarified that:
D. The Name "BOSTON": The parties hereto
expressly agree that Goudreau may use the term
"Formerly of Boston" for and in conjunction with any
biographical usage with respect to future
performances, but, except to this extent, Goudreau
shall have no other interest, right or title to the
name "BOSTON." Without limiting the foregoing,
Goudreau may not use the name "BOSTON" for or in
conjunction with any advertisement or promotion.
From 2004 to 2006, Goudreau and Sib Hashian began to
play music informally with Ernie Boch Jr. ("Boch"), an amateur
musician and New England area car mogul. Eventually, the three
started performing together in a band that they later called Ernie
and the Automatics ("EATA"). On February 6, 2009, Boch, Goudreau,
and other members of EATA signed a Confirmatory Recording Artist
Agreement (the "Confirmatory Agreement") in which the signatories
granted Boch the right in perpetuity to use, and authorize others
to use, their names and biographical information for advertising
and promotion of EATA. By signing the agreement, the EATA members
warranted that use of their names and biographical information
would not infringe upon the rights of any third parties.
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Boch created and managed EATA's website, which described
Goudreau as an "original" member of the band BOSTON. In 2009,
Boch posted on YouTube an EATA "pop-up"1 music video produced by
Boch's friend, Ian Barret, to promote EATA's new album. The "pop-
up" video displayed lines of text that would momentarily appear at
the bottom of the screen overlaying EATA's music video. Some of
the pop-up messages read as follows:
1. "Guitarist Barry Goudreau and drummer 'Sib' Hashian are
'former' original members of the band 'Boston'."
2. "Boston's' first record is the biggest selling debut in
history with 17 million units sold."
3. "The original cover art for 'Boston's' first record was a
head of Boston lettuce, not the guitar spaceship."
4. "Brian met Barry when he joined 'Orion the Hunter', Barry's
first band project after 'Boston.'"
5. "Brian, Barry, and Tim would later form 'RTZ' with 'Boston'
lead singer, Brad Delp."
In addition, Boch advertised EATA in magazines, in which he
referred to Goudreau as an original and founding member of BOSTON.
The cellophane wrapping of EATA's 2009 CD album entitled "Low
Expectations" bore a sticker reading: "Featuring Barry Goudreau
. . . former original member[] of the multi-platinum selling band
'BOSTON.'" When EATA held a CD release party on February 7, 2009,
1 As referred to in Boch's testimony and Goudreau's appellate
brief.
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the promotional material read in part: "Barry Goudreau and Sib
Hashian, two former original members of the multi-platinum selling
band BOSTON have reunited."
In addition to EATA's advertisements, Goudreau's musical
performance in "The Best of Boston series" was promoted as
featuring "original founding Boston member Barry Goudreau."
Additionally, promotional materials for Goudreau's shows at the
Cannery Casino Hotel referred to Goudreau as "BOSTON's former
'lead' guitarist and an original 'BOSTON' member." Moreover,
Goudreau was described as "the lead guitarist rock legend from the
band BOSTON" in performances with the James Montgomery Blues Band.
B. Procedural History
On April 17, 2013, Scholz filed suit against Goudreau in
the District of Massachusetts, alleging, as is relevant to this
appeal, federal trademark infringement in violation of 15 U.S.C.
§ 1114(1), breach of contract, and breach of the implied covenant
of good faith and fair dealing. Goudreau filed an answer on
May 24, 2013, and asserted various counterclaims including breach
of contract, breach of implied covenant of good faith and fair
dealing, and abuse of process, all under Massachusetts law.
Goudreau also sought a declaratory judgment that using language
other than "formerly of Boston" does not violate Scholz's trademark
rights. Scholz subsequently filed a first amended complaint
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("FAC") on May 21, 2014, adding claims of contributory trademark
infringement in violation of 15 U.S.C. § 1114(1), and vicarious
trademark infringement in violation of 15 U.S.C. § 1114(1).
On February 17, 2015, Scholz and Goudreau each filed a
motion for summary judgment. As it pertained to Goudreau's motion,
the district court granted summary judgment to Goudreau with
respect to all of Scholz's claims except for those of contributory
and various trademark infringement as they related to Goudreau's
membership in EATA. Notably, the district court found that there
was a genuine issue of material fact regarding whether Goudreau
had the ability to directly control or monitor EATA's promotions
of Goudreau. As to Scholz's motion, the district court granted
Scholz summary judgment on Goudreau's claim for declaratory
judgment, as well as the abuse of process claim, finding that
Scholz did not use the litigation process to obtain an improper
end. But the district court denied Scholz's motion for summary
judgment as to Goudreau's other two counterclaims relevant to this
appeal.
The district court held a jury trial on the remaining
claims in October and November of 2016. Following the fifth day
of the seven-day trial, Scholz filed a motion to amend his FAC to
reinstate his breach of contract claim so as to conform it to the
evidence presented at trial. The district court denied this motion
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the next day. On November 1, 2016, the jury rejected all of the
claims and counterclaims that it was presented. On the verdict
form for Goudreau's breach of contract counterclaim, the jury
answered "NO" to the question of whether Goudreau "perform[ed] his
obligations under the contract, or was excused from performance
because of [Scholz's] conduct."
On November 8, 2016, Scholz again moved to reinstate and
for entry of judgment on his breach of contract claim in light of
the jury's finding that Goudreau had not performed his obligations
under the Settlement Agreement. On December 15, 2016, Goudreau
filed a motion for attorney's fees pursuant to 15 U.S.C. § 1117(a).
On February 16, 2017, the district court denied both motions. Both
parties appealed in the following month.
II. The Appeals
The parties each raise three claims of error they believe
the district court to have made during the course of the underlying
litigation. We address each party's arguments, beginning with
those made by Scholz.
A. Scholz's Appeal
The gravamen of Scholz's claims is that his breach of
contract claim should have survived and prevailed. Specifically,
he contends that the district court erroneously dismissed his
breach of contract claim on summary judgment, improperly denied
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his motions to reinstate this claim, and erred in denying his
motion for entry of judgment on that claim consistent with the
jury's verdict. We discuss each argument in turn.
1. Summary Judgment
The Settlement Agreement states that it is "governed by
and construed and enforced in accordance with the laws of the
[Commonwealth] of Massachusetts." Under Massachusetts law, a
claim for breach of contract requires the plaintiff to show the
existence of a valid and binding contract, that the defendant
breached the contract's terms, and that the plaintiff suffered
damages as a result of that breach. Brooks v. AIG SunAmerica Life
Assurance, Co., 480 F.3d 579, 586 (1st Cir. 2007).
The parties agree that the Settlement Agreement was a
valid and binding contract. Scholz asserted that Goudreau breached
that contract in two ways. First, Scholz asserted that the
advertisements and promotions for Goudreau's subsequent musical
performances were "not limited to 'formerly of Boston' but instead
use[d] such terms as 'original founding member' or 'Lead Guitarist
Rock Legend from the Band BOSTON.'" Second, he claimed that any
reference to BOSTON in advertisements or promotions of Goudreau's
performances violated the contract, regardless of whether or not
the advertisement or promotion was limited to the phrase "formerly
of Boston."
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The district court disposed of this second argument by
pointing out that the Settlement Agreement allowed Goudreau to
reference BOSTON when using the term "'formerly of Boston' for and
in conjunction with any biographical usage with respect to future
performances." Further, the next sentence of the relevant contract
provision -- "[w]ithout limiting the foregoing, Goudreau may not
use the name 'BOSTON' for or in conjunction with any advertisement
or promotion" -- did not annihilate Goudreau's limited right to
use the band name. Scholz does not dispute the district court's
denial of his second claim, and we therefore need not discuss it
further.
Scholz does argue, however, that Goudreau's motion for
summary judgment should have been denied because of the reasonable
inference that Goudreau encouraged others to promote him as an
"original" or "founding" member of BOSTON, in breach of the
contract. For support, Scholz points to the district court's
denial of Goudreau's counterclaim for a declaratory judgment that
Goudreau could promote himself in a manner other than "formerly of
Boston"; Goudreau's admission in his counterclaim that he caused
others to hold him out as an "original member of BOSTON"; and the
EATA Confirmatory Agreement, in which Goudreau gave Boch the right
to use and authorize others to use Goudreau's name and biographical
information. The district court disagreed, finding that Scholz
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failed to show that Goudreau himself, rather than a third party,
breached the contract.
We review the district court's grant of summary judgment
de novo. Ocasio-Hernández v. Fortuño-Burset, 777 F.3d 1, 4 (1st
Cir. 2015). In so reviewing, we must "tak[e] the facts and all
reasonable inferences therefrom in the light most favorable to
[the non-moving party]." Aponte-Rosario v. Acevedo-Vilá, 617 F.3d
1, 6 (1st Cir. 2010).
After a careful review, we discern no error in the
district court's ruling granting summary judgment to Goudreau on
Scholz's breach of contract claim. The district court explained
the details of each offending instance cited by Scholz relaying
the facts underlying each allegation, each of which showed that
Goudreau did not instruct those responsible for the promotions to
use any language other than that which was permitted by the
Settlement Agreement. While Scholz did show that some of
Goudreau's performances were advertised using descriptors not in
conformance with the Settlement Agreement, Scholz did not show
that Goudreau had any role in drafting, approving, or promulgating
such language. Similarly, on appeal, Scholz does not direct us to
any record evidence from which we could find that Goudreau was
responsible -- either directly or indirectly -- for any promotion
or advertisement using language other than "formerly of Boston."
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Accordingly, we do not find any genuine issue of material fact as
to whether Goudreau breached the Settlement Agreement. See Fed.
R. Civ. P. 56(c)(1) ("A party asserting that a fact . . . is
genuinely disputed must support the assertion by . . . citing to
particular parts of materials in the record.").
Scholz makes much of Goudreau's statement in his
counterclaim that he "made sure that all venues, managers, and
other[s] involved referred to [him] . . . using the truthful and
accurate descriptive designations of formerly of BOSTON or as an
original member of BOSTON." But, as we have stated, Scholz pointed
to no specific instance in which Goudreau did, at any point, direct
anyone to bill him as an "original member" of BOSTON. Nor does
Goudreau's counterclaim for declaratory relief, and the district
court's denial thereof, show that Goudreau did diverge from the
language of the contract.
Scholz states that the Confirmatory Agreement created a
genuine issue for the jury as to whether Goudreau encouraged and
authorized Boch to use descriptions beyond those which were allowed
by the Settlement Agreement. But Boch testified in his deposition
that Goudreau told him to limit his description to "former member"
of BOSTON. Boch further commented that he added the word
"original" on his own, despite Goudreau's instructions otherwise.
Scholz does not dispute this on appeal, instead arguing that
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Goudreau's failure to stop Boch from promoting Goudreau as
otherwise constitutes a breach. But, given Boch's deposition
testimony that Goudreau did request such limitations on EATA's
promotional material, and Scholz's failure to provide any evidence
that Goudreau did not so request, there was no evidence in the
record from which the district court could have drawn the inference
to which Scholz claims that he was entitled.
Scholz adds that the district court erred as a matter of
law in allowing Goudreau's motion for summary judgment as to his
claim for breach of the implied covenant of good faith and fair
dealing. As an argument that piggybacks completely upon his
arguments pertaining to his breach of contract claim, this too
must fail. Accordingly, as Scholz failed to point to any facts at
the summary judgment stage to raise a genuine issue as to whether
Goudreau breached the Settlement Agreement, we find that the
district court did not err in awarding Goudreau summary judgment
on Scholz's breach of contract claim or his claim for breach of
the implied covenant of good faith and fair dealing. See Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986).
2. Motions to Reinstate
Scholz twice moved to amend his FAC, pursuant to Fed. R.
Civ. P. 15(b)(2), to reinstate his breach of contract claim.
Scholz now claims that the district court's denial of these motions
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was in error. We review both denials for abuse of discretion.
See Campana v. Eller, 755 F.2d 212, 215 (1st Cir. 1985).
Scholz filed his first motion to amend on October 30,
2016, claiming that Goudreau impliedly consented to reinstating
Scholz's breach of contract claim. "When an issue not raised by
the pleadings is tried by the parties' express or implied consent,
it must be treated in all respects as if raised in the pleadings.
A party may move -- at any time, even after judgment -- to amend
and to raise an unpleaded issue." Fed. R. Civ. P. 15(b)(2).
"Consent to the trial of an issue may be implied if, during trial,
a party acquiesces in the introduction of evidence which is
relevant only to that issue." DCPB, Inc. v. City of Lebanon, 957
F.2d 913, 917 (1st Cir. 1992) (emphasis added) (citing Campana,
755 F.2d at 215). One manner of acquiescing may be by failing to
object to the introduction of such evidence. See id.As he did before the district court, Scholz again
advances the argument that Goudreau impliedly consented to
litigating Scholz's breach of contract claim by failing to object
to his counsel's questions to Goudreau and Boch about whether
Goudreau granted Boch actual authority -- as opposed to whether
Boch had the apparent authority -- to handle the advertising and
promotion of EATA. Scholz says that these questions, and his
counsel's related questions about whether Goudreau granted Boch
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authority by signing the EATA Confirmatory Agreement were relevant
only to a breach of contract claim, and were irrelevant to Scholz's
claims for contributory or vicarious trademark infringement.
We disagree. We do not find that counsel's questions,
and the evidence adduced therefrom, were relevant only to a
potential breach of contract claim such that Goudreau could have
known that a breach of contract claim was permeating the jury
trial. See Rodríguez v. Doral Mortg. Corp., 57 F.3d 1168, 1172
(1st Cir. 1995) ("The truth-seeking function of our adversarial
system of justice is disserved when the boundaries of a suit remain
ill-defined . . . ."); Cole v. Layrite Prods. Co., 439 F.2d 958,
961 (9th Cir. 1971). Nor do we find that the questions were
irrelevant to Scholz's vicarious trademark infringement claims.
First, the record reflects that Scholz's counsel did not
make clear his intent to draw a meaningful distinction between the
legal concepts of "actual" and "apparent" authority at trial. In
fact, he did not even use the words "actual" or "apparent"
authority during his examinations of Goudreau and Boch. Cf. Sony
Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 435
n.17 (1984) (noting that "the lines between direct infringement,
contributory infringement, and vicarious liability are not clearly
drawn," and that an infringer may include "one who authorizes the
use of a copyrighted work without actual authority from the
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copyright owner" (quoting Universal City Studios, Inc. v. Sony
Corp of Am., 480 F. Supp. 429, 457-58 (C.D. Cal. 1979))). Second,
even if the intent of the counsel's line of questioning was clear,
"[a]pparent . . . authority results from conduct by the principal
which causes a third person reasonably to believe that a particular
person . . . has authority to enter into negotiations or to make
representations as his agent." Linkage Corp. v. Trs. of Bos.
Univ., 425 Mass. 1, 16 (1997) (alteration in original) (internal
quotation marks and citation omitted). Thus, Scholz's counsel's
questions about whether Goudreau gave Boch the right to promote
EATA, inasmuch as they were relevant to whether third persons
reasonably believed that Boch had Goudreau's permission to use
Goudreau's affiliation with BOSTON in EATA's promotions (i.e.
whether Boch had "apparent authority"), were not exclusively
relevant to Boch's "actual authority." See id.; cf. Binkley Co.
v. E. Tank, Inc., 831 F.2d 333, 338 (1st Cir. 1987) (finding that
a seller's agent had apparent authority to execute a provision for
termination of a contract in light of the agent's actual authority
to negotiate prices and times of delivery). Accordingly, we cannot
conclude that Goudreau consented to the reinstatement of Scholz's
breach of contract claim by acquiescing to the line of questions
regarding the promotion of EATA. See DCPB, Inc. v. City of Lebanon,
supra.-15-
Finally, we need only look to the district court's
memorandum accompanying its summary judgment order to illustrate
that the questions asked by Scholz's counsel were relevant to the
claims already presented to the jury. When discussing Scholz's
contributory trademark infringement claim, the district court
found there to be a genuine issue of material fact as to whether
Goudreau had "sufficient ability to direct and control the
promotions of EATA." Whether Goudreau gave Boch the authority to
use his name and biographical information in these promotions, or
alternatively whether Boch used this information without
Goudreau's permission, weighs directly on this question. The
district court further stated in its memorandum that the ultimate
question for the jury on Scholz's vicarious liability claim was
whether it was reasonable to infer from Goudreau's actions that
Boch or Tom Baggott, a promoter for EATA, acted with Goudreau's
authority. Questions pertaining to Goudreau's interactions with
Boch were also relevant to this issue.
Because these questions were relevant to issues already
before the jury, we find that they did not provide Goudreau
adequate notice that a breach of contract claim was being
litigated. See DCPB, 957 F.2d at 917 ("The introduction of
evidence directly relevant to a pleaded issue cannot be the basis
for a founded claim that the opposing party should have realized
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that a new issue was infiltrating the case."); see also Grand Light
& Supply Co. v. Honeywell, Inc., 771 F.2d 672, 680 (2d Cir. 1985)
("The purpose of Rule 15(b) is . . . not to extend the pleadings
to introduce issues inferentially suggested . . . ." (quoting
Browning Debenture Holders' Committee v. DASA Corp., 560 F.2d 1078,
1086 (2d Cir. 1977))). And, we would think it unjust to allow
Scholz to reinstate his breach of contract claim without sufficient
notice. Cf. In re Fustolo, No. 17-1984, 2018 WL 3424797, at *9
(1st Cir. 2018) (finding that plaintiff's failure to object to a
line of questioning "pertinent to other claims already presented"
could not "be construed to imply consent"). Thus, we conclude
that the district court did not abuse its discretion when it denied
Scholz's first motion to amend his FAC after the fifth day of
trial.
Scholz's second motion to amend his FAC by reinstating
his claim was tucked into Scholz's post-jury-verdict motion for
entry of judgment on his breach of contract claim consistent with
the jury's findings. In his motion for entry of judgment, Scholz
did not point to any additional evidence, aside from the jury's
finding that Goudreau failed to perform his obligations under the
1983 Settlement Agreement, from which the district court could
have found Goudreau's express or implied consent to litigate
Scholz's breach of contract claim. As explained in our discussion
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below, this jury finding does not change the calculus, and we are
therefore led to the same result as to the second motion to amend.
3. Motion for Entry of Judgment
Scholz avers that the jury's verdict for Goudreau's
breach of contract counterclaim, in which the jury found that
Goudreau did not "perform his obligations under the contract" and
was not excused from performance by Scholz's conduct, is the
functional equivalent of a jury finding that Goudreau breached the
Settlement Agreement. Therefore, Scholz says, the district court
erred in denying his motion for entry of judgment on his breach of
contract claim consistent with this finding.
Contrary to Scholz's assertion, the jury verdict on
Goudreau's counterclaim does not equate to a finding that Scholz
proved his claim of breach of contract. See Acumed LLC v. Advanced
Surgical Servs., 561 F.3d 199, 219 (3d Cir. 2009) ("[T]he jury's
verdict against appellant on its breach of contract counterclaim
does not prove the contrapositive."). Although the jury did find
that Goudreau did not "perform his obligations under the contract,"
Scholz's claim for breach of contract required that Scholz show
more than this. See Brooks, 480 F.3d at 586 (noting that a breach
of contract claim requires a showing of the existence of a valid
and binding contract, that the defendant breached the contract's
terms, and that the plaintiff suffered damages as a result of that
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breach). The evidence presented at trial did not compel the jury
to conclude that Scholz suffered damages as a result of Goudreau's
failure to perform his contractual obligations. Thus, the jury's
finding does not satisfy the third element of a breach of contract
claim. And, because of this, the district court correctly denied
Scholz's second motion to amend his FAC to reinstate a breach of
contract claim and Scholz's request that the district court enter
judgment in his favor.
At best, Scholz's true ask is that the court alter or
amend the judgment pursuant to Fed. R. Civ. P. 59(e). But, the
cases that Scholz cites all stand for the proposition that the
district court should rarely overturn a jury's verdict.2 We don't
disagree with the principle announced in those cases, though they
are inapposite to this case -- where there was no jury verdict on
Scholz's breach of contract claim. Further, a "motion [to alter
or amend a judgment] must establish either clear error of law or
point to newly discovered evidence of sufficient consequence to
make a difference." Franchina v. City of Providence, 881 F.3d 32,
56 (1st Cir. 2018) (quotation omitted). Scholz fails to establish
2 See Velázquez v. Figueroa-Gómez, 996 F.2d 425, 427 (1st Cir.
1993) ("[A] jury's verdict on the facts should only be overturned
in the most compelling circumstances."); see also Robinson v. Watts
Detective Agency, Inc., 685 F.2d 729, 742 (1st Cir. 1982); Cardiaq
Valve Techs. V. Neovasc, Inc., 2016 U.S. Dist. LEXIS 150686, *32
(D. Mass. 2016).
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a clear error of law or point to any sufficiently consequential
newly discovered evidence.
For these reasons, we find no abuse of discretion.
B. Goudreau's Appeal
Having disposed of Scholz's arguments, we turn to the
claims of error that Goudreau presents for our review. But be
forewarned: his arguments fare no better.
1. Abuse of Process
Goudreau first alleges that the district court erred by
entering summary judgment in Scholz's favor on Goudreau's abuse of
process claim, asserting that there were genuine issues of material
fact as to Scholz's motives for bringing the underlying litigation.
Goudreau claims that the totality of the circumstances show that
Scholz's true motives were to "litigate Goudreau into submission"
in order to obtain all royalty and copyright rights to BOSTON's
first two albums and to obtain discovery from Goudreau and others
to be used in other litigation.
To establish a claim of abuse of process under
Massachusetts law, a plaintiff must show that: 1) process was used;
2) for an ulterior or illegitimate purpose; 3) resulting in damage
to the plaintiff. Psy-Ed Corp. v. Klein, 459 Mass. 697, 713 (2011)
(citing Millennium Equity Holdings, LLC v. Mahlowitz, 456 Mass.
627, 636 (2010)). Process is abusive when it is used "to obtain
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a collateral advantage, not properly involved in the proceeding
itself, such as the surrender of property or the payment of money,
by the use of the process as a threat or a club." Cohen v. Hurley,
20 Mass. App. Ct. 439, 442 (1985) (quoting W. Page Keeton et al.,
Prosser and Keeton on the Law of Torts § 121, at 898 (5th ed.
1984)). Furthermore, an abuse of process claim is meant to address
claims brought "outside the interests properly pursued in the
proceeding." Broadway Mgmt. Servs. Ltd. v. Cullinet Software,
Inc., 652 F. Supp. 1501, 1503 (D. Mass. 1987). The bad intentions
of a defendant are irrelevant if that defendant "has done nothing
more than carry out the process to its authorized conclusion."
Cohen, 20 Mass. App. Ct. at 442.
After reviewing the record, we find no error in the
district court's holding.3 Goudreau posits that Scholz's
"ulterior" motives were to, using litigation, extract his royalty
streams from the first two BOSTON albums. However, Scholz's
directly stated in his FAC his motive to obtain all royalty rights
to, and copyrights in, BOSTON's first two albums. When a plaintiff
3 Goudreau's argument that Scholz abused the litigation process
by making meritless demands for contract rescission is, as
Goudreau's counsel conceded at oral argument, a claim better suited
as a malicious prosecution claim. See Beecy v. Pucciarelli, 387
Mass. 589 (1982) (finding malicious prosecution when a party brings
a suit with no probable cause and acts with improper motive or
malice). Evidence from the record supports this observation. But,
Goudreau raised no such claim in the district court.
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directly states his purpose in his complaint, "even a pure spite
motive" does not establish that there was an abuse of process if
the process is used "only to accomplish the result for which it
was created." Vigeant v. United States, 245 F. App'x 23, 25 (1st
Cir. 2007) (quoting Keeton et al., supra, at 897). And,
"traditionally, discovery activities have not provided grounds for
abuse of process actions in Massachusetts," as the "curtailing
[of] discovery activities[] would be inconsistent with the spirit
of Mass. R. Civ. P. 26(b)(1)." The Alphas Co., Inc. v. Kilduff,
72 Mass. App. Ct. 104, 115-16 (2008); see also Jones v. Brockton
Public Markets, Inc., 369 Mass. 387, 389-90 (1975) (limiting abuse
of process claims to writs of attachment, instituting a civil
action, and the bringing of criminal charges).
Accordingly, the district court did not err in granting
Scholz's summary judgment motion as to Goudreau's abuse of process
claim.
2. Attorney's Fees
Goudreau next argues that "the district court erred as
a matter of law in denying his motion for costs and attorney's
fees pursuant to 15 U.S.C. § 1117(a)." "We confine our review to
whether the district court has made a mistake of law or incorrectly
weighed (or failed to weigh) a factor in its decision." Richardson
v. Miller, 279 F.3d 1, 3 (1st Cir. 2002) (citing Foster v. Mydas
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Assoc., Inc., 943 F.2d 139, 143 (1st Cir. 1991)). Absent legal
errors, "[w]e review the [district] court's determination
regarding the reasonableness of the prevailing party's attorney's
fee request for 'manifest abuse of discretion.'" Flynn v. AK
Peters, Ltd., 377 F.3d 13, 26 (1st Cir. 2004) (citing Poy v.
Boutselis, 352 F.3d 479, 488 (1st Cir. 2003)).
The Lanham Act allows for an award of attorney's fees to
the prevailing party in a trademark violation case only "in
exceptional cases." 15 U.S.C. § 1117(a). We have not yet
considered what makes a case "exceptional" under the Lanham Act in
the context of a prevailing defendant.4 See Ji v. Bose Corp., 626
F.3d 116, 129 (1st Cir. 2010). But under the Patent Act -- which
contains nearly identical language, see 35 U.S.C. § 285 ("The court
in exceptional cases may award reasonable attorney fees to the
prevailing party.") -- "an 'exceptional' case is one that stands
out from others with respect to the substantive strength of a
party's litigating position . . . or the unreasonable manner in
4 We have construed the criteria for an award of attorney's fees
under the Lanham Act, in the context of a prevailing plaintiff, to
be infringements that were "malicious, fraudulent, deliberate, or
willful," or "when equitable considerations justify such awards."
See Tamko Roofing Prod., Inc. v. Ideal Roofing, Co., 282 F.3d 23,
31 (1st Cir. 2002) (internal quotation marks omitted).
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which the case was litigated." Octane Fitness, LLC v. ICON Health
& Fitness, Inc., 134 S. Ct. 1749, 1755-56 (2014).5
The Supreme Court has left it to the district courts to
"determine whether a case is 'exceptional' in the case-by-case
exercise of their discretion, considering the totality of the
circumstances." Id. at 1756. However, in a footnote in Octane
Fitness, the Supreme Court listed factors used in another similar
provision of the Copyright Act to guide that discretion. Id. at
1756 n.6. This "'nonexclusive' list of 'factors[]' includ[es]
'frivolousness, motivation, objective unreasonableness . . . and
the need in particular circumstances to advance considerations of
compensation and deterrence.'" Id. (quoting Fogerty v. Fantasy,
Inc., 510 U.S. 517, 534, n.19 (1994)).
Goudreau cries foul, alleging that the district court
utilized a more onerous "clear and convincing evidence" standard
than the Octane Fitness "preponderance of the evidence" standard.
5 The application of Octane Fitness's interpretation of § 285 of
the Patent Act to § 1117(a) of the Lanham Act is not disputed by
the parties; the district court applied Octane Fitness and Scholz
does not argue for a different standard. We also note that five
other circuits have so far applied Octane Fitness to Lanham Act
cases. See Sun Earth v. Sun Earth Solar Power, 839 F.3d 1179,
1180-81 (9th Cir. 2016) (en banc); Baker v. DeShong, 821 F.3d 620,
621–25 (5th Cir. 2016); Georgia–Pacific Consumer Prods. LP v. von
Drehle Corp., 781 F.3d 710, 720–21 (4th Cir. 2015); Slep–Tone
Entm't Corp. v. Karaoke Kandy Store, Inc., 782 F.3d 313, 317–18
(6th Cir. 2015); Fair Wind Sailing, Inc. v. Dempster, 764 F.3d
303, 313–15 (3d Cir. 2014).
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Further, he says that the district court only embarked on a cursory
review of the Octane Fitness factors. Since the district court
found for Goudreau on almost all of Scholz's Lanham Act claims,
Goudreau argues that this case was "exceptional." Additionally,
Goudreau notes that the district court's refusal to award
attorney's fees fails to deter Scholz from bringing future
frivolous lawsuits, and that because Goudreau raised an issue of
material fact as to Scholz's bad faith in abusing the litigation
process, the district court abused its discretion. See Nightingale
Home Healthcare v. Anodyne Therapy, 626 F.3d 958, 963-64 (7th Cir.
2010) ("Abuse of process is a prime example of litigating in bad
faith.").
We find neither that the district court used the
incorrect standard, nor that it abused its discretion. The
district court was intimately familiar with the totality of the
circumstances in this case, and reasonably found the case not to
be an "exceptional" one warranting the sought-after award. In its
electronic order denying Goudreau's motion, the district court not
only cited the Octane Fitness factors but also thoughtfully
analyzed each of those factors. Goudreau's disagreement with the
district court's weighting of those factors does not render that
analysis "cursory." As for deterrence, the district court properly
observed that a judgment on the merits at summary judgment itself
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precludes future litigation on the same set of facts. See B&B
Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015)
("This Court has long recognized that the determination of a
question directly involved in one action is conclusive as to that
question in a second suit." (internal quotation marks and citation
omitted)).
Goudreau's argument that he is entitled to attorney's
fees because of Scholz's purported abuse of process is equally
unavailing. As we have concluded, the district court properly
granted summary judgment to Scholz on Goudreau's abuse of process
claim. Goudreau has simply failed to prove the exceptionality of
his case by a preponderance of the evidence, or any other standard,
and we therefore affirm the district court's denial of costs and
attorney's fees.
3. Evidentiary Ruling
Finally, Goudreau argues that the district court
erroneously admitted into evidence at trial the EATA music video
with "cartoon-like pop-up text" created by and uploaded onto the
internet by Boch's friend, Ian Barrett. According to Goudreau,
the video was constitutionally protected non-commercial artistic
work comparable to a parody. Therefore, Goudreau argues, it could
not form the basis of liability for intellectual property
infringement.
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Under Rules 401 and 402 of the Federal Rules of Evidence,
the court will generally admit evidence that makes a fact more or
less probable than it would be otherwise. Fed. R. Evid. 401, 402.
But the court, at its discretion, may exclude such relevant
evidence if the evidence would confuse or mislead jurors, or if
its probative value is outweighed by unfair prejudice. Fed. R.
Evid. 403. When previously considering a Lanham Act trademark
claim, we have found that certain artistic forms of expression,
such as parodies, may be protected speech and thus not subject to
trademark infringement liability, notwithstanding the fact that
protected speech used another entity's registered trademark for a
non-commercial purpose. L.L. Bean, Inc. v. Drake Publishers, Inc.,
811 F.2d 26, 31-33 (1st Cir. 1987).
Goudreau asserts that the admission of this video
fundamentally prejudiced his case and caused jury confusion as to
the significance of the author's usage of the word-mark BOSTON to
Scholz's trademark claim. The jury finding that Goudreau did not
perform his obligations under the Settlement Agreement, Goudreau
argues, proves that admitting the video into evidence "was anything
but harmless." As a secondary matter, Goudreau maintains that
neither he nor Boch had anything to do with the creation of the
"pop-up" text, and that Scholz failed to show that Goudreau had
anything to do with it being posted online.
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We review a district court's evidentiary rulings for
abuse of discretion, Pagés-Ramírez v. Ramírez-González, 605 F.3d
109, 115 (1st Cir. 2010), but review legal issues within those
evidentiary ruling de novo and findings of fact for clear error.
Cameron v. Otto Bock Orthopedic Indus., Inc., 43 F.3d 14, 16 (1st
Cir. 1994). In light of these standards, we find that the district
court's conclusion that the video was a commercial promotional
piece was not clearly erroneous, and that the video was not subject
to constitutional protection as a matter of law. Accordingly, the
district court did not abuse its discretion in admitting the "pop-
up" video.
There was plenty of evidence to support the district
court's finding that the video served a commercial purpose. First,
the music video over which the pop-up text appears was created
immediately after EATA released its CD "Low Expectations" in
February 2009. The original music video (the version without the
pop-up text) was created by Boch to promote that new CD. That
original music video itself contains old video footage and sketches
of the band BOSTON, and the text in the pop-up messages described
two of the band members' ties to BOSTON. Ian Barrett, Boch's
friend who created the video, told Boch that he was going to create
this pop-up video and post it on the internet, and Boch uploaded
it to YouTube on November 2, 2009, soon after the release of "Low
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Expectations." Given these facts, it was reasonable for the
district court to conclude that the pop-up video was created and
posted in order to promote EATA's new album.
Further, the district court did not err as a matter of
law in concluding that the "pop-up" EATA video was not protected
speech in the form of a parody, and that the music video itself
was relevant to an issue at trial: whether Goudreau's was liable
for contributory or vicarious trademark infringements contained in
the video. Although Goudreau cites L.L. Bean, Inc. for support,
the parody described in that case is readily distinguishable from
the pop-up video at issue here. That case involved an article
within the "humor" and "parody" page of an adult entertainment
monthly periodical that utilized L.L. Bean's trademark along with
sexually explicit photos of nude models. L.L. Bean, Inc., 811
F.2d at 27. Unlike that article, the pop-up video at issue here
is not used solely as a form of artistic expression. Rather, it
uses the trademark to give factual data about band members, and is
used to promote the band's album. This is a far cry from the
protected speech in L.L. Bean, Inc. Cf. Parks v. LaFace Records,
329 F.3d 437, 454 (6th Cir. 2003) ("Crying 'artist' does not confer
carte blanche authority to appropriate a [trademarked entity's]
name.").
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But even were we to assume that this pop-up video was
intended to be parody, L.L. Bean, Inc. noted that a parody that
"engenders consumer confusion [is] entitled to less protection"
since it "implicates the legitimate commercial and consumer
protection objectives of trademark law." 811 F.2d at 32 n.3. A
"pop-up" video that features two former members of BOSTON, contains
text describing Goudreau and drummer Sib Hashian as founding
original members of BOSTON, discusses BOSTON's record sales and
the artwork on BOSTON's first album cover, and displays old footage
of BOSTON, would certainly have the potential to cause consumer
confusion.
Goudreau's claim that admission of the video caused the
jury confusion is equally unavailing. Goudreau does not show that
any jury confusion resulted from the video's introduction as it
pertains to Scholz's Lanham Act claims. To the contrary, the jury
found in Goudreau's favor as to these claims. While the jury did
find that Goudreau did not perform his obligations under the
Settlement Agreement, this was in relation to his own breach of
contract cross-claim, not Scholz's Lanham Act claims. Any argument
that admission of the video would cause the jury to confuse
Scholz's trademark infringement claims with Goudreau's breach of
contract claims was not argued before the district court and is
therefore waived. See Wood v. Millyard, 566 U.S. 463, 470 (2012).
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Even absent such waiver, Goudreau would still fail to establish
that it was this pop-up video, and not some other piece of
evidence, that caused the jury to make that finding. Therefore,
we find that the district court did not abuse its discretion in
admitting the pop-up video at trial.
III. Conclusion
Having addressed and rejected all of the parties' claims
of error, our work is complete. For the aforementioned reasons,
we affirm the judgment of the district court.
Affirmed.
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