Radiator Specialty Co. v. Pennzoil-Quaker State Co. , 207 F. App'x 361 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS January 30, 2004
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
03-20368
RADIATOR SPECIALTY COMPANY,
Plaintiff-Appellant,
VERSUS
PENNZOIL-QUAKER STATE COMPANY, formerly known as Pennzoil
Products Company; PANDORA MANUFACATURING INC., formerly known as
Snap Products Inc.
Defendants-Appellees.
Appeal from the United States District Court
For the Southern District of Texas
(01-CV-2205)
Before DUHÉ, BARKSDALE, and DENNIS, Circuit Judges.
PER CURIAM:1
Plaintiff Radiator Speciality Co. sued makers of “Fix-a-Flat”
under the Lanham Act, alleging that false advertising of
Defendants’ product as non-explosive and safe injured Plaintiff in
marketing its own “Puncture Seal” tire inflator, which was
allegedly truly safe but more expensive. The only issues on appeal
concern the district court’s holding on summary judgment that
Radiator’s claim of false advertisement is barred by the equitable
doctrine of laches. The court found the facts undisputed that
1
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
seven years elapsed between the time Radiator first objected to the
use of the “non-explosive formula” label on the “DME” version of
Fix-a-Flat and the date Radiator filed this suit. On motions for
summary judgment by defendants, Pandora Manufacturing, Inc. and its
alleged successor-in-interest, Pennzoil-Quaker State Company, the
district court dismissed based on laches. We affirm.
I.
Laches is an inexcusable delay on the part of the plaintiff
that results in prejudice to the defendant. Conan Props., Inc. v.
Conan’s Pizza, Inc., 752 F.2d 145, 153 (5th Cir. 1985). To the
extent that the relevant facts are undisputed, a district court
“enjoys considerable discretion in deciding whether to apply the
doctrine of laches.” National Ass'n of Gov. Employees v. City Pub.
Serv. Bd., 40 F.3d 698, 707 (5th Cir. 1994). When a district court
is making an equity determination such as laches, the scope of its
powers “is broad, for breadth and flexibility are inherent in
equitable remedies.” Swann v. Charlotte-Mecklenburg Bd. of Educ.,
402 U.S. 1, 15, 91 S. Ct. 1267, 1276 (1971). Unless the district
court resolved disputed issues of material fact against the
nonmovant, “its determination of whether the undisputed facts
warrant an application of laches is reviewed for abuse of
discretion.” National Ass'n, 40 F.3d at 707.
II.
Plaintiff asserts four errors. First, Radiator contends that
the district court ignored its evidence of Pandora’s and Pennzoil’s
“unclean hands,” which should have precluded them from invoking an
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equitable defense. The district court determined that the
undisputed facts did not demonstrate any “willful, egregious, or
unconscionable conduct or bad faith” on the part of Defendants, as
discussed in Hot Wax,2 so as to constitute unclean hands. We agree
with that assessment. Nor do we find any abuse of discretion in
the court’s requirement, in accordance with Hot Wax, that the
inequitable conduct alleged relate to the equitable issue in the
case, i.e., the defense of laches. (On the main demand, Radiator
is asking for damages, not equitable relief.) We agree that the
record demonstrates no genuine issue of material fact on the
question of Defendants’ “unclean hands” and find no abuse of
discretion in the district court’s ruling in this regard.
Radiator’s second assignment of error is that the district
court improperly calculated the length of delay for Pennzoil, which
purchased the Fix-A-Flat line in November 1997, by allowing
Pennzoil to “tack” onto the delay by Radiator in raising its claim
against the preceding owner of Fix-A-Flat. The court considered
the rationale behind patent and trademark jurisprudence allowing
“tacking.” If a sale involves an entire product line along with
the goodwill, then “the transferee effectively has assumed the
transferor’s identity,”3 and both the defendant and its predecessor
2
Hot Wax, Inc., v. Turtle Wax, Inc., 191 F.3d 813, 826 (7th
Cir. 1999).
3
R2 Medical Systems, Inc. v. Katecho, Inc., 931 F. Supp. 1397,
1412 (N.D. Ill. 1996).
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have been “lulled into security by plaintiff’s failure to sue.”4
Because under the undisputed terms of Pennzoil’s acquisition
document the goodwill was transferred with the entire product line,
the court reasoned that Pennzoil similarly effectively assumed the
transferor’s identity for purposes of laches. We discern no abuse
of discretion or error of law in the district court’s careful
analysis.
Radiator’s third and fourth assigned errors are that the
district court inappropriately resolved factual differences against
Radiator on the issues of unjustifiable delay and prejudice. We
conclude from our review of the record, however, that the material
facts are not genuinely disputed. The court did not reject
factually any of the reasons Plaintiff offered for the delay. We
hold that its analysis and conclusions about the insufficiency of
those reasons are well within its discretion.
The court found material evidence of prejudice to be
uncontradicted as well, and we agree. Although the court noted a
conflicting affidavit on the availability of “many of the
witnesses,” the court found no question of fact regarding the
unavailability of documents or economic harm. The court neither
improperly resolved any material fact nor abused its discretion in
finding prejudice.
III.
Laches “is not determined by a simple rule of thumb,” but by
4
Celastic Corp. v. McClellan Shoe Specialty Co., 15 F. Supp.
1048, 1050 (D.C. Del. 1936).
4
“a close scrutiny of the particular facts and a balancing of the
respective interests and equities of the parties, as well as the
general public.” 5 J. Thomas McCarthy, Trademarks and Unfair
Competition, § 31:22 (4th ed. 2003). The district court provided
a thorough opinion, making its determination to apply laches to
undisputed facts in precisely that manner. It did not abuse its
discretion in so doing.
AFFIRMED.
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