Desirous Parties Unlimited, Inc. v. Right Connection, Inc. ( 2023 )


Menu:
  •                            NOT FOR PUBLICATION                           FILED
    UNITED STATES COURT OF APPEALS                        JUN 30 2023
    MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    DESIROUS PARTIES UNLIMITED, INC.,               Nos. 22-16530
    a Texas corporation,                                 22-16885
    Plaintiff-Appellee,             D.C. No.
    2:21-cv-01838-GMN-BNW
    v.
    RIGHT CONNECTION, INC., a Nevada                MEMORANDUM*
    corporation; DON HUGHES, an individual,
    Defendants-Appellants.
    Appeal from the United States District Court
    for the District of Nevada
    Gloria M. Navarro, District Judge, Presiding
    Submitted June 6, 2023**
    San Francisco, California
    Before: MILLER and KOH, Circuit Judges, and CHRISTENSEN,*** District
    Judge.
    Defendant-Appellants Right Connection, Inc., and Don Hughes appeal the
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by Ninth Circuit Rule 36-3.
    **
    The panel unanimously concludes this case is suitable for decision
    without oral argument. See Fed. R. App. P. 34(a)(2).
    ***
    The Honorable Dana L. Christensen, United States District Judge for
    the District of Montana, sitting by designation.
    district court’s grant of a preliminary injunction in favor of Plaintiff-Appellee
    Desirous Parties Unlimited, Inc., and subsequent finding of contempt for violations
    of the preliminary injunction. We have jurisdiction pursuant to 
    28 U.S.C. §§ 1291
    and 1292(a)(1). Reviewing for abuse of discretion, see Chamber of Com. of the
    U.S. v. Bonta, 
    62 F.4th 473
    , 481 (9th Cir. 2023) (citing Roman v. Wolf, 
    977 F.3d 935
    , 941 (9th Cir. 2020)); Reebok Int’l Ltd. v. McLaughlin, 
    49 F.3d 1387
    , 1390
    (9th Cir. 1995), we affirm.
    The district court did not abuse its discretion in entering the preliminary
    injunction and imposing a $15,000.00 bond. A district court abuses its discretion if
    its decision is based on an erroneous legal standard or clearly erroneous factual
    findings. Negrete v. Allianz Life Ins. Co. of N. Am., 
    523 F.3d 1091
    , 1096 (9th Cir.
    2008). Appellants argue that the district court erred by granting a preliminary
    injunction that upset the status quo ante litem. We conclude that the status quo
    ante litem was Appellee’s exclusive right to use the relevant trademark in
    commerce, and it was appropriately protected by the entry of the preliminary
    injunction.
    Next, Appellants argue that the entry of the preliminary injunction was an
    abuse of discretion because there was an unreasonable delay between Appellee
    learning of the alleged infringement and filing its motion for preliminary
    injunction. A portion of the delay resulted from reasonable pre-litigation
    2
    communication. The remaining delay does not warrant denial of the preliminary
    injunction in light of the other factors weighing in favor of the injunction,
    especially the fact that there were ongoing, worsening injuries. See Arc of Cal. v.
    Douglas, 
    757 F.3d 975
    , 990 (9th Cir. 2014) (explaining that courts are “loath to
    withhold relief solely on” the basis of a delay and “such tardiness is not
    particularly probative in the context of ongoing, worsening injuries”). Finally, to
    the extent Appellants argue the district court’s own delay in granting the
    preliminary injunction should be considered as evidence against Appellee, we
    reject this argument. Appellants provide no support for this contention, and any
    delay by the district court is not indicative of Appellee “sleeping on its rights” or
    “the lack of need for speedy action” on Appellee’s part. Lydo Enters., Inc. v. City
    of Las Vegas, 
    745 F.2d 1211
    , 1213 (9th Cir. 1984) (quoting Gillette Co. v. Ed
    Pinaud, Inc., 
    178 F. Supp. 618
    , 622 (S.D.N.Y. 1959)).
    We discern no clearly erroneous finding of fact or erroneous application of
    law in the district court’s conclusions that (1) Appellee was likely to succeed on
    the merits of its trademark infringement claim, (2) Appellee would suffer
    irreparable harm, (3) the balance of equities did not weigh in favor of either party,
    and (4) it was in the public interest to enter a preliminary injunction. Specifically,
    the district court did not abuse its discretion in determining that Appellee was
    likely the sole owner of the mark. The first use of the mark in commerce, in a
    3
    November 2017 advertisement, identified Appellee as the source because it
    described the event as “Presented by DesirousParty.com.” The record reveals only
    that the parties worked together on events, not as joint owners of a trademark.
    Additionally, Appellants failed to rebut the presumption of irreparable harm in
    light of the district court’s finding that there was a likelihood of success on the
    merits. Appellants’ challenge to the amount of the bond imposed likewise has no
    merit.
    The district court did not err in finding that Appellants violated the
    preliminary injunction, holding Appellants in contempt, and issuing sanctions of
    $5,000.00 per day until Appellants cure their contempt. First, Appellants argue
    that the district court denied Appellants due process by failing to provide fair
    notice and an opportunity to respond to the argument that Appellants’ “dv” Logo
    violated the preliminary injunction. Contrary to Appellants’ characterization, the
    “dv” Logo argument was first raised in Appellee’s Motion to Enforce, and
    Appellants responded to the contention that their use of the “dv” Logo was
    prohibited in their Opposition Brief to the Motion to Enforce. Any evidence
    subsequently offered by Appellee on this issue constituted rebuttal evidence that
    the district court appropriately considered.
    Appellants next argue that the contempt finding was an abuse of discretion
    because the preliminary injunction failed to provide specific and definite terms and
    4
    the district court failed to provide a sufficient factual basis for its finding. We are
    satisfied that the terms of the preliminary injunction were sufficiently specific and
    definite, given the totality of the circumstances, to provide Appellants with
    adequate notice that their actions violated the preliminary injunction. Furthermore,
    it was unreasonable for Appellants to conclude that their actions complied with the
    terms of the preliminary injunction. The district court’s finding of the likelihood
    of confusion between the “dv” Logo and Dirty Vibes trademark is supported by the
    record. Given Appellants’ contempt, the district court had the discretion to award
    Appellee attorney’s fees. See Harcourt Brace Jovanovich Legal & Pro. Publ’ns,
    Inc. v. Multistate Legal Stud., Inc., 
    26 F.3d 948
    , 953 (9th Cir. 1994).
    Finally, Appellants argue that the district court erred in ordering Appellants
    to pay Appellee $5,000.00 per day until their contempt is cured. Appellants failed
    to raise the issue of their ability to pay the sanction before the district court.
    Appellants did not preserve this issue for appeal, and we decline to consider it in
    the first instance. See In re E.R. Fegert, Inc., 
    887 F.2d 955
    , 957 (9th Cir. 1989)
    (explaining that we “will not consider arguments that are not ‘properly raise[d]’”
    (quoting Rothman v. Hosp. Serv. of S. Cal., 
    510 F.2d 956
    , 960 (9th Cir. 1975))).
    AFFIRMED.
    5