394 F.Supp.3d 1073
C.D. Cal.2019Background
- Cliffside (via Clean & Sober Media/C&S Media owned by Richard Taite) acquired the online journal The Fix in 2013; The Fix published a 2011 negative review of Passages Malibu and later posted a Process Statement (Oct 2014) and Mission Statement (Nov 2013) describing its review methodology and editorial independence.
- Passages repeatedly requested removal of the 2011 review; The Fix refused and advertised Cliffside services on pages that included the Passages review. Passages discovered Cliffside’s ownership link to The Fix only after a November 2017 article in The Verge.
- Passages sued (Feb 2, 2018) under the Lanham Act claiming The Fix’s review and statements were false or misleading commercial advertising/promotional material tied to Cliffside; Cliffside counterclaimed on related theories.
- The jury found for Passages on Lanham Act claims relating to The Fix’s Passages review; bench trial addressed equitable remedies (laches, unclean hands, injunction, disgorgement, attorneys’ fees).
- Court found Cliffside concealed ownership and had significant involvement with The Fix’s content; also found Passages operated an extensive network of unbranded promotional websites that concealed Passages’ ownership (uncharged in jury verdict but relevant to equitable defenses).
- Remedies: court denied laches, found Passages had unclean hands as to The Fix’s Mission Statement claim, awarded permanent injunction (removal of Passages review from Cliffside properties and 404 on former URL), awarded $60,000 disgorgement (The Fix’s estimated revenue), denied attorneys’ fees, and remanded remaining state claims to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Laches (timeliness) | Passages filed promptly after learning Cliffside owned The Fix (Nov 2017); suit within months. | Cliffside: injuries/false review were knowable earlier (2011/2014); laches should bar claims. | Laches inapplicable — cause of action under Lanham Act accrued when Passages discovered commercial affiliation (Nov 2017); concealment supports equitable tolling/unclean-hands bar to laches. |
| Unclean hands | Passages: equitable defense inapplicable; it sought relief for Cliffside’s misconduct. | Cliffside: Passages ran deceptive unbranded websites that conceal Passages’ control — misconduct related to claims. | Court: Passages had unclean hands regarding the Mission Statement/independence claim (clear & convincing); but unclean hands did not bar claims about the Passages review or Process Statement. |
| Injunctive relief scope | Remove offending review from Cliffside properties and prevent future false statements; replace URL with 404; ban certain metadata. | Cliffside: First Amendment concerns; claim moot because content removed. | Permanent injunction granted to remove the Passages review from Cliffside-owned sites and require 404 at prior URL; metadata injunction denied as overbroad; voluntary removal not dispositive—risk of recurrence. |
| Monetary relief (disgorgement & fees) | Disgorgement of Cliffside profits from the violation (various methods offered: spike in net income, ad spend, saved ad costs); fees as exceptional case. | Cliffside: No causal proof linking profits to the Lanham Act violations; not willful; fees unwarranted. | Disgorgement: willfulness not proven for Passages-review claims, so disgorgement not mandated; exercising equitable discretion, court awarded $60,000 (The Fix’s estimated revenue tied to the review). Attorneys' fees denied (case not "exceptional"). |
Key Cases Cited
- Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829 (9th Cir.) (laches applied using analogous state limitations period for Lanham Act claims)
- SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (U.S.) (statute of limitations can preclude laches where Congress provided a limitations period)
- Internet Specialties W., Inc. v. Milon-DiGiorgio Enters., Inc., 559 F.3d 985 (9th Cir.) (limitations period begins when plaintiff knew or should have known the "essence" of the Lanham Act injury)
- Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725 (9th Cir.) (elements for commercial advertising or promotion under § 1125(a))
- U-Haul Int’l, Inc. v. Jartran, Inc., 793 F.2d 1034 (9th Cir.) (disgorgement and presumption tied to advertising expenditures in comparative advertising cases)
- TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820 (9th Cir.) (disgorgement requires proof of causation; presumption limited even among competitors)
- Stone Creek, Inc. v. Omnia Italian Design, Inc., 875 F.3d 426 (9th Cir.) (willfulness required for disgorgement under Lanham Act)
- Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir.) (plaintiff must establish defendant’s gross profits from infringing activity with reasonable certainty)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (U.S.) (standard for awarding fees in "exceptional" cases; totality of circumstances)
- SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 839 F.3d 1179 (9th Cir.) (application of Octane Fitness standards to Lanham Act fee requests)
- General Bedding Corp. v. Echevarria, 947 F.2d 1395 (9th Cir.) (federal rule for when limitations period begins; discussed in laches context)