Northern Central Distributing, Inc. v. Bogenschutz
1:17-cv-01351
| E.D. Cal. | Mar 1, 2019Background
- Northern Central Distributing (plaintiff) and Rockie’s Containers dba Y Décor (defendants) are competing home-decor sellers; plaintiff alleges defendants used plaintiff’s proprietary SKUs.
- Parties entered a Stipulation and Order re Preliminary Injunction (the Stipulated Injunction) forbidding defendants from using identical or "similar" SKUs (defined as 3+ consecutive matching characters) and requiring notice plus 10 days to cure any alleged SKU violation.
- Plaintiff moved for contempt (First Contempt Motion) alleging ~492 violations; the court found defendants in contempt for displaying 67 protected SKUs on y‑decor.com and imposed $500 per violation ($33,500).
- Plaintiff later identified 14 SKUs (a subset of the 67) displayed on defendants’ website and filed a Second Contempt Motion seeking $7,000 (14 × $500), additional weekly coercive sanctions, and attorneys’ fees.
- The court denied the Second Contempt Motion as not ripe because plaintiff failed to give the required fresh notice and 10‑day cure opportunity for the 14 alleged violations; the court treated its order denying the motion as providing notice and directed defendants to file evidence by March 11, 2019 that they are not currently using the 14 SKUs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did defendants violate the Stipulated Injunction by displaying 14 protected SKUs? | Screenshots show the 14 SKUs on y‑decor.com; this constitutes use. | Although SKUs appeared, defendants claim neither they nor third‑party sellers used the SKUs to sell products and lack control over some third parties. | Court: Plaintiff showed the SKUs were displayed; that constitutes "use." Court required defendants to file evidence they are not currently using the SKUs. |
| Was plaintiff required to give fresh notice and 10 days to cure before filing the Second Contempt Motion? | Plaintiff contends prior notice and the court’s prior contempt ruling suffice. | Defendants argue plaintiff must give new notice before bringing another contempt motion. | Court: New notice and 10‑day cure are required; plaintiff did not provide it, so the motion was premature and denied. |
| Can plaintiff recover the $500 per violation sanction again for the same SKUs? | Seeks $7,000 for the 14 violations plus additional coercive weekly sanctions because prior fine was insufficient. | Defendants contend they were already sanctioned for those SKUs and plaintiff cannot re‑punish the same violations. | Court did not resolve double‑punishment argument substantively because it denied the motion as premature for lack of notice. |
| Are attorneys’ fees appropriate for bringing the Second Contempt Motion? | Requests fees and costs for enforcement. | Implied opposition; court must find a material violation to award fees. | Court did not award fees; motion denied without addressing fees on the merits. |
Key Cases Cited
- Institute of Cetacean Research v. Sea Shepherd Conservation Soc., 774 F.3d 935 (9th Cir.) (discussing contempt and liability for facilitating others’ violations)
- Labor/Community Strategy Ctr. v. Los Angeles Cty. Metro. Transp. Auth., 564 F.3d 1115 (9th Cir.) (elements required to prove civil contempt)
- Gen. Signal Corp. v. Donallco, Inc., 787 F.2d 1376 (9th Cir.) ("all reasonable steps" defense and treatment of technical/inadvertent violations)
- United States v. Ayres, 166 F.3d 991 (9th Cir.) (present inability to comply as a defense to contempt)
- Primus Auto. Fin. Servs., Inc. v. Batarse, 115 F.3d 644 (9th Cir.) (court’s inherent powers to impose contempt sanctions)
- FTC v. Enforma Natural Prods., Inc., 362 F.3d 1204 (9th Cir.) (requirement that the order be specific and definite for contempt)