MEMORANDUM OPINION
Rent-a-Wreek is a nationwide franchise business that specializes in the short and mid-term rental of used automobiles.
For nearly 10 years, David Schwartz, the originator of the concept, and Rent A Wreck, Inc. (hereinafter, collectively “Schwartz”) and Rent-A-Wreck of America, Inc. (“Rent-A-Wreck”) and Bundy American, LLC (hereinafter, collectively “RAWA”), have been doing battle over Schwartz’s operation of a RAWA franchise in West Los Angeles, California. Their latest skirmish concerns certain actions on RAWA’s part which the Court has found to be contemptuous, and as to which the Court must now consider appropriate sanctions. While the procedural history of the case is long,
After the second appeal became final and the case was remanded to this Court, Schwartz filed a Bill of Costs, seeking $32,665.21 from RAWA. On April 1, 2016, the Clerk of Court issued an Order Taxing Costs in favor of Schwartz and against
On May 3, 2016, Schwartz filed a Motion to Enforce Court’s Order and for Contempt. ECF No. 528, which the parties briefed. On September 30, 2016, the Court held a Show Cause Hearing at which it found RAWA in contempt of the Court’s Order of March 4, 2011, in that for several weeks, RAWA deliberately directed or permitted its call center operators to advise prospective customers that RAWA had no franchise in what was Schwartz’s exclusive Rent-A-Wreck business territory in West Los Angeles.
For the reasons stated on the record at the September 30, 2016 and February 27, 2017 hearings, and as further set forth in this Memorandum, Schwartz’s Motion to Enforce Court’s Order and for Contempt, ECF No. 528, will be GRANTED IN PART and DENIED IN PART.
I.
It is well-established that federal courts possess an inherent power to punish for contempt. Chambers v. NASCO, Inc.,
Schwartz has, by clear and convincing evidence, satisfied all four elements on the part of RAWA.
By written order dated March 4, 2011, the Court ordered that “[RAWA’s] Call Center shall in no way attempt to dissuade prospective customers from connecting with [Schwartz’s] business or in any way attempt to divert business from [Schwartz’s] exclusive business territory to other franchises.” ECF No. 382. Schwartz contends that RAWA violated the terms of the Court’s March 4, 2011 Order.
The March 4, 2011 Order was unquestionably a valid decree. It was not reversed or vacated by the Fourth Circuit in its Opinion and Order of March 9, 2012. See ECF No. 395.
According to Schwartz, RAWA violated the March 4, 2011 Order when it intentionally diverted prospective customers away from his business. He alleges and has testified based on his own phone calls to RAWA’s customer service center that for more than one month, i.e. primarily in April of 2016, employees at the customer service call and email centers systematically informed potential customers inquiring by phone that despite Schwartz’s West Los Angeles franchise, no franchise existed there or that Schwartz had ceased operating. Moreover, some customers were directed to a different RAWA franchise in another California city while others were referred to a used car rental company known as Priceless, a non-RAWA but RAWA-related entity. Schwartz, himself as the caller, has established eight instances in April 2016 when RAWA’s call center and email response team falsely represented either that RAWA had no franchise in West Los Angeles or that Schwartz’s franchise no longer existed. Based on this conduct, Schwartz submits that RAWA violated the Court’s March 4,2011 Order.
Although RAWA concedes that their call center staff may have wrongly represented that Schwartz’s franchise was closed or did not exist, it has argued that a contempt finding is not warranted because these statements were caused by an inadvertent programming error within a March 31, 2016 software update to their online reservation system prepared by a third party. According to RAWA, the programming error removed several franchises, including Schwartz’s franchise, from a list used by the call center staff. RAWA alleges that the error did not otherwise affect their public website, which consumers could continue to use to locate and contact Schwartz’s franchise. Accordingly, says RAWA, it did not intend to divert business from Schwartz’s franchise. Furthermore, RAWA maintains that it did not know about the programming error or its effects until Schwartz served the instant Motion and that it promptly corrected the error at that time. Therefore, according to RAWA, Schwartz cannot prove, at least not by
The Court is unconvinced by RAWA’s arguments.
There is no question that RAWA’s conduct in or about April 2016 violated the terms of the March 4, 2011 Order. When prospective customers contacted RAWA about possibly renting a car in the West Los Angeles apa, they were told that there was no RAWA franchise located in West Los Angeles, which, as the Court has had occasion to note, is the second largest city in the United States. Consequently, RAWA diverted or attempted to' divert business from Schwartz’s franchise, in clear violation of the order that they “in-no way attempt to .., divert business from [Schwartz’s] exclusive business territory to other franchises.” Even if the violation occurred due to an inadvertent error-—a proposition whjch the Court flatly rejects—it is irrelevant. “The absence of willfulness does not relieve from civil contempt,” and “it matters not with what intent the defendant did the prohibited act.” In re Walters,
With regard to whether RAWA had actual or constructive knowledge of its violation of the March 24, 2011 Order, the Court looks not only to the facts surrounding the immediately involved violations but considers as well the history and context of the litigation between the parties. RAWA cites Oce N. Am., Inc. v. MCS Servs., Inc.,
The history between the parties adds context. The Court recalls yet again its finding that in 2012 RAWA, deliberately changed the address and hours it was listing for Schwartz’s franchise on its website to an outdated address and to . patently incorrect hours,
Taken together with the earlier direct verbal threats made by RAWA’s CEO Jack Fitzgerald to Schwartz that he was going to make things difficult for Schwartz and take everything Schwartz fiad, the Court concludes that RAWA’s diversion of business from Schwartz’s franchise in or about April 2016 was clearly and convincingly deliberate and intentional, not merely accidental or negligent. The Court finds RAWA intentionally violated the March 4, 2011 Order.
Finally, there can be little doubt that Schwartz suffered harm as a result of RAWA’s violation. Although lost business and damage to business reputation may be difficult to quantify, it defies experience to believe that they did not result. In any event, the attorneys’ fees associated with having to bring RAWA’s contemptuous actions to the attention of the Court, as discussed infra, are not only real, but unquestionably tangible.
In sum, the Court finds Schwartz has satisfied his prima facie burden of showing all four elements for the imposition of civil contempt against RAWA. With that, the burden,shifts to RAWA to set forth a valid defense for its violation of the March 4, 2011 Order. See Darwin Const. Co.,
To benefit from the substantial compliance defense, the violating party must show that it took all reasonable steps to ensure compliance. See United States v. Darwin Const. Co.,
RAWA asserts that it substantially complied with the March 4, 2011 Order with respect to the call center misstatements in or about April 2016 and that it only violated that Order due to an inadvertent error. Beyond restating the standard for the substantial compliance defense, RAWA offers very little support for this assertion. Even if the programming error was due to an inadvertent mistake committed by a third party—and the Court does not believe it was—the efforts made by RAWA to ensure that it was not diverting business from Schwartz’s franchise were, to say the least, substandard. There is no indication that RAWA alerted, much less instructed, its employees as to the significance of the West Los Angeles franchise. In fact, what seems clear is that the company took absolutely no steps whatsoever to ensure that its employees even knew about the instant litigation, the March 4, 2011 Order, or the importance of treating the West Los Angeles franchise fairly. The substantial ■ compliance defense offers RAWA no shelter.
Whether the defense of good faith is available to civil contempt is open to debate. Courts within the Fourth Circuit have disagreed whether good faith is a stand-alone defense to civil contempt.
III.
“The appropriate remedy for civil contempt is within the court’s broad discretion.” In re Gen. Motors Corp.,
In addition to injunctive relief, Schwartz seeks monetary relief in the form of attorneys’ fees and compensation for lost profits. He seeks $500,000 to recoup his losses from the diversion of business from his territoiy. He also asks to recover all attorneys’ fees he has incurred dating back to the start of the litigation with RAWA in 2007. Alternatively, Schwartz seeks all attorneys’ fees related to the current Motion for Contempt, the relevant hearings, and other related filings.
A. Injunctive Relief
Injunctive relief in this case is not only merited, but necessary and appropriate. In light of RAWA’s consistent efforts to undermine Schwartz’s business, coercive sanctions will ensure that RAWA in no way continues to divert business from Schwartz’s franchise. Accordingly, the Court will order that:
1. RAWA shall publish the correct address, phone number, dates, and hours of operation for Schwartz’s franchise on the Rent-A-Wreck website.9 If any of this information requires amendment at any time in the future, Schwartz should contact RAWA, and RAWA shall update the information on the website without delay.
2. RAWA shall employ a pre-recorded dialogue for all incoming calls to its call center. The pre-recorded dialogue must substantially be as follows:
“Thank You for calling the Rent-A-Wreck Customer Care Center. This call may be monitored and recorded for quality assurance and training purposes. For information regarding cities served by our location in the Greater Los Angeles, California area, please press 1. For information about all other locations, please press 2.”
Upon pressing 1 the caller will hear the following message: “Please press 1 for the Greater Los Angles, California area telephone number. Please press '2 for the Greater Los Angles, California area street address. Please press 3 for the Greater Los Angles, California area business hours. Please press 4 for the Greater Los Angles, California area email address.”
Upon pressing 1, the caller will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The phone number is 310-826-7555, 310-826-7555. Please press 1 to return to the previous menu.”
Upon pressing 2, the caller will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The address is 2270 South Centinela Avenue, Los Ange-les, California 90064. Please press 1 to return to previous menu.”
Upon pressing 3, the caller will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The business hours are: Monday 'thru Friday 9:00 AM to 6:00 PM Pacific Time, Saturday 9:00 AM to 4:00 PM Pacific Time, Sunday 10:00 AM to 1:00 PM Pacific Time. Please press 1 to return to previous menu.”
Upon pressing 4, the caller will hear the following-message on a continuous loop until the caller presses 1 or hangs up: “The email address is w-r-e-n-t-w-r-e-c-k@aol.com. W-rent-wreck@aol.com. Please press 1 to return to previous menu.”
If any of the information in the prerecorded dialogue requires amendment at any time in the future, Schwartz shall contact RAWA, and RAWA shall update the recording without delay.
B. Monetary Relief
i. ' Attorneys’ Fees and Costs
At a minimum, Schwartz is entitled to an award of attorneys’ fees. The Court concludes that he is not entitled to attorneys’ fees dating back to the start of the litigation. Without question, however, he is due compensation for attorneys’ fees related to bringing and litigating the instant contempt motion. These relate to all the pleadings, preparation, and multiple court appearances required to bring RAWA’s contemptuous actions to the Court’s attention:
Based upon evidence received at the September 30, 2016 Show Cause Hearing and for all the reasons stated above, the Court finds that RAWA’s violation of the Court’s March 4, 2011 Order rises to the requisite level of obstinacy or recalcitrance justifying an award of attorneys’ fees. See CapitalSource Fin., LLC v. Delco Oil, Inc., Civ. No. DKC-06-2706,
To calculate an attorneys’ fees award, the Court must calculate the “lodestar” figure, i.e., the number of hours reasonably expended on the litigation multiplied by an hourly rate that is also reasonable. See Robinson v. Equifax Info. Servs., LLC,
Schwartz’s counsel submitted a Fees and Costs Supplement, ECF No. 566-3, accounting for $87,440.00 in attorneys’ fees and $2,982.00 in costs, which the Court has carefully reviewed. The Court holds that attorneys’ fees in the amount of $60,000.00, roughly two-thirds of what Schwartz seeks, are justified based upon its finding that counsel’s billing rates of $200 per hour are reasonable and appropriate, given the time reasonably needed to research the relevant legal issues, prepare motions, and prepare for and appear at the hearings.
Accordingly, RAWA, jointly and severally, shall pay Schwartz $60,000.00 for Schwartz’s reasonable attorneys’ fees and $2,982.00 for his reasonable costs incurred between April 12, 2016, when his counsel began preparing- to file the instant contempt motion, and April 17, 2017, the date Schwartz’s last pleadings pertaining to the contempt were filed.
ii. Lost Profits and Reputational Harm With regard to Schwartz’s request for monetary sanctions for lost profits, the Court has no trouble concluding that Schwartz’s request for $500,000 is, to put it mildly, over the top. Still,= in the Court’s view, Schwartz is entitled to some lesser amount for lost profits stemming from both the sales he would have likely made but for RAWA’s diversion of business and for the reputational damage he suffered when RAWA broadcast to the public that his franchise' was non-existent or shuttered.
It is true that a compensatory civil contempt sanction .cannot “exceed the actual loss to the complainant caused by the actions of respondent, lest the contempt fine become punitive in nature, which is not appropriate in a civil contempt proceeding.” Enovative Techs., LLC v. Leor,
First, as to lost profits:
As an initial matter, the lost profits are limited to Schwartz’s losses caused by RAWA’s employees’ misstatements. Although the Court recognizes that Schwartz’s business was likely affected by RAWA’s inaccurate listing of information about Schwartz’s franchise on its website and by its allegedly malfunctioning website referral system, the Court’s finding of contempt, and compensation for same, is limited to the call center misstatements. See Goodyear Tire & Rubber Co. v. Haeger, _ U.S. _,
Aided by averages, historic performance data, and industry-wide statistics provided by the parties,
Then there is the matter of reputational harm.
The damage done to Schwartz’s business by RAWA’s employees’ misstatements did not simply result in profits lost during and around the month of April 2016. There can be little doubt that Schwartz’s business also suffered substantial reputational harm. Prospective customers who were falsely told that his business was closed or non-existent may never patronize his business again, and may even have disseminated that falsehood to others. Pursuant to its broad discretion. see In re Gen. Motors Corp.,
In reaching the decision to award Schwartz that amount, the Court has consulted case law in the commercial defamation and defamation per se contexts, where courts have enhanced damages to compensate plaintiffs for harm that is otherwise not easily calculated, especially where, precisely because of defendants’ conduct, a plaintiff cannot prove the harm.
In fact, courts in the past have used the Lanham Act as a guide to structure civil contempt sanctions. See, e.g., Howard Johnson Co. v. Khimani,
IV.
Summing up, Schwartz’s Motion to Enforce Court’s Order and for Contempt, ECF No. 528, is GRANTED IN PART and DENIED IN PART.
RAWA SHALL comply with the injunc-tive relief set forth above. In addition, RAWA, jointly and severally, SHALL pay Schwartz $60,000.00 for Schwartz’s reasonable attorneys’ fees and $2,982.00 reasonable costs incurred between April 12, 2016 and April 17, 2017. Additionally, RAWA, jointly and severally, SHALL pay Schwartz $6,879.60 for lost profits suffered by Schwartz’s West Los Angeles franchise and RAWA, jointly and severally, SHALL pay Schwartz $13,759.20 for reputational damage to Schwartz’s West Los Angeles franchise. The total amount payable to Schwartz by RAWA, jointly and severally, shall be $83,620.80. Final Judgment will be entered in favor of Schwartz and against RAWA in that amount.
A separate Order will ISSUE.
FINAL ORDER OF JUDGMENT
Upon consideption of Plaintiffs’ Motion to Enforce Courfis Order and for Contempt (ECF No. 528), and Defendants’ Opposition thereto, hearings having been held on September 30, 2016 and February 27,2017, it is, for the reasons stated on the record and as set forth in the accompanying Memorandum Order, this 29th day of June, 2017
ORDERED:
1. Plaintiffs’ Motion to Enforce Court’s Order and for Contempt (ECF No. 528) is GRANTED IN PART and DENIED IN PART;
2. Defendants are found in CONTEMPT of the Court’s Order of March 4, 2011, in that for several weeks, they deliberately directed or permitted their call center operators to advise prospective customers that Rent-A-Wreck had no franchise in what was Plaintiffs’ exclusive • Rent-A-Wreck business territory in West Los Ange-les, which was well-known to Defendants;
3. As a remedy, Defendants are required to PUBLISH the correct address, phone number, dates,- and hours of operation for Plaintiffs’ franchise on the Rent-A-Wreck website. If any of this information requires amending at. any time in the future, Plaintiffs shall contact Defendants, and Defendants SHALL update the information on the website without delay;
4. Further, Defendants SHALL employ a pre-recorded dialogue for all incoming calls to its call center. The prerecorded dialogue must substantially be as follows:
“Thank You for calling the Rent-A-Wreck Customer Care Center. This call may be monitored and recorded for quality assurance and training purposes. For information regarding cities served by our location in the Greater Los Angeles, California area, please press 1. For information about - all other locations; please press 2,” Upon pressing 1 the caller will hear the following message: “Please press 1 -for the Greater Los .Angles, .Californiaarea telephone number. Please press 2 for the Greater Los Angles, California area street address. Please press 3 for the. Greater Los Angles, California area business hours. Please press 4 for the Greater Los Angles, California area email address.” Upon pressing 1, the caller will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The phone number is 310-826-7555, 310-826-7555. Please press 1 to return to the previous menu.”
Upon pressing 2, the caller .will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The address is 2270 South Cen-tinela Avenue, Los Angeles, California 90064, Please press 1 to return to previous menu.”
Upon pressing 3, the caller will hear the following message on a continuous loop -until the caller presses 1 or hangs up: “The business hours are: Monday thru Friday 9:00 AM to 6:00 PM Pacific Time, Saturday 9:00 AM to 4:00 PM Pacific Time, Sunday 10:00 AM to 1:00 PM Pacific Time, Please press 1 to return to previous menu.”'
Upon pressing 4, the caller will hear the following message on a continuous loop until the caller presses 1 or hangs up: “The email address is w-r-e-n-t-w-r-e-c-k@aol.com. W-rent-wreck@aol. com. Please press 1 to return to previous menu.”
If any of the information in the prerecorded dialogue . requires amendment at any timé in the future, Plaintiff shall contact RAWA, and RAWA SHALL update the recording without delay;
5. Defendants, jointly and severally, SHALL pay Plaintiffs $60,000.00 to cover Plaintiffs’ reasonable attorneys’ fees for the preparation of . pleadings and participation in court proceedings to establish Defendants’ contempt as found by the Court;
6. Defendants, jointly and severally, SHALL pay Plaintiffs $2,982.00 to cover Plaintiffs’ reasonable costs incurred in preparing pleadings and participating in court proceedings to establish Defendants’ contempt as found by the Court;
7. Defendants, jointly and severally, SHALL pay Plaintiffs $6,879.60 for lost profits suffered by Plaintiffs’ West Los Angeles franchise by reason of Defendants’ contempt;
8. Defendants, jointly and severally, SHALL pay Plaintiffs $13,759,20 for reputational damage to Plaintiffs’ West Los Angeles franchise by' reason of Defendants’ contempt;'
' 9. Final Judgment is ENTERED in favor of Plaintiffs and against Defendants, jointly and severally, in the amount of $83,620.80;
10. The Clerk of the Court is directed to CLOSE this case.
Notes
. Schwartz filed suit against RAWA in June 2007. In the last iteration of the Complaint, Schwartz sued for declaratory judgment, specific performance, and breach of contract. In response, RAWA filed various counterclaims, one of which asserted that the Schwartz franchise violated California competition law and constituted an unlawful restraint on trade. The parties’ claims proceeded to trial in April 2010. The jury found that Schwartz had a contract with RAWA with respect to Schwartz’s operation of a used car rental business in West Los Angeles and that the contract afforded Schwartz1 the exclusive right to operate a RAWA franchise in West Los Angeles. RAWA subsequently moved under Federal Rule of Civil Procedure 50 to set aside portions of the jury’s verdict, arguing, among other things, that California competition law rendered the exclusivity provision void ab initio. The Court denied RAWA’s Rule 50 Motion and entered a Final Order of Declaratory Judgment on September 23, 2010. ECF No. 344. On appeal, on March 9, 2012, the United States Court of Appeals for the Fourth Circuit issued an opinion affirming in part, vacating in part, reversing in part, and remanding the case for further proceedings. ECF No. 395. Of immediate relevance, the Fourth Circuit instructed the Court to submit to a jury the question of whether the exclusive territory provision of Schwartz’s contract foreclosed competition in a substantial sháre of the market for rental cars, and therefore whether Schwartz’s franchise was void under California law, as asserted by RAWA. After the second -jury trial, the jury found that Schwartz’s exclusive territory agreement did not foreclose competition in a substantial share of the market for rental cars and accordingly, the Court entered a Final Order of Judgment on Remand in favor of Schwartz on RAWA’s counterclaim. On March 10, 2015, the Fourth Circuit issued an opinion affirming the Judgment. ECF No. 517. That court’s mandate issued on April 2, 2015, ECF No. 519.
. At the September 30, 2016 hearing, after the Court inquired as to the matter, counsel for RAWA handed Schwartz’s counsel a check for $13,405.11 to cover the court-ordered costs. The fact that RAWA waited until the filing of Schwartz’ Motion and the day of the hearing to make the tender was yet another indication of RAWA’s apparent strategy, proclaimed at the outset by RAWA's principal operative, Jack Fitzgerald, to make Schwartz sweat at virtually every stage of the proceedings.
. The Court’s finding of contempt is confined to RAWA and not its counsel. That said, as has been expressed several times in the course of this case, the Court has concerns that the hand of RAWA’s counsel—whether lead counsel or in-house counsel—does seem to have been involved in earlier potentially contemptuous activity, specifically vis a vis RAWA’s online publication of different false information pertaining to Schwartz’s West Los Angeles franchise. Thus, the Court received testimony at the September 30, 2016 hearing indicating that RAWA’s outside counsel, Daniel Janssen, Esquire, had directed RAWA to change the address and hours listed for Schwartz's franchise on its website to an outdated address and hours, even though RAWA had previously published the correct information. Janssen did not dispute that fact at that hearing. Later, however, in both the briefing for and at the February 27, 2017 hearing, RAWA contended that it was RAWA’s in-house counsel, Greg Steinbarth, Esquire, who gave the change directive, and that he did so over the objection of Janssen. To be clear, that episode is not the basis of the present contempt finding; but it does illustrate the continuously cavalier attitude that RAWA has exhibited toward Schwartz,
. The March 4, 2011 Order was not a declaratory judgment as asserted by RAWA. Rather, it explicitly and coercively directed RAWA to refrain from certain actions.
. RAWA offers flimsy rationales for ⅛ deci- ■ sion to publish information that it- knew was outdated and incorrect, including that Schwartz had failed to submit the necessary forms to obtain clearance to move his franchise to a new location. When the Court inquired at the February 27, 2017 hearing as to whether RAWA had sent specific notice to Schwartz informing him of his obligation to submit said forms, RAWA’s in-house counsel Steinbarth alluded to a July 24, 2012 letter sent by RAWA’s President James Cash to Schwartz. This letter, which notably RAWA had not attempted to enter as an exhibit at any of the hearings, was read into the record following the Court’s in4uiry. The Court found RAWA’s reluctance to enter the letter into the record curious given that it apparently buttressed the argument that RAWA had previously given notice to Schwartz to submit the necessary forms. But from the letter itself it was obvious why RAWA did not offer the letter initially. The letter also advised Schwartz that he could not, at that point, cure the “breach,” and that RAWA was prepared to take steps to terminate his franchise. The Court observed that no reference was made to
. Although the Court's finding of contempt is ■ limited to the call center misstatements in or about April 2016, the Court can only conclude that RAWA’s publication of the wrong address and' hours for Schwartz’s franchise also caused harm to Schwartz. This fortifies the Court’s conclusion that RAWA has consistently not acted in good faith and underscores that the diversion of business through the call center misstatements that is now before the Court was done intentionally.
. The Court is further convinced that &e misstatements perpetuated by RAWA’s call center employees were part of an intentional scheme devised by RAWA based on the fact that those employees’ statements to customers appear to have come from a pre-written, uniform, script, Thus, three different employees responded to potential customers with the words; “Unfortunately, Rent-A-Wreclc does not have a location in Los Angeles, California anymore ..." or some slight variation thereof. It is highly unlikely that these employees spontaneously generated responses virtually identical to those of their colleagues. Clearly someone in RAWA’s organization prepared a script for these call center employees to use.
. The Fourth Circuit, in Consol. Coal Co. v. Local 1702, United Mineworkers of Am.,
At one time, the Fourth Circuit considered an alleged contemnor’s good faith to. be a stand-alone defense to civil contempt. See Consol. Coal Co. v. United Mineworkers of Am., Local 1702,683 F.2d 827 , 832 (4th Cir. 1982). But because ‘‘[t]he absence of wilfulness does not relieve from civil contempt,” McComb v. Jacksonville Paper Co.,336 U.S. 187 , 191,69 S.Ct. 497 ,93 L.Ed. 599 (1949), the Fourth Circuit subsequently rejected this defense, holding that “good faith alone does not immunize a party from a civil contempt sanction,” McLean v. Cent. States, Se. & Sw. Areas Pension Fund,762 F.2d 1204 , 1210 (4th Cir. 1985) (citing McComb,336 U.S. at 191 ,69 S.Ct. 497 ).
Id. at *10 n. 21. This conclusion was recently accepted in Victor Stanley, Inc. v. Creative Pipe, Inc.,
Conversely, numerous courts, including the Fourth Circuit itself, have cited directly to United Mineworkers of America without mention of McLean, holding that “a good faith attempt to comply as well as substantial compliance or the inability to comply, can be defenses to a civil contempt order.” See, e.g., Dunkin’ Donuts, Inc. v. Three Rivers Entm’t And Travel,
. The Court understands that both parties are currently satisfied with the information currently displayed on Rent-A-Wreck's website.
. RAWA’s complaint that three different attorneys were involved in pursuing the contempt issue for Schwartz is seriously undercut by the fact that RAWA itself has apparently employed at least four attorneys (including in-house counsel) during the coúrse of this litigation. ’ •
. The sanction imposed by the Court need not be dependent upon proof of actual loss. See In re Gen. Motors Corp.,
. In an affidavit attached to his original Motion for Contempt, Schwartz stated that he normally received 2 to 3 referrals from the RAWA Call Center per day. See ECF No. 528-14.
. Although the parties disagree somewhat about these numbers, the suggested percentages each side suggests are actually relatively close. In reaching its damage calculation, the Court has averaged the parties’ suggested percentages. Schwartz asserts that 25% of inquires result in a reservation. RAWA claims it is actually 23%. Schwartz states that 75% of those reservations materialize into actual rentals. RAWA says it is 72%.
. This figure represents 2.5 calls per day x 39 days x .24 x .735 x $400 profit per rental.
. These areas of law are particularly helpful considering that, in the course of violating the March 4, 2011 Order, RAWA not only diverted business from Schwartz’s franchise, but also defamed Schwartz’s business. A plaintiff asserting a claim for defamation under the Lanham Act must establish each of five elements, showing that:
(1) the defendant made a false or misleading description of fact or representation of fact in a commercial advertisement about his own or another’s product; (2) the misrepresentation is material, in that it is likely to influence the purchasing decision; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commerce; and (5) the plaintiff has been or is likely to beñnjured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products.
Verisign, Inc. v. XTZ.COM LLC,