Desirous Parties Unlimited, Inc. v. Right Connection, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 30, 2023
• Docket: 22-16530
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 30 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT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.