FCA US LLC v. 324 Automotive Grilles

• Court: Court of Appeals for the Eleventh Circuit
• Decided: January 15, 2020
• Docket: 19-12023
• Status: Unpublished

Opinion

Case: 19-12023 Date Filed: 01/15/2020 Page: 1 of 10

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-12023 Non-Argument Calendar ________________________

D.C. Docket No. 4:18-cv-00195-WTM-CLR

UNITED STATES OF AMERICA,

Plaintiff,

FCA US LLC,

Intervenor Plaintiff-Appellant,

versus

60 AUTOMOTIVE GRILLES, et al.,

Defendants,

324 AUTOMOTIVE GRILLES,

Defendant-Appellee.

________________________

Appeal from the United States District Court for the Southern District of Georgia ________________________

(January 15, 2020) Case: 19-12023 Date Filed: 01/15/2020 Page: 2 of 10

Before WILLIAM PRYOR, GRANT and BLACK, Circuit Judges.

PER CURIAM:

Appellant FCA US LLC appeals the district court’s denial of FCA’s motion

to intervene in this in rem forfeiture proceeding. FCA argues the district court

erred when it found FCA’s interest in the proceeding, to the extent such an interest

was even cognizable, was adequately represented by the Government, and FCA

therefore had no right to intervene under Rule 24(a) of the Federal Rules of Civil

Procedure. FCA further argues it can satisfy the other requirements of Rule 24(a).

I. BACKGROUND

Before getting into the specific facts of this case, we briefly set out the

statutory and regulatory framework underlying forfeiture actions of this sort.

Section 24 of the Lanham Act and Section 526 of the Tariff Act prohibit the

importation of goods that “copy or simulate” registered trademarks owned by

United States citizens or corporations. 15 U.S.C. § 1124; 19 U.S.C. § 1526.

Customs and Border Patrol (CBP) is authorized to seize and forfeit infringing

goods, and generally does so where a trademark owner has recorded its mark with

the Customs Office. 19 U.S.C. §§ 1526(b) and (e), 1595(c)(2)(C); 19 C.F.R.

§ 133, Subpart A.

Following a seizure, CBP takes custody of the goods and provides written

notice of the seizure to each party who appears to have an interest in the seized

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items. 19 U.S.C. §§ 1605, 1607; 19 C.F.R. § 162.31. The importer of the goods

then has several options. As relevant here, those options include filing “a claim

stating his interest” in the seized property, at which point the “customs officer shall

transmit such claim . . . to the United States attorney for the district in which

seizure was made, who shall proceed to a condemnation . . . in the manner

prescribed by law.” 19 U.S.C. § 1608; see also 19 C.F.R. § 162.47. This forces

the case into a district court where the Government must establish probable cause

for the forfeiture, and it allows the importer to present arguments that the seizure

was improper.

LKQ Corporation and its subsidiary Keystone Automotive Industries, Inc.

(LKQ) import and sell, among other merchandise, automotive replacement parts,

including the replacement automotive grilles that are the subject of the instant

forfeiture proceeding. Although LKQ had been importing these replacement

grilles for years without objection by the various trademark owners, beginning in

2017, CBP began seizing LKQ’s imports pursuant to the Tariff Act. Over the

course of approximately ten months, CBP executed at least 167 seizures at three

different ports. LKQ has sought judicial forfeiture in several of these seizure

cases, including those giving rise to the instant proceeding.

In light of LKQ’s request for judicial forfeiture, the Government filed in the

district court an amended civil complaint in rem for the forfeiture of 324

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automotive grilles, pursuant to 19 U.S.C. §§ 1526(b) and (e), and 1595a(c)(2)(C).

The amended complaint alleged the grilles constituted “articles of merchandise

bearing counterfeit marks, or marks that copy or simulate registered trademarks,

imported into the United States in violation of 15 U.S.C. § 1124 and without the

consent of the trademark owners.” Those trademark owners include, among

others, Ford, Toyota, Mazda, Honda, and Appellant FCA (Chrysler).

After the Government initiated the forfeiture action, LKQ filed a Verified

Claim contesting the forfeiture of the grilles, pursuant to Rule G(5)(a) of the

Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture

Actions, thereby inserting itself as a defendant in the case. LKQ asserted it was the

“lawful owner” of the seized grilles.

That same day, LKQ filed a motion seeking to dismiss the forfeiture

proceeding. LKQ acknowledged that the various trademark owners had valid

trademark registrations, but argued the amended complaint should be dismissed on

two grounds. First, LKQ argued the replacement grilles do not violate any

trademark law because: (1) the trademarked designs are functional, at least in the

context of aftermarket repairs; and (2) the replacement grilles are not counterfeit

and there is no likelihood of confusion. Second, LKQ argued the replacement

grilles are not subject to seizure because “[m]ost of” the grilles—including those

allegedly infringing on FCA’s trademarks—are covered by design patent licenses

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that allow LKQ “to make any grille that is substantially similar to the grille designs

covered by . . . [FCA’s] design patents.”

The Government filed its response to LKQ’s motion, contending LKQ’s

motion failed to establish, or even argue, that the Government failed to state a

claim, instead improperly focusing on the underlying merits of the Government’s

claims and relying on evidence outside the amended complaint. The Government

did not comprehensively respond to LKQ’s arguments concerning trademark law

or the contours of its licensing agreement with FCA, but it did request an

opportunity to substantively respond if the court elected to convert LKQ’s motion

to dismiss to a motion for summary judgment. LKQ filed a reply to the

Government’s response, and the Government filed a sur-reply.

Appellant FCA then filed the Motion to Intervene that is the subject of this

appeal. FCA sought intervention due to “the erroneous arguments” made by LKQ

in the motion to dismiss. FCA argued LKQ had mischaracterized trademark law,

insisting it needed to intervene to “vindicate” both its trademark and contractual

rights and “present evidence” as to those issues. In the alternative, FCA sought

leave to appear as amicus curiae. FCA did not file a formal intervenor complaint.

Instead, it attached a proposed memorandum in opposition to LKQ’s motion to

dismiss, in which it addressed LKQ’s substantive arguments concerning the

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legitimacy of the replacement grilles. LKQ opposed the motion, and the

Government expressed no view on the matter.

The district court denied the motion. Before addressing the substance of

FCA’s motion, the district court noted that, because the Supplemental Rules did

not refer to or otherwise permit intervention as a plaintiff in a forfeiture

proceeding, Federal Rule of Civil Procedure 24(a) applied. Applying that rule, the

district court concluded that, assuming FCA’s interest in protecting its intellectual

property was sufficient to warrant intervention, FCA’s interests were already

adequately represented by the Government. This appeal followed.

II. DISCUSSION

“Generally, the denial of a motion to intervene is not considered a final

appealable order over which we have jurisdiction.” Fed. Sav. & Loan Ins. Corp. v.

Falls Chase Special Taxing Dist., 983 F.2d 211, 214 (11th Cir. 1993). However,

under this circuit’s “anomalous rule” we have “provisional jurisdiction” to review

the district court’s denial of FCA’s motion to intervene as a matter of right under

Rule 24. Id. (quotation marks omitted). If we find the district court was correct,

“our jurisdiction disappears because the district court’s ruling would not be a final

decision.” Id. Should we find the district court erred, however, “we maintain

jurisdiction and must reverse the ruling.” Id.

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Rule 24(a)(2) provides for intervention as a matter of right where certain

conditions are met:

On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.

Fed. R. Civ. P. 24(a)(2). We have interpreted this rule to require a party seeking

intervention of right to demonstrate that: “(1) his application to intervene is timely;

(2) he has an interest relating to the property or transaction which is the subject of

the action; (3) he is so situated that disposition of the action, as a practical matter,

may impede or impair his ability to protect that interest; and (4) his interest is

represented inadequately by the existing parties to the suit.” Worlds v. Dept. of

Health and Rehab. Servs., 929 F.2d 591, 593 (11th Cir.1991) (quotation marks

omitted).

Assuming intervention as a plaintiff is appropriate in this sort of civil asset

forfeiture proceeding, we agree with the district court that FCA failed to show its

interest was not adequately represented by the Government. We limit our

discussion to this requirement.

Where, as here, an “applicant[] for intervention seek[s] to achieve the same

objectives as an existing party in the case,” the applicant must overcome a

presumption that it is adequately represented. United States v. City of Miami, 278

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F.3d 1174, 1178 (11th Cir. 2002) (quotation marks omitted). FCA has failed to do

so here. Like the district court, we can discern no difference between the

objectives the Government seeks to fulfill in this case and those of FCA. Both

ultimately seek a finding that the Government has cause to seize and forfeit the

defendant property. In making its case, the Government will necessarily need to

make the same arguments FCA indicates it wishes to make: the defendant

automotive grilles unlawfully infringe on FCA’s trademark rights and were

imported into the United States without the consent of FCA. The fact that FCA

might go about making these arguments in a different manner or otherwise

believes itself to be in a better position to make them does not make the

Government’s representation inadequate.

FCA insists the Government must serve “multiple interests” beyond

protecting FCA’s intellectual property, such as “ensur[ing] that the overall

regulatory scheme for the nation’s borders is not jeopardized.” But FCA has not

shown that any of these additional interests the Government may have are in direct

conflict with its interest in protecting trademark rights. See City of Miami, 278

F.3d at 1179 (finding the Government adequately represented a prospective

intervenor’s interests where there was no indication the Government’s asserted

interest and the intervenor’s related interest were “mutually exclusive”). At the

end of the day, the Government cannot succeed in its forfeiture action without

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making the case that the defendant automotive grilles unlawfully infringed on the

rights of FCA and other trademark owners.

We further note that the statutory and regulatory scheme laid out above

reinforces our conclusion that FCA’s interests are adequately represented by the

Government in this action. As the district court noted, §§ 1526 and 1595a provide

mechanisms by which private parties—trademark owners—may essentially enlist

the Government’s aid in enforcing private rights. This scheme assumes the

Government is competent to protect those rights in the context of forfeiture

proceedings. And notably, none of the relevant statutes, the regulations

promulgated pursuant to those statutes, or the Supplemental Rules applicable in

forfeiture proceedings contemplates intervention as a plaintiff by private rights

owners who assert no claim to the defendant property itself.

Because the primary objectives FCA seeks to achieve in this case are goals

shared by the Government, FCA’s interests are adequately represented, and the

district court was not required to permit FCA to intervene in this forfeiture

proceeding. See Fed. R. Civ. P. 24(a); Worlds, 929 F.2d at 593.

III. CONCLUSION

Because we agree with the district court that FCA has no basis for

intervention as a matter of right, there is no “final decision” for us to review, and

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we must dismiss the appeal for lack of appellate jurisdiction. See Fed. Sav. &

Loan Ins. Corp., 983 F.2d at 214.

DISMISSED.