Just Goods, Inc. v. Eat Just, Inc.

CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 2, 2022
Docket20-15809
StatusUnpublished

This text of Just Goods, Inc. v. Eat Just, Inc. (Just Goods, Inc. v. Eat Just, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Just Goods, Inc. v. Eat Just, Inc., (9th Cir. 2022).

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 2 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JUST GOODS, INC., a Delaware Nos. 20-17033 & 20-15809 corporation,

Plaintiff-counter- D.C. Nos. 3:18-cv-02198-WHO defendant-Appellee,

v. MEMORANDUM*

EAT JUST, INC., FKA Hampton Creek, Inc.; JOSHUA TETRICK, an Individual,

Defendants-counter- claimants-Appellants.

Appeal from the United States District Court for the Northern District of California William Horsley Orrick, District Judge, Presiding

Argued and Submitted October 22, 2021 San Francisco, California

Before: WATFORD and HURWITZ, Circuit Judges, and BAKER,** International Trade Judge. Partial Concurrence and Partial Dissent by Judge BAKER.

Eat Just, Inc. (“EJ”) entered into a contract (the “Term Sheet”) with Just

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable M. Miller Baker, Judge for the United States Court of International Trade, sitting by designation. Goods, Inc. regarding use of the trade name JUST. The district court entered an

amended judgment on March 30, 2020 (the “March 30 Order”) interpreting the Term

Sheet, and entered an order on September 11, 2020 holding EJ in contempt of the

March 30 Order. These consolidated appeals challenge both the March 30 Order

and the contempt order. We affirm both.1

1. The district court faithfully read the Term Sheet’s text in determining

that EJ was prohibited from reposting content referring to itself as JUST. The court

correctly held that the Term Sheet allowed EJ to use the term in only three specified

instances: “(1) in the Frame Logo, (2) as part of the names/phrases ‘Eat Just’ and

‘Make it Just,’ and (3) in text in conjunction with a generic product name (e.g., Just

Egg).” Paragraph 1(c) only authorizes EJ to use JUST “in text” in certain specified

instances, and other sections of the Term Sheet underscore that other in text uses are

not authorized. For example, Paragraph 2 reads: “For the sake of clarity, [EJ] may

refer in text to its brand as JUST, so long as JUST is used in connection with [EJ’s]

generic product name (e.g., ‘Just Mayo[]’ . . . ).” (Emphasis added). The Term

Sheet contains numerous other restrictions regarding EJ’s use of JUST in Paragraphs

3, 5, 9, 12, and 15. See Brobeck, Phleger & Harrison v. Telex Corp., 602 F.2d 866,

872 (9th Cir. 1979) (“We seek to interpret the contract in a manner that makes the

1 Just Goods, Inc.’s unopposed motion in No. 20-15809 to supplement the record on appeal is DENIED. Dkt. 38.

2 contract internally consistent.”).2 Because the Term Sheet was intended to settle a

trademark dispute between the parties, the district court correctly concluded it would

be an “end run” around the settlement to allow EJ freely to repost content referring

to its own brand as JUST.

2. The district court also correctly held that the Term Sheet prohibits EJ

from capitalizing the term JUST in the phrase “Make it JUST” and the corporate

name “Eat JUST.” Capitalization of the term JUST varies throughout the Term

Sheet, and the district court appropriately found that the “absence of capitalization”

in particular provisions at issue was “intentional.” The court also correctly

recognized that allowing EJ to capitalize JUST in its corporate name, or in the

marketing phrases “Make it JUST” and “#MakeItJUST,” would be a “backdoor” to

violation of the Term Sheet. Where, as here, the district court presided over the

2 The partial dissent mistakenly assumes that our interpretation of the Term Sheet rests on the ejusdem generis canon. See Dissent at 2–9. Our interpretation rests instead on the unambiguous text of the Term Sheet, which makes plain throughout that only three defined uses of the Mark were permitted. See Cal. Civ. Code § 1641 (“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.”).

And, even if California’s so-called “tiebreaker rule” were relevant to our interpretation of the Term Sheet, see Dissent at 11–12, the result would not change. The contract begins in Paragraph 1 by stating that, “[e]xcept for internal use,” EJ will be “restrict[ed]” in its “use of JUST.” In the context of a settlement of an infringement suit, interpreting the Term Sheet to allow permitting any use of the Mark “in text” leads to an illogical reading of the agreement. See ASP Props. Grp., LP v. Fard, Inc., 133 Cal. App. 4th 1257, 1269 (2005); Cal. Civ. Code § 1652.

3 litigation giving rise to the settlement agreement, its interpretation of the agreement

should be treated with “due respect” given the court’s “superior perspective.”

Congregation ETZ Chaim v. City of Los Angeles, 371 F.3d 1122, 1124 (9th Cir.

2004).

3. The district court’s interpretation of the Term Sheet does not violate the

First Amendment, as it only restricts the commercial use of a source identifier. See

Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 900 (9th Cir. 2002) (“Limited to

this core purpose—avoiding confusion in the marketplace—a trademark owner’s

property rights play well with the First Amendment.”).

4. The district court did not abuse its discretion by holding EJ in contempt

of the March 30 Order. To do so, a court must find “by clear and convincing

evidence that the contemnors violated a specific and definite order of the court.”

FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999) (cleaned up). The

order alleged to have been violated must “state in specific terms the acts that it

required or prohibited.” Int’l Longshoremen’s Ass’n, Loc. 1291 v. Phila. Marine

Trade Ass’n, 389 U.S. 64, 76 (1967) (cleaned up). After specifying the three

permitted uses of the term JUST, the March 30 Order makes plain that “[o]ther uses

of the term [JUST] violate the parties’ agreement.” EJ’s reposting of third-party

content referring to its brand as JUST was thus an impermissible “use” under the

March 30 Order. These violations were not based on a “good faith” interpretation

4 of the March 30 Order or a “reasonable effort . . . to comply.” In re Dual-Deck Video

Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993).

AFFIRMED.

5 Just Goods, Inc. v. Eat Just, Inc., FKA Hampton Creek, Inc., FILED Nos. 20-17033 & 20-15809 MAR 2 2022 MOLLY C. DWYER, CLERK BAKER, Judge, concurring in part and dissenting in part: U.S. COURT OF APPEALS

I join Part 3 of the memorandum disposition, and I concur in my colleagues’

conclusion that Eat Just, Inc. (EJ) violated the settlement Term Sheet between it and

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