Klein-Becker USA, LLC v. Englert

711 F.3d 1153, 106 U.S.P.Q. 2d (BNA) 1169, 85 Fed. R. Serv. 3d 342, 2013 WL 1223819, 2013 U.S. App. LEXIS 6191
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 27, 2013
Docket12-4076
StatusPublished
Cited by66 cases

This text of 711 F.3d 1153 (Klein-Becker USA, LLC v. Englert) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Klein-Becker USA, LLC v. Englert, 711 F.3d 1153, 106 U.S.P.Q. 2d (BNA) 1169, 85 Fed. R. Serv. 3d 342, 2013 WL 1223819, 2013 U.S. App. LEXIS 6191 (10th Cir. 2013).

Opinion

MATHESON, Circuit Judge.

Klein-Becker USA and Klein-Becker IP Holdings (collectively “Klein-Becker”) sued Patrick Englert and Mr. Finest, Inc., for trademark infringement, copyright infringement, false advertising, and unfair competition under the Lanham Act; false advertising under the Utah Truth in Advertising Act; unfair competition under the Utah Unfair Practices Act; fraud; civil conspiracy; and intentional interference with existing and prospective business relations. Mr. Englert was sanctioned several times for failing to comply with court orders and discovery schedules. 1 The third and final sanction resulted in the entry of default judgment for Klein-Beck *1157 er on all remaining claims. A bench trial determined damages.

Mr. Englert appeals the district court’s entry of default judgment against him, determination of his personal liability and the amount of damages owed, grant of a permanent injunction, denial of a jury trial, and refusal to allow Mr. Englert to call a certain witness. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I. BACKGROUND

A. Factual History

Klein-Becker owned and controlled all aspects of the trademarks StriVectin-SD and StriVectin (U.S. Trademark Registration Numbers 2,760,414 and 3,165,013) at all times relevant to this appeal. 2 The StriVectin line of skin care products could only be sold through authorized sellers that Klein-Becker approved and trained.

Mr. Englert has never been an authorized seller of StriVectin. Nonetheless, in April 2006, Klein-Becker discovered that Mr. Englert was advertising and selling products marketed as StriVectin on eBay without authorization. Klein-Becker filed an Electronic Notice of Claimed Infringement with eBay on the belief that Mr. Englert either stole or counterfeited those items, and requested that eBay remove the alleged unlawful listings. In response, eBay removed a portion of Mr. Englert’s listings. Mr. Englert challenged the removal, claiming that the items did not involve infringing materials and that Klein-Becker was required to file a complaint in federal court.

Some of the StriVectin products that Mr. Englert sold online were acquired in March 2005 as part of a scheme whereby Mr. Englert posed as a General Nutrition Center (“GNC”) store to purchase StriVec-tin products. GNC stores received special pricing from Klein-Becker, below regular wholesale rates. Mr. Englert purchased $82,050 of Klein-Becker’s products directly from Klein-Becker by fraudulently altering the “Bill To” and “Ship To” addresses on GNC invoices to pose as a GNC store and purchase StriVectin at the special GNC rate (“the GNC scheme”). He sold those products online through eBay and other commercial web platforms, including his commercial websites, mrfi-nestsupplements.com and mrfinest.com.

On January 3, 2007, StriVectin products worth $320,000 were stolen from a Salt Lake City warehouse. Klein-Becker tracked these products by lot numbers, and the district court granted Klein-Becker’s Ex Parte Emergency Motion for a Temporary Restraining Order and Seizure Order to resecure the products and stop their unlawful sales. While carrying out that order on March 1, 2007, Klein-Becker found $36,000 in stolen products at Mr. Englert’s residence, where he conducts business as Mr. Finest, Inc., and as other alter egos through which he sold StriVec-tin products. Evidence at Mr. Englert’s residence indicated that he had already sold additional units of stolen StriVectin online. Klein-Becker was able to repurchase 16 units of the stolen StriVectin from Mr. Englert’s online platforms.

B. Procedural History

Klein-Becker sued Mr. Englert on May 9, 2006, for alleged trademark infringement, copyright infringement, false advertising, and unfair competition under the Lanham Act; false advertising under the Utah Truth in Advertising Act; unfair *1158 competition under the Utah Unfair Practices Act; fraud; civil conspiracy; and intentional interference with existing and prospective business relations.

On February 9, 2007, Klein-Becker moved for sanctions against Mr. Englert for delaying and obstructing court orders to expedite discovery before the preliminary injunction hearing. A magistrate judge found that Mr. Englert’s discovery responses were “inadequate” and “almost contemptuous.” Klein-Becker USA, LLC v. Englert, No. 2:06-CV-S78 TS, 2011 WL 147893 at *7 (D.Utah Jan. 18, 2011).

On March 21, 2007, Klein-Becker renewed its motion for sanctions after discovering that Mr. Englert had withheld additional information from discovery. On June 20, 2007, the magistrate judge found that Mr. Englert “deliberately withheld information and intentionally caused delay.” Id. at *9. He issued sanctions, requiring Mr. Englert to pay Klein-Becker’s expenses related to the motion to compel and the renewed motion for sanctions. He warned Mr. Englert that sanctions would escalate if the violations continued.

Mr. Englert was represented by counsel until April 23, 2007, when the district court granted Mr. Englert’s counsel’s motion to withdraw. He proceeded pro se throughout the rest of the district court proceedings.

On August 2, 2007, Klein-Becker filed a motion for partial summary judgment, which the district court granted in part on the trademark infringement claim. On January 23, 2008, after Klein-Becker filed a third set of motions for sanctions, the district court ordered Mr. Englert to pay Klein-Becker $75,411.45 for expenses, including attorney fees, related to filing and prosecuting motions for sanctions during discovery.

On March 27, 2008, the district court found that Mr. Englert had failed to comply with the magistrate judge’s order that he either appear in person or retain counsel and that he provide a complete privilege log no later than June 30, 2007. He granted Klein-Becker’s motion for sanctions and, on March 27, 2008, entered a default judgment against Mr. Englert on all remaining claims pursuant to Fed. R.Civ.P. 37(b)(2)(A)(vi).

On January 18, 2011, after a bench trial on damages, the district court entered judgment in favor of Klein-Becker for $773,384.31, including $673,988.17 for Lan-ham Act damages, $78,056.14 for fraud damages, $11,340 for stolen property, and $10,000 for copyright damages. The court also awarded Klein-Becker all attorney fees and costs. Finally, the district court determined that Klein-Becker was entitled to a permanent injunction, but declined Klein-Becker’s request to make the preliminary injunction permanent because circumstances had changed. Instead, the court ordered Klein-Becker to submit a proposed permanent injunction within 10 days. Upon inspection of the record, this court was unable to locate the permanent injunction. We ordered both parties to supplement the record with the permanent injunction, but neither party could do so.

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711 F.3d 1153, 106 U.S.P.Q. 2d (BNA) 1169, 85 Fed. R. Serv. 3d 342, 2013 WL 1223819, 2013 U.S. App. LEXIS 6191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klein-becker-usa-llc-v-englert-ca10-2013.