Richard I. Spiece Sales Co., Inc. d/b/a Spiece Sales Co., Inc. v. Levi Strauss North America

19 N.E.3d 345, 2014 Ind. App. LEXIS 519, 2014 WL 5426761
CourtIndiana Court of Appeals
DecidedOctober 27, 2014
Docket85A02-1312-CC-1037
StatusPublished
Cited by1 cases

This text of 19 N.E.3d 345 (Richard I. Spiece Sales Co., Inc. d/b/a Spiece Sales Co., Inc. v. Levi Strauss North America) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richard I. Spiece Sales Co., Inc. d/b/a Spiece Sales Co., Inc. v. Levi Strauss North America, 19 N.E.3d 345, 2014 Ind. App. LEXIS 519, 2014 WL 5426761 (Ind. Ct. App. 2014).

Opinion

OPINION

KIRSCH, Judge.

Following a bench trial, Richard I. Spiece Sales Co., Inc., doing business as Spiece Sales Co., Inc. (“Spiece”), appeals the trial court’s judgment in favor of Levi Strauss North America (“LS & CO.”) on LS & CO.’s complaint on account and on Spiece’s counterclaim. On appeal, Spiece raises six issues which we consolidate and restate as whether the trial court’s findings of fact and conclusions thereon, in support of LS & CO. and against Spiece, are clearly erroneous. 1

We affirm.

*348 FACTS AND PROCEDURAL HISTORY

LS & CO. is an international corporation that manufactures and distributes products worldwide; the primary products at issue in this case are Levi’s jeans. Spiece, a domestic corporation owned by Tom Spiece (“Tom”), is a retail operation that sells mainly sportswear and is a retail partner of LS & CO. In addition to LS & CO. products, Spiece sells products from other manufacturers, including, Lee, Dick-ies, Wrangler, Carhartt, Cinch, and Hag-gar. The instant case arises from LS & CO.’s March 2011 termination of Spiece’s online sales privileges.

The parties’ relationship began in 1978, when Spiece was approved to sell Levi’s jeans in Spiece’s two Indiana stores. LS & CO. conveyed its approval by sending Tom a letter, dated October 9, 19.78 (“1978 letter”), which stated in part, “I would like to take this opportunity to welcome you as a new account of the Jeanswear Division of Levi Strauss & Co.,” and reminded Tom of certain LS & CO. “policies specifically regarding account selection and distribution.” Joint Ex. 24 (Vol. VII). 2 During the 1980s and 1990s, Spiece made investments designed to increase its sales of Levi’s jeans, including purchasing a fifty-foot-tall pair of inflatable Levi’s jeans, traveling to Egypt to shoot a commercial promoting its brick and mortar stores, and staging a promotion where Tom was shot out of a canon with a pair of Levi jeans in his mouth. TV. at 213-14.

LS & CO. products were sold to Spiece only on a purchase order and acceptance basis throughout the United States. 3 LS & CO.’s Terms & Conditions of Sale (“Terms of Sale”) stated: 4

THE DELIVERY OF A PURCHASE ORDER TO LEVI STRAUSS & CO. (“LS & CO.”) BY AN AUTHORIZED U.S. AND U.S. TERRITORIES RETAILER (“CUSTOMER”) FOR THE PURPOSE OF PURCHASING LS & CO. PRODUCTS CREATES NO OBLIGATION ON THE PART OF LS & CO. UNLESS OR UNTIL ACCEPTED. ACCEPTANCE OF A PURCHASE ORDER IS EXPRESSLY CONDITIONAL UPON CUSTOMER’S AGREEMENT WITH THE FOLLOWING:

J.E. 96 (Vol. IX); Appellee’s App. at 326. 5 The conditions described in the Terms of Sale pertained to purchase orders, product resale, shipping, claims, invoicing, and credit. Under the category “Purchase Orders,” the language specifically stated, “Each shipment by LS & CO. to the Customer, whether in whole or partial fulfillment of any Customer purchase order or related confirmation, constitutes a separate sale, obligating the Customer to pay LS & CO." for the contents of that shipment.” J.E. 96 (Vol. IX); Appellee’s App. at 826. The trial court found that LS & CO. accepted Spiece’s purchase orders “conditioned on” Spiece: “1) complying] with all applicable LS & CO. policies; and 2) paying for the products it received.” Appellant’s App. at 28.

*349 In 2000, Spiece applied to LS & CO. for approval to sell Levi’s jeans online. LS & CO. approved Spiece’s request and conveyed that approval by sending a letter, dated December 5, 2000 (“2000 letter”), to Mark Campbell, Spiece’s computer specialist, stating, “We are pleased to inform you that your site, www.denimexpress.com, meets our on-line selling criteria. You. are now authorized to sell LS & CO. products on your web site.” J.E. 44 (Vol. VIII). The 2000 letter also provided that, due to the Internet’s dynamic nature, LS & CO. would revise its online selling policies from time to time, and that it was Spiece’s responsibility to comply with the policies “to remain in good standing as an authorized online retailer of LS & CO. products.” Id. Thereafter, Spiece began selling LS & CO. products through www.denimexpress. com.

After Spiece was authorized to sell LS & CO products online, it not only had to comply with the Terms of Sale, but also LS & CO’s policies regarding Retail Selling on the Internet (“Internet Policies” or “RSOTI”). LS & CO.’s 2000 Internet Policies were amended in 2002, 2008, and 2010. Except as otherwise discussed below, the pertinent provisions of each of those policies remained the same. The Internet Policies contained directives aimed at protecting LS & CO.’s trademarks and restricting their overuse by LS & CO.’s retail partners like Spiece. Ap-pellee’s App. at 238, 241, 301, 352. LS & CO. Internet Policies required sellers to feature brands other than LS & CO.’s brand on their websites and refrain from using LS & CO.’s logos and trademarks to imply that the site was owned or managed by LS & CO. Id. Again, LS & CO. reserved the right to change its policies and “to withdraw its authorization to sell online at any time.” Appellee’s App. at 236, 244, 305, 353. The trial court found that the Internet Policies, generally, “provided that LS & CO. retained the sole and exclusive right to control its customers[’] use of LS & CO.’s trademark(s) as a design element on the interior and exterior of customers’ store(s), on customers’ Internet selling site(s) or in customers’ advertising and promotional efforts.” Appellant’s App. at 30.

One of the ways that Spiece directed customers to its Denim Express website was through online marketing. Debra Nguyen, digital marketing specialist for LS & CO., testified regarding the use of “Google as a search engine and the process by which LS & CO., as well as other vendors, sell on-line.” Appellant’s App. at 30. “Google is the titan in the industry of search engines and complying with their criteria is necessary to utilize Google as a search engine_LS & CO. derived great benefits from ensuring not only its compliance with Google policies, but its customers[’] compliance as well.” Id. at 30-31.

Spiece used two techniques in its marketing—paid searches, “where advertisers can ... bid for placements” on the Internet, and a natural search technique called “key word stuffing.” Tr. at 79, 86. Key word stuffing is done to enhance a natural search ranking through the excessive use of copy or text on a website with the goal of manipulating the search engine indexing. Id. at 88. Key word stuffing was disfavored by Google, who often punished those engaged in that practice.

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19 N.E.3d 345, 2014 Ind. App. LEXIS 519, 2014 WL 5426761, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richard-i-spiece-sales-co-inc-dba-spiece-sales-co-inc-v-levi-indctapp-2014.