Supplement Ctr., LLC v. Evol Nutrition Assocs., Inc.

389 F. Supp. 3d 1281
CourtDistrict Court, N.D. Georgia
DecidedJune 17, 2019
Docket1:18-CV-03633-ELR
StatusPublished
Cited by3 cases

This text of 389 F. Supp. 3d 1281 (Supplement Ctr., LLC v. Evol Nutrition Assocs., Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Supplement Ctr., LLC v. Evol Nutrition Assocs., Inc., 389 F. Supp. 3d 1281 (N.D. Ga. 2019).

Opinion

Eleanor L. Ross, United States District Judge

Presently before the Court are several matters. The Court's rulings and conclusions are set out below.

I. Background

Plaintiffs Supplement Center, LLC, Kenneth Affolter, and M&N Distributing LLC filed this action on July 29, 2018, against Defendants Evol Nutrition Associates, Inc. ("Evol"), Jeremy Nickels, Annbiz LLC, and Asif Noorani. Am. Compl. [Doc. 3]. Notably, this case arises from the same *1284background of facts as a case previously before the undersigned, Evol Nutrition Associates, Inc. v. Supplement Center, LLC & Kenneth Affolter, No. 1:17-CV-1572-ELR (N.D. Ga. May 2, 2017) ("the Original Action"). In the Original Action, Evol brought suit against Supplement Center and Kenneth Affolter alleging various trademark infringement claims. Original Action [Doc. 1]. Specifically, Evol, who produces dietary supplements sold in stores nationwide, alleged that Supplement Center and Affolter, through their advertisement and sale of a product called "Walkers," were infringing upon Evol's trademark for a dietary supplement called "Sleep Walkers." The Original Action concluded when, on April 24, 2018, at the Parties' request, the Court entered a Consent Judgment and Permanent Injunction Order ("Consent Judgment"). Id. [Doc. 42].

Pursuant to the Consent Judgment, the Court (1) ordered Supplement Center and Affolter to pay a monetary judgment to Evol in the amount of $50,000.00; (2) permanently enjoined Supplement Center and Affolter from producing or selling any dietary supplement products containing both Phenibut and Gamma aminobutyric acid ("GABA"); (3) permanently enjoined Supplement Center and Affolter from using the mark " 'Walkers,' 'Wakers,' or any colorable variation thereof;" and (4) dismissed Supplement Center and Affolter's counterclaims with prejudice. [Id. ] The Court retained "personal and subject matter jurisdiction over all parties in [the] matter to address any issues arising out of [the Consent Judgment]." [Id. ]

Following the entry of the Consent Judgment, the Parties encountered several issues. According to Supplement Center and Affolter, Evol misrepresented the Consent Judgment to Supplement Center's existing business relationships. Am. Compl. ¶ 21. Additionally, Supplement Center alleges that they have now realized that Evol obtained the Consent Judgment via fraud. Id. ¶ 51. Thus, on July 29, 2018, Plaintiffs filed the present action against Defendants alleging claims for (I) intentional tortious interference with existing economic relationships; (II) trade libel; (III) common law unfair competition; (IV) false advertising pursuant to the Lanham Act; and (V) common law fraud. Id.

In contrast, Defendants contend that shortly after the entry of the Consent Judgment, Plaintiffs willfully violated the Consent Judgment by marketing products under the enjoined trade names of "Walkers" and "Walters;" marketing and selling the product "Stride," which contains the prohibited combination of Phenibut and GABA; and failing to provide payments in accordance with the agreed-upon payment schedule. Additionally, Defendants allege that Plaintiffs have falsely advertised the product "Stride." Thus, on November 7, 2018, and in response to Plaintiffs' amended complaint, Defendants filed an Answer wherein they asserted counterclaims for (I) breach of consent judgment, (II) tortious interference with business relations, (III) civil conspiracy, and (IV) false advertising pursuant to the Lanham Act. Answer [Doc. 8]. Plaintiffs now move to dismiss Defendants' counterclaims. [Doc. 11]. Also on November 7, 2018, Defendant Evol filed a Motion to Join Additional Party as Counterclaim Defendant. [Doc. 8]. Having been fully briefed, these motions are now ripe for the Court's review.

Separately, on December 3, 2018, shortly after filing its Answer and Counterclaims in this case, Evol moved in the Original Action, inter alia , to reopen the case and for a finding that Supplement Center and Kenneth Affolter are in civil contempt of Court for violating the Consent Judgment. Original Action [Doc. 44]. Although the resolution of that matter will *1285be handled separately, the Court notes that the motion is also fully briefed.

II. Procedural Concerns

Prior to addressing the pending motions, the Court finds it necessary to address the various procedural concerns represented in this case. In short, the Court finds that the Parties failed to follow proper procedure for presenting the Court with their disputes concerning the Consent Judgment. For clarity, the Court will discuss each party's failure in turn.

A. Plaintiffs' Allegations of Fraud Concerning the Consent Judgment

As noted above, Plaintiffs bring this case against Defendants alleging claims for (I) intentional tortious interference with existing economic relationships; (II) trade libel; (III) common law unfair competition; (IV) false advertising pursuant to the Lanham Act; and (V) common law fraud. Am. Compl. Notably, when the Court examines Count V for common law fraud, it is clear that Plaintiffs are making a direct allegation that Defendants conducted themselves in a fraudulent manner when negotiating and securing the Consent Judgment that concluded the Original Action. Id. ¶¶ 48-52. The effect of a ruling in favor of Plaintiffs on this count would result in the Court setting aside the Consent Judgment. Boykin v. Boykin, No. 95-0318-CB-C, 1996 U.S. Dist. LEXIS 8584, at * 13 n.9 (S.D. Ala. June 6, 1996) (noting that fraud in the inducement would nullify a consent judgment).

When a party declares that a consent judgment is the product of fraud, the proper procedure for presenting this allegation to the Court is not a new action for common law fraud, but rather an appropriate motion in the original case, particularly when, as here, the Court has retained personal and subject matter jurisdiction to address any issues arising out of the Consent Judgment. See FED. R. CIV. P. 60(b)(3) (permitting courts to set aside judgments procured by fraud); O'Burn v. Shapp, 70 F.R.D. 549, 552 (E.D. Pa. 1976) (finding intervenors' separate action alleging that a consent decree should be set aside due to fraud as not actionable because the court continued to maintain jurisdiction over the consent decree); accord Raspa v. Dawkins (In re Dawkins), 546 B.R. 463, 465 (Bankr. M.D. Fla. 2016) (considering allegation of fraud in the procurement of a consent judgment in the context of Rule 60(b) ). Plaintiffs' claim for common law fraud is procedurally improper and thus, pursuant to the Court's inherent authority to manage its docket, the Court dismisses it. See Link v. Wabash R.R. Co., 370 U.S. 626

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Bluebook (online)
389 F. Supp. 3d 1281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/supplement-ctr-llc-v-evol-nutrition-assocs-inc-gand-2019.