The Money Store, Inc. v. Harriscorp Finance, Inc.

885 F.2d 369, 15 Fed. R. Serv. 3d 139, 12 U.S.P.Q. 2d (BNA) 1282, 1989 U.S. App. LEXIS 14063, 1989 WL 106698

• Court: Court of Appeals for the Seventh Circuit
• Decided: September 19, 1989
• Docket: 88-3015
• Status: Published

Opinions

RIPPLE, Circuit Judge.

In 1983, the district court entered an order enjoining The Money Store, Inc. (TMS) from using its federally registered service mark “THE MONEY STORE” in the Chicago metropolitan area because Harriscorp Finance, Inc. (Harris) was a good faith junior user of the mark. In 1988, TMS filed a motion to modify the terms of the injunction so that it could employ the service mark in the Chicago area. The district court denied the motion. We now affirm.

I.

BACKGROUND

In April 1974, TMS received a service mark registration from the Patent and Trademark Office to use THE MONEY STORE in connection with moneylending services. Prior to TMS’ federal registration of the mark, however, a local Chicago bank had been using the THE MONEY STORE mark. Harris purchased the mark from this bank in January 1974 and established a number of “Money Store” money-lending facilities in Chicago area shopping malls; Harris also advertised under the service mark. In 1977, upon seeking to expand its operations to the Chicago area and finding that another financial institution — Harris—was using the service mark, TMS filed an action in the district court alleging infringement by Harris on TMS’ federally registered service mark THE MONEY STORE.

The district court held a bench trial and determined that Harris was a good faith junior user of the service mark and thus entitled to continue using the mark. Accordingly, it entered a permanent injunction preventing TMS from employing THE MONEY STORE in Harris’ market area. See The Money Store, Inc. v. Harriscorp Finance, Inc., 212 U.S.P.Q. 436, 439 (N.D.Ill.1980). On appeal to this court (the first appeal), we vacated the judgment and remanded the case in light of an error by the district court in interpreting the validity of Harris’ acquisition of the mark and TMS’ registration actions taken under the Lan-ham Act, 15 U.S.C. §§ 1051 et seq. See The Money Store, Inc. v. Harriscorp Finance, Inc., 689 F.2d 666 (7th Cir.1982). We noted, however, that, on the precise issue of the allocation of service mark usage between Harris and TMS, the district court had correctly determined that Harris could “assert the rights of a good faith junior user in its market area, as that area shall be determined by the district court on remand.” Id. at 679. The case thus returned to the district court. Subsequently, that court entered a permanent injunction detailing Harris’ rights to the service mark in the Chicago area. See R.Vol. IV at The Money Store, Inc. v. Harriscorp Finance, Inc., No. 77 C 3175 (N.D.Ill. Mar. 9, 1983) (judgment order) [hereinafter Order]. This injunction followed a hearing before the court, and the language of the judgment order completely adopted a Stipulated Motion for Entry of Judgment Order agreed upon by both parties. See Tr. of Feb. 1, 1983; R.Vol. IV at Stipulated Motion for Entry of Judgment Order (dated March 9, 1983).

This injunction stated, inter alia, that (1) TMS possessed a valid United States service mark registration in THE MONEY STORE issued on April 2, 1974, and (2) Harris, nevertheless, was a good faith junior user of the service mark in the Chicago metropolitan area.¹ The Order also permanently enjoined Harris from using THE MONEY STORE throughout the United States except within the Chicago metropolitan area and, correspondingly, permanently enjoined TMS from using the service mark THE MONEY STORE within the Chicago metropolitan area.²

In January 1988, TMS filed a motion pursuant to Rule 60(b) of the Federal Rules of Civil Procedure; in this motion, TMS requested that the district court modify the terms of the Order. The district court, the same judge who had overseen this case since its initial filing in 1977 presiding, conducted an evidentiary hearing to examine TMS’ claim that Harris had abandoned the mark or so diminished its “Money Store” activities that a material change in circumstances had occurred, warranting modification of the Order. See Tr. of May 25, 1988. To support its motion, TMS presented the testimony of private investigator Thomas Gallo. Id. at 37-45; see also R.V at Gallo Affidavit. He testified that there was no “Money Store” listing in (1) any current Chicago area phone book, (2) the plaintiff-defendant indices of the Circuit Court of Cook County since 1983, (3) the records of the Illinois Secretary of State’s office, or (4) Harris’ own business directory. Moreover, Mr. Gallo stated that he visited the first floor of the Harris Bank building at 110 West Monroe Street in Chicago and inquired about the location of “The Money Store.” According to Mr. Gallo, the receptionist informed him that “The Money Store” was not located there. Mr. Gallo also visited Harris’ office in Summit, Illinois and similarly found no one who was aware of “The Money Store.”

In its decision, the district court set forth a number of findings of fact and conclusions of law. See R.Vol. V at The Money Store, Inc. v. Harriscorp Finance, Inc., No. 77 C 3175, 1988 WL 96544 (N.D.Ill. Sept. 14, 1988) (memorandum opinion) [hereinafter Mem. op.]. The district court noted that in late 1983, Harris had sold its shopping center facilities to another financial institution, but retained the THE MONEY STORE service mark. After the sale, Harris opted to concentrate its “Money Store” operations on the tenth floor of the Harris Bank building in downtown Chicago. The district court found that the “receptionist at this downtown office answers the phone by saying ‘Money Store,’ and its invoices, stationery, and business cards all bear the service mark.” Mem. op. at 2. Also, as of the date of the hearing, Harris’ “Money Store” operation served over 700 customers with more than $20 million in outstanding loans. Furthermore, the “Money Store” had made $5-6 million in new loans within the previous six months. In light of these factors, the district court denied TMS’ motion to modify the injunction because TMS had failed to demonstrate an exceptional change in circumstances warranting relief.

II.

ANALYSIS

A. Governing Principles

The appellant submits that the district court erred in refusing to modify the 1983 permanent injunction. Therefore, the principles underlying the Supreme Court’s decision in United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932), must be our starting point. See United States v. City of Chicago, 663 F.2d 1354, 1359 (7th Cir.1981) (en banc). “In Swift, the Court recognized the inherent power of a court of equity to modify a decree in light of changed circumstances, ‘to adapt its restraints to the needs of a new day.’ ” Chicago, 663 F.2d at 1359 (quoting Swift, 286 U.S. at 113, 52 S.Ct. at 462).³ “The Swift decision has been codified in the Federal Rules of Civil Procedure.” Id. at 1359 n. 16. Before the district court, TMS made its motion for modification under that codification — Rule 60(b)(5). Rule 60(b)(5) states that:

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: ... (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application....

Fed.R.Civ.P. 60(b)(5).

We review decisions by the district court on Rule 60(b)(5) motions under an abuse of discretion standard. See Delaware Valley Citizens’ Council v. Pennsylvania, 755 F.2d 38, 41 (3d Cir.), cert. denied, 474 U.S. 819, 106 S.Ct. 67, 88 L.Ed.2d 54 (1985); DeFilippis v. United States, 567 F.2d 341, 343 (7th Cir.1977). Review under this standard is, of course, deferential. However, deferential review does not mean no review at all. See Mars Steel Corp. v. Continental Bank N.A., 880 F.2d 928, 936-37 (7th Cir.1989) (en banc); In re Ronco, Inc., 838 F.2d 212, 217 (7th Cir.1988). We must be satisfied that the district court’s decision was guided by established principles of law.

Two fundamental principles are readily distilled from an examination of cases applying Rule 60(b)(5). First, this court has, on numerous occasions, spoken regarding the plaintiff’s burden in requesting Rule 60(b)(5) relief: “[Modification of a permanent injunction is extraordinary relief, and requires a showing of extraordinary circumstances.” Chicago, 663 F.2d at 1360; see also Daubert v. Percy, 713 F.2d 328, 329 (7th Cir.1983), cert. denied, 465 U.S. 1026, 104 S.Ct. 1283, 79 L.Ed.2d 686 (1984); Instrumentalist Co. v. Marine Corps League, 694 F.2d 145, 154 (7th Cir.1982); DeFilippis, 567 F.2d at 342; SEC v. Advance Growth Capital Corp., 539 F.2d 649, 652 (7th Cir.1976); accord Klapprott v. United States, 335 U.S. 601, 613, 69 S.Ct. 384, 389, 93 L.Ed. 266 (1949) (opinion of Black, J.). Second, and equally well settled, is the principle that consideration of a motion under Rule 60(b)(5) “does not allow relitigation of issues which have been resolved by the judgment.” DeFilippis, 567 F.2d at 343-44; see also, e.g., Instrumentalist, 694 F.2d at 154.

These two principles are simply more precise articulations of the approach of Justice Cardozo in Swift. In that case, the Court addressed whether it should modify a ten-year-old antitrust injunction against certain large meatpackers that prevented them from entering into nonmeat aspects of the grocery business. The Court stated that:

The inquiry for us is whether the changes are so important that dangers, once substantial, have become attenuated to a shadow. No doubt the defendants will be better off if the injunction is relaxed, but they are not suffering hardship so extreme and unexpected as to justify us in saying that they are the victims of oppression. Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned.

286 U.S. at 119, 52 S.Ct. at 464 (emphasis supplied). Indeed, recognizing that the governing principles have their roots in Swift and its progeny, see, e.g., United States v. United Shoe Mach. Corp., 391 U.S. 244, 88 S.Ct. 1496, 20 L.Ed.2d 562 (1968), we have previously established a two-pronged analysis to guide the district court’s consideration of a Rule 60(b)(5) inquiry:

The standard for modification of injunctions that emerges from Swift and United Shoe is thus not based solely on hardship to the enjoined party. The standard also incorporates consideration of whether there remains any need to continue the injunction, that is, whether “the purposes of the litigation as incorporated in the decree” have been achieved.

Chicago, 663 F.2d at 1360 (footnote omitted); see also Stewart v. General Motors Corp., 756 F.2d 1285, 1291 (7th Cir.1985).

B. Application of Governing Principles

On appeal, TMS concedes that Harris has not abandoned its use of the service mark. TMS suggests, however, that Harris’ dwindling use of THE MONEY STORE “to the point of almost total invisibility” constitutes a sufficiently dramatic change to warrant modification of the injunction. Appellant’s Br. at 20. It suggests, for instance, that the injunction could be modified to permit TMS to use, accompanied by a disclaimer, the service mark. In TMS’ view, the district court erred in focusing on “the absolute level of Harris’ present use of the mark THE MONEY STORE rather than considering the relative use between 1983 and 1988.” Appellant’s Br. at 22 (emphasis in brief). TMS sees the relative change in circumstances surrounding Harris’ use of the service mark in the Chicago area as “extraordinary.”

We cannot accept this view. In the original litigation, terminated by the 1983 Order, the district court determined that Harris was a good faith junior user of the service mark THE MONEY STORE in the Chicago metropolitan area. The present litigation is not an occasion to retry the fundamental issues at stake in that litigation regarding the “likelihood of confusion” between the TMS and Harris uses of the service mark. See Mem. op. at 6 (“Rule 60(b) ‘does not allow relitigation of issues that have been resolved by judgment[.]’ DeFilippis v. United States, 567 F.2d 341, 343-44 (7th Cir.1977).”); see also 11 C. Wright & A. Miller, Federal Practice and Procedure § 2863 at 206-07; § 2961 at 600-01 (1973). Rather, the key question before the district court on the Rule 60(b)(5) motion in 1988 was “whether there remains any need to continue the injunction.” Chicago, 663 F.2d at 1360. On that issue, the district court noted that Harris’ Chicago “Money Store” operation is still viable, having more than $20 million in outstanding loans and attracting new business every year, and that its invoices, stationery, and business cards all bear the service mark. The district court then concluded that “Harris’ decision to cut back its ‘Money Store’ operation is insufficiently dramatic to justify an equitable modification of the judgment and the injunction. A simple reduction in business activity is not the type of change envisioned by the Swift court.” Mem. op. at 5-6.

On this record, we cannot view this determination that Harris continues to use the mark in the Chicago metropolitan region as clearly erroneous. Nor, on this record, can we say that the district court erred in its conclusion that “Harris’ decision to cut back its ‘Money Store’ operation is insufficiently dramatic to justify an equitable modification of the judgment and the injunction.” Mem. op. at 5. Accordingly, the purposes of the original litigation have not been achieved, and the need to continue the Order remains. See Chicago, 663 F.2d at 1360. Therefore, the district court properly denied TMS’ motion for modification of the injunction.

CONCLUSION

The district court did not abuse its discretion in denying The Money Store, Inc.’s motion to modify an injunction under Federal Rule of Civil Procedure 60(b)(5). Accordingly, we affirm the judgment of the district court.

Affirmed.

1 . The Order defined the Chicago metropolitan area as "consisting of Cook County and, the surrounding Illinois counties of Lake, McHenry, Kane, DuPage and Will.” Order at 3, ¶ 10.

2 . The precise language of the injunction provides:

13. Defendant [Harris], ... [is] hereby permanently enjoined and prohibited from using the mark "THE MONEY STORE” ... anywhere throughout the United States, except for the Chicago Metropolitan Area, as defined herein, in connection with the operation of retail establishments involving the sale, offering for sale or distribution of any moneylend-ing, banking or other financial services or any other goods or services on or in connection with which such use is likely to cause confusion, to cause mistake, or to deceive.

Order at 3. The court also enjoined TMS, stating that:

15. Plaintiff [TMS] ... [is] hereby permanently enjoined and prohibited from using the mark "THE MONEY STORE" ... anywhere in the Chicago Metropolitan Area, as defined herein, in connection with the operation of retail establishments involving the sale, offering for sale or distribution of any moneylend-ing, banking or other financial services or any other goods or services on or in connection with which such use is likely to cause confusion, to cause mistake, or to deceive.

Id. at 4.

3 . In the Order, the district court explicitly retained its inherent equity power to modify the decree. The court stated that:

16. In order to permit each party to conduct its business while minimizing public confusion to the extent reasonably possible, each party shall have the right, notwithstanding Paragraphs 13 and 15 of this Judgment, to use the mark "THE MONEY STORE" to advertise its services throughout the United States. In order to protect the public interest and the parties, this Court shall retain jurisdiction of this matter, and each such party shall have the right to apply to the Court for further injunctive relief in accordance with principles of equity in the event that the other party's use of the mark “THE MONEY STORE” in advertising has resulted in a likelihood of confusion, mistake, or deception that injures or damages such party.

Order at 4-5.