Top Tobacco, L.P. v. Diamond J. Wholesale, LLC

• Court: Court of Appeals for the Eleventh Circuit
• Decided: August 22, 2023
• Docket: 22-10926
• Status: Unpublished

Opinion

USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 1 of 6

[DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 22-10926 Non-Argument Calendar ____________________

TOP TOBACCO, L.P., REPUBLIC TECHNOLOGIES (NA), LLC, REPUBLIC TOBACCO, L.P., Plaintiffs-Appellees, versus GABSONS NOVELTIES, et al.,

Defendants,

DIAMOND J. WHOLESALE, LLC, d.b.a. Gabsons Novelties, USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 2 of 6

2 Opinion of the Court 22-10926

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:19-cv-02148-LMM ____________________

Before JORDAN, NEWSOM, and ANDERSON, Circuit Judges. PER CURIAM: Diamond J Wholesale, LLC, and Raj Solomon, its sole owner and member, appeal a judgment of $11 million in statutory damages in favor of the plaintiffs (Top Tobacco, L.P., Republic Technologies (NA), LLC, and Republic Tobacco, L.P.) on their claims of willful trademark infringement under the Lanham Act, 15 U.S.C. §§ 1114 et seq. Following review of the parties’ briefs and the record, we affirm.1 Evidentiary Rulings. The appellants contend that the district court erred in excluding certain evidence (witness testimony and invoices) which purportedly would have shown that they and their suppliers had purchased the counterfeit products from a legitimate

1 As we write for the parties, we assume their familiarity with the case and set

out only what is necessary to explain our decision. The panel unanimously determined that this appeal should be removed from the oral argument calen- dar and decided on the briefs. See 11th Cir. R. 34-3(b). USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 3 of 6

22-10926 Opinion of the Court 3

wholesaler named Star Importers. According to the appellants, this evidence would have shown that they and their suppliers believed that Star Importers was a large and reputable seller of the plaintiffs’ products. And that, the appellants say, would have helped them defeat the plaintiffs’ claim that the trademark infringement was willful. Reviewing for abuse of discretion, see Chrysler Int’l Corp. v. Chemaly, 280 F.3d 1358, 1362–63 (11th Cir. 2002), we discern no er- rors. First, the district court did not abuse its discretion in exclud- ing the testimony of Steve Kent—one of the appellants’ suppliers— because, among other things, Mr. Kent did not purchase products from Star Importers during the time period relevant to this suit. See D.E. 172 at 38–39. Second, the district court did not abuse its discretion in excluding the invoices under Rule 37 because the ap- pellants did not turn them over in discovery and only brought them to the district court’s attention a year or so after the discovery dead- line ended. See D.E. 154 at 17–19. In any event, even if the exclu- sion of the invoices constituted an abuse of discretion, any error was harmless because the invoices were not for transactions be- tween Diamond J and Star Importers—they were between Quick Save Food Mart (a convenience store owned by Mr. Solomon) and Star Importers. The invoices therefore do not bear on the appel- lants’ purported good faith in obtaining the counterfeit products at issue, and any error in excluding them was harmless. See Luxottica USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 4 of 6

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Grp., S.p.A. v. Airport Mini Mall, LLC, 932 F.3d 1303, 1319 (11th Cir. 2019); 28 U.S.C. § 2111. 2 Judicial Notice. The appellants complain that the district court failed to take judicial notice of the definition of the word “culpability.” See D.E. 172 at 36, 39–40. If there was any error un- der Federal Rule of Evidence 201, it was harmless because the dis- trict court permitted the appellants to include their definition of “culpability” in the jury instructions. See id. at 39–40. The appel- lants acknowledged that including the definition in the jury instruc- tions would basically accomplish the same thing as judicial notice, see id. at 40, but they chose not to place the definition in the instruc- tions. Given that course of action, any error in declining to take judicial notice of the definition was invited, is procedurally barred, or was harmless, or a combination of those three things. Mr. Solomon’s Individual Liability. Mr. Solomon challenges the district court’s grant of summary judgment holding him indi- vidually liable for trademark infringement. He asserts that knowledge of infringement is required for individual liability under the Lanham Act, and that—as the district court originally thought—there are genuine issues of fact about his state of mind. We conclude that the district court did not err. Under 15 U.S.C. § 1114(1)(a)—which in relevant part prohibits the use in

2 With respect to the matter of financial data about Diamond J and its compet-

itors, the appellants were able to testify and comment on Diamond J’s small size and the restrictive effect that its size had on purchasing directly from Top Tobacco. Any error respecting that evidence was therefore also harmless. USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 5 of 6

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commerce of counterfeit marks—a “showing of intent or bad faith is unnecessary to establish a violation[.]” Chanel, Inc. v. Italian Ac- tivewear of Fla., Inc., 931 F.2d 1472, 1476 (11th Cir. 1991). And an individual is liable under that provision if he “actively and know- ingly caused the infringement.” See id. at 1477. In Chanel we affirmed a district court’s summary judgment order holding a corporate official individually liable because he (1) was the president and CEO of the infringing company, (2) pur- chased the infringing goods, (3) advertised those goods as legiti- mate, and (4) operated the showroom where the goods were sold. See id. at 1478. Here Mr. Solomon was the owner and sole member of Diamond J, and he stipulated that he was “chiefly responsible for buying and selling the counterfeit products and therefore ‘actively caused the infringement as a moving, conscious force.’” D.E. 130– 6 at ¶ 3. This was sufficient for the district court to grant summary judgment against him on the issue of individual liability. See Chanel, 931 F.2d at 1478 n.8 (explaining that an individual is liable if he “ac- tively participated as a moving force in the decision to engage in the infringing acts, or otherwise caused the infringement as a whole to occur”) (emphasis omitted). See also Edmondson v. Velvet Lifestyles, LLC, 43 F.4th 1153, 1164 (11th Cir. 2022) (“In other words, a corporate officer who directs, controls, ratifies, participates in, or is the moving force behind the infringing activity is personally lia- ble for that infringement.”) (internal quotation marks and citation omitted). USCA11 Case: 22-10926 Document: 58-1 Date Filed: 08/22/2023 Page: 6 of 6

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Simply stated, we held in Chanel, 931 F.2d at 1476, that intent is not necessary to demonstrate a violation of § 1114(1)(a). Given this underlying principle, individual liability under that provision does not demand proof of scienter. Any issues of fact relating to Mr. Solomon’s state of mind were therefore not material. See 87 C.J.S. Trademarks, Etc. § 296 (Aug. 2023 update) (“Actual intent to infringe is not necessary for liability under the Lanham Act, and, therefore, individual liability may be imposed on a corporate of- ficer who had no knowledge of the infringement, but who had (1) the right and ability to supervise the infringing activity, and (2) a direct financial interest in [that] activity. In determining whether a corporate officer’s acts render the officer individually liable under the Lanham Act, it is immaterial whether the officer knows that the acts will result in infringement.”) (citations omitted). 3 We affirm the district court’s judgment. AFFIRMED.

3 Knowledge of infringement is required for the remedy of treble damages and

attorney’s fees under § 1117(b) of the Lanham Act, and such knowledge is usu- ally a matter for the fact-finder. See Chanel, 931 F.2d at 1476–78. Here the jury found that Mr. Solomon acted willfully. See D.E. 191.