Verizon Communications, Inc. Verizon Trademark Services, Llc, Formerly Known as Bell Atlantic Trademark Services, LLC v. Inverizon International, Inc.

295 F.3d 870, 2002 U.S. App. LEXIS 13888, 2002 WL 1476312
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 11, 2002
Docket01-3503
StatusPublished
Cited by26 cases

This text of 295 F.3d 870 (Verizon Communications, Inc. Verizon Trademark Services, Llc, Formerly Known as Bell Atlantic Trademark Services, LLC v. Inverizon International, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Verizon Communications, Inc. Verizon Trademark Services, Llc, Formerly Known as Bell Atlantic Trademark Services, LLC v. Inverizon International, Inc., 295 F.3d 870, 2002 U.S. App. LEXIS 13888, 2002 WL 1476312 (8th Cir. 2002).

Opinions

HANSEN, Circuit Judge.

Verizon Communications, Inc. and Verizon Trademark Services, LLC (collectively “Verizon”) appeal the district court’s decision to stay this declaratory judgment action pending resolution of a state court action filed by Inverizon International, Inc. (“Inverizon”). We reverse and remand for further proceedings.

I.

On July 25, 2000, Inverizon sent a cease and desist letter to Verizon, demanding that it refrain from using the “Verizon” mark because such use was likely to cause confusion with Inverizon’s mark. The letter explained that Inverizon uses its service mark for agricultural business and management consulting services and asserted that the use of Verizon’s mark “in connection with a range of services, some of which overlap with services provided by [Inverizon] ... constitutes infringement of [Inverizon’s] trademark rights, as well as unfair competition under § 43 of the Lan-ham Act, 15 U.S.C. § 1125.” (Appellants’ Add. at 6.) The letter added that “[s]uch use also violates various state anti-dilution statutes and other state laws.” (Id.) In-verizon wrote that it “would prefer to resolve this matter amicably and avoid unnecessary legal action.” (Id.) The letter demanded a response within 14 days, stating a timely response with indications that Verizon will refrain from using the mark [872]*872“may obviate more formal legal action.” (Id. at 7.)

On August 7, 2000, within the 14-day response period, Verizon contacted Inveri-zon in an effort to resolve this matter, and neither party raised the subject of litigation. Verizon asserted that there is no likelihood of confusion or dilution because its communications services are sufficiently distinct from Inverizon’s agricultural consulting services. Inverizon’s trademark counsel disagreed, indicating that there was an overlap in the “wireless business” provided by the companies. (App. at 94.) Verizon asked for clarification of and details pertaining to this asserted overlap in services, but Inverizon provided nothing.

After waiting three weeks for additional information from Inverizon supporting its demands and detailing the alleged overlap in services, Verizon filed this declaratory judgment suit in federal district court in Missouri. Verizon seeks a declaration that the use of its mark does not infringe upon Inverizon’s rights or constitute unfair competition in violation of the Lanham Act or various state statutes.

Six weeks later, on October 16, 2000, Inverizon filed suit against Verizon in Missouri state court, expressly denying that it was seeking any relief under federal law. Inverizon then moved to dismiss or stay the federal action on the basis of the pending state court action. Likewise, Verizon filed a motion in state court to dismiss the state action in light of the federal suit.

The parties proceeded with discovery in the federal action until May 15, 2001, when the federal district court granted Inveri-zon’s motion to stay the federal proceedings. Subsequently, the state court denied Verizon’s motion to dismiss the state court action, relying heavily on the federal court’s decision to abstain and the federal court’s finding that Verizon had wrongfully deprived Inverizon of its choice of forum. Verizon now appeals the district court’s decision to stay the federal declaratory judgment action.

II.

We review the district court’s grant of a motion to stay in a declaratory judgment action for an abuse of discretion. Wilton v. Seven Falls Co., 515 U.S. 277, 289-90, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995); see Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 498, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942). In Wilton, the Court held that the district court did not abuse its discretion by staying a declaratory judgment case based on diversity jurisdiction where a subsequently filed state court action presented an “opportunity for ventilation of the same state law issues.” 515 U.S. at 290, 115 S.Ct. 2137. While declaring that the abuse of discretion standard governed cases of abstention in the declaratory judgment context, the Court also plainly indicated that it was not attempting “to delineate the outer boundaries of that discretion in other cases, for example, cases raising issues of federal law or cases in which there are no parallel state proceedings.” Id. (emphasis added). As in Wilton and Brillhart, the present case involves a subsequently filed parallel state court proceeding, but unlike Wilton and Brillhart, the present declaratory judgment action is based on a federal question rather than diversity jurisdiction. Thus, the boundaries of the district court’s discretion in the present case are not specifically delineated in either Wilton or Brill-hart, neither of which involved a federal question.

In general, we have described the abuse of discretion standard as follows:

[W]hen we say that a decision is discretionary, or that a district court has discretion to grant or deny a motion, we do [873]*873not mean that the district court may do whatever pleases it. The phrase means instead that the court has a range of choice, and that its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law. An abuse of discretion,' on the other hand, can occur in three principal ways: when a relevant factor that should have been given significant weight is not considered; when an irrelevant or improper factor is considered and given significant weight; and when all proper factors, and no improper ones, are considered, but the court, in weighing those factors, commits a clear error of judgment.

Kern v. TXO Prod. Corp., 738 F.2d 968, 970 (8th Cir.1984). After carefully reviewing the record, we conclude that the district court failed to consider a factor that should have been given significant weight in this case and also committed a clear error of judgment.

The district court’s decision to stay this action was based on the following factors: (1) the two actions involve the same issues between the same parties, (2) the state court action can resolve all of the issues, (3) it would be inefficient to require litigation in two separate actions, and (4) Verizon wrongfully deprived Inverizon of its choice of forum. These findings indicate a consideration of the factors and principles enunciated in BrillhaH and Wilton. However, the district court failed to mention one very significant factor present in this case that simply was not at issue in either Bnllhart or Wilton — that is, the presence of a federal question that is not present in the state court action. Cf. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (indicating that “the presence of federal-law issues must always be a major consideration weighing against surrender” of federal jurisdiction).

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Bluebook (online)
295 F.3d 870, 2002 U.S. App. LEXIS 13888, 2002 WL 1476312, Counsel Stack Legal Research, https://law.counselstack.com/opinion/verizon-communications-inc-verizon-trademark-services-llc-formerly-ca8-2002.