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Telecredit Service Corp. v. Electronic Transaction Corp.

filed: September 4, 1992.

TELECREDIT SERVICE CORP., PLAINTIFF-APPELLANT,
v.
ELECTRONIC TRANSACTION CORP.; ELECTRONIC TRANSACTION CORP. D/B/A "SCAN"; DAVID ALEXANDER; DENIS DUNANN, DEFENDANTS-APPELLEES.



Appeal from the United States District Court For the Central District of California. DC NO. CV-90-2620-IH. Irving Hill, District Judge, Presiding

Before: Sneed and D.w. Nelson, Circuit Judges, and Wanger, District Judge.*fn**

MEMORANDUM

OVERVIEW

Appellant Telecredit Services Corp. ("Telecredit") brought this unfair competition claim under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), against competitor Electronic Transaction Corp. ("ETC"). Telecredit alleged that ETC had violated the Lanham Act by circulating a flyer falsely claiming that ETC's prices were lower than Telecredit's. The district court granted summary judgment for ETC because it concluded that there was no evidence that the flyer had deceived consumers or that Telecredit had been injured by the flyer. Telecredit appeals the grant of summary judgment, as well as a prior district court order limiting its discovery. We affirm.

STANDARD OF REVIEW

We review a grant of summary judgment de novo. Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 110 S. Ct. 3217 (1990). We must determine whether, viewing the evidence in the light most favorable to Telecredit, there are any genuine issues of material fact and whether the district court correctly applied the law. Tzung v. State Farm Fire & Cas. Co., 873 F.2d 1338, 1339-40 (9th Cir. 1989).

Discussion

1. Injunctive Relief

Telecredit's complaint sought both damages and an injunction preventing ETC from circulating the flyer in the future. ETC claims that because it ceased distributing the flyer in 1990 and has no plans to resume distribution, Telecredit's claim for injunctive relief is moot. In the Ninth Circuit, voluntary cessation of wrongful conduct moots a claim for injunctive relief only if "the reform of the defendant [is] irrefutably demonstrated and total." Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132, 1135 (9th Cir. 1986).

That standard is met in this case. The district court questioned counsel for ETC extensively on this point:

COURT: Now, I want to discuss the matter of the injunctive prayer now. But I must ask the defendant a question. My memory of the evidence is that you have said that this document has not been used or sent out for a period of some years already; is that right? Or months? What is it?

MR. NOEL: Last July [1990], your honor, a letter from Mr. Carney of this firm to Mr. St. Marie representing the plaintiff made the representation that the sales sheet was no longer being used in commerce.

COURT: All right. And I take it you're prepared to assure the court and your opposition that no further use will ever be made of the document by sending ...


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