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Schussler v. Webster

March 9, 2009

STEVEN SCHUSSLER AND SCHUSSLER CREATIVE, INC., ET AL., PLAINTIFFS,
v.
J. FRANK WEBSTER, DEFENDANT.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER:

(1) GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO VACATE ORDER; (Doc. No. 60) (2) ENTERING AMENDED DECLARATORY JUDGMENT; and (3) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PERMANENT INJUNCTION. (Doc. No. 58)

Presently before the Court are defendant's motion to vacate the Court's September 22, 2008 Order, and plaintiffs' motion for permanent injunction. For the reasons stated herein, the Court: (1) grants defendant's motion to vacate in part; (2) denies defendant's motion to vacate in part; (3) enters an amended declaratory judgment in favor of plaintiffs; (4) grants plaintiffs' motion for permanent injunction in part; and (5) denies plaintiffs' motion for permanent injunction in part.

BACKGROUND

Factual Background

Plaintiffs bring this action for defamation, tortious interference with contract, and tortious interference with prospective economic advantage. Plaintiffs develop concepts for themed restaurants; their previous projects include the "Rainforest Café" and "T-Rex." In 2005, Schussler Creative filed a trademark application for the mark "Hot Dog Hall of Fame." Together with its business partner, RED Development, LLC, ("RED Development") Schussler Creative is developing a restaurant franchise called "Hot Dog Hall of Fame." The first "Hot Dog Hall of Fame" opened on August 13, 2008, at the Mohegan Sun Casino at Pocano Downs, Wilkes-Barre, Pennsylvania.

Defendant is J. Frank Webster, also known as "Uncle Frank" and "Mr. Hot Dog." Defendant owns a large collection of hot dog memorabilia which he has been collecting since the 1970's. He maintains a website with an online newsletter at www.thehotdoghalloffame.com. The last hot dog restaurant he operated closed in 1983. He has never sought or received money in connection with his activities on his website or with the memorabilia collection, although he considers it more than a hobby. It is his eventual plan to open a museum showcasing the collection with an on-site restaurant and other hot-dog related activities.

In June of 2007, defendant sent e-mails to various media organizations, hospitality companies, civic leaders, and RED Development regarding plaintiffs' plan to open the Hot Dog Hall of Fame restaurants. In the e-mails, defendant claimed Mr. Schussler stole the concept of Hot Dog Hall of Fame from him; plaintiffs do not own the intellectual property of the Hot Dog Hall of Fame; and Mr. Schussler was a "liar," a "thief," and a "con man." Defendant also stated he would "poison the well" for Mr. Schussler and "blacken" the "eyes" of Mr. Schussler and his counsel.

Procedural Background

Plaintiffs filed a complaint on October 18, 2007, alleging (1) defamation, (2) tortious interference with prospective economic advantage, and (3) tortious interference with contract. (Doc. No. 1.) On November 15, 2007, the Court preliminarily enjoined defendant from "sending e-mails, letters, or other correspondence to current or prospective business associates of plaintiffs, or making verbal statements to such persons, or posting materials on a website, which state or imply that plaintiffs have stolen, misappropriated, or infringed upon intellectual property allegedly belonging to defendant relating to the Hot Dog Hall of Fame." (11/15/2007 Order at 7.) The preliminary injunction is in effect until the conclusion of this litigation.

On June 27, 2008, plaintiffs filed a motion for summary judgment and for a permanent injunction of defendant's "tortious and defamatory behavior." (Doc. No. 32.) On September 22, 2008, the Court issued an Order ("Order") granting in part and denying in part the motion for summary judgment, and denying the motion for permanent injunction. (Doc. No. 47.) The Court found that "[b]ecause Schussler Creative has registered the trademark, it is presumed valid." (Order at 4.) The Court granted plaintiffs' motion for summary judgment as to the claim for trademark rights, and entered a declaratory judgment that defendant had no trademark right in his use of "The Hot Dog Hall of Fame" and that defendant's use of that name "did not invalidate Schussler Creative's trademark for 'Hot Dog Hall of Fame." (Order at 6-7.) The Order denied plaintiffs' motion for summary judgment on their defamation and tortious interference claims.

On January 14, 2009 plaintiffs moved for a permanent injunction asking the Court to preclude defendant from publishing statements that claim, insinuate, or imply that plaintiffs: (a) do not own or are not entitled to use the phrases "The Hot Dog Hall of Fame" or "Hot Dog Hall of Fame"; or (b) stole or otherwise misappropriated trademark rights from defendant. (Doc. No. 58.) Defendant has filed an opposition, (Doc. No. 65,) and plaintiffs filed a reply. (Doc. No. 66.) On January 26, 2009 defendant moved to vacate the Order under Fed. R. Civ. P. 60(b). (Doc. No. 60.) Plaintiffs filed an opposition (Doc. No. 64,) and defendant has filed a reply. (Doc. No. 67.)

DISCUSSION

I. Defendant's Motions to Vacate September 22, 2008 Order

Federal Rule of Civil Procedure 60(b) provides, "[o]n motion and just terms, the court may

relieve a party or its legal representative from a final judgment, order, or proceeding," for a variety of reasons. Fed. R. Civ. P. 60(b) (2009). Defendant moves the Court for an order vacating in part the Order pursuant to either Fed. R. Civ. P. 60(b)(1), 60(b)(3), or 60(b)(6), primarily because plaintiffs allegedly made false statements of fact and law that "induced" the Court to erroneously issue the declaratory judgment in plaintiffs' favor. The alleged misrepresentations are set forth below, followed by a discussion of whether relief is warranted under Fed. R. Civ. P. 60(b).

A) Misrepresentations of Fact

Defendant argues that contrary to plaintiffs' representations in their pleadings, plaintiffs do not own a registered trademark in the name "Hot Dog Hall of Fame," and do not even own the trademark application for that name. Defendant also states that regardless of who owns the trademark application, no trademark has ever been issued on the name. Defendant supports his argument with the declaration of Michael A. Febbo. Mr. Febbo's declaration details reports from the United States Patent and Trademark Office ("PTO") website regarding trademark applications for the "Hot Dog Hall of Fame," and attaches those reports as exhibits.*fn1 His declaration and the attached exhibits indicate:

(a) Schussler Creative filed a trademark/service mark application for "Hot Dog Hall of Fame" on March 21, 2005 with an application serial number of 78591560 ("'560 application.") The PTO mailed a "final refusal" of the statement of use for the application on November 19, 2008. As ...


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