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Bauer Bros. LLC v. Nike

June 4, 2010

BAUER BROS. LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
NIKE, INC., AN OREGON CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge

ORDER DENYING MOTION TO ENFORCE SETTLEMENT (Doc. No. 22)

Pending before the Court is Defendant Nike, Inc.'s ("Nike") motion to enforce settlement. The Court decides the matter on the papers submitted and without oral argument. See S.D. Cal. Civ. R. 7.1(d.1) For the reasons stated below, the Court DENIES Defendant's motion. (Doc. No. 22.)

I. BACKGROUND

Nike has sponsored the United States men's soccer team since 2005. (Doc. No. 22-1 at 4.) In an effort to bring awareness to the team, Nike adopted a promotional campaign using the historic rallying cry, "DON'T TREAD ON ME," to spark national pride. Id. Since 2005, the phrase has been used in soccer publications and on promotional products and merchandise. (Id. at 5.)

Plaintiff Bauer Brothers LLC ("Bauer Brothers") creates and sells apparel. Its product line includes clothing bearing the trademarked phrase "DON'T TREAD ON ME." (Doc. No. 1.) Bauer Brothers owns this trademark and, in March 2009, brought suit against Nike for trademark infringement. Id.

On May 18, 2009, both parties met at an Early Neutral Evaluation ("ENE") Conference before Magistrate Judge Adler. (Doc. No. 13.) During that conference, the parties were able to reach a settlement. The settlement included nine conditions, each of which were placed on the record orally. (Doc. No. 22 at Exh A.)

The seventh condition, in its entirety, reads:

Point number seven, is Nike will provide in two weeks the declaration confirming that it has not made any profits on its "Don't Tread On Me" or "DTOM" products that it has sold.

(Doc. No. 22, Exh A at 2:14--18.) The settlement transcript does not include an explanation of how the parties would define "profits."

On June 11, 2009, Nike sent a declaration to Bauer Brothers to satisfy the "no profit" condition. (See Doc. No. 27 - Filed under Seal) Bauer Brothers objected to Nike's "no profit" declaration and has refused to dismiss the lawsuit.

As a result, Nike has filed the instant motion to enforce the May 18th settlement. (Doc. No. 22.) Since the date of that filing, the case was transferred to Magistrate Judge Gallo (Doc. No. 30), and then to Magistrate Judge Skomal. (Doc. No. 31.) Magistrate Judge Adler is no longer associated with this case.

II. LEGAL STANDARD

It is well settled that a district court has the equitable power to enforce a settlement agreement for a case pending before it. Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987); see Mid-South Towing Co. V. Har-Win, Inc., 733 F.2d 386, 389 (5th Cir. 1984); Aro Corp. V. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976); Autera v. Robinson, 419 F.2d 1197, 1200 (D.C. Cir. 1969). However, settlement agreements should only be enforced if they are complete. Id. Summary enforcement of a settlement agreement "is ill-suited to situations presenting complex factual issues related either to the formation or the consummation of the [settlement] contract, which only testimonial exploration in ...


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