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Brady v. Grendene USA, Inc.

United States District Court, S.D. California

April 29, 2015

JAMES W. BRADY and PATRICIA M. BRADY, Plaintiffs,
v.
GRENDENE USA, INC., a Delaware Corporation, and GRENDENE S.A., a Brazil Corporation, Defendants. AND RELATED COUNTERCLAIMS

ORDER: (1) GRANTING IN PART AND DENYING IN PART THE BRADYS' MOTION FOR CONTEMPT AND TO DECLARE DEFENDANTS VEXATIOUS LITIGANTS; (2) VACATING HEARING DATE [ECF No. 210]

GONZALO P. CURIEL, District Judge.

I. INTRODUCTION

Before the Court is Plaintiffs James W. Brady and Patricia M. Brady's (collectively, the "Bradys") Motion for Contempt for Repeated Violations of Protective Order, and to Declare Defendants Vexatious Litigants. (ECF No. 210.)[1] Defendants Grendene USA, Inc. and Grendene S.A. (collectively, "Grendene") oppose. (ECF No. 218.)

The parties have fully briefed the motion. (ECF Nos. 210, 218, 220.)The Court finds the motion suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1). Upon review of the moving papers, admissible evidence, and applicable law, the Court GRANTS the Bradys' motion as to contempt and DENIES the Bradys' motion as to declaring Grendene and its counsel vexatious litigants.

II. BACKGROUND

On March 9, 2012, the Bradys filed a complaint against Grendene alleging trademark infringement of their IPANEMA mark (the "Trademark Action" or "this case"). (ECF No. 1.) On September 27, 2012, a protective order was entered in this case by Magistrate Judge Karen S. Crawford (the "Protective Order"). (ECF No. 38.) On December 15, 2014, Grendene filed a complaint against the Bradys alleging that filing the Trademark Action constituted a breach of a settlement agreement between Made in Brazil, Inc. ("MIB"), the Bradys' company, and the Ipanema Show Corporation, Grendene's alleged predecessor-in-interest, that is at issue in the Trademark Action (the "Breach of Contract Action"). Complaint, Grendene USA, Inc. v. Brady, 3:14-cv-2955-GPC-KSC (S.D. Cal. Dec. 15, 2014), ECF No. 1.

On February 3, 2015, Grendene USA filed a complaint with the World Intellectual Property Organization alleging that the Bradys registered their new website, http://www.ipanemaus.com, in bad faith because it was similar to Grendene USA's website, http://www.ipanemausa.com (the "WIPO Action"). (ECF No. 210-3, Ex. 1.) The WIPO Action was filed against the Bradys' daughter as http://www.ipanemaus.com was registered in their daughter's name. ( Id. )

On February 27, 2015, Grendene USA filed a complaint against the Bradys, their daughter, and MIB in the United States District Court for the Middle District of Florida alleging trademark infringement and unfair competition (the "Florida Action"). Grendene USA, Inc. v. Brady, 6:15-cv-0314-CEM-GJK (M.D. Fla. Feb. 27, 2015), ECF No. 1.

On March 2, 2015, Grendene's law firm, Kupferstein Manuel & Quinto LLP ("KMQ"), filed a complaint against the Bradys in Los Angeles Superior Court alleging breach of contract, fraud, and unfair competition (the "KMQ Action"). (ECF No. 210-3, Ex. 3.) The KMQ Action arises out of the Bradys' alleged failure to fulfill an order for a $68 swimsuit placed by one of KMQ's agents through the Bradys' website. ( Id. ) Based on these allegations, KMQ seeks $68 in actual damages and $6800 in punitive damages. ( Id. )

In bringing these lawsuits, the Bradys allege that Grendene and KMQ have "repeatedly violated the protective order in this case." (ECF No. 210-1, at 7, 12-13.) Based on these alleged violations, the Bradys move this Court to: (1) find Grendene and KMQ in contempt, (2) order Grendene and KMQ to dismiss all four of their actions against the Bradys, (3) order Grendene and KMQ to pay the Bradys' attorney fees, and (4) declare Grendene and KMQ vexatious litigants. (ECF No. 210-1, at 13-14.)

IV. LEGAL STANDARD

A. Contempt

Federal Rule of Civil Procedure 70(e) allows the Court to find a party in contempt for failure to comply with a court order. FED. R. CIV. P. 70. In the Ninth Circuit, the moving party has the initial burden to show "by clear and convincing evidence that the contemnors violated a specific and definite order of the court." In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002) (citation and quotation marks omitted). Once the moving party has satisfied its burden, the "burden then shifts to the contemnors to demonstrate why they were unable to comply." Id. (citation and quotation marks omitted). Generally, a violation is found where a party fails "to take all reasonable steps within the party's power to comply" with a court order. Reno Air Racing Ass'n., Inc. v. McCord, 452 F.3d 1126, 1130 (9th Cir. ...


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