United States District Court, N.D. California, San Jose Division
NEWMARK REALTY CAPITAL, INC. Plaintiff,
BGC PARTNERS, INC., et al., Defendants.
DENYING IN PART PLAINTIFF'S MOTION FOR ORDER TO SHOW
CAUSE WHY DEFENDANTS ARE NOT IN CIVIL CONTEMPT OF COURT'S
PRELIMINARY INJUNCTION ORDER; AND ORDER REGARDING
PLAINTIFF'S MOTIONS TO SUBMIT NEW EVIDENCE [RE: ECF 145,
LABSON FREEMAN, United States District Judge
Newmark Realty Capital, Inc. filed a Motion for Order to Show
Cause Why Defendants Are Not in Civil Contempt of the
Court's Preliminary Injunction Order (“Motion for
Contempt”). Mot., ECF 145. Plaintiff claims that
Defendants BGC Partners, Inc. and Newmark & Co. Real
Estate, Inc. are in contempt for violating the Court's
November 16, 2017 preliminary injunction order. Having
considered the parties' briefing and oral argument, the
Court hereby DENIES IN PART Plaintiff's Motion for
Contempt. The Court, however, orders Defendants to correct
technical violations of the preliminary injunction order. The
Court will also allow Defendants to respond to
Plaintiff's newly submitted evidence which they did not
have an opportunity to respond.
and Defendants are companies that offer services in the
commercial real estate market. Over the years these companies
have both expanded geographically and Defendants have
expanded substantially into the mortgage services sector
occupied by Plaintiff. On April 4, 2016, Plaintiff filed this
action against Defendants, alleging trademark infringement.
Compl., ECF 1.
November 16, 2017, the Court issued a preliminary injunction
order that enjoined Defendants from using:
NEWMARK alone or in combination with any other words as a
trademark to denote the source of the following
services-mortgage banking, mortgage brokerage, loan
servicing, investment brokerage and investment consulting in
the field of commercial real estate.
16, 2017 Order, ECF 134. That order went into effect on
November 17, 2017 upon Plaintiff's posting of a bond. ECF
137. On November 30, 2017, Plaintiff filed the instant motion
claiming that Defendants had failed to comply with the
preliminary injunction order. Mot. The following day, on
December 1, 2017, Defendants filed a Motion for Stay and
Motion for Reconsideration of the Preliminary Injunction. ECF
Court held a hearing on Defendants' Motion for Stay and
Plaintiff's Motion for Contempt on December 14, 2017.
Defendants' Motion for Stay was denied. ECF 173. The
Court, however, recognized that the terms “investment
brokerage” and “investment consulting” may
be too vague to be enforceable. Id. Thus, the Court
suspended the injunction as to “investment
brokerage” and “investment consulting”
services pending further consideration of the parties'
efforts to jointly propose clear definitions of these terms.
Id. As for Plaintiff's Motion for Contempt, the
Court heard oral argument but set another hearing on January
4, 2018 due to the limited time for argument. The Court also
allowed the parties to file supplemental briefing by January
2, 2018. During the January 4, 2018 hearing, the Court
provided some guidance as to the boundaries of the
preliminary injunction order in relation to Defendants'
website. See January 4, 2018 Hearing Tr., ECF 183.
The Court also asked the parties to meet and confer to
facilitate Defendants' compliance based on the
Court's guidance. Defendants agreed to provide a
declaration regarding the status on correcting their sales
the Court granted in part and denied in part Defendants'
Motion for Reconsideration of the Preliminary Injunction.
March 30, 2018 Order, ECF 262. Determining that the November
16, 2017 Order contained several errors, the Court narrowed
the preliminary injunction. Id. at 42-43.
Accordingly, Defendants are currently enjoined from using:
NEWMARK alone or in combination with any other words, but not
NEWMARK KNIGHT FRANK alone or in combination with other
words, as a trademark to denote the source of the following
services-mortgage banking, mortgage brokerage, loan
servicing, and investment services which are subordinate to
or derivative of mortgage services provided by mortgage
brokers-in the field of commercial real estate.
Id. at 43.
to the Court's ruling on Defendants' Motion for
Reconsideration of the Preliminary Injunction, Plaintiff
filed a Motion to Modify the Preliminary Injunction and
requested the Court to expand the November 16, 2017
injunction. ECF 202. Considering the narrowed injunction
issued on March 30, 2018, the Court denied Plaintiff's
Motion to Modify the Preliminary Injunction. ECF 284. As
such, the currently effective injunction is set forth in the
Court's March 30, 2018 Order.
parties have appealed the Court's preliminary injunction
order to the Ninth Circuit. ECF 319, 323. This Court retains
jurisdiction to enforce the preliminary injunction while the
appeal proceeds. See Ashker v. Sayre, No. 05-03759
CW, 2010 WL 1980233, at *3 (N.D. Cal. May 17, 2010).
contempt “consists of a party's disobedience to a
specific and definite court order by failure to take all
reasonable steps within the party's power to
comply.” Reno Air Racing Ass'n., Inc. v.
McCord, 452 F.3d 1126, 1130 (9th Cir. 2006) (citation
omitted); see also Gen. Signal Corp. v. Donallco,
Inc., 787 F.2d 1376, 1379 (9th Cir. 1986) (“Civil
contempt occurs when a party fails to comply with a court
order.”). “The standard for finding a party in
civil contempt is well settled: The moving party has the
burden of showing by clear and convincing evidence that the
[nonmoving party] violated a specific and definite order of
the court.” FTC v. Affordable Media, LLC, 179
F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v. City
& County of San Francisco, 968 F.2d 850, 856 n. 9
(9th Cir. 1992)).
contempt need not be willful.” In re Dual-Deck
Video Cassette Recorder Antitrust Litig., 10 F.3d 693,
695 (9th Cir. 1993) (internal quotation marks and citation
omitted). Contempt sanctions, however, are not warranted
where the nonmoving party's action “appears to be
based on a good faith and reasonable interpretation” of
the court's order. Id. (quoting Vertex
Distrib., Inc. v. Falcon Foam Plastics, Inc., 689 F.2d
885, 889 (9th Cir. 1982)). Substantial compliance also is a
defense to civil contempt-“[i]f a violating party has
taken ‘all reasonable steps' to comply with the
court order, technical or inadvertent violations of the order
will not support a finding of civil contempt.” Gen.
Signal Corp. v. Donallco, Inc., 787 F.2d 1376, 1379 (9th
Cir. 1986) (citation omitted).
the party alleging civil contempt must demonstrate by clear
and convincing evidence that (1) the nonmoving party violated
a court order, (2) the noncompliance was more than technical
or de minimis, and (3) the nonmoving party's conduct was
not based on a good faith and reasonable interpretation of
the violated order. Facebook, Inc. v. Power Ventures,
Inc., No. 08-CV-05780-LHK, 2017 WL 3394754, at *8 (N.D.
Cal. Aug. 8, 2017) (citing United States v. Bright,
596 F.3d 683, 694 (9th Cir. 2010)).
Request for Judicial Notice
Court may generally consider matters properly subject to
judicial notice. See Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007). In support of
its motion, Plaintiff filed a Request for Judicial Notice
(“RJN”) of “Newmark Group, Inc.'s
November 21, 2017 Amendment No. 1 to Form S-1 Registration
Statement filed with the Securities and Exchange
Commission.” RJN, ECF 146.
RJN is GRANTED, as the document is a matter of public record
and Defendants do not dispute the document's
authenticity. Fed.R.Evid. 201; Reyn's Pasta Bella,
LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir.
2006). While the document is accepted as what it represents,
any specific fact findings and legal conclusions set forth in
the document may not bind this Court.
Defendants' Objections to Plaintiff's Supplemental
Brief and Accompanying Declarations
object to and request the Court to strike Plaintiff's
Supplemental Brief (“Pl.'s Supplemental Brief, ECF
177), Second Supplemental Yip Declaration (ECF 177-1), and
Dao Declaration (ECF 177-5). ECF 179. Defendants contend that
Plaintiff's Supplemental Brief is “overlong due to
the use of copious, lengthy footnotes.” Id. at
1-2. Defendants also argue that the Second Supplemental Yip
Declaration inappropriately recites prior factual allegations
in an attempt to flout page limits and contains evidence that
“adds nothing to the contempt motion . . . but to which
Defendants yet again ha[d] no opportunity to reply.”
Id. at 2. The Court does not find the content and
length of Plaintiff's Supplemental Brief and the Second
Supplemental Yip Declaration to be improper. The Court
therefore OVERRULES Defendants' objections and DENIES the
request to strike Plaintiff's Supplemental Brief and the
Second Supplemental Yip Declaration.
the Dao Declaration, Defendants assert that it contains
hearsay. ECF 179 at 2. This declaration states that Tom Dao,
an employee of Plaintiff, received an “email from a
contact” that references a financing deal facilitated
by “NKF Capital Markets.” Dao Decl., ECF 177-5;
see also Exs. 1 and 2 to Dao Decl., ECF 177-6, -7.
The Court does not find that the Dao Declaration contains
hearsay because Plaintiff offers the declaration for the
proposition that confusion has “surfaced regarding NKF
CAPITAL MARKETS” (Pl.'s Supplemental Brief 3)
rather than for the truth of the matter asserted. The Court
therefore OVERRULES Defendants' objections and DENIES the
request to strike the Dao Declaration.
Plaintiff's Objections to the Supplemental Declaration of
filed nine objections to the Supplemental Lewis Declaration
(ECF 187-1) which was submitted as a status report regarding
Defendants' sales brochures. ECF 188. Defendants filed a
reply to Plaintiff's objections. ECF 194.
Plaintiff objects to Ms. Lewis' statement that
“[a]s someone who has worked in commercial real estate
since 1999, I agree with Plaintiff's principal, Mr.
Mitsanas, who testified that sales and financing services
have been offered side-by-side for decades” as lacking
foundation and mischaracterizing Mr. Mitsanas' testimony.
ECF 188 at 1. This objection is OVERRULED because Ms. Lewis
is making a statement based on her personal understanding of
Mr. Mitsanas' statement rather than arguing the precise
nature of his position.
Plaintiff objects to Ms. Lewis' statement that “I
cannot imagine that customers would be confused about the use
of the word ‘Newmark' on sales brochures that
pre-date the Court's order, since those brochures are
fundamentally about selling property, something that
Plaintiff does not do” as lacking foundation and
speculative. Id. This objection is OVERRULED because
Ms. Lewis is describing her belief based on her personal
observations of the brochures and understanding of
Plaintiff's business. To the extent that Ms. Lewis'
“belief” is not relevant the Court will give this
evidence the weight it deserves.
third to eighth objections pertain to Ms. Lewis'
statements regarding Defendants' production and
distribution of sales brochures. See ECF 188 at 2-5.
For example, Ms. Lewis explains that Defendants “rarely
if ever use Microsoft Office” and instead “use[s]
a more sophisticated design tool known as Adobe Creative
Suite.” Supplemental Lewis Decl. ¶ 9. Plaintiff
objects to those statements as lacking foundation or
irrelevant. The Court finds that the objected statements are
relevant and do not lack foundation because Ms. Lewis, as
Chief Administrative Officer for Newmark Knight Frank, has
worked with her marketing staff on editing Defendants'
sales brochures (see Supplemental Lewis Declaration
¶¶ 1-2). Plaintiff's third to eighth objections
are therefore OVERRULED.
addition, Plaintiff objects to Ms. Lewis' statement that
“[Defendants'] brokers would much rather talk to .
. . clients about how we can help them sell properties”
as speculative, lacking foundation, and irrelevant. ECF 188
at 4-5; Supplemental Lewis Decl. ¶ 17. However, as
provided in Ms. Lewis's Declaration in support of
Defendants' opposition to the Motion for Contempt, she
has had interactions with Defendants' brokers while
executing Defendants' compliance plan. See
generally Lewis Decl. in Supp. of Defs.' Opp'n,
ECF 164-2. Thus, the Court does not find that Ms. Lewis'
statement to be speculative or lacking foundation. Her
statement is relevant because it is probative of
Defendants' compliance with the injunction order.
Supplemental Lewis Decl. ¶ 17. This objection is
PLAINTIFF'S MOTIONS TO SUBMIT NEW EVIDENCE
Plaintiff's Motion to Submit New ...