Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-5_07-cv-05009/USCOURTS-arwd-5_07-cv-05009-13/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FAYETTEVILLE DIVISION

ROTOWORKS INTERNATIONAL LIMITED PLAINTIFF

v. Civil No. 07-5009

GRASSWORKS USA, LLC;

GRASSWORKS!!! L.L.C.;

ROBERT D. UMBERSON a/k/a/BOBBY 

UMBERSON; LINDA K. REED; and

METAL WORKS, L.L.C DEFENDANTS

O R D E R

On the 1st day of November, 2007, the following matters came

on for hearing:

* Plaintiff's Motion For Entry Of Judgment Or For 

Clarification Of Previous Orders (document #120);

* the Court's Order of September 4, 2007, requiring

defendants to show cause why they should not be held in

contempt for violation of the Court's March 5, 2007,

Order; and 

* the Court's Order of October 19, 2007, requiring 

defendants to show cause why they should not be held in

contempt for failing to comply with the Court's 

September 4, 2007, Order,

and from the written submissions of the parties, and the evidence

and arguments adduced at the November 1, 2007 hearing, the Court

finds and orders as follows:

1. Plaintiff Rotoworks International Limited ("Rotoworks")

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manufactures a type of farm implement known as a Rotowiper, used

to wipe herbicide on cropland. In its Amended Complaint,

Rotoworks alleges that defendants are liable to it for trademark

infringement by counterfeiting and implied passing off, in

violation of 15 U.S.C. §1114(1), and for trade dress and trademark

infringement, in violation of 15 U.S.C. §1125(a).

The Amended Complaint prays for an extension of the

preliminary injunction entered on March 5, 2007, to Metal Works,

L.L.C.; for permanent injunctive relief; for damages, attorney's

fees and costs; for removal of all references to Rotowiper

products from defendants' product literature and grassworks.net

website; and for destruction of all knock-off products

manufactured by defendants. The Amended Complaint also seeks

transfer of ownership of the rotowiper.com domain name (the

"Domain Name") from defendants to plaintiff.

2. On March 5, 2007, the Court entered an Order (the "March

5 Order") which, among other things, prohibited defendants from

"conducting any marketing activities which use the Rotowiper

trademark, logo, website, or aqua trade dress."

3. On September 4, 2007, the Court granted plaintiff

summary judgment (the "September 4 Order") as to transfer of the

Domain Name, and directed defendants "to effect a transfer of the

Domain Name within seven (7) days of the date of this Order."

The September 4 Order also noted the Court's concern, based

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on several submissions, that the defendants were violating the

March 5 Order, and directed the defendants to "show cause, within

seven (7) days of the date of this Order, why they should not be

held in contempt for violation of the Court's March 5, 2007,

Order, by continued use of the Domain Name and Website to conduct

marketing activities involving weed wipers."

4. On September 18, 2007, plaintiff filed its Third Motion

To Compel, directed, in part, to the issue of transfer of the

Domain Name, in which it asserted that "Rotoworks has received no

indication that Defendants have or will comply with the Court's

Order. Full ownership remains vested with Bobby Umberson."

(Emphasis in original.) 

Defendants' Response In Opposition To Plaintiff's Third

Motion to Compel, filed on October 2, 2007, failed to even address

this assertion, and on October 12, 2007, plaintiff filed its

Motion For Entry of Judgment, one part of which sought an order

directing the Internet domain name registrar Tucows, Inc., to

transfer the Domain Name to plaintiff.

5. It was not until September 25, 2007, that defendants

belatedly filed a response to the September 4 Order. In it, they

asserted that 

there is no evidence that Mr. Umberson used the

'www.rotowiper.com' domain name or his email associated

with it to market or sell products in violation of the

Court's March 5, 2007 order. . . . Mr. Umberson simply

continued to receive email sent in care of the domain

name 'www.rotowiper.com'. Defendants had no notice that

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this would be considered a violation of this Court's

order.

(Emphasis in original.)

6. On October 19, 2007, the Court entered a show cause

Order, setting the matter down for hearing on November 1, 2007,

and directing the defendants to show cause why they should not be

held in contempt for violating the September 4 Order and failing

to transfer the Domain Name as directed.

7. The Court's civil contempt power serves two purposes:

"to effectuate compliance with the court's order or process; and

to compensate individuals from harm incurred by noncompliance."

Hartman v. Lyng, 884 F.2d 1103, 1106 (8th Cir. 1989). In

addition, even if neither coercion nor restitution is appropriate

under the circumstances, where civil contempt has occurred a

contempt citation will stand independent of other sanctions. Id.

The burden of proof on a motion for contempt citation is on

the moving party, to show by clear and convincing evidence that

the facts warrant such relief. Jake's, Ltd., Inc. v. City of

Coates, 356 F.3d 896, 899 (8th Cir. 2004).

8. Based on the submissions of the parties and the evidence

adduced at the hearing, the Court finds that defendants are in

civil contempt of the March 5 Order. The persuasive evidence is

as follows:

* In spite of the clear language of the March 5 Order

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For example, on May 14, 2007, Umberson sent an e-mail to Kirk Vanzant, stating "WE 1

HAVE BEEN BUILDING USA BUILT UNITS FOR SEVERAL YEARS AND marketing both US built and the

Rotowiper LINE." On May 30, 2007, he sent an e-mail to Johnathan Duffy, stating "We are

building NOT importing any more of the New Zealand made wipers." Both statements would

lead a reasonable person to believe that Umberson was marketing two types of Rotowipers,

one made in New Zealand, the other made in the United States. 

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prohibiting defendants from using the rotowiper.com website to

conduct marketing activities, Umberson continued to receive emails at the address bobby@rotowiper.com. There is no evidence

that he made any attempt to change this e-mail address or cease

receiving e-mail at this address, and there is evidence of sales

made as a result of e-mail contacts to him at this address.

* Umberson continued to use the Rotowiper trademark and

logo, by misleading statements to potential customers which gave

the impression that Umberson was manufacturing Rotowipers in

America rather than importing them from New Zealand. The only 1

evidence that Umberson may have attempted to clarify the

distinction between his product and that of Rotoworks was

Umberson's own testimony that he made such clarifications in

telephone conferences with various customers. The Court finds

that testimony self-serving and lacking in credibility. 

9. Although not all the e-mails to bobby@rotowiper.com

posted after March 5 resulted in sales, several of them did. The

following sales appear to have been made as a result of either (a)

using the bobby@rotowiper.com e-mail address; (b) using statements

blurring the distinction between defendant's product and that of

Rotoworks, or (c) both, after the entry of the March 5 Order:

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* On March 16, 2007, Richard DuBroc contacted Umberson at

bobby@rotowiper.com, indicating interest in purchasing a

"rotowiper." This contact resulted in a sale generating $4,150.00

in revenue.

* On May 29, 2007, Jonathan Duffy contacted Umberson at

bobby@rotowiper.com, inquiring about "your wipers," and noting

that "your website seems to be down." Umberson responded in an email with "Rotowipe" in both the "subject" and "conversation"

lines, that "[w]e are building NOT importing any more of the New

Zealand made wipers." This contact resulted in a sale generating

$3,750.00 in revenue.

If the Court could, based on clear and convincing evidence,

connect these sales with loss of revenue on the part of plaintiff,

an award of compensatory damages for civil contempt might well be

justified and appropriate. The fact is, however, that -- at this

point -- there is nothing more than speculation to show that such

a connection exists. The Court did not direct defendants to

transfer the Domain Name to plaintiff until September 4, 2007 --

a date well after the sales occurred. There was no evidence

presented to show whether, absent transfer of the Domain Name, the

purchasers' inquiries would have reached plaintiff instead of

defendants and would have potentially resulted in sales for

plaintiff. Thus, for purposes of determining whether compensation

is due plaintiff to make it whole by reason of defendants’

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contemptuous actions/inactions, the Court sees no basis to

properly infer or conclude that plaintiff would have made these

sales if defendants had not made them. Absent such a basis, no

compensatory damages may now be awarded. This is not to say,

however, that plaintiff may not attempt to prove up such damages

at the trial of this cause. 

The fact that there is no basis upon which to award damages

does not detract from the Court's finding of contempt. Because

defendants had a duty to comply with the Court's March 5 Order

"independently of whatever benefit such compliance would or did

confer on plaintiffs, the contempt finding stands on a clear and

convincing showing that defendants committed civil contempt."

Hartman, 884 F.2d at 1106.

10. The Court also finds that defendants are in contempt of

the September 4 Order. As of the date of the hearing -- almost

two months after transfer of the Domain Name was ordered -- the

transfer still had not been effected. The Court finds this

failure to transfer contemptuous, because defendants' excuses for

their failure to effect the transfer are not credible:

* Umberson testified that he took immediate action to

effect the transfer as soon as he learned of the September 4

Order. It appears, however, that this did not occur until

September 26, 2007 -- over three weeks after the transfer was

ordered -- when his attorney Gary Speed sent him an e-mail asking

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him to take action, and called to alert him to the e-mail. That

delay alone, in the absence of a justifiable explanation, is

contemptuous.

* Umberson asserted that after hearing from Speed, he

filled out an on-line form, and then received confirmation that

the Domain Name had been "cancelled." He testified that this led

him to believe he had done all that was required of him by the

September 4 Order. The Court does not credit this self-serving

“explanation” since the word "cancellation" obviously does not

have the same meaning as the word "transfer" and there is no

reasonable basis for Umberson to honestly believe otherwise. 

* Umberson also gave testimony that directly contradicted

the preceding scenario. He testified that Speed "probably" emailed him the September 4 Order shortly after it was entered and

that he was either "too busy" or had "too many e-mails," and just

did not read it. Given that this e-mail would have been sent, if

at all, about three months before the trial of an important case

in which Umberson holds a large stake, the Court does not find

this testimony credible. 

* In addition to the intrinsic lack of credibility in

Umberson's second scenario, its context operates to further

deprive it of credibility. It was given in response to a leading

question by Umberson's own attorney, at a point several hours into

a hearing in which Umberson had never before acknowledged

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receiving the September 4 Order in a timely fashion.

Additionally, if the testimony were true, it could easily be

documented by a copy of the e-mail. When the Court so noted,

Umberson's attorney asserted that attorney-client privilege

prevented disclosure of any such e-mail. The Court rejects the

assertion of attorney-client privilege as to this document, since

"[v]oluntary disclosure of attorney client communications

expressly waives the privilege." U.S. v. Workman, 138 F.3d 1261,

1263 (8th Cir. 1998). Accordingly, the failure to present the

document is evidence that it does not exist, and that Umberson's

testimony about it was untruthful.

* Defense counsel set forth a litany of technical hurdles

said to excuse the failure to effect the transfer. The Court does

not find any of these to be sufficient justification. None of the

defendants, nor their counsel, took the simple, obvious, expedient

step of hiring a person trained in computer technology do what was

necessary to bring about the transfer. The failure to do so --

given Umberson's disavowal of computer skills -- is evidence of

willful failure to comply with the Court's Order.

11. While there is no evidence to support an award of

damages to plaintiff for defendants' willful disregard of the

September 4 Order, the Court finds that coercive measures are

called for, given the continuing failure to comply. The Court

will, therefore, impose a fine on defendants of $500.00 per day

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for each day after November 15, 2007, that the Domain Name has not

been transferred to plaintiff. Both plaintiff and defendant are

directed to file a report of the status of the Domain Name on that

date.

12. To the extent that the Motion seeks any relief not

consistent with that granted in this Order, the Court will deny

Plaintiff's Motion For Entry Of Judgment Or For Clarification Of

Previous Orders.

13. To the extent defendants can be said to have formally

requested the Court to revisit the issue of travel expenses for

the witness Neil Barker, the Court declines to do so, finding the

amount reasonable and the award appropriate.

14. The Court finds that plaintiff is entitled to an award

of reasonable attorney's fees and costs in connection with its

Motion For Entry Of Judgment Or For Clarification Of Previous

Orders, and will consider same upon submission by plaintiff of a

statement of its costs and fees within fourteen days of the date

of this Order. Defendants will have eleven days thereafter to

lodge any objections to the amounts sought.

15. Finally, the Court notes that, subsequent to the hearing

at which the matters being addressed were submitted and taken

under advisement, counsel for both plaintiff and defendants

electronically filed unsolicited papers, in apparent attempts to

further address the matters already submitted. Both sides filed

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letters to the Court, and plaintiff also filed an Affidavit. None

of these filings was accompanied by a certificate of service, as

required by Rule III.B.3. of the Court's CM/ECF Administrative

Policies and Procedures Manual for Civil Filing. Not only did the

parties fail to comply with this simple rule of procedure intended

to keep all parties informed of filings and communications with

the Court, but the filings themselves were presumptuous and

inappropriate. Had the Court desired further presentation or

comment from counsel after the hearing, it would have asked for

same. It did not. 

In addition, the Court notes that while these papers

superficially purport to be relevant to the issues under

consideration, they actually provide little or no edification to

the Court with respect to those issues. Instead, they essentially

are attempts to further the unprofessional bickering between the

attorneys, which is a disservice both to the Court and to their

respective clients. The Court declines to consider the contents

of the unsolicited papers, and has decided the issues raised at

the hearing based upon the presentations at the hearing and the

papers that were properly before it.

This is not the first time that personal feuding between the

attorneys has disrupted the orderly progress of this case and

wasted judicial resources, and the Court will have no more of such

conduct. Given the history of this case, the Court may decide to

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conduct a hearing with respect to the conduct of the attorneys

after the case is concluded. If and when that happens, counsel

will be given full opportunity to state their grievances against

each other, and the Court will devote its full attention to their

conduct. It may be that, after such a hearing, it will be

appropriate to refer the entire matter to the Arkansas Supreme

Court on Professional Conduct for a review of the conduct of the

attorneys throughout the case. In the meantime, the Court will

insist that the attorneys focus their efforts and energies on the

issues which affect their respective clients, and cease bickering

among themselves. 

IT IS THEREFORE ORDERED that Plaintiff's Motion For Entry Of

Judgment Or For Clarification Of Previous Orders (document #120)

is granted in part and denied in part.

The Motion is granted insofar as it has already resulted in

a previous Order clarifying the date by which defendants were

required to pay certain sanctions and travel expenses.

The Motion is also granted insofar as it seeks relief for

defendant's failure to comply with the Court's September 4 Order

requiring transfer of the Domain Name.

The Motion is denied in all other respects.

IT IS FURTHER ORDERED that defendants are guilty of civil

contempt for violating the Court's March 5 Order by continuing to

use the e-mail address bobby@rotowiper.com.

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IT IS FURTHER ORDERED that defendants are guilty of civil

contempt for violating the Court's September 4 Order by failing to

transfer the Domain Name, and shall be fined $500.00 per day for

each day this contempt continues after November 15, 2007.

IT IS FURTHER ORDERED that both plaintiff and defendants are

to file a written report on the status of the Domain Name on

November 15, 2007.

IT IS FURTHER ORDERED that plaintiff is entitled to an award

of reasonable attorney's fees incurred in filing and prosecuting

their Motion For Entry Of Judgment Or For Clarification Of

Previous Orders, and may submit a statement therefor within

fourteen days of the date of this Order. Defendants will have

eleven days thereafter to lodge any objections.

IT IS SO ORDERED, this 8th day of November, 2007.

 /s/ Jimm Larry Hendren 

JIMM LARRY HENDREN

UNITED STATES DISTRICT JUDGE

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