2007 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
4-20-2007 

# Al C R in aldi Inc v . B a ch Ro ck M

u sic S ch
P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 06-2354

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2007

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2007 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

w Di git al Re posit or y

. F or mor e inform at ion, p le as e c on t a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du
. Re c omme nde d C it at ion
" Al C R in ald i Inc v

. B a ch Rock M

usic S ch" (2007). 2007 D e cisio n s . P ape r 1239. http://d i git alc ommon s .l a

w . vi l l a no va . e du/thir dc ir c uit_2007/1239NOT
- P RE CE DE NT I AL I N TH E U N I TED STA TES C O U RT O F A PPEA LS

F O R T H E T H IR D C IR C U IT
C as e N o: 06- 2354 A L C . R IN A L D I, I N C .; M U S IC U N L IM IT E D , IN C .; C H O P IN P IA N O & O R G A N , IN C .; CAP I TOL AREA P I ANO COM P ANY , LL C,

t/ a J acobs M us i c C om pany

v. B A C H T O R O C K M U S IC S C H O O L , IN C ., t/ a E astC oastP i ano L i qu i dator s; BA CH T O R OC K M US I C; E AS T CO AS T P I ANO

LI QUI DATORS
A l C . R in a ld i, I n c ., M u s ic U n lim ite d , In c ., C h o p in P ia n o & O rg a n , In c .,

A p p e llan ts

__________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia D i s t r i ctC our tN o. : 00- cv- 05477 D istric t Ju d g e : H o n o ra b le S tew a rt D a lze ll

__________ Subm i t t ed Pur s uantt o T hi r d C i r cui tL
. A
. R
. 34. 1( a)

A pr i l 11, 2007

### The H onorable David R. Hansen, Senior Cir cuit Judg e of the United States * 

### Co urt of Appe al s f

or the E ighth C ir cu it, sittin g by de sig natio n. 2 Be f o r e : S M I T H, NYGAA RD , a n d HANS E N, C i r cui tJudges * ( Fi l ed: A pr i l 20, 2007)

__________ OP I NI ON

__________ H A N S E N , C i r cui tJudge
. A ppel l ant s A l C
. R i nal d i , I nc. , M us i c U nl i m i t ed, I nc. , and C hopi n Pi ano & O r gan, In c . (co llec tiv e ly"J a c o b s M u sic ") a p p e a l th e D istric t C o u rt' s d e n ial o f th e ir m o tio n f

o r c iv il
con t em pt. Jacobs M usi c al l eged t ha t B ach to R ock M usi c S cho ol, Inc. (" B ach to R ock ") vi ol at ed the pr ovi s i ons of a pr i orcons entor derthati m pos ed a pe r m anentinjun cti on pr ohi bi t i ng B ach t o R ock fr om engagi ng i n cert ai n advert i s i ng and s al es pr act i ces . A ti s s ue on appea l i s w hethert he D i s t r i ct C our t corr ect l yconcl uded thatt he s cope of t hatpr i oror der d id n o t r e a c h B a c h to R o c k ' s c o n d u c t o f a d v e rt is in g o v e r t h e In te rn e t o n its w e b s ite
. B ec aus e thi s i s a non- pr ece dent i al opi ni on and w e w r i t e onl yfort he part i es , our fa ctua l rec it ati o n is b ri ef
. Jac o b s M u sic is a pian o an d o ther ke yb o ard in s tr u m e n t r etail er, and B ach t o R ock i s a compet i t or i n t he bus i nes s of s el l i ng pi anos t o the gener al p u b l i c. J acobs M us i c or i gi nal l ybr oughts ui t i n 2000 agai ns t B ach t o R ock, as s er t i ng caus es of ac t i on forfal s e and mi s l eadi ng advert i s i ng i n vi ol at i on of t he L anham A ct , 15 U
. S. C
. § 1125( a) , and
s t at e comm on l aw cl ai m s of unfa i rcompet i t i o n , tr a d e d i s p a r a g e me n ta n d t o r t i ous i nt er fer ence3

w ith b u sine ss r elati o n s. Jac o b s M u sic all eg ed that B ac h to R o ck so u g h t t o att rac t cus tom ers t o i t s r et a i l s t o r e s a n d o t h e r s a l e s e v e n t s c l a i mi n g t o b e a p i a n o l i q u i d a t o r o f f e r i n g br and
n a m e p ian o s a t li q u id a tio n p ric e s, so m e tim e s u p to 8 0 % o f f th e list p ric e . Ja c o b s M u sic al l eged thatt hes e cl ai m s w er e fa l s e and mi s l eadi ng beca us e B ach t o R ock st ocked f ew pi anos of t he br ands named and t he new pi anos avai l abl e w er e l ow erqual i t yi ns t rum ent s . J acobs M us i c al s o al l eged t hat B ach t o R ock' s pr act i ce w as t o l ur e pot ent i al cus t om er s t o i t s s al es
v e n u e s w ith m isle a d in g a d v e rtisin g a n d th e n p re ss u re c u sto m e rs to p u rc h a se th e lo w q u a lity i ns t rum ent s w i t houtcompar i s on s hoppi ng bym i s r epr es ent i ng bot h t he qual i t yof t he i ns t rum ent s and t he l i m i t ed t i m e per i od dur i ng w hi ch t he i ns t rum ent s w oul d be ava i l abl e at t he s peci al pr i ce of

fer ed. T h e p a rties re a c h e d a S e ttl e m e n t A g re e m e n t a n d M u tu a l R e lea se re so lv in g a ll di s put ed mat t er s r el at ed t o t hes e cl ai m s and r equi r i ng t he entr y of a cons entor derpr ohi bi t i ng
cert ai n enumer at ed s al es and adver t i s i ng pr act i ces . T he D i s t r i ctC our tent er ed the C ons ent O r derr efl ect i ng t he n eg o ti ated a gr eementon A pr i l 2, 2001. T he C ons entO r derl i s t s 21
s epar at e par agr aphs enumer a t i n g th e p r ohi bi t ed conduc tand pr ovi des forl i qui dat ed damages in the am o u n t o f $ 1 0 , 0 0 0 fo r e ac h ad v erti sem en t tha t v iolates it s term s. T h e D istri ct C o u rt retaine d juri sd ict ion o v er the ac ti o n fo r p u rpo ses o f en fo rcing the term s o f th e C o n sen t O rde r.

B as ed on vi ol at i ons of t he C ons ent O r der , J acobs M us i c obt ai ned a ci vi l cont empt
or deragai ns t B ach t o R ock and a j udgm entfor$60, 000 i n l i qui dat ed damages on A ugus t26,

### Ja co bs Musi c fi le d ase co nd s uppl ementa l moti on f or c ont em pt o n M ar ch6, 1 

### 2006 , c iti ng e vid en ce that B ac h to Ro ck ha d a lso sup ple m ente d th e onl ine adve rt isi ng b y

dis tributin g th e sam e adve rt ise m ents thr oughdir ec t mai lin gs o r adve rt ise m ents i n lo ca l ne w spa pe rs . T he dis tric t c ourt de nie d th at moti on f or co nte m pt o n April 21, 200 6, w ith out pr ej udi ce to its r ea sse rt iona ft er thi s a ppe alis concluded. (App. at 26.)
4 2 0 0 3
. See A lC
. R i naldi, I nc. v. B ach t o R o ck Mus i c Sch. , I nc. , 2 7 9 F
. S u p p . 2 d 6 2 4 ( E
. D. Pa. 2003)
. O n J anuary 19, 2006, and suppl ement ed on February 7, 2006, J acobs M us i c fi l ed
a n o th e r m o tio n f

o r c iv il co n tem p t an d to re c o v e r liq u id a ted d a m a g e s, a ss e rtin g th a t B a c h to R ock w as publ i s hi ng t he s ame decept i ve adve r t i s ement s o n i t s w eb s i t e. B ach t o R ock arg u ed that the C o n sen t O rde r do es n o t a p p ly to o n li n e a d v erti sing
. T h e D istri ct C o u rt 1 concl uded t hatt he C ons entO r der does notappl yt o onl i ne adve r t i s i ng and deni ed the mot i on forcont empt . J acobs M us i c appe al s , and w e af fi r m t he w el l
- r eas oned opi ni on of t he D i s t r i ct C o u rt . I
. T he D i s t r i ctC our thad j ur i s di ct i on pur s uant to 2 8 U
. S. C
. § 1331 and s uppl ement al j ur i s di c t i on ov e rt he s t a t e l a w c l a i ms p ur s ua ntt o 2 8 U. S. C. § 1 36 7( a )
. W e e xe r c i se j ur i s di ct i on overt hi s appea l pur s uantt o 28 U
. S. C
. § 1291 and § 1292( a) ( 1)
. W e r evi ew t he d e n ia l o f a m o tio n f

o r c o n te m p t f

o r a n a b u s e o f

d is c re tio n , H

ol l and v. N

ew Jer s ey D ep'tof C or r ect i ons , 246 F. 3d 267, 288 n. 18 ( 3d C i r . 2001) , but"a di s t r i ctcourt ' s cons t ruct i on and in te rp re ta tio n o f

a c o n s e n t d e c re e is s u b je c t to s tr a ig h tf

o rw a rd p le n a ry o r d e n o v o re v ie w ," i d. at277. I f a di s t r i ctcour tm i s cons t rues a cons entdecr ee, i tcomm i t s l egal err o rw hi ch5

a m o u n ts to a n a b u s e o f d is c re tio n in g ra n ti n g o r d e n y in g a m o tio n f o r c o n te m p t. See Mc Dowe l lv . Ph i l a d e l

p h i a Hou s . Au th

. (

PHA) , 4 2 3 F .3 d 2 3 3 , 2 3 8 (3 d C ir . 2 0 0 5 ), c e rt. deni ed , 126 S. C t. 1 9 10 ( 2006) ( "A n abus e of di s cr et i on m ayoccuras a r es ul tof an e r r ant concl us i on of l aw , an i m pr operappl i cat i on of l aw t o fac t , ora cl ear l yerr oneous fi ndi ng of f a c t."); s ee al

s o H ol l and , 2 4 6 F .3 d a t 2 8 8 n .1 8 (s a m e ). II. C ons entdecr ees bearm anyof t he at t r i but es of contr act s , and t hus , "w e i nt erpr ett hem
w ith re f erence t o tr adit i on al pri ncipl es of co ntr acti nterpret at i on . " U ni t ed Stat es v. N

ew Jer s ey , 194 F. 3d 426, 430 ( 3d C i r . 1999)
. "' [W ] e di s cern t he s cope of a cons entdecr ee by
exam i ning t he langu age w i t hin i t s four corners, ' " not at t em pti ng t o s t rai n the t erm s or i m po se add i t i on al t erm s "' t o recon ci l e t he d ecree w i t h o ur ow n co ncep t i on of it s purpose. ' " I d. ( quot i ng H

a rr is v . C ity o

f P h ila d e lp h ia , 1 3 7 F
. 3 d 2 0 9 , 2 1 2 (3d C ir
. 1 9 9 8 )). "T h e p arti es a re bo un d b yt he obj ect i ve defini t i on of t he w ords t heyuse t o ex press t heiri ntent . " I d. ( i nt er nal
ma r k s o mi t t e d )
. W h i l e e x t r i n s i c e v i d e n c e ma y b e c o n s u l t e d t o c o n s t ru e a n a mb i g u o u s t e r m, "[ o ]u r f irs t ta s k
. . . is to d e ter m in e w h e th e r its te rm s u n a m b ig u o u slyc o v e r th e d isp u te in qu est i on . " I

d. T h e C o n se n t O rd e r c o n tain s 2 1 sp e c if ic p a ra g ra p h s d e tailin g th e p ro h ib ited c o n d u c t, 13 of w hi ch begi n w i t h t he w or ds "[ a] dver t i s ing orot herw i s e pr om ot i ng" c er t ai n s al es p ra c tice s. F o r e x a m p le, th e p ro h ib iti o n s in c lu d e "[ a ]d v e rtisin g o r o th e rw ise p ro m o tin g " s a le p r i c e s o rd i s c o u n t s w i t h o u ta s p e c i f i c p r i c e r a n g e , p e r c e n t a g e d i s c o u n t s f r o m B a c h t o R o c k 's6

s ugges t ed l i s tpr i ce or any ot her publ i s hed pri ce l i s t t hat i s not r ecogni zed a s an author i t at i ve
s our ce of r et ai l pr i ces , ort hatt he s t at ed s al e pri ces w i l l be ava i l abl e foronl ya l i m i t ed t i m e. ( A pp. at27- 29. ) T he pr ohi bi ted co n d u ct i s di r ect l yfol l ow ed bya l i qui dat ed damages pr o v i s i o n e n u me r a t i n g t h e t yp e s o f me d i a t h a t a r e s u b j e c t t o l i q u i d a t e d d a ma g e s and expl ai ni ng how t o t al l yt he occur r ence of prohi bi t ed conduct t o pr oper l y cal cul at e t he amount of li qu i dated dam ages: [ S ]h o u ld th e C o u rt d e ter m in e u p o n M o tio n b yJa c o b s M u sic C o . tha t B a c h to R ock has publ i s hed, ci r cul at ed, di s t r i but ed or ot herw i s e di s s emi nat ed .
. . any tele v isio n o r ra d io a d v e rtise m e n t, ne w sp a p e r o r m a g a z in e a d v e rtise m e n t, p r o mo t i o n , c i r c u l a ro ro t h e rd o c u me n tt h a ti s i n c o n s i s t e n t wi t h a n y o f t h e t e r ms o f th is O rd e r, d e f

e n d a n t sh a ll .
. . b e o rd e re d to p a yliq u id a ted d a m a g e s to Pl ai nt i ffs i n t he amount of t en thous and dol l ar s ( $10, 000) pert el evi s i on or r adio stat i on on w hi ch ornew s paperand/ orm agaz i ne i n w hi ch the adve rt isem entappea r s and/ orver s i on of t he pr om ot i on, ci r cul arorot her document t hatw as ut i l i zed. For purpos es of comput at i on, t he $10, 000 s um sh a ll ap p lyo n lyto th e sp e c if ic n e w sp a p e r, m a g a z in e , tel e v is io n o r ra d io s ta tio n a n d n o t to th e n u m b e r o f in d iv id u a l c o p ie s o r b ro a d c a s ts th e re o f
. (I d. at 29 -30
. ) J acobs M us i c ar gues t hatt he D i s t r i ctC our terr ed i n concl udi ng t hat t he s cope of t he C ons entO r derdoes not r eac h I nt ernet onl i ne adver t i s i ng pr act i ces . J acobs M us i c does not
ar gue thatt h e C o n sent O r deri s ambi guous orthatanypar ol evi dence i ndi cat es t he part i es
a c tu a lly in te n d e d th e a g re e m e n t to c o v e r I n te rn e t a d v e rt is in g a c tiv ity. N ow here do es t he C on sentO rderm enti on t he Int ernetor a d v e rtising on w eb si t es, t hough ot hert ypes of m edi a ar e s peci fica ll ynamed. T he w or ds w i t hi n t he fourcorner s of t he C ons entO r derw er e ext ens i vel y negot i at ed, and r eadi ng t hem t ogether , i ti s appar enton7

t he fa ce of t he decr ee t hat t he l i qui dat ed damages pr ovi s i on–w hi ch i s s peci fi c t o vi ol at i ons i n t el evi s i on, r adi o, new s paper s , orm agaz i nes –i s i nt ended t o appl y t o anyadvert i s i ng "that is i n co n sist en t w ith an y o f the term s o f this O rde r. " (I d. at29. ) M or e expl i ci t l y , i ts t at es t hat "[ t ] hi s l i qui dat ed damages pr ovi s i on i s i nt ended t o compensa t e pl ai nt i ffs forl os s es t heym ay
s u s t a i n f r o m any viol at i on of t his O rder
. " (I d. at 30 ( emphasi s added)
. ) T hus , t he pr ohi bi t ed
con d u ct in thi s cas e ca nnotbe vi ew ed i n i s ol at i on fr om t he t er m s l i m i t i ng t he l i qui dat ed d a m a g e s to a d v e rt is in g in th e typ e s o f m e d ia s p e c if

ie d
. A s t he D i s t r i ctC our tnot ed: I n t he l i qui dat ed damages pr ovi s i on, t he par t i es ' exper i ence d couns el , w or ki ng under t h e a e g i s o f

J u d g e Har t , a g r e e d t o a d e t a i l e d d e s c r i p t i o n o f h ow l i qu i dated dam ages w ou l d b e cal culat ed fo r e ach v i olat i on . T heyal so p a i n s t a k i n g l y l i s t e d t h e f o r m s o f m e d i a t o w h i c h s u c h d a m a g e s w o u l d a p p l y. N o tab ly , the p a rtie s s p e c if ied th a t p u b lica tio n s in a "te lev isio n o r ra d io advert i s ement , new s paperorm agaz i ne adve r t i s ement , pr om ot i on, ci r cul aror o ther d o cu m en t" w ere su b ject to li q u idated d am ag es if tho se p u b li ca ti o n s w ere "i nco nsi st ent w i t h any of t he t erm s of thi s O rder
. " C on sentO rderat3. T hu s, t he l i qui dat ed damages pr ovi s i on m us t by i t s t er m s be r ead t ogetherw i t h t he p ro h ib itio n s s e c tio n . (I d. at10. ) T he D i s t r i ct C our tapt l ynot ed thatt he I nt ernet"w as al i ve and ve r yw el l " a tt he t i m e of the negot i at i ons i n 2001 and thatt he I nt ernethas been r ecogni zed a s a " uni que and
w ho l l ynew m edium of w orl dw i de hum an co m m un i cat i on . " (I d. at12 ( i nt ernal m ar ks and cit ati o n o m itted).) Y et, the Intern et is no t l ist ed in the C o n sen t O rde r alon g w ith the m o re tr ad it ion al t yp es o f m ed ia. W e ag ree w ith the D istri ct C o u rtthat to co n stru e the g en eric w o rd "doc um ent " t o i ncl ude onl i ne adve r t i s i ng i n t hes e ci r cumst ance s w oul d undul y expand the
s cope of t he C ons entO r deras w r i t t en. A ddi t i onal l y , t he D i s t r i ct C our t car eful l ynot ed that8

t hi s cons t ruct i on of t h e C o n sen t O r der"do[ es ] notabs ol ve B ach t o R ock fr om any ob l i gati on s i thas t o Jacob s M usi c un der t he L anh am A ct . " (I d. at 15 -16
. ) W e fi nd no l egal err or i n t he w el l
- r eas oned opi ni on of t he D i s t r i ctC our tand conc l ude th a t th e D istric t C o u rt d id n o t ab u se its d isc re tio n in d e n y in g th e m o tio n f o r c iv il co n tem p t. A c c o rd in g ly, w e w ill a f f ir m th e ju d g m e n t o f

th e D is tr ic t C o u rt .