2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-16-2015

Arrowpoint Capital Corp v. Arrowpoint Asset

Management

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"Arrowpoint Capital Corp v. Arrowpoint Asset Management" (2015). 2015 Decisions. Paper 741.

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 14-3063

_____________

ARROWPOINT CAPITAL CORP.,

 Appellant

v.

ARROWPOINT ASSET MANAGEMENT, LLC; 

ARROWPOINT PARTNERS GP, LLC; ARROWPOINT 

PARTNERS GP2, LLC; ARROWPOINT FUNDAMENTAL 

OPPORTUNITY FUND, LP; ARROWPOINT

STRUCTURED OPPORTUNITY FUND, LP

_______________

On Appeal from the United States District Court

for the District of Delaware

(D.C. No. 1-10-cv-00161)

District Judge: Hon. Gregory M. Sleet

_______________

Argued

March 18, 2015

Before: SMITH, JORDAN, and SLOVITER, Circuit 

Judges.
2

(Opinion Filed: July 16, 2015)

_______________

Corby C. Anderson [ARGUED]

Matthew S. DeAntonio

Nexsen Pruet

227 W. Trade St. – Ste. 1550

Charlotte, NC 28202

Michael W. Arrington

Parkowski, Guerke & Swayze

800 King St. – Ste. 203

Wilmington, DE 19801

 Counsel for Appellant

Todd Anthony Coomes

Robert W. Whetzel

Richards, Layton & Finger

920 N. King St.

Wilmington, DE 19801

Jaclyn H. Grodin

Lewis D. Prutzman [ARGUED]

Tannenbaum, Helpern, Syracuse & Hirschtritt

900 Third Avenue

New York, NJ 10022

 Counsel for Appellees

_______________

OPINION OF THE COURT

_______________
3

JORDAN, Circuit Judge.

Arrowpoint Capital Corp. (“Capital”) appeals an order 

of the United States District Court for the District of 

Delaware denying a preliminary injunction in this action for

trademark infringement and unfair competition. Invoking the 

Lanham Act and Delaware state law, Capital sought to enjoin

Arrowpoint Asset Management, LLC; Arrowpoint Partners 

GP, LLC; Arrowpoint Partners GP2, LLC; Arrowpoint 

Fundamental Opportunity Fund, LP; and Arrowpoint 

Structured Opportunity Fund, LP (collectively “AAM”) from 

using a logo or word mark employing the name “Arrowpoint” 

in connection with any investment-related products and 

services. Because the District Court’s ruling rests on an 

overly narrow interpretation of the kind of confusion that is

actionable under the Lanham Act, we will vacate and remand.
4

I. Background

A. Factual Background1

Capital is a Delaware holding company, whose 

subsidiaries, Arrowood Indemnity Company and Arrowood 

Surplus Lines Insurance Company, provide insurance and 

investment-related financial services throughout the United 

States under the Arrowpoint Capital name. Capital says that 

it began managing and investing assets derived from 

insurance policy premiums in 2007 and that its “primary 

source of income is the investment of its reserves in fixed 

income securities.” (Opening Br. at 5.) According to Capital,

 

1

In an appeal from the grant or denial of a preliminary 

injunction, we typically view the facts in the light most 

favorable to the prevailing party. See Stuhlbarg Int’l Sales 

Co. v. John D. Brush & Co., 240 F.3d 832, 840 (9th Cir. 

2001) (“In an appeal from the granting of a preliminary 

injunction, the appellate court will view the facts most 

favorable to the plaintiff and all factual conflicts will be 

resolved in favor of the prevailing party.” (internal quotation 

marks omitted)); see also Utah Med. Prods., Inc. v. Searcy, 

958 P.2d 228, 232 (Utah 1998) (reviewing the denial of a 

preliminary injunction and explaining that under the clearerror standard of review, “an appellant must demonstrate that 

even in the light most favorable to the trial court, the evidence 

was insufficient to support the findings”); Maritrans GP Inc. 

v. Pepper, Hamilton & Scheetz, 602 A.2d 1277, 1280 (Pa. 

1992) (noting that, in reviewing a lower court’s reversal of a 

preliminary injunction order, the facts are “taken in a light 

most favorable to ... the winner at the trial court level”). 
5

it earned more than one million dollars from investmentrelated services provided to third-party clients for whom it 

had executed nearly 1,000 trades between 2007 and 2011. 

Capital claims to manage about two billion dollars in assets, 

at least as of 2011, and to have executed over 1,200 trades for 

its own portfolio between 2007 and 2011. Currently, Capital

owns six trademarks registered with the United States Patent 

& Trademark Office for insurance, investment, and 

consulting services, all of which feature the words 

“Arrowpoint Capital” or the 

logo .

2

 It also has a 

pending registration for investment management services, as 

to which AAM has filed an opposition.3 Capital says that it

 

2 The trademarks are: 1) Arrowpoint Capital, Reg. No 

3,484,564, a word mark registration for insurance-related 

services; 2) Arrowpoint Capital, Reg. No. 3,484,563, a logo 

registration for insurance-related services; 3) Arrowpoint 

Capital, Reg. No. 3,948,120, a word mark registration for 

business auditing services; 4) Arrowpoint Capital, Reg. No. 

3,948,121, a logo registration for business auditing services; 

5) Arrowpoint Capital, Reg. No. 4,132,173, a word mark 

registration for employee retirement plan administration and 

consulting services; and 6) Arrowpoint Capital, Reg. No. 

4,132,172, a logo registration for employee retirement plan 

administration and consulting services. Registrations 3 

through 6 were awarded after the District Court briefing had 

concluded. 

3 The proceedings before the United States Patent and 

Trademark Office pertaining to the seventh registration –

Serial Number 77,836,169 – have been stayed pending the 

outcome of this litigation. 
6

markets its investment services through presentations, 

sponsorships, speaking engagements, and attendance at 

industry conferences, and it expended approximately 

$390,000 between 2007 and 2011 doing so. 

The AAM entities, which use the 

logo , include an investment management 

company, two private investment funds, commonly called 

“hedge funds,” and the hedge funds’ general partners – all of 

which are limited liability companies or limited liability 

partnerships organized under the laws of Delaware with their 

principle places of business in Denver, Colorado. The AAM 

entities were formed between December 2007, when AAM 

first began using the mark “Arrowpoint,” and April 2009. 

They provide investment-related services, including 

individual investment management services and 

administration services for hedge funds. AAM claims to 

manage over $1.5 billion in assets and to serve “high net 

worth individuals, companies operating primarily for the 

benefit of wealthy individuals, family foundations, or trusts.” 

(App. at 6.) 

B. Procedural History

On February 26, 2010, Capital filed a complaint in the 

District Court, asserting four claims: (1) trademark 

infringement under Section 32 of the Lanham Act, 15 U.S.C. 

§ 1114; (2) unfair competition and false advertising under 

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a);4(3) 

 

4 Although Capital labeled its second claim as one for 
7

trademark infringement and misappropriation under Delaware 

common law; and (4) violation of the Delaware Deceptive 

Trade Practices Act, Del. Code Ann. tit. 6 § 2532. That same 

day, Capital filed a motion for a preliminary and permanent 

injunction to prevent AAM “from using the ‘Arrowpoint’ 

name in any form or the [AAM] logo as a trade name, 

trademark, or domain name in the advertising, marketing, 

promotion, sale, offering for sale, or distribution of [AAM’s] 

products and services.” (App. at 113-114.) 

The parties engaged in discovery for several months

until, on August 6, 2010, Capital moved for a scheduling 

order and a scheduling conference, which AAM opposed for 

reasons that are unclear. Two months later, the District Court 

issued a scheduling order allowing for limited additional 

discovery and setting a briefing schedule for the injunction 

motion. In March 2011, Capital notified the District Court 

that briefing was complete and requested a hearing on its 

injunction motion. 

Over seventeen months later, on August 20, 2012, 

Capital filed its first motion to supplement the record, seeking 

to submit affidavits describing nine additional alleged 

instances of alleged actual confusion that took place after the 

 

both unfair competition and false advertising under Section 

43(a) of the Lanham Act, that was only a label. As the 

District Court noted, Capital “only briefed and referenced 

statutory language related to unfair competition.” Arrowpoint 

Capital Corp. v. Arrowpoint Asset Mgmt., LLC, No. CV 10-

161-GMS, 2014 WL 2123572, at *3 n.9 (D. Del. May 20, 

2014). Accordingly, the Court only addressed the unfair 

competition claim.
8

parties had completed briefing on the injunction motion. 

Capital filed a second motion to supplement the record on 

April 15, 2013, seeking to submit evidence – again in the 

form of affidavits – of seven more instances of alleged actual 

confusion that had occurred since the first motion to 

supplement had been filed. 

About four months later, on August 13, 2013, Capital 

submitted a letter to the District Court inquiring about the 

status of its pending motions. The District Court then issued 

an order, on September 18, 2013, denying the first motion to 

supplement, and another on March 25, 2014, denying the 

second motion to supplement. On May 20, 2014, more than 

four years after Capital moved for a preliminary injunction, 

the District Court denied Capital’s motion without an 

evidentiary hearing. This appeal followed.

II. Discussion5

Capital argues that the District Court erred in denying 

its motion for a preliminary injunction and the related

motions to supplement the record, and it further asserts that, 

based on the time taken to consider its preliminary injunction 

motion, the case should be reassigned to a different judge on 

remand. We address those arguments in turn.

 

5 The District Court had jurisdiction under 28 U.S.C. 

§§ 1331 and 1367, and we have jurisdiction pursuant to 28 

U.S.C. § 1292. 
9

A. Motion for a Preliminary Injunction6

Preliminary injunctive relief is “an extraordinary 

remedy” and “should be granted only in limited 

circumstances.” Am. Tel. & Tel. Co. v. Winback & Conserve 

Program, Inc., 42 F.3d 1421, 1426-27 (3d Cir. 1994) (internal 

quotation marks omitted). “[O]ne of the goals of the 

preliminary injunction analysis is to maintain the status quo, 

defined as the last, peaceable, noncontested status of the 

parties.” Opticians Ass’n of Am. v. Indep. Opticians of Am., 

920 F.2d 187, 197 (3d Cir. 1990) (internal citations and 

quotation marks omitted). The test for such relief is familiar. 

“A party seeking a preliminary injunction must show: (1) a 

likelihood of success on the merits; (2) that it will suffer 

irreparable harm if the injunction is denied; (3) that granting 

preliminary relief will not result in even greater harm to the 

nonmoving party; and (4) that the public interest favors such 

relief.” Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 708 

(3d Cir. 2004). The “failure to establish any element [of that 

test] renders a preliminary injunction inappropriate.” 

 

6 We review a district court’s decision to grant or deny 

a preliminary injunction for an abuse of discretion. 

Highmark, Inc. v. UPMC Health Plan, Inc., 276 F.3d 160, 

170 (3d Cir. 2001). Any findings of fact are reviewed for 

clear error and conclusions of law are subject to plenary 

review. Id. “An abuse of discretion exists where the district 

court’s decision rests upon a clearly erroneous finding of fact, 

an errant conclusion of law, or an improper application of law 

to fact.” Am. Civil Liberties Union of N.J. v. Black Horse 

Pike Reg’l Bd. of Educ., 84 F.3d 1471, 1476 (3d Cir. 1996).
10

NutraSweet Co. v. Vit–Mar Enters., Inc., 176 F.3d 151, 153 

(3d Cir. 1999). 

Typically, then, the first step in the analysis is to 

consider whether the party seeking the preliminary injunction 

is likely to succeed on its underlying legal claims, which, in 

this case, center on trademark infringement.7“To prevail on 

a claim for trademark infringement or unfair competition 

under the Lanham Act, the owner of a valid and legally 

protectable mark ... must show that a defendant’s use of a 

similar mark for its goods ‘causes a likelihood of confusion.’” 

Kos, 369 F.3d at 708-09 (quoting A & H Sportswear, Inc. v. 

Victoria’s Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 

 

7 Capital challenged in the District Court both AAM’s 

use of the word mark “Arrowpoint” and the AAM logo. See 

supra p.7. As to the logos, the District Court ruled that they 

were so dissimilar in appearance and impression that they 

were not confusingly similar. On appeal, Capital offers no 

argument that the Court’s ruling with respect to the logos was 

incorrect, and, thus, it has waived any argument against that 

ruling. Kost v. Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993) 

(“[U]nder Federal Rule of Appellate Procedure 28(a)(3) and 

(5) and Third Circuit Local Appellate Rule 28.1(a), appellants 

are required to set forth the issues raised on appeal and to 

present an argument in support of those issues in their 

opening brief. It is well settled that if an appellant fails to 

comply with these requirements on a particular issue, the 

appellant normally has abandoned and waived that issue on 

appeal and it need not be addressed by the court of appeals.” 

(internal citations omitted)). 
11

2000)).8 In determining whether there is a likelihood of 

confusion, we have adopted a non-exhaustive list of factors, 

commonly referred to within our Circuit as the “Lapp

factors,” based on an early case in which they were set forth. 

Id. at 709; see also Interpace Corp. v. Lapp, Inc., 721 F.2d 

460, 463 (3d Cir. 1983). Because some of the Lapp factors as 

initially stated were “not apposite for directly competing 

goods,” we later “adapted [them] to make them applicable 

whether the products directly compete or not.” A & H, 237 

F.3d at 212-13. As adapted, the factors are as follows: (1) the 

degree of similarity between the owner’s mark and the 

allegedly infringing mark; (2) the strength of the owner’s 

mark; (3) the price of the goods and other factors indicating 

the care and attention one expects would be given when

making a purchase; (4) the length of time the alleged infringer

has used the mark without evidence of actual confusion 

arising; (5) the intent of the alleged infringer in adopting the 

mark; (6) the evidence of actual confusion; (7) whether the 

goods are marketed through the same channels; (8) the extent 

to which the target markets are the same; (9) the perceived 

relationship of the goods, whether because of their nearidentity, similarity of function, or other factors; and (10) other 

facts suggesting that the prior owner might be expected to

expand into the alleged infringer’s market. Id. at 215. While 

the Lapp factors originally referred to competing products, it 

is clear that, because the Lanham Act protects against the use 

of marks which cause confusion as to “goods, services, or 

 

8 Because the District Court found that Capital had a 

valid and legally protectable trademark, and because that 

determination is not challenged on appeal, we do not address 

it. Kost, 1 F.3d at 182. 
12

commercial activities,” 15 U.S.C. 1125(a)(1) (emphasis 

added), those factors apply equally to services, like those 

provided by Capital and AAM. Thus, insofar as the case law 

uses the terms “goods” or “products” in connection with the 

Lapp factors, those terms are interchangeable with “services.” 

“The Lapp factors are best understood as ‘tools to 

guide a qualitative decision.’” Kos, 369 F.3d at 709 (quoting 

A & H, 237 F.3d at 216). None of them in itself is

determinative and each must be “‘weighed and balanced’”

based on the particular facts of the case. Id. (quoting 

Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 

269 F.3d 270, 280 (3d Cir. 2001)). Nevertheless, one of the 

factors, the sixth in the Lapp list, is of particular significance 

because it focuses on evidence of actual confusion, and all of 

the Lapp factors are only proxies for the fundamental 

question of whether there is a likelihood of confusion from 

the use of similar marks. Cf. Top Tobacco, L.P. v. N. Atl. 

Operating Co., 509 F.3d 380, 383 (7th Cir. 2007) (“A list of 

factors designed as proxies for the likelihood of confusion 

can’t supersede the statutory inquiry.”). The controversy here 

bears primarily on that sixth factor.

In its initial preliminary injunction briefing before the 

District Court, Capital submitted evidence of eleven incidents 

of actual confusion.

9

 The District Court discounted that 

 

9 The eleven instances of actual confusion Capital 

offered were as follows.

(1) April 2009: A salesperson for the Royal Bank of Scotland 

(“RBS”) contacted Capital to ask why Capital used a different 

broker for a large security purchase identified by the code 
13

 

*******F9, given that Capital had used the RBS salesperson 

in the past. AAM had made the purchase at issue. 

(2) April 2009: JPMorgan allocated a securities purchase, 

identified by the code *******A3, to a Capital account, when 

it should have been allocated to an account owned by AAM. 

(3) May 2009: An attorney for Barclays negotiating Capital’s 

Term Asset-Backed Securities Loan Facility (“TALF”) 

agreement asked whether Capital was a different entity from 

the Arrowpoint represented by Tannenbaum Helpern. The 

Tannenbaum Helpern firm represented AAM, but never 

represented Capital. 

(4) June 2009: JPMorgan misallocated to a Capital account a 

securities purchase, identified by the code *******J0, that 

had been made by AAM. 

(5) July 2009: JPMorgan again misallocated to a Capital 

account a securities purchase, identified by the code 

*******L2, that had been made by AAM. 

(6) Summer 2009: Citigroup, Inc. notified Capital that 

Capital’s application to purchase TALF securities had been 

delayed due to confusion caused by AAM’s submission of an 

application for the same securities under the “Arrowpoint” 

name. This caused Capital to lose its position in the queue to 

acquire the securities. 

(7) August 2009: When Capital attempted to participate in a 

corporate bond offering through RBS, it was informed that it 

would not be able to do so out of Colorado – an apparent 
14

evidence because the confusion was among brokers and 

dealers, rather than being “actual customer confusion.” 

Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC, 

No. CV 10-161-GMS, 2014 WL 2123572, at *6 (D. Del. 

 

reference to AAM, which was based there. Eventually, after 

the confusion was resolved, Capital received two-thirds of the 

allocation it initially requested. 

(8) Fall 2009: Morgan Stanley attempted to confirm a change 

in address from AAM’s address in Denver to Capital’s 

address in Charlotte. 

(9) April 2010: Citigroup sent Capital a general request for 

information regarding AAM’s “Arrowpoint Fundamental

Opportunity Fund LP” and “Arrowpoint Structured 

Opportunity Fund LP.” 

(10) Summer 2010: A JPMorgan salesperson complained 

that Capital did not use JPMorgan for a securities purchase. 

The purchase had been made by AAM. 

(11) Summer 2010: Capital received numerous calls from 

employees at Bank of America Merrill Lynch who were 

confused about whether a trade had been executed by Capital 

or by AAM. As a result of those calls, the bank’s salespeople 

have had to communicate with the trading desk about which 

“Arrowpoint” is involved in particular transactions. The 

bank’s employee said one such conversation lasted for 

approximately an hour because they had to determine which 

trades had been executed for Capital and for AAM, 

respectively, and which salespeople were assigned to each 

entity. 
15

May 20, 2014). Capital argues that the District Court took 

too narrow a view of what constitutes actionable confusion,

and we agree. 

The Lanham Act defines trademark infringement as

use of a mark so similar to that of a prior user as to be “likely 

to cause confusion, or to cause mistake, or to deceive.” 15 

U.S.C. § 1114(1)(a). The likelihood of confusion with which

the Lanham Act is concerned is not limited to confusion of 

products among purchasers. For example, in Checkpoint 

Systems Inc. v. Check Point Software Technologies, Inc. and 

again in Kos Pharmaceuticals, Inc. v. Andrx Corp., we 

described how the 1962 amendments to the Lanham Act 

broadened the scope of trademark protection. Section 32 of 

the Lanham Act originally proscribed only the use in 

commerce of similar marks where it was “‘likely to cause 

confusion or mistake or to deceive purchasers as to the 

source of origin of such goods or services.’” Esercizio v. 

Roberts, 944 F.2d 1235, 1244 (6th Cir. 1991) (emphasis 

added) (quoting 1946 Lanham Act). In 1962, Congress 

deleted the terms “purchasers” and “source of origin,”

affording Lanham Act protection more broadly when a mark 

is “likely to cause confusion, or to cause mistake, or to 

deceive.” Kos, 369 F.3d at 711 (internal quotation marks 

omitted); Checkpoint, 269 F.3d at 295; see also 4 McCarthy 

on Trademarks and Unfair Competition § 23:7 (4th ed.)

(“Congress struck out language in the Lanham Act which 

required confusion, mistake or deception of purchasers as to 

the source of origin of such goods and services. Several 

courts have noted this expansion of the test of infringement 

and held that it supports a finding of infringement when even 

non-purchasers are deceived.” (internal quotation marks 

omitted)). 
16

For example, in Country Floors, Inc. v. Partnership 

Composed of Gepner & Ford, 930 F.2d 1056, 1058 (3d Cir. 

1991), we reversed a District Court’s grant of summary 

judgment in favor of a defendant, Country Tiles, where the

plaintiff, Country Floors, had adduced evidence that suppliers 

and other business contacts confused the two entities. 

Specifically, Country Floors represented “(a) that Directory 

assistance gave a caller the number for the ‘Country Tiles’ 

Manayunk Store rather than the ‘Country Floors’ Philadelphia 

showroom; (b) that [a Country Tiles] store received a pastdue notice intended for ... ‘Country Floors’ ... from a 

supplier whose invoice arrived in an envelope which included 

other materials intended for ‘Country Tiles;’ (c) that [the] 

Manager of the ‘Country Tiles’ Manayunk store testified that 

the number of inquiries about a connection between Country 

Floors and Country Tiles at the Manayunk store had increased 

from very few to a noticeable amount; and (d) that [an] 

interior designer ..., who is not affiliated with Country 

Floors, had confused the two stores.” Id. at 1064. Most of 

this evidence did not involve customer confusion, but, 

nonetheless, we held that it was “evidence of actual 

confusion” sufficient to defeat summary judgment because “a 

factfinder could conclude there was actual confusion between 

the ... names as well as the[] marks.” Id.

Similarly, in Mid-State Aftermarket Body Parts, Inc. v. 

MQVP, Inc., 466 F.3d 630, 634 (8th Cir. 2006), the United

States Court of Appeals for the Eighth Circuit reversed a 

summary judgment ruling that was grounded on a misguided 

likelihood-of-confusion analysis. The district court’s decision 

had “emphasized that distributor Mid-State does not offer 

services that compete with the MQVP services protected by 
17

the mark, and that Mid-State’s customers are collision shops 

who are parts end users, not the manufacturers and 

distributors who are potential purchasers of MQVP’s 

services.” Id. The Eighth Circuit observed, however, that

“the Lanham Act’s unfair competition inquiry is not so 

narrow.” Id. Rather, that court held, “‘[c]onfusion is relevant 

when it exists in the minds of persons in a position to 

influence the purchasing decision or persons whose confusion 

presents a significant risk to the sales, goodwill, or reputation 

of the trademark owner.’” Id. (emphasis added) (quoting 

Beacon Mut. Ins. Co. v. OneBeacon Ins. Grp., 376 F.3d 8, 10 

(1st Cir. 2004)). 

A number of other decisions both within our circuit 

and beyond have likewise highlighted that the Lanham Act 

extends to “the use of trademarks which are likely to cause 

confusion, mistake, or deception of any kind, not merely of 

purchasers nor simply as to source of origin.” Kos, 369 F.3d 

at 711 (internal quotation marks omitted) (quoting Syntex 

Labs., Inc. v. Norwich Pharmacal Co., 437 F.2d 566, 568 (2d 

Cir. 1971)); see also, e.g., Checkpoint, 269 F.3d at 295 

(overly narrow view of confusion “would undervalue the 

importance of a company’s goodwill with its customers”); 

Meridian Mut. Ins. Co. v. Meridian Ins. Grp., Inc., 128 F.3d 

1111, 1118 (7th Cir. 1997) (context of confusion 

“immaterial” because any injury to goodwill or loss of control 

over reputation is actionable); Champions Golf Club, Inc. v. 

Champions Golf Club, Inc., 78 F.3d 1111, 1119-20 (6th Cir. 

1996) (relevant evidence of confusion goes beyond purchaser 

confusion and includes “confusion among nonpurchasers” in 

order to “protect the manufacturer’s reputation” (internal 

quotation marks omitted)).
18

The analysis provided by the United States Court of 

Appeals for the Second Circuit in Morningside Group, Ltd. v. 

Morningside Capital Group, L.L.C., 182 F.3d 133 (2d Cir. 

1999), is particularly relevant because, like the present case, it 

involved the highly regulated financial industry. There, the 

plaintiff presented at trial “extensive evidence of phone calls 

and other inquiries received by its people from sophisticated 

members of the financial community, both about [the 

defendant’s] transactions and about the relationship between 

the two entities.” Id. at 141. “Nonetheless the district court 

discounted that evidence because it relied on an inordinately 

narrow definition of actual confusion.” Id. The Second 

Circuit held that, “[c]ontrary to the district court’s approach, 

evidence of actual confusion need not be limited to evidence 

of mistaken completed transactions. ... [C]ourts can properly 

take into account evidence of either a diversion of sales, 

damage to goodwill, or loss of control over reputation.” Id. 

(internal quotation marks omitted). Recognizing the 

particular importance of identity and reputation to financial 

firms, the Court noted that “the relevance of actual confusion 

beyond mistaken completed transactions is important ...

because in the financial world an investor will almost never 

complete a transaction with a mistakenly identified party. If 

nothing else, compliance with the due diligence requirement 

will normally prevent such errors.” Id. The Second Circuit

warned that, before a transaction is done, “investors might be 

confused about the affiliation between two similarly named 

companies and might very well alter their behavior based on 

that confusion.” Id. 

In the present case, the District Court cited the correct 

standard when it stated that “the [Lanham] Act covers ‘the 

use of trademarks which are likely to cause confusion, 
19

mistake, or deception of any kind, not merely of purchasers 

nor simply as to source of origin.’” Arrowpoint, 2014 WL 

2123572, at *4 n.11 (quoting Kos, 369 F.3d at 711). But the 

Court did not then appear to apply that standard; instead it

repeatedly discussed the lack of customer confusion. It said, 

for example, that “the plaintiff produced no evidence of 

actual customer confusion. ... [I]t argues that ‘broker 

dealers’ ... all have been misled.” Id. at *6. Similarly, it 

concluded that, as a matter of law, there was no general 

likelihood of confusion, “especially since the record is devoid 

of any inference of customer confusion.” Id. at *7 (emphasis 

added). And, rather than recognizing the special importance 

of identity and reputation in the financial industry, it 

discounted such concerns, saying that similar marks can 

coexist because “consumers take greater care than many 

others,” and “‘prospective purchasers are unlikely to perceive 

the marks before becoming familiar with the parties’ 

businesses.’” Id. at *5 & n.15. That overly narrow 

interpretation of what constitutes confusion under the Lanham 

Act is contrary to our deeply rooted precedent, including our 

decisions in Checkpoint, Kos, and Country Floors. We thus 

take this opportunity to reiterate that the Lanham Act protects 

against “the use of trademarks which are likely to cause 

confusion, mistake, or deception of any kind, not merely of 

purchasers nor simply as to source of origin.” Kos, 369 F.3d 

at 711 (internal quotation marks omitted). It certainly covers 

confusion created “‘in the minds of persons in a position to 

influence [a] purchasing decision or persons whose confusion 

presents a significant risk to the sales, goodwill, or reputation 

of the trademark owner.’” Mid-State, 466 F.3d at 634 

(emphasis added) (quoting Beacon, 376 F.3d at 10). 
20

AAM cites our decision in Checkpoint, arguing that 

somehow it stands for the proposition that the “absence of 

evidence of actual consumer confusion in a purchasing 

decision” defeats a claim for infringement. (Answering Br. at 

32.) But that interpretation of the case is flawed. First, our 

consideration of actual confusion evidence in Checkpoint fell 

in the middle of a lengthy discussion of whether initialinterest confusion – as opposed to point-of-sale confusion –

was actionable under the Lanham Act. 269 F.3d at 292-99. 

Almost all of our analysis on the issue of confusion related to 

that question, which we answered in the affirmative.

10

 

Second, while we expressly reserved judgment as to whether 

investor confusion is actionable – a reservation prompted by 

the lack of evidence in the case – we nevertheless noted that 

“[a]rguably, the 1962 amendments to the Lanham Act 

extended actionable confusion beyond purchasers to other 

instances affecting a party’s business or goodwill.” Id. at 

 

10 In reaching the conclusion that initial-interest 

confusion was actionable, we cited to 3 McCarthy on 

Trademarks & Unfair Competition § 23.7 for the proposition 

that: 

In 1962, Congress struck out language in the 

Lanham Act which required confusion, mistake 

or deception of purchasers as to the source of 

origin of such goods and services. Several 

courts have noted this expansion of the test of 

infringement and held that it supports a finding 

of infringement when even non-purchasers are 

deceived. 

Id. at 295 (internal quotation marks omitted).
21

300. We went on to recognize that “[i]nvestor confusion may 

well threaten a party’s business or goodwill if it would likely 

deter or inhibit a company’s ability to attract investors and 

raise capital.” Id. In short, Checkpoint does not stand for the 

proposition that non-purchaser confusion is not actionable 

under the Lanham Act or that it is less important than 

customer confusion. There was simply insufficient evidence 

of any kind of confusion in Checkpoint to support a claim, 

and the case therefore does not shore up AAM’s position.

AAM also argues that the District Court’s decision did 

not turn on whether non-purchaser confusion was actionable 

but rather on whether Capital’s evidence deserved to be given

weight. According to AAM, the District Court discounted the 

evidence of confusion among non-purchasers because it came 

in the form of “self-serving affidavits of [Capital’s] 

employees relating hearsay.” (Answering Br. at 28.) And the 

District Court did in fact say that it “view[ed] many of the 

alleged inquiries about the affiliation between the parties with 

great skepticism, given the interested sources and the inability 

to cross examine the supposedly confused individuals.” 

Arrowpoint, 2014 WL 2123572, at *7 (quoting A & H, 237 

F.3d at 227).

But, even if AAM were correct that the legal error 

concerning the test for confusion had no impact on the

District Court’s decision – a premise we do not accept – the 

argument that the Court was just weighing evidence would 

fail. No doubt, a district court called upon to weigh evidence 

may give little credence to that which it deems unreliable,

Kos, 369 F.3d at 719, but it must demonstrate that its decision

in that regard is supportable. Here, the District Court did not 

conduct an evidentiary hearing prior to ruling on the 
22

preliminary injunction, yet it refused to credit evidence 

because of perceived credibility issues with the affiants and 

because there was no opportunity to cross examine the 

individuals who were confused. While an evidentiary hearing 

is not always required before resolving a preliminary 

injunction, Bradley v. Pittsburgh Bd. of Educ., 910 F.2d 1172, 

1175-76 (3d Cir. 1990) (describing various scenarios in which 

a hearing would be unnecessary), we have noted that it “may 

be improper to resolve a preliminary injunction motion on a 

paper record alone; [and] where the motion turns on a 

disputed factual issue, an evidentiary hearing is ordinarily 

required,” Kos, 369 F.3d at 719 n.16. The record here does 

not indicate that either party expressly asked for an 

evidentiary hearing, although Capital claims that it made an 

oral motion to the District Court. Nonetheless, because 

consideration of the injunction motion evidently was 

influenced in some significant degree by credibility issues 

and factual disputes, the District Court should have conducted 

one. See Prof’l Plan Exam’rs of N.J., Inc. v. Lefante, 750 

F.2d 282, 288 (3d Cir. 1984) (a district court cannot resolve a 

motion for a preliminary injunction that depends upon the 

resolution of disputed issues of fact without first holding an 

evidentiary hearing); CBS Broad., Inc. v. EchoStar Commc’ns 

Corp., 265 F.3d 1193, 1207 (11th Cir. 2001) (“Without the 

benefit of an evidentiary hearing, the district court erred in 

rejecting [the litigant’s] assertions as not credible.”).11

 

11 See also, e.g., Certified Restoration Dry Cleaning 

Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 553 (6th Cir. 

2007) (“[I]f questions of fact had been in dispute, an 

evidentiary hearing would have been required.”); Cobell v. 

Norton, 391 F.3d 251, 261 (D.C. Cir. 2004) (“[I]f there are 

genuine issues of material fact raised in opposition to a 
23

Moreover, we reject AAM’s argument that the District 

Court was entitled to entirely discount hearsay affidavits at 

the preliminary injunction stage. It is true that we have held 

that a district court may reject unreliable affidavits in 

evaluating evidence of actual confusion. For example, in A & 

H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., we held 

that a district court was right to view “with great skepticism” 

evidence entirely coming from interested sources who were 

not subject to cross examination and were otherwise isolated 

or exceptional. 237 F.3d at 227. We noted that “[i]t is within 

the District Court’s discretion to consider the facts, and weigh 

 

motion for a preliminary injunction, an evidentiary hearing is 

required. Particularly when a court must make credibility 

determinations to resolve key factual disputes in favor of the 

moving party, it is an abuse of discretion for the court to settle 

the question on the basis of documents alone, without an 

evidentiary hearing.” (citations omitted)); Medeco Sec. Locks, 

Inc. v. Swiderek, 680 F.2d 37, 38 (7th Cir. 1981) (“It is well 

established that, in general, a motion for a preliminary 

injunction should not be resolved on the basis of affidavits 

alone. Normally, an evidentiary hearing is required to decide 

credibility issues.”); Forts v. Ward, 566 F.2d 849, 851 (2d 

Cir. 1977) (same); Marshall Durbin Farms, Inc. v. Nat’l 

Farmers Org., Inc., 446 F.2d 353, 356 (5th Cir. 1971) (same); 

Consolidation Coal Co. v. Disabled Miners of S. W. Va., 442 

F.2d 1261, 1269-70 (4th Cir. 1971) (same); 11A Charles 

Allen Wright, et al., Federal Practice and Procedure § 2949 

(3d ed. 2014) (noting that while an evidentiary hearing is not 

always required, there is a “strong preference ... for oral 

evidence” in preliminary injunction proceedings and that 

most courts require an evidentiary hearing where there are 

disputed facts).
24

them.” Id. And, we have made similar statements in other 

cases. See, e.g., Citizens Fin. Grp., Inc. v. Citizens Nat’l

Bank of Evans City, 383 F.3d 110, 122 (3d Cir. 2004) (“In 

general, actual confusion evidence collected by employees of 

a party in a trademark action must be viewed with skepticism 

because it tends to be biased or self-serving.” (internal 

quotation marks omitted)); Checkpoint, 269 F.3d at 298 

(“[T]he District Court properly took into account the potential 

bias of Checkpoint Systems’s employees who testified 

[regarding actual confusion].”). None of those cases, 

however, were decided upon an application for a preliminary 

injunction; rather, they were decisions made at later stages of 

each case. That procedural distinction explains why the selfserving hearsay affidavits in Kos, a case involving a 

preliminary injunction, were sufficient, but the same kind

evidence was not enough to sustain a judgment for the 

plaintiff in Checkpoint. 

In rejecting the argument that hearsay affidavits were 

inadequate to entitle a movant to preliminary relief in Kos, we 

explained that temporary injunctions are “customarily granted 

on the basis of procedures that are less formal and evidence 

that is less complete than in a trial” or at summary judgment 

because there is no “rule in the preliminary injunction context 

akin to the strict rules governing the form of affidavits that 

may be considered in summary judgment proceedings.” 369 

F.3d at 718. Cf. E.T. Browne Drug Co. v. Cococare Prods., 

Inc., 538 F.3d 185, 196 & n.8 (3d Cir. 2008) (“We have 

explained the importance of the distinction between the 

preliminary injunction and summary judgment stages of 

litigation ... . The distinction between the two standards

remains as important in the context of weighing the results of 

a survey as in making credibility determinations... .”); 11A 
25

Charles Allen Wright, et al., Federal Practice and Procedure

§ 2949 (3d ed. 2014) (“[I]t is not surprising that in practice 

affidavits usually are accepted on a preliminary injunction 

motion without regard to the strict standards of Rule 56(c)(4),

and that hearsay evidence also may be considered.” (footnotes 

omitted)). It also appears that at least some of these allegedly 

unsubstantiated affidavits actually had email communications 

pertaining to the confusion attached as exhibits. We offer no 

opinion as to whether the District Court should credit those 

submissions, but it is not enough to simply dismiss them as 

self-serving. One would hardly expect them to be otherwise. 

No party is likely to submit evidence that does not serve its 

case. 

In sum, despite credibility questions, the District Court 

failed to hold an evidentiary hearing, or to adequately set 

forth its rationale for discounting Capital’s evidence, or to 

hear oral argument. On this record, those failings amount to 

error. 

Because we conclude that the District Court erred in its

actual confusion analysis and its treatment of Capital’s 

evidence of confusion, we need not address the remaining 

Lapp factors.12 We agree with Capital that the District 

 

12 The District Court found that the length of time the 

defendant used the mark without actual confusion arising is 

neutral because “[t]he court is unable to thoroughly assess 

this factor given the nature of the alleged ‘actual confusion’” 

Arrowpoint, 2014 WL 2123572, at *7; customer care and 

sophistication, “strongly favor[ed] the defendants [AAM]” 

Id.; AAM adopted the mark in good faith and thus that factor 

favored AAM; channels of advertising factor favored 
26

Court’s overly narrow view of what constitutes confusion 

under the Lanham Act affected its analysis of the other Lapp

factors and the District Court should revisit its rulings in the 

first instance in light of the forgoing discussion.

13

 Kos, 369 

F.3d at 712 (stating that normally the application of an 

incorrect legal standard results in a remand for the district 

court to rule in the first instance using the correct standard).14 

 

defendant because the parties use different media; and the 

customer bases are similar but because the parties offered 

“distinctly different investment management strategies to 

generally different classes of investors” that factor favored 

defendants. Id. at *8. 

13 While the delay in this case is troubling – we are 

dealing with an application for preliminary relief dating back 

four years – we reject the suggestion that the District Judge 

cannot ably and fairly address the case. Our reasons for 

denying the request for reassignment are set forth herein. See

infra pp. 35-37.

14 We do, however, take this opportunity to note some 

difficulty with the District Court’s analysis of AAM’s intent 

in adopting the mark. AAM admitted that it knew Capital 

was using the “Arrowpoint” name in the insurance industry 

before it began using it. That admission was necessary 

because, prior to adopting the “Arrowpoint” name, AAM had 

conducted a trademark search that revealed that Capital was 

already using “Arrowpoint” in connection with both 

insurance and financial services. AAM said it did not think 

Capital’s use of “Arrowpoint” for insurance services would 

preclude it from using “Arrowpoint” for investment services 

and the District Court accepted that explanation, finding that 
27

Because the District Court determined that Capital 

could not show a likelihood of success on the merits, it did 

not analyze the remaining three factors for preliminary relief. 

If, on remand, the District Court reaches a different 

conclusion on the likelihood of success, it will, of course, 

need to address one or more of those factors as it assesses 

Capital’s request for an injunction. See, e.g., McNeil 

Nutritionals, LLC v. Heartland Sweeteners, LLC, 511 F.3d 

350, 369 (3d Cir. 2007) (“[W]e will therefore remand for the 

District Court to consider whether [Appellant] establishes a 

likelihood of success on the remaining elements of trade dress 

infringement under the Lanham Act, as well as the remaining 

factors for preliminary injunctive relief.”); Allegheny Energy, 

Inc. v. DQE, Inc., 171 F.3d 153, 167 (3d Cir. 1999) (“On 

remand, the District Court should reassess – in light of this 

opinion – the three remaining factors in the four-factor 

 

AAM adopted the name in good faith. Since insurance 

companies invest customer premiums in various financial 

instruments as a primary source of profits, however, see, e.g., 

Robert McMenamin et al., What do U.S. life insurers invest 

in? The Federal Reserve Bank of Chicago, Chicago Fed 

Letter No. 309 at tbl. 1 (April 2013) (explaining that, in the 

fourth quarter of 2011, life insurers held about $3.5 trillion in 

assets, over $3.3 trillion of which were invested in various 

financial instruments); see also Opening Br. at 5 (“[Capital]’s 

primary source of income is the investment of its reserves in 

fixed-income securities”), the closely related character of the 

markets for insurance services and for investment services 

warranted closer consideration. Again, we do not have any 

fixed opinion on this point, but the answer does not appear to 

us as evident as it seems to have been to the District Court.
28

determination of whether a preliminary injunction should 

issue.”); Home Instead, Inc. v. Florance, 721 F.3d 494, 500 

(8th Cir. 2013) (“The district court is in the best position to 

evaluate all of the evidence and weigh the factors to 

determine whether the injunction should issue.” (internal 

quotation marks omitted)). We offer no opinion as to whether 

Capital is entitled to preliminary relief.

15

 

B. Motion to Supplement16

Capital also challenges the District Court’s denial of 

its motions to supplement the record with additional evidence 

of actual confusion. Specifically, while its motion for 

 

15 It must be said, however, that, directly contrary to 

Capital’s suggestion that a showing of actual confusion 

creates a presumption of irreparable harm, we recently held in 

light of two recent Supreme Court cases, eBay Inc. v. 

MercExchange, L.L.C., 547 U.S. 388 (2006), and Winter v. 

Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), 

that “a party bringing a claim under the Lanham Act is not 

entitled to a presumption of irreparable harm when seeking a 

preliminary injunction and must demonstrate that irreparable 

harm is likely.” Ferring Pharms., Inc. v. Watson Pharms., 

Inc., 765 F.3d 205, 206 (3d Cir. 2014).

16 We review for abuse of discretion the District 

Court’s decision on the motions to supplement the record. 

See Bradley v. Work, 154 F.3d 704, 709 (7th Cir. 1998) (“We 

also find no abuse of discretion – the appropriate question –

in the district court’s refusal to allow the Voters to 

supplement the record ... .” (citation omitted)). 
29

preliminary relief was pending, Capital sought to supplement 

the record twice. On August 20, 2012, it filed a motion for 

leave to supplement the record with nine additional instances 

of what it describes as actual confusion.

17

 Capital later 

 

17 The additional confusion evidence consisted of the 

following.

(1) Spring 2011: An analyst at Morgan Stanley contacted 

Capital to request an allocation for a bond trade. When 

asked to verify that the trade was for Capital, the analyst 

advised that it actually was for “Arrowpoint Asset” and 

asked whether Capital was affiliated with Arrowpoint Asset. 

(App. at 205.)

(2) Summer 2011: Capital was contacted by a representative 

of Goldman Sachs and asked to confirm and allocate a trade 

placed by an employee of AAM. 

(3) Fall 2011: A Barclays representative commented on 

Capital’s attendance at an upcoming securities conference. 

Capital had not yet signed up to attend. The Barclays 

representative explained that she had seen a list of attendees 

that included “Arrowpoint Partners.” (Id. at 182-184, 189).

(4) Spring 2012: While attending a conference, Capital 

representatives introduced themselves to two employees of 

Solamere Advisors, an investment and wealth management 

firm. The Solamere Advisors employees said they had heard 

of Capital and had looked at the company’s “funds” while 

evaluating funds for clients. (Id. at 191-92.) Only AAM 

offers such funds. 
30

 

(5) Spring 2012: Capital placed a multi-million dollar order 

for a new issue bond offered by RBS, Deutsche Bank, and 

UBS, but received no allocation in that offering because the 

syndicate desk handling the transaction had mistakenly 

believed it was placed by “the Arrowpoint in Colorado,” a 

“fast money” account or a “hedge fund.” (Id. at 194-95.) 

Capital’s contact at RBS explained the syndicate desk’s 

mistaken assumption, but by that time there was no way to 

rectify the mistake.

(6) Summer 2012: A Credit Suisse salesperson called 

Capital to inquire about a report from his syndicate desk that 

“Arrowpoint” – evidently AAM – had placed a multi-million 

dollar order for a security. (Id. at 181-82.)

(7) Summer 2012: A Wells Fargo salesperson asked 

whether Capital had placed an order for several million 

dollars in securities. Upon investigating, the salesperson 

reported that the buyer was “Arrowpoint Asset Management 

in Denver.” (Id. at 181.)

(8) Summer 2012: A Morgan Stanley representative 

contacted Capital to confirm a multimillion dollar fixedincome trade that had been booked to “Arrowpoint Capital.” 

(Id. at 204.) The representative said the trader was “Kaelyn” 

at telephone number (303) ***-****. The telephone number 

was to AAM’s Denver office for one of AAM’s traders. 

(9) Summer 2012: A representative of Bank of America 

Merrill Lynch contacted Capital by email to inquire about a 

trade that had been rejected. The email, with the salutation 

“Team,” had two additional addressees, both employed by 
31

discovered at least six more examples of actual confusion and 

moved to supplement the record a second time on April 15, 

2013.18 The District Court denied both motions – on 

 

AAM. (Id. at 203-04, 208-09.) The bank representative then 

called Capital to ask whether it had another entity, because 

she noticed that the trade said “Arrowpoint Asset 

Management.” (Id.) She later reported AAM had confirmed 

“this was their trade.” (Id.)

18 That evidence consisted of the following.

(1) Fall 2012: Capital asked its contact at State Street Bank to 

provide a list of authorized signers for its bank account. The 

bank contact forwarded a list of authorized signers consisting 

of two pages. The first page listed authorized signatories for 

Capital and the second page listed authorized signatories for 

AAM. When informed of this error, the bank contact 

explained that the information he forwarded had been pulled 

from an electronic database through a search by name –

indicating that the employee searched for “Arrowpoint.” 

(2) Fall 2012: An RBS manager contacted Capital about a 

money difference in a multi-million dollar trade. Capital 

learned that the trade had been made by AAM because the 

customer was identified as “ARROWPOINT ASSET 

MGMT-GS.” 

(3) Fall 2012: Capital and Barclays jointly participated in a 

trial to evaluate a risk management system. Barclays set up 

access for Capital’s employees, but mistakenly listed the firm 

name as “Arrowpoint Asset Management, LLC.” When 

asked about the mistake, the contact at Barclays responded 
32

 

that he thought Capital and AAM were both part of the same 

entity, which he called “Arrowpoint.” 

(4) Winter 2013: A Morgan Stanley employee called Capital 

to get account details for trades it had allocated to Capitals’ 

account. Capital could not identify these trades by the 

numbers given, so it asked for the name of the trader. The 

name provided was that of a trader employed by AAM. The 

Morgan Stanley employee, upon realizing this, stated that he 

must have been confused, and that the trades must have been 

made by the other Arrowpoint. 

(5) Winter 2013: A Credit Suisse employee contacted 

Capital to ask whether it had submitted orders in a deal in 

which Wells Fargo or Barclays were other leads. The 

employee said his syndicate desk had seen an “Arrowpoint” 

in the other banks’ order books and wanted to know whether 

this referred to Capital or AAM. 

(6) Winter 2013: A Royal Bank of Canada Capital Markets 

employee contacted Capital to say he had learned from his 

syndicate desk that Capital had placed a multi-million dollar 

order for an asset-backed security. Although Capital had 

analyzed this offering, it had not yet decided to buy. The bank 

employee later reported that the order actually was placed by 

an “Arrowpoint” in Denver, and he apologized for the trouble 

caused by his confusion. 

(7) Spring 2013: A reporter for Creditflux, an independent 

report on credit trading and investing, contacted Capital to 

confirm a tip from market sources that “Arrowpoint” was 

about to get involved in structured credit by launching a 
33

September 18, 2013 and March 25, 2014, respectively –

without explanation. 

Capital argues that the delay in deciding the motion for 

preliminary relief necessitated the filing of supplemental 

information and that the District Court had no basis for 

denying the motions to supplement because the evidence to 

be submitted was probative of actual confusion. See Fuji 

Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 

F.2d 591, 597 (5th Cir. 1985) (stating that “there is simply no 

precedent” for the “total disregard of evidence of actual 

confusion”); McCarthy § 23:13 (“No matter how convinced a 

trial judge may be of the absence of any likelihood of 

confusion, he or she must at least listen to evidence presented 

of actual confusion.”). AAM counters that the District Court 

rejected the evidence because it was more of the same selfserving hearsay that the Court had previously declined to 

accept and that AAM would have been prejudiced by having 

to respond to the additional evidence of confusion nearly 

seventeen months after the record closed. 

 

collateral debt obligation, known as a “CLO.” Capital had no 

such intention. When asked whether he was sure he had the 

right company, the reporter responded by asking whether he 

was speaking with “Arrowpoint Capital.” Capital asked the 

reporter whether he was seeking the Denver-based AAM, and 

the reporter confirmed that he was in fact looking for the 

Denver-based firm. A few weeks later, a Business Wire news 

item reported that AAM had launched a CLO. The item 

referred to AAM’s company name as “Arrowpoint” and to the 

new product as “Arrowpoint CLO 2013-1.” 
34

We are faced with the difficulty of evaluating the 

District Court’s rulings in this regard when they are wholly 

unexplained. It would ordinarily be within the District 

Court’s discretion to set a deadline for submissions in 

deciding a temporary restraining order or preliminary 

injunction and to refuse to accept supplemental filings 

submitted after that deadline – although the significant delay 

in this case would give us cause to doubt the wisdom and 

viability of such a decision if that is what happened here. On 

the other hand, if the District Court refused to grant the 

motions because the affidavits contained hearsay, it would 

likely have erred for the reasons we have already described. 

Because we are unable to discern the basis for the District 

Court’s rulings on the motions to supplement and because we 

are vacating the denial of the preliminary injunction on other 

grounds, we will also vacate the denial of the motions to 

supplement and ask the District Court to revisit its ruling in 

light of this opinion. 

C. Motion for Reassignment19

Finally, Capital asks us to reassign the case to a 

different district judge on remand, arguing that the delay in 

ruling on the motion for preliminary relief and the adverse 

evidentiary rulings call into question the judge’s impartiality. 

We strongly disagree. 

Reassignment is “an exceptional remedy, one that we 

weigh seriously and order sparingly.” United States v. 

 

19 Our authority to direct the reassignment of a case on 

remand is based on 28 U.S.C. § 455(a) and 28 U.S.C. § 2106. 

United States v. Bertoli, 40 F.3d 1384, 1411 (3d Cir. 1994).
35

Kennedy, 682 F.3d 244, 258 (3d Cir. 2012). “To warrant 

reassignment under § 455(a), a case generally must involve 

apparent bias deriving from an extrajudicial source, meaning 

something above and beyond judicial rulings or opinions 

formed in presiding over the case.” United States v. Bergrin, 

682 F.3d 261, 282 (3d Cir. 2012). “Our supervisory powers 

under § 2106, however, also permit reassignment and are not 

necessarily constrained by that limitation.” Id.

Notwithstanding the differences between the standards for 

reassignment under § 455(a) and § 2106, we have typically 

reviewed requests for reassignment under both provisions

applying a standard that calls for reassignment when “‘a 

reasonable person, with knowledge of all the facts, would 

conclude that the judge’s impartiality might reasonably be 

questioned.’” Id. (quoting United States v. Wecht, 484 F.3d 

194, 213 (3d Cir. 2007)).

 Here, it is clear that reassignment is not warranted. 

We have never held that delay alone merits reassignment. 

Further, the cases Capital cites for the proposition that delay 

alone can warrant reassignment – Brooks v. Central Bank of 

Birmingham, 717 F.2d 1340, 1343 (11th Cir. 1983) and Yang 

v. City of Chicago, 137 F.3d 522, 527 (7th Cir. 1998) – are 

inapposite. In Brooks, the court of appeals ordered 

reassignment because the district court repeatedly 

demonstrated hostility toward certain provisions of the Civil 

Rights Act of 1964 and ruled that the appointment of counsel 

violated the Thirteenth Amendment. 717 F.2d at 1342-43. 

Similarly, the reassignment in Yang was not based on the 

district court’s delay, but instead was pursuant to a local rule 

providing for reassignment whenever a case is remanded for a 

new trial. Yang, 137 F.3d at 527 (ordering reassignment 

because of Seventh Cir. L.A.R. 36). 
36

Further, adverse rulings – even if they are erroneous –

are not in themselves proof of prejudice or bias. See, e.g.,

Liteky v. United States, 510 U.S. 540, 555 (1994) (“[J]udicial 

rulings alone almost never constitute a valid basis for a bias 

or partiality motion [under § 455(a)]” since they rarely 

“evidence the degree of favoritism or antagonism required ... 

when no extrajudicial source is involved”); Securacomm 

Consulting, Inc. v. Securacom, Inc., 224 F.3d 273, 278 (3d 

Cir. 2000) (“[A] party’s displeasure with legal rulings does 

not form an adequate basis for recusal.”); Jones v. Pittsburgh 

Nat’l Corp., 899 F.2d 1350, 1356 (3d Cir. 1990) 

(“Disagreement with a judge’s determinations certainly 

cannot be equated with the showing required to so reflect on 

his impartiality as to dictate recusal.”). 

Indeed, after careful consideration of the record, we 

find no evidence of bias in the district judge’s handling of the 

case. To the contrary, the judge appears to have been 

completely impartial and we have high confidence in him as a 

jurist. Because we are satisfied that he will handle this case 

in a fair and expeditious manner, the request for reassignment 

will be denied. 

III. Conclusion

For the forgoing reasons, we will vacate the rulings at 

issue and remand the case for further proceedings consistent 

with this opinion.