Court Opinion

ID: 2673031
Source: CourtListenerOpinion
Date Created: 2014-05-08 20:22:25.921846+00
Date Added: 2024-06-11T12:36:41.838022
License: Public Domain

FILED
                             NOT FOR PUBLICATION                              MAY 07 2014

                                                                          MOLLY C. DWYER, CLERK
                      UNITED STATES COURT OF APPEALS                        U.S. COURT OF APPEALS

                             FOR THE NINTH CIRCUIT

THE COCHRAN FIRM, P.C., an Alabama               No. 13-55502
corporation,
                                                 D.C. No. 2:12-cv-05868-SJO-
                Plaintiff-counter-defendant -    MRW
Appellee,

  v.                                             MEMORANDUM*

THE COCHRAN FIRM LOS ANGELES,
LLP, a California Limited Liability
Partnership,

                Defendant,

  And

RANDY H. MCMURRAY, P.C., a
California professional corporation;
RANDY H. MCMURRAY, individually,

                Defendants-counter-claimants
- Appellants.

                     Appeal from the United States District Court
                         for the Central District of California
                      S. James Otero, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                      Argued and Submitted February 3, 2014
                               Pasadena, California

Before: PREGERSON and BERZON, Circuit Judges, and AMON, Chief District
Judge.**

      Appellants appeal the district court’s order granting Appellee’s motion for a

preliminary injunction. Because the parties are familiar with the factual

background and procedural history of this case, we need not discuss them here.

We have jurisdiction under 28 U.S.C. § 1292(a)(1), and we reverse and remand.

      1. At the outset, we reject Appellants’s argument that Appellee lacks

standing to bring this suit. When an Alabama corporation changes its name, it does

not alter its legal entitlements or obligations. See, e.g., N. Birmingham Lumber Co.

v. Sims & White, 48 So. 84, 85 (Ala. 1908); Richard Thigpen, Alabama

Corporation Law § 3:5 (4th ed.). That Appellee filed this suit in a name it had

mistakenly failed to register with the Alabama Secretary of State is thus entirely

irrelevant to its constitutional standing, especially given that it subsequently

assumed the name in which this suit was filed.

      2. “The district court’s grant of a preliminary injunction is reviewed for

abuse of discretion and should be reversed if the district court based its decision on

       **
             The Honorable Carol Bagley Amon, Chief District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.

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an erroneous legal standard or on clearly erroneous findings of fact.” Stormans,

Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir. 2009) (internal quotation marks

omitted).

      The district court did not abuse its discretion in concluding that Appellee

was likely to demonstrate that it owns The Cochran Firm trademark. Appellee

submitted evidence that the trademark was registered and that its subsequent

assignment to Appellee was recorded, thereby providing prima facie evidence that

the mark is valid and that the assignment was duly executed. See 15 U.S.C. §§

1115(a), 1060(a)(3). Appellants have not rebutted that prima facie evidence.

      Appellants argue on appeal that the assignment was to an entity that had not

yet been formally registered with the Alabama Secretary of State. But Appellants

did not advance this argument before the district court, and did not assemble a

sufficient record on the question to permit our full evaluation of it. What evidence

we have of the assignment manifests an intent to assign the trademark to Appellee,

notwithstanding any technical deficiency.

      3. Notwithstanding Appellee’s successful defense of the district court’s

conclusion that it is likely to demonstrate ownership of the trademark, we must

remand for the district court to augment the record and to reconsider Appellants’s

unclean hands argument. See Fed. Trade Comm’n v. Enforma Natural Prods.,

                                                                                     3
Inc., 362 F.3d 1204, 1212 (9th Cir. 2004). Unclean hands is a defense to

trademark infringement suits. Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826

F.2d 837, 847 (9th Cir. 1987). The rationale behind this defense is that, “when the

owner of a trade-mark applies for an injunction . . . it is essential that the plaintiff

should not in his trade-mark . . . be himself guilty of any false or misleading

representation.” Clinton E. Worden & Co. v. Cal. Fig Syrup Co., 187 U.S. 516,

528 (1903). To make out an unclean hands defense, a trademark defendant “must

show that [the] plaintiff used the trademark to deceive consumers.” Japan

Telecom, Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 870 (9th Cir. 2002).

“[A]pplication of the unclean hands doctrine raises primarily a question of fact.”

Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989).

      Before the district court, Appellants argued that Appellee’s “business

structure and advertising violate[] numerous statutes, rules of professional conduct,

and other ethical standards designed to protect the public, including those

involving fee-splitting, advertising, client confidentiality, and conflicts of interest.”

The district court, however, “d[id] not find the structure of [Appellee’s] business to

be relevant to this action.” That conclusion was incorrect.

      The structure of Appellee’s business is important in assessing whether

Appellee has unclean hands. Specifically, Appellee may be misusing the

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trademark to deceive the public into believing it is a single, national firm, when in

fact it is a network of separate partnerships. Because the record before us does not

provide sufficient information about the relationships both between Appellee and

the local offices, or between Appellee and the public, we remand to the district

court to determine whether Appellee has unclean hands in its use of the Cochran

Firm trademark. The district court shall keep the preliminary injunction in place

while it examines this issue.

      4. “Because false or misleading commercial statements aren’t

constitutionally protected,” enjoining such speech “rarely raise[s] First

Amendment concerns.” TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820,

829–30 (9th Cir. 2011) (internal citations omitted). Here, however, the injunction

is worded so broadly that it forbids McMurray from truthfully representing himself

as one of the late Johnnie Cochran’s law partners. For example, Paragraphs 1, 2,

and 5 of the injunction prohibit McMurray from revealing that past affiliation in a

curriculum vitae or biographical statement on his firm’s website. Although the

injunction carves out an exception for at least some representations that McMurray

“was a former attorney with the Cochran Law Firm,” that exception is not broad

enough to cover representations that McMurray was not only a former attorney at

the firm, but also was held out to the public as a partner of Johnnie Cochran. “The

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district court was required to tailor the injunction so as to burden no more

protected speech than necessary.” Id. at 830. We direct it to do so on remand.

      REVERSED AND REMANDED.

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