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CLS Products, LLC v. Contech International, LLC

United States District Court, D. Oregon

April 22, 2015

CLS PRODUCTS, LLC and STEPHEN J. CALDWELL, Plaintiffs,
v.
CONTECH INTERNATIONAL, LLC d/b/a PHOENIX CURB MACHINES, STUART JOHNSON, and JOHN DOES 1-10, Defendants.

Richard W. Todd, TODD & SHANNON LLP, River Highway, Troutdale, Whitney C. Gibson, VORYS, SATER, SEYMOUR AND PEASE LLP, Cincinnati, OH, Attorneys for Plaintiffs.

Ryan C. Kaiser and Gregory P. Lynch, MILLER NASH GRAHAM & DUNN LLP, Bend, OR, Attorneys for Defendants.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

Before the Court is Defendant/Counter-Plaintiff ConTech International, LLC's ("ConTech") Motion to Enforce Judgment and Permanent Injunction against Plaintiffs/Counter-Defendants CLS Products, LLC and Stephen J. Caldwell (collectively, "CLS"). For the reasons that follow, ConTech's motion is granted in part and the Stipulated Judgment and Permanent Injunction (Dkt. 30) is vacated and rescinded.

BACKGROUND

Stephen J. Caldwell and Edgar Taylor were co-owners of Pro Curb, a limited liability company that designed, manufactured, and sold slipform curb machines. Sometime before 2011, the business relationship between Mr. Caldwell and Mr. Taylor deteriorated and the two parties severed all business ties. In 2011, Mr. Taylor joined ConTech and assigned his rights in Pro Curb's machines to ConTech. As Mr. Taylor's assignee, ConTech filed a lawsuit against Mr. Caldwell and Pro Curb that sought, among other relief, a declaration that Mr. Taylor was the sole owner of the Pro Curb machines. In April 2012, the Multnomah County Circuit Court entered a judgment against Mr. Caldwell that awarded Mr. Taylor ownership of the Pro Curb machines, subject to Mr. Taylor's assignment to ConTech.

On February 11, 2014, CLS brought suit against ConTech, alleging defamation, unlawful promotion of commercial activities in violation of the Lanham Act, [1] and tortious interference with CLS's business relationships. ConTech subsequently brought counterclaims against CLS, alleging unfair competition, misappropriation of trade secrets, and unjust enrichment. On August 12, 2014, based upon the parties' joint request, the Court entered a Stipulated Judgment and Permanent Injunction ("SJPI") resolving the above matters.

On September 24, 2014, ConTech filed the present motion to enforce judgment, alleging that CLS had violated paragraph 3(a) of the SJPI. Paragraph 3(a) states in relevant part:

[CLS], together with their respective officers, agents, servants, employees, and attorneys or those in active concert or participation with them who have actual notice of the injunction shall be and hereby are permanently restrained and enjoined from:
a. Creating, copying, altering, distributing, or otherwise using any images, videos, recordings, marks, labels, words, text, or symbols that reflect, show, represent, mention, or otherwise refer to Phoenix Curb's personnel... and/or any of the following products: (i) any slipform curb machines produced by Phoenix Curb, including, without limitation, the PCM 2500, PCM 3300, PCM 6500, and PCM 7500; (ii) the "Curbie" curb cutting machine produced by Phoenix Curb; (iii) the Lift-Off System produced by Phoenix Curb, including models LF-1500, LF-3000, and LF-3000E; (iv) the Municipality Package produced by Phoenix Curb; and (v) the slipform curb machines shown on Exhibit A attached hereto (collectively, the "Protected Products").

Dkt. 30, p. 3-4 (emphasis added). Specifically, ConTech alleges that CLS violated the SJPI by "continuing to display and use images and video that reflect, show, and represent" ConTech's products identified in the SJPI. ConTech requested that the Court find CLS in contempt and order full compliance with the SJPI.

On December 1, 2014, after considering the parties' briefing on ConTech's motion to enforce, the Court tentatively concluded that the disputed language in paragraph 3(a) of the SJPI was ambiguous. Before issuing its ruling, the Court requested that both parties submit supplemental briefing on two questions: "If the Court finds that paragraph 3(a) [of the SJPI] is ambiguous (1) how would this finding affect ConTech's request that the Court hold [CLS] in contempt for violation of the SJPI; and (2) what, if any, additional action the parties would request from the Court?"

Both parties then filed supplemental briefs with divergent requests. ConTech requested that the Court: (1) defer ruling on the motion to enforce and allow modest discovery regarding the parties' intent regarding paragraph 3(a); (2) after discovery, clarify the meaning of paragraph 3(a); or (3) in the alternative, relieve the parties from the SJPI pursuant to Fed.R.Civ.P. 60(b) so that ConTech may pursue its underlying claims. CLS requested that the motion to enforce be dismissed.

On January 26, 2015, the Court granted ConTech's request and allowed limited discovery regarding Mr. Caldwell's intentions and understanding with respect to paragraph 3(a) of the SJPI. Pursuant to the Court's order, ConTech took the depositions of Mr. Caldwell and Cameron Grieb, a former employee of CLS. On March 13, 2015, in light of this additional discovery, ConTech filed supplemental briefing renewing its request that the Court (1) find that CLS willfully violated the SJPI by displaying certain photos on its website; (2) clarify paragraph 3(a) of the SJPI in a manner that requires CLS to remove certain photos on ...


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