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Webb v. Trailer City, Inc.

United States District Court, D. Oregon

May 15, 2017

VINCENT L. WEBB, a resident of the State of Nevada, Plaintiffs,
v.
TRAILER CITY, INC., an Oregon corporation; DAN E. WALKER, a resident of Oregon; and CHANGZHOU NANXIASHU TOOL CO., LTD., a foreign corporation, Defendants.

          OPINION AND ORDER

          ANNA J. BROWN United States District Judge.

         This matter comes before the Court on Plaintiff Vincent L. Webb's request for damages (#26) against Defendant Changzhou Nanxiashu Tool Co., Ltd., [1] for violation of the terms of the Permanent Injunction (#16) issued against Defendant.

         For the reasons that follow, the Court AWARDS Plaintiff sanctions against Defendant for damages in the amount of $6, 399, 540.00.

         BACKGROUND

         On June 20, 2011, Plaintiff filed a Complaint in this Court and alleged claims for trademark infringement; violation of Oregon Unlawful Trade Practices Act, Oregon Revised Statutes § 646.608(b); copyright infringement; and unfair competition against Defendant. On June 29, 2011, Defendant was served with Summons and Complaint. Defendant failed to answer or otherwise to appear within the time required. On August 19, 2011, the Court entered a Default Judgment and Permanent Injunction (#16) against Defendant.

         Defendant was required under the terms of the Permanent Injunction to return proprietary materials to Plaintiff and was enjoined from “manufacturing, exporting, selling, or importing into the United States” trailers that were manufactured using Plaintiff's proprietary materials or trailers “identical to any of the models which [Defendant] previously manufactured for Plaintiff.” Although an unspecified amount of damages was alleged in Plaintiff's Complaint, no monetary damages were requested by Plaintiff in the Default Judgment.

         On September 14, 2016, Plaintiff filed a Motion (#18) to Reopen Case and Order to Show Cause why Defendant should not be held in contempt for violating the terms of the Default Judgment and Permanent Injunction. On September 16, 2016, the Court issued an Order (#21) and required Defendant to respond to Plaintiff's Motion for Order to Show Cause by October 3, 2016. Defendant did not respond. On October 7, 2016, Plaintiff filed a Reply requesting the Court to reopen the case, issue an order to show cause why Defendant should not be held in contempt, and set a hearing to determine damages.

         On October 12, 2016, the Court issued an Order to Show Cause why Defendant should not be held in contempt, and the Court set a hearing for November 3, 2016. On October 17, 2016, Plaintiff filed a certificate of service indicating Defendant had been served with the Order to Show Cause. On November 2, 2016, Plaintiff filed a Brief (#26) in Support of Damages and requested an award of $14, 867, 010.00 in damages.

         On November 3, 2016, the Court held the show-cause hearing. Defendant failed to appear as ordered. The Court entered an Order (#28) finding Defendant in contempt for failing to comply with the terms of the Permanent Injunction and took the issue of damages under advisement.

         On January 5, 2017, the Court issued an Order (#29) directing Plaintiff to file a supplemental brief to support the amount of damages sought. On March 13, 2017, Plaintiff filed a Supplemental Memo (#36) regarding damages at the direction of the Court and now seeks damages of $11, 947, 505.00 together with pre-judgment interest pursuant to Oregon Revised Statutes § 82.010.

         STANDARDS

         The court may impose civil contempt sanctions to coerce the defendant into compliance with the court's order and to compensate the complainant for losses sustained. United States v. UMWA, 330 U.S.258, 303-04 (1947). See also Shell Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016)(“The purpose of civil contempt is coercive or compensatory.”).

         In a civil contempt proceeding based on a patent-infringement case the district court is free to exercise its inherent discretion to correct willful violations of the court's orders when determining an award of damages. The court is not bound by provisions of the patent-infringement statute. See Dow Chem. Co. v. Chem. Cleaning, Inc., 434 F.2d 1212, 1214-15 (5th ...


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