Matsunoki Group Inc v. Timberwork Oregon Inc et al, No. 4:2008cv04078 - Document 229 (N.D. Cal. 2011)

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Matsunoki Group Inc v. Timberwork Oregon Inc et al Doc. 229 1 2 IN THE UNITED STATES DISTRICT COURT 3 FOR THE NORTHERN DISTRICT OF CALIFORNIA 4 5 MATSUNOKI GROUP, INC., doing business as HAIKU HOUSES, 6 Plaintiff, 7 v. 8 9 United States District Court For the Northern District of California 10 TIMBERWORK OREGON, INC.; TIMBERWORK, INC.; JOAN L. SHUELL; EARL MAURY BLONDHEIM; DON PAUL; ILENE ENGLISHPAUL; and DOES 1 through 10, inclusive, 11 Defendants. 12 / 13 14 No. C 08-04078 CW ORDER DENYING PLAINTIFF’S MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION (Docket No. 177); DEFENDANTS’ MOTION FOR CERTIFICATION FOR INTERLOCUTORY APPEAL (Docket No. 183); AND PLAINTIFF’S MOTION TO EXCLUDE EXPERT TESTIMONY (Docket No. 227) 15 This order addresses three pending motions in the above 16 captioned case. Plaintiff Matsunoki Group, Inc. seeks leave from 17 the Court to file a motion for reconsideration. Docket No. 177. 18 Defendants Timberwork, Inc.1 and Earl Blondheim (collectively 19 Timberwork) seek certification for an interlocutory appeal of the 20 Court’s order granting Matsunoki’s motion for relief from judgment. 21 Docket No. 183. Matsunoki has also moved to exclude certain expert 22 testimony. Docket No. 227. Having considered all of the papers 23 submitted by the parties, the Court DENIES all three motions. 24 BACKGROUND 25 This is a copyright and trademark infringement case about 26 custom-built Japanese pole-style houses. Matsunoki brings claims 27 28 1 Plaintiff erroneously sued Timberwork Oregon, Inc. 1 against Timberwork, Don Paul and Ilene English-Paul for copyright, 2 trademark and trade dress infringement, false designation of origin 3 and unfair competition.2 4 On April 16, 2010, the Court granted Timberwork’s motion for summary judgment against Matsunoki on all of its claims, including 6 Matsunoki’s copyright claims.3 7 Matsunoki could prove ownership of the copyrights for seven 8 publications at the center of the dispute. 9 evidence that its predecessor Landmark Architecture and Design 10 United States District Court For the Northern District of California 5 owned the copyrights, but failed to present evidence that those 11 copyrights had been transferred to Matsunoki. 12 administratively dissolved as a corporation on November 6, 2006. 13 The Court stated, “Because Matsunoki presents no evidence that it 14 currently owns the copyrights at issue, and it is not clear when 15 and if it will obtain those copyrights by assignment, the Court 16 concludes that Matsunoki cannot bring any claims for copyright 17 infringement. 18 Order Granting Mot. Summ. J. at 12. 19 The parties disputed whether Matsunoki presented Landmark was Therefore, Matsunoki’s copyright claims fail.” Subsequently, Matsunoki moved the Court for relief from 20 judgment under Federal Rule of Civil Procedure 60(b), presenting 21 evidence of the following two developments: (1) on January 7, 2010, 22 the Tennessee Secretary of State reinstated Landmark as a 23 24 25 26 2 The Court previously dismissed claims against Joan Schuell for lack of personal jurisdiction. Docket No. 59. Defendants Don Paul and Ilene English-Paul are unrepresented by counsel and have not joined Timberwork’s motion for certification. 3 27 28 In this order the Court also summarily adjudicated the claims against Don Paul and Ilene English-Paul in their favor. 2 1 corporation in good standing, and (2) on February 26, 2010, 2 Landmark assigned in writing all of its intellectual property to 3 Matsunoki. 4 motion for relief from judgment on the basis of the two new 5 developments. 6 I. Timberwork’s Motion for Certification under 28 U.S.C. § 1292(b) 7 On September 3, 2010, the Court granted Matsunoki’s Timberwork requests that the Court certify for interlocutory 8 appeal its order relieving Matsunoki from judgment. 9 identifies two questions of law that it seeks to appeal: Timberwork United States District Court For the Northern District of California 10 (1) Whether the reinstatement of Landmark and assignment of 11 the assets to Matsunoki constitutes “newly discovered 12 evidence” within the meaning of Rule 60(b)(2); and 13 (2) Whether Matsunoki exercised due diligence to discover this 14 evidence. 15 Pl.’s Mot. at 4. 16 A. Legal Standard 17 Pursuant to 28 U.S.C. § 1292(b), a district court may certify 18 an appeal of an interlocutory order only if three factors are 19 present. 20 "controlling question of law." 21 that a question of law is controlling requires a showing that the 22 "resolution of the issue on appeal could materially affect the 23 outcome of litigation in the district court." 24 Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982) (citing U.S. 25 Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966)). 26 Seventh Circuit has explained: 27 28 First, the issue to be certified must involve a 28 U.S.C. § 1292(b). Establishing In re Cement We think [Congress] used “question of law” in much the 3 The 1 same way a lay person might, as referring to a “pure” question of law rather than merely to an issue that might be free from a factual contest. The idea was that if a case turned on a pure question of law, something the court of appeals could decide quickly and cleanly without having to study the record, the court should be enabled to do so without having to wait until the end of the case. 2 3 4 5 Ahrenholz v. Bd. Trustees of Univ. of Ill., 219 F.3d 674, 676-77 6 (7th Cir. 2000). 7 Second, there must be "substantial ground for difference of 8 opinion" on the issue. 28 U.S.C. § 1292(b). A substantial ground 9 for difference of opinion is not established by a party's strong United States District Court For the Northern District of California 10 disagreement with the court's ruling; the party seeking an appeal 11 must make some greater showing. Mateo v. M/S Kiso, 805 F. Supp. 12 792, 800 (N.D. Cal. 1992), abrogated on other grounds by Brockmeyer 13 v. May, 361 F.3d 1222, 1226-27 (9th Cir. 2004). 14 Third, it must be likely that an interlocutory appeal will 15 "materially advance the ultimate termination of the litigation." 16 28 U.S.C. § 1292(b); Mateo, 805 F. Supp. at 800. Whether an appeal 17 will materially advance termination of the litigation is linked to 18 whether an issue of law is "controlling" in that the court should 19 consider the effect of a reversal on the management of the case. 20 Id. In light of the legislative policy underlying § 1292, an 21 interlocutory appeal should be certified only when doing so "would 22 avoid protracted and expensive litigation." In re Cement, 673 F.2d 23 at 1026; Mateo, 805 F. Supp. at 800. If, in contrast, an 24 interlocutory appeal would delay resolution of the litigation, it 25 should not be certified. See Shurance v. Planning Control Int'l, 26 Inc., 839 F.2d 1347, 1348 (9th Cir. 1988) (refusing to hear a 27 28 4 1 certified appeal in part because the Ninth Circuit's decision might 2 come after the scheduled trial date). 3 All three requirements under 28 U.S.C. § 1292(b) must be met for certification to issue. 5 2007 U.S. Dist. LEXIS 39172, *9 (D. Ariz.). 6 departure from the normal rule that only final judgments are 7 appealable, and therefore must be construed narrowly." 8 Price Stern Sloan, Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 2002). 9 Thus, the court should apply the statute's requirements strictly, 10 United States District Court For the Northern District of California 4 and should grant a motion for certification only when exceptional 11 circumstances warrant it. 12 463, 475 (1978). 13 interlocutory order has the burden of establishing the existence of 14 such exceptional circumstances. 15 discretion in deciding whether to grant a party's motion for 16 certification. 17 1996) rev'd in part on other grounds, 106 F.3d 1125 (2nd Cir. 18 1997). Best Western Int’l, Inc. v. Govan, "Section 1292(b) is a James v. Coopers & Lybrand v. Livesay, 437 U.S. The party seeking certification of an Id. A court has substantial Brown v. Oneonta, 916 F. Supp. 176, 180 (N.D.N.Y. 19 B. Discussion 20 Timberwork has identified controlling issues for appeal; if 21 the Court’s order relieving Matsunoki from judgment were reversed, 22 the judgment would be reinstated and the case closed. 23 However, Timberwork has failed to identify a substantial 24 ground for difference opinion as to the controlling question of 25 law. 26 substantial difference of opinion exists as to whether Matsunoki’s 27 assignment constitutes “newly discovered evidence,” and whether 28 Timberwork extensively cites facts, and asserts that a 5 1 Matsunoki acted with “due diligence.” 2 the way the Court applied settled law to the particular facts in 3 this case does not satisfy the requirements under 28 U.S.C. § 4 1292(b), even if the moving party’s disagreement with the court’s 5 order is “vehement.” 6 *27. 7 However, disagreement with Best Western Int’l, 2007 U.S. Dist. LEXIS at Timberwork has not identified any lack of precedent within the 8 Ninth Circuit, or conflicting decisions in other circuits, in 9 support of its motion for certification. APCC Services, Inc. v. United States District Court For the Northern District of California 10 AT&T Corp., 297 F. Supp. 2d 101, 107 (D.D.C. 2003) (“A substantial 11 ground for difference of opinion is often established by a dearth 12 of precedent within the controlling jurisdiction and conflicting 13 decisions in other circuits.”). 14 decision on the question of what constitutes “newly discovered 15 evidence.” 16 Circuit denied the plaintiff’s Rule 60(b) motion, rejecting the 17 argument that the evidence was “newly discovered” when plaintiff 18 learned of it eight days before judgment was rendered. 19 1082, 1093 (9th Cir. 2003). 20 of Madera, 2005 U.S. Dist. LEXIS 29497 (E.D. Cal.), is a lower 21 court decision that does not give rise to a circuit split. 22 Furthermore, Riverbend Ranch is consistent with Feature Realty, 23 because it also holds, “Evidence is not newly discovered under the 24 Federal Rules if it was in the moving party’s possession at the 25 time of trial or could have been discovered with reasonable 26 diligence.” 27 persuading the Court to certify an interlocutory appeal, it 28 Timberwork cites one Ninth Circuit In Feature Realty Inc. v. City of Spokane, the Ninth Id. at *5. 331 F.3d Riverbend Ranch Golf Course v. County Although Timberwork bears the burden of 6 1 identifies no lack of authority and presents no substantial 2 disagreement among courts as to what constitutes due diligence. 3 Timberwork’s motion also falters because it will likely delay the resolution of this case. 5 scheduled for July, 2011. 6 appeal are not weighty matters that are likely to be expedited on 7 appeal. 8 and expert discovery will end on February 19, 2011. 9 dispositive motions are to be heard on or before April 8, 2010. 10 United States District Court For the Northern District of California 4 Consequently, Timberwork has not established that an immediate 11 appeal may materially advance the ultimate termination of the case. 12 Because a district court’s certification is reserved for 13 exceptional circumstances, and Timberwork has failed to satisfy all 14 requirements under 28 U.S.C. § 1292(b), the Court denies the motion 15 for certification. 16 II. Matsunoki’s Motion for Leave to Move for Reconsideration Trial in this matter is currently The issues that Timberwork seeks to Fact discovery on this case closed on December 20, 2010, All case 17 A. Legal Standard 18 This Court’s Local Rule 7-9(b)(3) permits the reconsideration 19 of an interlocutory order if there was a manifest failure by the 20 Court to consider material facts or dispositive legal arguments 21 which were presented to the Court before such order was issued. 22 party moving for leave to file a motion for reconsideration, 23 however, may not repeat any argument made earlier in support of or 24 opposition to the interlocutory order. A L.R. 7-9(c) 25 B. Discussion 26 Matsunoki’s request for reconsideration reiterates arguments 27 28 made in response to Timberwork’s motion for summary judgment, 7 1 already rejected by the Court, and attempts to raise new arguments. 2 Matsunoki attacks the Court’s ruling that it unduly delayed in 3 filing suit, by arguing that the cease and desist letter was 4 narrowly written. 5 letter’s broad wording. 6 that the laches defense does not apply to the Pauls, and that 7 Steen’s death did not prejudice Defendants, and points to a legal 8 test for the applicability of the laches defense, which no party 9 briefed, and the Court did not apply in its summary judgment order. The Court, however, has already ruled on the Order, 13-14. Matsunoki further asserts United States District Court For the Northern District of California 10 E-Systems, Inc. v. Monitek, 720 F.2d 604, 607 (9th Cir. 1983). 11 Although Matsunoki did not raise these arguments in prior briefing, 12 they do not present newly established evidence or law. 13 Civil Local Rule 7-9 is not intended to allow parties to repeat 14 prior argument or present new arguments that could have been raised 15 earlier, the Court need not entertain Matsunoki’s request to 16 reconsider. 17 Because Even if the Court were to consider Matsunoki’s new arguments, 18 the outcome on summary judgement would remain the same. 19 raises, for the first time, a six factor test used to determine 20 whether laches will bar relief from trademark infringement. 21 Notably, Matsunoki’s motion for reconsideration neglects to apply 22 the standard to the particular facts of this case. 23 application, however, demonstrates that the test does not change 24 its finding that laches provides a valid defense for Timberwork. 25 Matsunoki The Court’s The six E-Systems factors are: “1) the strength and value of 26 trademark rights asserted; 2) plaintiff’s diligence in enforcing 27 the mark; 3) harm to senior user if relief denied; 4) good faith 28 8 1 ignorance by junior users; 5) competition between senior and junior 2 users; and 6) extent of harm suffered by junior user because of 3 senior user’s delay.” 4 Smoker, Inc. v. Tillamook County Creamery Ass’n, 465 F.3d 1102, 5 1008 (9th Cir. 2006)(applying two of the six E-Systems factors, the 6 plaintiff’s diligence in enforcement and the defendant’s good faith 7 use). 8 9 720 F.2d at 607; see also Tillamook Country These factors weigh in Timberwork’s favor. The Haiku Houses marks have value and have provided for a measure of Timberwork’s United States District Court For the Northern District of California 10 business success. 11 enforcing its rights. 12 and Timberwork’s direct assertion in 2001 that it owned the marks, 13 Matsunoki could have acted sooner than 2008, when it finally filed 14 suit. 15 Matsunoki, and after seven years of silence from Matsunoki, 16 Timberwork risks losing the marks and its business. 17 not ignorant of Timberwork’s ongoing existence or activities during 18 this time. 19 exists, although Matsunoki is based in Tennesee, and Timberwork is 20 based in California. 21 proceeded with its business, taking on more clients and involving 22 the Pauls to increase its marketing and sales activities. 23 these facts make clear that Matsunoki was less than diligent in 24 enforcing its rights, and Timberwork acted in good faith. 25 Matsunoki has been less than diligent in Considering its knowledge about Timberwork Nearly a decade after the cease and desist letter from The companies formerly worked together. Matsunoki was Competition In light of Matsunoki’s silence, Timberwork Overall, Matsunoki asserts another new argument, distinguishing between 26 Defendants Timberwork and the Pauls. 27 claims against the Pauls are barred by laches, just as the defense 28 9 Nevertheless, Matsunoki’s 1 applies to Timberwork. 2 plaintiff cannot sit on the knowledge that another company is using 3 its trademark, and then later come forward and seek to enforce its 4 rights.” 5 Enterprises, Inc., 559 F.3d 985, 980-90 (9th Cir. 2009). 6 of laches is two-fold: “first, was the plaintiff’s delay in 7 bringing suit unreasonable? 8 by the delay?” 9 “This defense embodies the principle that a Internet Specialties West, Inc. v. Milon-Didiorgio The test Second, was the defendant prejudiced Id. at 990. If a plaintiff filed suit within the limitations period for United States District Court For the Northern District of California 10 the analogous action at law, there is a presumption that laches in 11 inapplicable. Jarrows Formulas, Inc. v. Nutrition Now, Inc., 304 12 F.3d 829, 835. The parties agree that the four-year limitations 13 period from California trademark infringement law is the most 14 analogous. 15 involved in the business until 2004, at the earliest. 16 Matsunoki argues that the lawsuit against the Pauls is within the 17 four-year statute of limitations period, and no presumption in 18 favor of laches applies. 19 under a theory of agency. 20 marketing its products and services with Timberwork’s 21 authorization. 22 The Pauls acquired and used the marks through Timberworks, and 23 should be treated as identically situated. 24 Matsunoki points out that the Pauls did not become As a result, Nevertheless, the Pauls are protected The Pauls acted on behalf of Timberwork, The Pauls did not act independently of Timberwork. Even if no presumption of laches applies, the equitable 25 principles are not entirely barred from consideration in the claims 26 against the Pauls. 27 the plaintiff ‘knew or should have known about its potential cause 28 “The limitations period for laches starts when 10 1 of action.’” 2 2001, Matsunoki was aware of Timberwork’s use of the marks. 3 Matsunoki sent a cease and desist letter that same year. 4 Timberwork responded to the letter, insisting that Timberwork had 5 ownership of the trademarks. 6 business. 7 with respect to Timberwork, and should have known that Timberwork 8 might involve other parties to conduct their business. 9 Timberwork’s insistence that it was the mark owner, and its Tillamook Country Smoker, 465 F.3d at 1108. As of Timberwork carried on with its Matsunoki knew that it had potential causes of action United States District Court For the Northern District of California 10 continued use of the marks, increased the likelihood that it would 11 involve third parties, like the Pauls, and thus increased the risk 12 that the marks were being used widely without authorization. 13 Matsunoki either knew or should have known about the Pauls’ role, 14 and therefore the limitations period for laches includes them. 15 The two-prong test for laches, weighing the reasonablness of 16 Matsunoki’s delay and the prejudice suffered by the Pauls, also 17 supports an outcome in the Pauls’ favor. 18 unreasonable, because it was well aware that Timberwork continued 19 to conduct its business using the marks, and Timberwork might 20 involve third parties in that course of conduct. 21 acting in good faith, not knowing about the dispute that had arisen 22 in 2001. 23 Steen’s death deprived the Pauls of testimony that could have 24 clarified the intellectual property’s authorship and transfer. 25 Greater clarity about these facts would have aided the fair 26 resolution of these claims. The Pauls were Likewise, Matsunoki’s delay prejudiced the Pauls. 27 28 Matsunoki’s delay was 11 1 2 III. Matsunoki’s Motion to Exclude Expert Testimony On February 15, 2011, Matsunoki moved to exclude the expert 3 testimony of Jerry P. Loving. 4 Matsunoki’s motion without prejudice because it does not comply 5 with the Court’s case management order. 6 limine may be made only in accordance with the Court's order for 7 pre-trial preparation, and heard at the final pre-trial conference, 8 absent the Court's permission, for good cause shown. 9 motions, except discovery motions, must be included in a single United States District Court For the Northern District of California 10 The Court denies Docket No. 41. Motions in All other round of briefing and noticed to be heard on April 8, 2011. 11 12 Docket No. 227. CONCLUSION The Court DENIES Timberwork’s motion for certification of an 13 interlocutory appeal, and Matsunoki’s motion for leave to file a 14 motion for reconsideration. 15 prejudice, Matsunoki’s motion to exclude the expert testimony of 16 Jerry P. Loving. 17 The Court also DENIES, without IT IS SO ORDERED. 18 19 Dated: 2/18/2011 CLAUDIA WILKEN United States District Judge 20 21 22 23 24 25 26 27 28 12