United States District Court, M.D. Alabama, Southern Division
RECOMMENDATION OF THE MAGISTRATE JUDGE
[1]
STEPHEN M. DOYLE UNITED STATES MAGISTRATE JUDGE
Pending
before the Court is Plaintiff's Motion for Contempt (Doc.
30), Defendant's Counter Motion for Contempt (Doc. 38),
and Plaintiff's Supplemental Brief in Support of Motion
for Contempt (Doc. 61). On May 8, 2019, the undersigned
Magistrate Judge held a hearing on the motions. For the
reasons that follow, it is the recommendation of the
undersigned that Plaintiff's Motion for Contempt (Doc.
30), as supplemented, be granted in part and denied in part,
and that Defendant's Counter Motion for Contempt (Doc.
38) be denied.
I.
DISCUSSION
A.
Background
Showcoat
Solutions, LLC, (“Plaintiff”) is a company that
sells hair-growth products in the agricultural industry.
See generally (Doc. 76) at 4-5. This case arises
from allegations that Defendants stole Plaintiff's
product formulas and used those formulas to manufacture and
sell their own products under the name Code Blue, as well as
allegations that Defendants created and sold counterfeit
goods using Plaintiff's ShowCoat and other n a m e s,
likenesses, and intellectual property. See generally
(Doc. 76).
Contemporaneous
with its Complaint, Plaintiff filed a Motion for Temporary
Restraining Order (Doc. 2), which alleged irreparable and
immediate harm resulting from Defendants' alleged
counterfeiting and sale of Plaintiff's products. The
United States District Judge previously assigned to the case
held a hearing on the Motion, but was unable to conclude the
hearing in the time allotted. Therefore, the District Judge
entered an interim Order, which was agreed to by the parties,
and continued the hearing for a later date. See
(Docs. 11, 12). On the day before the hearing was to
continue, the parties filed a Joint Motion for Order to
Cancel Hearing and Enter Consent Interlocutory Injunction
(Doc. 18). The Court granted the parties' request,
cancelled the hearing, and entered the proposed Interlocutory
Injunction, which reads, in relevant part:
1. All Defendants shall cease using the name “ShowCoat,
” “Volumax, ” “Pop Shot, ” or
using the ShowCoat or similar marks in the manufacture,
marketing, or sale of any goods, or acting in concert with
others to do the same;
2. All Defendants shall not manufacture, market, or sell any
products developed in whole or in part from the ShowCoat
formula or acting in concert with others to do the same;
3. All parties shall preserve and demand the preservation of
all computers, computer tablets, phones, smart phones,
external media (CDs, thumb drives, external hard drives, and
the like), servers, cloud-based storage, and email accounts
on which they have stored any communication or information
with, about, referring to and/or relating to ShowCoat,
ShowCoat's marks, ShowCoat's formula;
4. All parties shall preserve and demand the preservation of
all materials related to the manufacture, marketing, or sale
of livestock hair-enhancement products. Nothing herein
prevents any party from carrying on its normal business
operations except as otherwise prohibited by this order;
5. Plaintiff, its agents, officers, and members shall refrain
from using Defendants' names or disclosing identifying
information about Defendants in connection with this matter,
or acting in concert with o thers to do the same. In
addition, Plaintiff shall delete, destroy, or remove, to the
extent possible, all press releases, announcements, social
media posts, or any other public materials it has produced
using Defendants' names or disclosing identifying
information about Defendants in connection with this matter.
Nothing herein prevents Plaintiff from informing the public
that Wilson and Butler are no longer dealers for Plaintiff,
nor that there may be counterfeit products in circulation in
the market, but such information shall not be presented in a
way that implicates Defendants or associates them with
wrongdoing;
6. No security will be required at this time;
7. This order shall remain in effect during the pendency of
this litigation and until further order of the court[.]
(Doc. 19).
B.
The Parties' Motions
On
December 5, 2018, Plaintiff filed its Motion for Contempt
(Doc. 30). Plaintiff argues that Defendants Chris Wilson
(“Wilson”) and Andy Butler
(“Butler”), (collectively
“Defendants” for purposes of this
recommendation), have not complied with this Court's
Interlocutory Injunction because of certain social media
posts appearing on their Twitter and Facebook pages. See
generally (Doc. 30). According to Plaintiff,
Defendants' posts use the name “ShowCoat”
“in the manufacture, marketing, or sale” of
Defendants' product, Code Blue, which competes with
ShowCoat and is allegedly created by the misappropriation of
ShowCoat trade secrets. Id. at 4.
In
response, Defendants assert that, after the Interlocutory
Injunction was entered, they “attempted to remove all
references to ShowCoat from their various social media
accounts, but because of the volume of material on these
accounts, some items were missed.” (Doc. 38) at ¶
1. Defendants further note that, although they believe the
posts at issue do not actually violate the Interlocutory
...