IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-41275
_____________________
ISLANDER EAST RENTAL PROGRAM; J RAY RILEY,
Plaintiffs-Appellants,
v.
LOWRY BARFIELD; ELIZABETH PARR; JAMES B PENNY; LOCKWOOD
SEEGAR; ISLANDER EAST ASSOCIATION; BILL FERGUSON,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
(G-95-CV-404)
_________________________________________________________________
March 24, 1998
Before REYNALDO G. GARZA, KING, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Plaintiffs-appellants Islander East Rental Program and J.
Ray Riley appeal the magistrate judge’s entry of a permanent
injunction against them, his decision not to issue a civil
contempt citation for Defendants’ alleged violation of a consent
preliminary injunction, and his denial of their motion for new
trial. We affirm the magistrate judge’s judgment declining to
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
issue a civil contempt citation and denying Plaintiffs’ motion
for new trial. We affirm the permanent injunction except for
Paragraphs (e) and (g) thereof and except insofar as it fails to
include a statement of reasons justifying the issuance thereof,
and we remand to the magistrate judge with instructions to revise
or delete Paragraphs (e) and (g) and to add to the injunction a
statement of reasons justifying its issuance as required by
Federal Rule of Civil Procedure 65(d).
I. FACTUAL & PROCEDURAL BACKGROUND
Plaintiff-appellant Islander East Rental Program (the
Program) has, since 1977, been responsible for marketing and
administering a rental pool consisting of some of the condominium
units located in the Islander East condominium development in
Galveston, Texas. The Program has a four-member executive
committee that administers the pool and markets the rental units,
and it has maintained its offices in the main lobby of the
Islander East development. Plaintiff-appellant J. Ray Riley has
been the chairman of the Program’s executive committee since its
inception. Riley and the Program (collectively, Plaintiffs)
contend that the Program is an autonomous organization that is
fully independent; they characterize the Program as a joint
venture between its members.
Defendants-appellees the Islander East Association (the
Association) and its five board members (collectively,
2
Defendants) serve as the condominium owners association and
administer and enforce the condominium agreement that governs the
Islander East development. Until 1977, the Association operated
a rental pool program, and Defendants contend that the Program is
a subordinate part of the Association that is essentially a
continuation of the Association’s earlier rental pool.
On July 2, 1995, the Association board voted to abolish the
executive committee of the Program and take over the
administration of the Program directly. Four days later, the
Program filed this action1 alleging claims of civil conspiracy,
trademark and service mark infringement, unfair competition,
misappropriation, conversion, breach of duty of good faith, and
tortious interference with business relationships. The
Association counterclaimed, alleging similar injuries and
requesting a declaratory judgment that it owned the Islander East
mark. Both sides sought a preliminary injunction, and the
district court therefore instructed the parties to mutually
propose an injunction to bind each of them until the matter was
resolved. On August 2, 1995, with the consent of the parties,
the district court entered a preliminary injunction barring all
parties from using the Islander East mark in relation to
condominium rentals.
1
Riley was later added to the action as a separate
plaintiff.
3
By agreement, the case was thereafter tried before a
magistrate judge who bifurcated the trial. The first part was
tried to the jury, and the magistrate judge limited the evidence
to events that took place prior to the entry of the consent
preliminary injunction on August 2, 1995. He then entered a
directed verdict for the Program on all of the Association’s
counterclaims except the claim relating to ownership of the mark,
and the jury thereafter determined that the Association owned the
mark.
The second part of the trial involved whether the Program
was entitled to compensatory damages for Defendants’ alleged
violations of the preliminary injunction and whether the
injunction was wrongfully issued. Because the jury determined
that the Association owned the Islander East mark, the magistrate
judge declined to enter a civil contempt citation against
Defendants. Neither party took any money from the judgment, and
the court dissolved the preliminary injunction.
The magistrate judge’s final judgment included the following
permanent injunction against Plaintiffs:
(a) From using or commercially exploiting any of the
service marks, trademarks and trade names of the
Islander East Association consisting of “Islander East”
or any other service mark, trademark or trade name
alone or in combination with any design or logo,
relating to condominium rental services;
(b) From undertaking any activity which falsely tends
to represent the services of the Islander East
Rental Program or J. Ray Riley as those of the
Islander East Association, or activities that are
4
likely to cause confusion or mistake in the mind
of the public, or will cause consumers to believe
that the services of the Islander East Rental
Program or J. Ray Riley are sponsored or somehow
affiliated with the services of the Islander East
Association;
(c) From undertaking any activity which disparages or
tends to diminish or erode the public’s
recognition of the Islander East Association’s
service marks, trademarks and trade names,
including, in whole or in part, “Islander East”
and design or logo;
(d) From passing off or assisting others in selling or
passing off the services of the Islander East
Rental Program and J. Ray Riley as those of the
Islander East Association;
(e) From interfering in any way with the continued
operation of any condominium rental program
operated by the Islander East Association;
(f) From interfering with or diverting reservations
booked through any condominium rental program
operated by the Islander East Association;
(g) From interfering with or otherwise threatening the
participants in any condominium rental program
operated by the Islander East Association; and
(h) From interfering with or otherwise threatening any
officers, directors, or employees of the Islander
East Association in connection with the operation
of any condominium rental program.
Following entry of judgment, Plaintiffs moved for a new
trial, and the magistrate judge denied their motion. Plaintiffs
now appeal the permanent injunction, the court’s decision not to
issue a civil contempt citation for the Association’s alleged
violation of the preliminary injunction, and the denial of their
motion for new trial.
5
II. STANDARD OF REVIEW
We apply the same standard of review to the findings and
conclusions of the magistrate judge that we would apply to a
decision of the district court. Taylor v. Domestic Remodeling,
Inc., 97 F.3d 96, 98 (5th Cir. 1996). “Conclusions of law made
by the magistrate judge are therefore subject to de novo review
while findings of fact made by the magistrate judge are upheld
unless such findings are clearly erroneous.” Id.
III. DISCUSSION
A. Permanent Injunction
Plaintiffs contend that the magistrate judge abused his
discretion in entering the permanent injunction because it was
not based “on any established principles of law” or on “any
factual findings relevant to whether injunctive relief should
issue.” Plaintiffs further argue that the injunction violates
the requirements of Federal Rule of Civil Procedure 65(d) because
it is not sufficiently specific and the reasons for its issuance
are not set forth. They insist that the order is so vague that
it is impossible to discern what they are prohibited from doing.
Specifically, Plaintiffs point to subparagraph (g) of the
injunction, which states, in part, that they are prohibited from
“interfering with or otherwise threatening the participants in
any condominium rental program operated by the Islander East
Association.” Plaintiffs argue that this language may serve to
6
prevent them from enforcing their rights and thus creates a
“second class” category of homeowners.
Defendants respond that the district court was justified in
entering the permanent injunction because it issued a declaratory
judgment that the Islander East mark belonged to the Association,
and 28 U.S.C. § 2202 states that, “[f]urther necessary or proper
relief based on a declaratory judgment or decree may be granted,
after reasonable notice and hearing, against any adverse party
whose rights have been determined by such judgment.” 28 U.S.C.
§ 2202. They contend that the magistrate judge did not abuse his
discretion in finding that a permanent injunction was warranted.
Defendants further argue that the injunction is not unreasonably
vague.
We review a district court’s grant or denial of a permanent
injunction for abuse of discretion. Peaches Entertainment Corp.
v. Entertainment Repertoire Assocs., Inc., 62 F.3d 690, 693 (5th
Cir. 1995).
The district court abuses its discretion if it (1)
relies on clearly erroneous factual findings when
deciding to grant or deny the permanent injunction (2)
relies on erroneous conclusions of law when deciding to
grant or deny the permanent injunction, or (3)
misapplies the factual or legal conclusions when
fashioning its injunctive relief.
Id.
A district court may issue a permanent injunction where
there is a real danger that the act prohibited by the injunction
would occur in its absence and will cause injury to the party
7
requesting the injunction. See 11A CHARLES ALAN WRIGHT ET AL.,
FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2942, at 45-47 (1995). The
form of the injunction must follow Federal Rule of Civil
Procedure 65(d), which requires that “[e]very order granting an
injunction . . . shall set forth the reasons for its issuance;
shall be specific in terms; shall describe in reasonable detail,
and not by reference to the complaint or other document, the act
or acts sought to be restrained.” FED. R. CIV. P. 65(d).
The requirements of Rule 65(d) are not purely
technical, but serve to “prevent uncertainty and
confusion” by those faced with injunctive orders and to
“avoid the possible founding of a contempt citation on
a decree too vague to be understood,” as well as to
facilitate informed and intelligent appellate review.
Citizen Band Potawatomi Indian Tribe of Okla. v. Oklahoma Tax
Comm’n, 969 F.2d 943, 946 n.3 (10th Cir. 1992) (quoting Schmidt
v. Lessard, 414 U.S. 473, 476 (1974) (per curiam)). Although the
requirements of Rule 65(d) are mandatory, elaborate detail is
unnecessary; we have explained that “[a]n injunction must simply
be framed so that those enjoined will know what conduct the court
has prohibited.” Meyer v. Brown & Root Constr. Co., 661 F.2d
369, 373 (5th Cir. 1981).
Having reviewed the record and the briefs in this case, we
are persuaded that the magistrate was justified in deciding to
enter a permanent injunction. Cf. Seattle-First Nat’l Bank v.
Manges, 900 F.2d 795, 800 (5th Cir. 1990). Nevertheless, the
“no-reference requirement [of Rule 65(d)] has been strictly
8
construed in this circuit to require that parties be able to
interpret the injunction from the four corners of the order as
required by Rule 65(d).” Id. (alteration in original and
internal citations and quotation marks omitted); see also
Landmark Land Co. v. Office of Thrift Supervision, 990 F.2d 807,
811 (5th Cir. 1993) (vacating and remanding an injunction based
on the district court’s failure to comply with Rules 52(a) and
65(d) despite the appellate court’s conclusion that the district
court did not abuse its discretion in granting the injunction).
Because the injunction entered in this case does not “set forth
the reasons for its issuance,” we conclude that it fails to
conform to Rule 65(d) and therefore must be remanded to the
district court for entry of such reasons. FED. R. CIV. P. 65(d).
Turning to the content of the injunction, we conclude that
Paragraphs (a) through (d) are clear enough to notify Plaintiffs
as to what actions are prohibited. Paragraph (a) of the
injunction precludes Plaintiffs from using any service marks,
trademarks, or trade names belonging to the Association; it does
not prevent Plaintiffs from using any different or unrelated
service mark, trademark, or trade name. Similarly, Paragraphs
(b) through (d) specifically prevent Plaintiffs from utilizing
the Islander East mark or from representing themselves as related
to the Association. In addition, Paragraph (f) is sufficiently
specific in that it focuses on the narrow issue of interfering
with or diverting reservations from the Association’s rental
9
program. We do not read Paragraph (f) as prohibiting any lawful
competition with the Association’s rental program. Paragraph (h)
is sufficiently specific because it is narrowly tailored to
protect only “officers, directors or employees of the Islander
East Association in connection with the operation of any
condominium rental program” and does not prevent Plaintiffs from
exercising their legal rights against the named individuals
outside of the rental program context.
However, we do not think that Paragraphs (e) and (g) satisfy
Rule 65(d)’s specificity requirement. Paragraph (e) is
overbroad. Its requirement that Plaintiffs refrain from
“interfering in any way” with the operation of the rental program
fails to identify what specific actions are prohibited and
subjects Plaintiffs to possible liability for exercising legal
rights that they possess as condominium owners. See, e.g.,
Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 52 (2d Cir. 1996)
(vacating a paragraph of an injunction that left the appellant in
the position of “risk[ing] contempt if she guesses wrong about
what constitutes a ‘reasonably needful action’”); Federal
Election Comm’n v. Furgatch, 869 F.2d 1256, 1263 (9th Cir. 1989)
(remanding an injunction to the district court for clarification
of what conduct was prohibited because the phrase “similar
violations” was impermissibly vague); Payne v. Travenol Labs.,
Inc., 565 F.2d 895, 897-98 (5th Cir. 1978) (finding that an
injunction paragraph prohibiting the defendants from
10
“discriminating” failed to satisfy the specificity requirement of
Rule 65(d)); Wynn Oil Co. v. Purolator Chem. Corp., 536 F.2d 84,
86 (5th Cir. 1976) (finding that a portion of an injunction
prohibiting the appellants from “slandering and disparaging the
Wynn Oil Co. and its products” was “impermissibly vague”).
Paragraph (g) is overbroad because it would prohibit
Plaintiffs from taking any action against any participant in the
Association’s rental program, including, for example, a
meritorious suit brought against one of the participants to
recover a debt and having nothing to do with the Islander East
development. Paragraph (g) should be reformed so as to specify
that it prohibits Plaintiffs from interfering with or threatening
the participants in the Association’s rental program on the basis
of or in connection with their participation in any condominium
rental program.2 See Peregrine Myanmar Ltd., 89 F.3d at 51-52
(upholding a portion of an injunction banning the appellant from
“‘communicating with MAFCO’s officers, directors, employees, and
agents on matters pertaining to MAFCO or plaintiffs’” because it
was narrowly tailored to prohibit only interference with the
company’s management communications).
2
We note that the inclusion of such language in
Paragraph (h) is what saves it from the same failing. See, e.g.,
Peregrine Myanmar Ltd., 89 F.3d at 51 (upholding a paragraph of
an injunction prohibiting the defendant from “interfer[ing] with
‘plaintiffs’ business or plaintiffs’ interest in MAFCO’”).
11
On remand, the district court is instructed to reform the
injunction so as to “set forth the reasons for its issuance” as
required by Rule 65(d). FED. R. CIV. P. 65(d). In addition, the
court is instructed to either rewrite Paragraphs (e) and (g) to
conform with the specificity requirement of Rule 65(d) or delete
them altogether.3 Until then, with the exceptions of Paragraphs
(e) and (g), the injunction shall continue in force according to
its interpretation in this opinion. See Seattle-First Nat’l
Bank, 900 F.2d at 800.
B. Preliminary Injunction
Plaintiffs next argue that the district court erred in
refusing to give them the opportunity to prove that Defendants
violated the preliminary injunction and that Plaintiffs were
damaged as a result.4
3
While we have attempted to identify the problems with
these paragraphs as written and have made some suggestions as to
how they might be reformed, we emphasize that, on remand, the is
free to exercise its discretion (within the bounds of Rule 65(d)
and circuit precedent) in reforming these paragraphs to address
the problems that it identifies as warranting the injunction.
See Young v. Pierce, 822 F.2d 1368, 1374 (5th Cir. 1987) (“It is
properly the role of the district court, familiar as it is with
this case, to attempt the modification of the injunction to
accord with the dictates of Rule 65(d).”).
4
Plaintiffs also contend that they were denied their
Seventh Amendment right to a jury trial on this issue. This
argument lacks merit. “There is no right to a trial by jury for
the violation of an order of court when the proceeding is for
civil contempt unless a statute so provides.” 11A WRIGHT, supra,
§ 2960, at 379 (citing Shillitani v. United States, 384 U.S. 364
(1966)). Plaintiffs have identified no statutory authority
providing a right to a jury trial in the instant situation.
12
We review a district court’s grant or denial of relief in a
civil contempt proceeding for abuse of discretion. Washington-
Baltimore Newspaper Guild, Local 35 v. Washington Post Co., 626
F.2d 1029, 1031 (D.C. Cir. 1980). As we have explained,
Compensatory civil contempt reimburses the injured
party for the losses and expenses incurred because of
his adversary’s non-compliance. . . .
. . . .
A party held only in civil contempt by way of
compensation to his adversary will be absolved of
liability if the court order was invalid or erroneous.
The adversary should realize no gain from orders to
which he was not entitled.
Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 827-28 (5th Cir.
1976); see also United States v. United Mine Workers of Am., 330
U.S. 258, 295 (1947) (noting that, although a party “may be
punished for criminal contempt for disobedience of an order later
set aside on appeal,” it does not follow that “the plaintiff in
the action may profit by way of a fine imposed in a simultaneous
proceeding for civil contempt based upon a violation of the same
order”). In this case, Plaintiffs seek compensatory civil
contempt damages for Defendants’ alleged violations of the
preliminary injunction. The magistrate judge determined that
Plaintiffs were not entitled to civil contempt damages due to the
outcome of the suit regarding the ownership of the Islander East
mark. We agree. As the resolution of the main case indicates
that Plaintiffs were not entitled to use the Islander East mark
13
and that the mark belonged to Defendants, Plaintiffs have not
suffered “losses flowing from [Defendants’ alleged]
noncompliance” with the injunction and therefore are not entitled
to recover damages on that basis. Norman Bridge, 529 F.2d at
827.5
5
Plaintiffs contend that we should treat this injunction
differently than the one at issue in Norman Bridge because the
parties in this case consented to the injunction. They urge this
court to follow the Third Circuit’s decision in American
Greetings Corp. v. Dan-Dee Imports, Inc., 807 F.2d 1136 (3d Cir.
1986). American Greetings involved a suit brought by a marketer
of a line of teddy bears against a competitor alleging various
copyright and trademark infringements. Id. at 1138. The
district court entered an injunction against the defendant,
prohibiting it from marketing its line of teddy bears. Id. The
defendant later consented to an order prohibiting it from
distributing certain types of related stuffed animals pending a
hearing on the broadening or narrowing of the original
injunction. Id. Thereafter, the defendant continued to market a
“plush dog with tummy graphics,” and the district court found it
in contempt of the consent order. Id. at 1140. On appeal, the
Third Circuit held that the defendant could not challenge the
civil contempt citation by challenging the validity of an
injunction to which it had consented. Id. at 1148.
American Greetings is inapposite. In American Greetings the
district court exercised its discretion to issue a civil contempt
citation where the defendant disobeyed an injunction to which it
had consented. Id. In contrast, in this case the magistrate
judge exercised his discretion not to issue a civil contempt
citation because the main case resulted in a determination that
the Islander East mark belonged to the Association and not to the
Program. Defendants are not arguing that because the injunction
was invalid the magistrate judge could not have held them in
civil contempt; rather they are simply arguing that the
magistrate judge did not abuse its discretion in choosing not to
enter a civil contempt citation against them. The Third
Circuit’s decision in American Greetings does not comment on
whether a district court abuses its discretion in deciding not to
issue a civil contempt citation where a party disobeys a
preliminary injunction that was entered with their consent and
that was later found to have been erroneous.
14
C. Motion for New Trial
Plaintiffs next argue that the magistrate judge erred in
denying their motion for new trial. They contend that the jury’s
verdict finding that the Association owns the Islander East mark
and finding for Defendants on the other counts of wrongdoing was
clearly erroneous.
A grant of a new trial is left to the broad discretion of
the trial court, but that discretion is “tempered by the
deference due to a jury.” Scott v. Monsanto Co., 868 F.2d 786,
789 (5th Cir. 1989). We review a district court’s denial of a
motion for new trial for abuse of discretion, thereby recognizing
“the deference that is due the trial court’s first-hand
experience of the witnesses, their demeanor, and the over-all
context of the trial.” Dawson v. Wal-Mart Stores, Inc., 978 F.2d
205, 208 (5th Cir. 1992). As we have explained,
The reviewing court gives somewhat greater deference
when the district court has denied the new trial motion
and left the jury’s determinations undisturbed. New
trials should not be granted on evidentiary grounds
unless, at a minimum, the verdict is against the great
weight of the evidence.
Id. (internal citations omitted). We review all of the evidence
presented in the light most favorable to the jury’s verdict, and
we will not overturn it unless the evidence “points ‘so strongly
and overwhelmingly in favor of one party that the court believes
that reasonable men could not arrive at a contrary
[conclusion].’” Jones v. Wal-Mart Stores, Inc., 870 F.2d 982,
15
987 (5th Cir. 1989) (alteration in original). Thus, mere
conflicting evidence or evidence that would support a different
conclusion by the jury cannot serve as the grounds for granting a
new trial. See Dawson, 978 F.2d at 208. “Where the jury could
have reached a number of different conclusions, all of which
would have sufficient support based on the evidence, the jury’s
findings will be upheld.” Id. Having reviewed the record and
the briefs on appeal, we conclude that sufficient evidence
existed to support the jury’s verdict, and we therefore hold that
the district court did not abuse its discretion in denying
Plaintiffs’ motion for new trial.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
magistrate judge declining to issue a civil contempt citation and
denying Plaintiffs’ motion for new trial. We AFFIRM the
permanent injunction except for Paragraphs (e) and (g) thereof
and except insofar as it fails to include a statement of reasons
justifying the issuance thereof, and we REMAND to the magistrate
judge with instructions to revise or delete Paragraphs (e) and
(g) and to add a statement of reasons justifying the issuance of
the permanent injunction as required by Rule 65(d). The
magistrate judge is ordered to make the necessary revisions and
addition within a period of thirty days from the date of entry of
judgment or from the date of entry of any order on rehearing,
16
whichever comes later. Any further appeal shall be on an
expedited basis and shall be to this panel. During the remand
and prior to the entry of judgment by the magistrate judge on the
revised permanent injunction, the existing permanent injunction,
excepting only Paragraphs (e) and (g) thereof, shall continue in
force in accordance with the interpretation thereof contained in
this opinion.
AFFIRMED in part and REMANDED. Costs shall be borne by
Plaintiffs.
17