Getty Petroleum Corp. v. Aris Getty, Inc.

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

No. 94-2241

GETTY PETROLEUM CORPORATION,

Plaintiff, Appellee,

v.

ARIS GETTY, INC., ET AL.,

Defendants, Appellees.

J.P. NOONAN TRANSPORTATION, INC.,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Douglas P. Woodlock, U.S. District Judge]

Before

Boudin, Circuit Judge,

Aldrich and Bownes, Senior Circuit Judges.

Natasha C. Lisman with whom William L. Boesch and Sugarman,

Rogers, Barshak & Cohen, P.C. were on brief for appellant.

Dimitrios Ioannidis with whom Michael S. Field, Beth Pirro Cook

and Field & Schultz were on brief for appellees Aris Getty, Inc., et

al.

June 13, 1995

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ALDRICH, Senior Circuit Judge. Two defendants,

J.P. Noonan Transportation, Inc., a common carrier, and Aris

Getty, Inc., jointly with its owner, George Varelis ("Aris"),

were found liable to Getty Petroleum Corporation ("Getty"), a

well-known vendor of gasoline, under the Lanham Act, 15

U.S.C. 1114 and 1125, for trademark infringement.

Plaintiff's damages were settled via separate negotiations

with each defendant. Noonan then cross-claimed against Aris

for indemnification. In a thorough opinion the district

court disagreed and granted summary judgment for Aris. We

affirm.

The facts are simple. In 1981 Varelis formed Aris

Getty, Inc., and was licensed by Getty to operate a Getty

filling station. It prominently displayed the usual Getty

pole sign, and its gasoline pumps and service attendants'

uniforms bore the Getty name and marks. Aris had an

arrangement with a local distributor to supply it with Getty

gasoline. In 1984 Aris terminated its relationship with

Getty and thereafter began to purchase unbranded gasoline

through J.P. Noonan from another distributor. Except to

change the markings on its pumps to "Aris Gas," Aris made no

change in the appearance of its station, signs, or employee

uniforms.

The court found that Noonan "knowingly delivered

unbranded gasoline to Aris Getty" while fully aware that Aris

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"was not an authorized Getty franchise." Although it murmurs

at the court's conclusion, Noonan knew that many Aris

customers believed they were receiving Getty gasoline. Any

other contention would be fanciful. Thus, as the court

found, Noonan, jointly with Aris, violated the Lanham Act, 15

U.S.C. 1114(1), and was contributorially responsible.

Inwood Laboratories Inc. v. Ives Laboratories, Inc., 456 U.S.

844 (1982).

[L]iability for trademark
infringement can extend beyond those who
actually mislabel goods with the mark of
another. Even if a manufacturer does not
directly control others in the chain of
distribution, it can be held responsible
for their infringing activities under
certain circumstances. Thus, if a
manufacturer or distributor intentionally
induces another to infringe a trademark,
or if it continues to supply its product
to one whom it knows or has reason to
know is engaging in trademark
infringement, the manufacturer or
distributor is contributorially
responsible for any harm done as a result
of the deceit.

456 U.S. at 853-54.

It is true that, as a distributor, Noonan did not

have title to the gasoline. However, it had, and supplied,

an essential factor -- physical possession of the property to

which the trademark was to be attached. Liability -- which

is not questioned -- was thus direct, for an affirmative act,

and not merely vicarious by operation of law for the act of

another.

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In this circumstance Noonan's much cited case of

Garbincius v. Boston Edison Co., 621 F.2d 1171 (1st Cir.

1980), is of no assistance to it, but quite the contrary. In

general indemnity is not allowed when liability is based upon

one's own fault.1

Noonan claims two other strings to its bow, both

based on the great disparity between Aris's profits and its

own meager ones. We assume the disparity.2 However, the

Massachusetts court's dictum of a claimed indemnitee's fault

being disregardable in "exceptional cases" is limited to

fault that is "insignificant in relation to that of the

indemnitor." Rathbun v. Western Massachusetts Electric Co.,

395 Mass. 361, 364, 479 N.E.2d 1383, 1385 (1985). We regard

this as relating to conduct, not to profits. We could not

label wrongful delivery for five years insignificant.

Equally we see no basis for Noonan's claim that its small

1. Indemnity is permitted only when one does
not join in the negligent act but is
exposed to derivative or vicarious
liability for the wrongful act of
another. In such cases the court has
held that plaintiffs in the indemnity
actions had no participation in the
negligence of the defendants.

Garbincius, 621 F.2d at 1176 (citation omitted).

2. How Aris succeeded in obtaining a much smaller settlement
figure than Noonan escapes us, but we think it irrelevant.
These were independent agreements, separately arrived at, and
there is no question of Noonan's payment having reduced
Aris's.

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profits were "special circumstances" that implied a right of

indemnity. If Noonan wanted protection it could have asked

for it as part of its contract.

Affirmed.

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