Martin's Herend Imports, Inc. v. Diamond & Gem Trading United States of America Co.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT
_______________

m 98-20519
_______________

MARTIN’S HEREND IMPORTS, INC.,
and
HERENDI PORCELANGYAR,

Plaintiffs-Appellees,

VERSUS

DIAMOND & GEM TRADING UNITED STATES OF AMERICA COMPANY,
JUDITH JUHASZ, and FRANK JUHASZ,

Defendants-Appellants,

******************************
_______________

m 98-20892
_______________

MARTIN’S HEREND IMPORTS, INC.,
and
HERENDI PORCELANGYAR,

Plaintiffs-Counter-Defendants-
Appellees,

VERSUS

DIAMOND & GEM TRADING UNITED STATES OF AMERICA COMPANY,
JUDITH JUHASZ, and FRANK JUHASZ,

Defendants-Counter-Claimants-
 Appellants,

LOWELL T. CAGE, Trustee,

Intervenor Defendant-
Appellant.

_________________________

Appeals from the United States District Court
for the Southern District of Texas
_________________________

November 9, 1999

Before GARWOOD, SMITH, and part, and remand.
BENAVIDES, Circuit Judges.
I.
JERRY E. SMITH, Circuit Judge: This matter began with a dispute over the
import and sale of high-end porcelain products
These consolidated appeals involve a manufactured by Herendi, a Hungarian
trademark infringement dispute and a company that owns a federally registered
counterclaim for alleged wrongful seizure. trademark that consists of the hand-painted
Judit h and Frank Juhasz and their “Herend” name and design. Martin’s is a U.S.
proprietorship, Diamond & Gem Trading corporation that owns the exclusive right to
United States of America Company import Herendi’s products into the United
(collectively “Diamond & Gem”), appeal (1) States. Frank and Judith Juhasz owned and
the denial of their motion to amend and clarify operated Diamond & Gem, a Houston
the effect of a permanent injunction entered proprietorship that sold, among other things,
against them in the trademark dispute; (2) a porcelain pieces bearing the Herend trade-
partial summary judgment in favor of Martin’s mark. Diamond & Gem acquired the pieces
Herend Imports, Inc. (“Martin’s”), and Heren- from American and foreign sources, including
di Porcelangyar (“Herendi”) that Martin’s Herendi’s stores in Hungary, and sold them in
lacked bad faith in obtaining a seizure order the United States. Among the Herend pieces
for Diamond & Gem’s goods; (3) a jury in- Diamond & Gem sold were pieces that
struction that Diamond & Gem had the burden Martin’s did not offer for sale in the United
of proof on its wrongful seizure counterclaim; States.
and (4) an order, given on remand after a prior
appeal, limiting Diamond & Gem to the II.
witnesses, issues, and discovery it had offered Martin’s sued Diamond & Gem, alleging,
at the first trial. We affirm in part, reverse in inter alia, trademark infringement, and

2
obtained an ex parte temporary restraining spite failing to request additional discovery at
order against Diamond & Gem and a seizure that time, Diamond & Gem subsequently made
order based, in part, on affidavit evidence that numerous attempts to introduce new evidence,
Diamond & Gem had sold counterfeit Herend which the court denied.
porcelain goods. Counsel for Martin’s, along
with U.S. marshals, seized porcelain pieces Diamond & Gem moved for leave to file a
and records from Diamond & Gem’s business First Amended Counterclaim to seek
premises. declaratory relief with respect to the scope of
the injunction. The court denied the motion,
Diamond & Gem counterclaimed, alleging then entered the Amended Permanent
that the seizure was wrongful. Following the Injunction; Diamond & Gem appealed that and
presentation of Martin’s’s evidence, the court filed an unsuccessful petition for writ of
granted summary judgment for Martin’s on the mandamus.
wrongful seizure counterclaim. The jury then
returned a verdict in favor of Martin’s for Martin’s filed a motion for partial summary,
$685,000 on the trademark infringement claim, judgment alleging that it had not acted in bad
and the court entered final judgment and a per- faith as a matter of law at the ex parte hearing
manent injunction against Diamond & Gem to obtain the seizure of Diamond & Gem’s
and later entered a contempt order against merchandise. The court granted the summary
Diamond & Gem for violating the terms of the judgment motion on the issue of bad faith and
injunction. held that Diamond & Gem was not entitled to
summary judgment establishing the scope of
After entry of final judgment, Diamond & the injunction based on its denied First
Gem filed for bankruptcy protection under Amended Counterclaim and that Diamond &
chapter 7. The bankruptcy case is still Gem could not introduce any new evidence.
pending, but Lowell Cage, Trustee for
Diamond & Gem and intervenor-defendant, The wrongful seizure case went to the jury,
has also appealed the adverse judgment on the which found in favor of Martin’s. The court
wrongful seizure counterclaim. Diamond & entered final judgment incorporating the
Gem appealed, and we affirmed the judgment verdict, and Diamond & Gem appealed. We
and damage award but found the injunction consolidated Diamond & Gem’s two appeals.
too broad and remanded with instructions to
amend it. We also reversed the summary judg- III.
ment on the wrongful seizure counterclaim. Diamond & Gem appeals the denial of the
See Martin’s Herend Imports, Inc. v. motion for leave to amend to request a
Diamond & Gem Trading USA, Co., 112 F.3d declaratory judgment that “all Herend
1296, 1307-08 (5th Cir. 1997) (“Martin’s I”). porcelain found in the United States is
presumed to have been adopted by Herend.”
On remand, the district court asked the par- Diamond & Gem also contends that the
ties which issues they felt still needed to be re- district court erred in its modification of the
solved. Diamond & Gem identified for retrial permanent injunction to comply with Martin’s
the wrongful seizure counterclaim and the I.
language of the “over broad” injunction. De-

3
 A. from selling only those goods that Martin’s has
As an initial matter, we must consider ever approved for importation and sale in this
whether we have jurisdiction to hear an im- country. Thus, the injunction is sufficiently
mediate appeal of the injunction. Under altered to satisfy § 1292(a)(1).
§ 1292(a)(1), the modification of an injunction
is “independently appealable.” See Western Martin’s objects to our jurisdiction under
Water Man v. Brown, 40 F.3d 105, 108 n.1 § 1292(a)(1) by seeking to draw a distinction
(5th Cir. 1995). And if we have jurisdiction bet ween permanent and preliminary
over the modification of the injunction, we injunctions, arguing that only the latter are
also may review the denial of Diamond & subject to interlocutory appeal. But neither
Gem’s motion to amend and clarify the effect § 1292(a)(1) nor Fifth Circuit precedent draws
of the injunction. See id.1 any distinction between preliminary and
permanent injunctions in this regard.
For us to have jurisdiction over this
interlocutory appeal, the district court’s order In Association of Co-Operative Members,
must “modify” the earlier order, not merely Inc. v. Farmland Indus., Inc., 684 F.2d 1134
“interpret” it. See In re Ingram Towing Co., (5th Cir. 1982), we held that jurisdiction was
59 F.3d 513, 516 (5th Cir. 1995). The line proper and noted that § 1292(a)(1), “on its
between modification and interpretation is a face,” provided jurisdiction over the issuance
functional one, and the dispositive issue is of a permanent injunction. See id. at 1137-38.
whether “the ruling appealed from can fairly be Thus, we properly have jurisdiction under
said to have changed the underlying decree in § 1292(a)(1).
a jurisdictionally significant way.” See Sierra
Club v. Marsh, 907 F.2d 210, 212 (1st Cir. B.
1990). Before the district court ruled on Diamond
& Gem’s motion to amend and clarify the
This is unlike the circumstance in Ingram injunction, Diamond & Gem filed a second
Towing, in which we lacked jurisdiction motion for partial summary judgment, seeking
because the district court had only “explained” to have the court find, as a matter of law, that
the coverage of the earlier injunction. See all Herend porcelain manufactured by the Her-
Ingram Towing, 59 F.3d at 516. Here, the endi factory had been approved by Martin’s or
district court altered the language of the Herendi, or both, for importation into and sale
injunction to “relax its prohibitions” against in the United States. In support of this
Diamond & Gem. See Sierra Club, 907 F.2d motion, Diamond & Gem sought to introduce
at 212. Specifically, the court attempted to declarations by Frank Juhasz and Edwin
follow this court’s mandate to limit the Pound, a sales representative who had worked
injunction’s reach to prohibit Diamond & Gem with Martin’s for about thirteen years.

According to Diamond & Gem, Pound’s
1
See also Mercury Motor Express, Inc. v. testimony “suggests that all of the porcelain
Brinke, 475 F.2d 1086, 1091 (5th Cir. 1973) manufactured by the [Herendi] factory over
(holding that court with interlocutory jurisdiction time has been approved for importation and
over an injunctive order pursuant to § 1292(a)(1) sale in the United States” and also supports
may decide other aspects of the order).

4
Diamond & Gem’s theory, during the first asserting that “all Herend porcelain found in
trial, that anything Diamond & Gem, a retailer the United States is presumed to have been
in a secondary market, purchased in the United approved.”
States “should be presumed” to have come
from Martin’s. The district court denied the Diamond & Gem is merely attempting to
motion to amend. argue the same theory that failed in the earlier
trademark infringement disputeSSthat it did
We review denials of leave to amend for not in fact infringe so long as it sold goods
abuse of discretion. See Dussouy v. Gulf bought in the United States. And Diamond &
Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir. Gem seeks to introduce new evidence to
1981). In the context of motions to amend support this theory. But given that this is an
pleadings, “discretion” may be misleading, impermissible attempt to relitigate which type
because FED. R. CIV. P. 15(a) “evinces a bias of Herend pieces Diamond & Gem can
in favor of granting leave to amend.” Id. permissibly sell, the court did not abuse its
Indeed, “unless there is a substantial reason,” discretion in denying the motion to amend.
such as undue delay, bad faith, dilatory motive,
or undue prejudice to the opposing party, “the In Martin’s I, we agreed that Martin’s was
discretion of the district court is not broad entitled to injunctive relief, and, accordingly,
enough to permit denial.” Id. at 598 (citing we affirmed the summary judgment in favor of
Lone Star Motor Import v. Citroen Cars, 288 Martin’s’s trademark infringement claim. See
F.2d 69, 75 (5th Cir. 1961)).2 id. at 1299. The “law of the case” doctrine
counsels that “when a court decides upon a
The problem with Diamond & Gem’s mo- rule of law, that decision should continue to
tion to amend, however, is that through the govern the same issues in subsequent stages of
guise of clarifying the scope of the injunction, the same case.” Schiro v. Farley, 510 U.S.
Diamond & Gem seeks to go far beyond the 222, 232 (1994).3 This is a new appeal, but
command of Martin’s I. There, we held that the same case; accordingly, Diamond & Gem
Diamond & Gem would be “allowed to sell is precluded from offering new evidence on
any Herend piece offered in a Martin’s issues already decided and affirmed.
catalogue” and would be “free to sell any
individual piece of the same quality from the A district court acts within its discretion
same product line” if Martin’s “ever approved when dismissing a motion to amend that is
a piece for importation and sale in this frivolous or futile.4 Thus, because Diamond &
country.” See Martin’s I, 112 F.3d at 1308.
In its amended counterclaim, Diamond & Gem
3
offers a much more expansive reading, Accord Copeland v. Merrill Lynch & Co.,
47 F.3d 1415, 1423 (5th Cir. 1995) (observing that
a final judgment on certain issues should continue
to govern those issues at later stages of the case).
2
See also Avatar Exploration, Inc. v. Chevron,
4
U.S.A., Inc., 933 F.2d 314, 320 (5th Cir. 1991) See Jamieson v. Shaw, 772 F.2d 1205,
(observing that while leave to amend is freely 1209-11 (5th Cir. 1985) (observing that amend-
given, it is not automatic, and denial is proper if ments are futile if the theory presented lacks legal
based on sufficient circumstances, such as foundation or was presented in prior version of
untimeliness and futility). (continued...)

5
Gem could not relitigate the issues decided in While injunctions should be specific, the
Martin’s I, the court did not abuse its command for specificity is not absolute; it
discretion in denying the motion to amend. merely requires injunctions to be “framed so
This is so notwithstanding that the court did that those enjoined will know what conduct
not explain the reasons for its denial.5 the court has prohibited.” Meyer v. Brown &
C. Root Constr. Co., 661 F.2d 369, 373 (5th Cir.
Diamond & Gem contends that the district 1981). “The mere fact that . . . interpretation
court erred in its modification of the injunction is necessary does not render the injunction so
to conform to Martin’s I. The relevant vague and ambiguous that a party cannot
portion of the modified injunction reads: know what is expected of him.” United States
v. Greyhound Corp., 508 F.2d 529, 536 (7th
[Diamond & Gem is enjoined from] dis- Cir. 1974).
tributing, advertising or selling in the
United States products which are This approach seems reasonable. It is
physically different from but which bear enough that the phrase “physically different”
the same federally registered trademark will be understood by both parties in the
No. 1,816,915 as genuine Herend context of the many procedural skirmishes in
products which have ever been sold by the life of this case and in the context of
the Plaintiffs (or either them) in the Martin’s I.
United States or which are of the same
quality from the same product line as The other deficiencies, however, are more
those genuine Herend products which problematic. Diamond & Gem complains of
have ever been sold by the plaintiffs or the omission of a crucial “not” that should
either of them in the United States. have been inserted before “of the same
quality.” Next, it argues that the injunction
Diamond & Gem points to several contains a confusing string of “which” clauses
deficiencies and inaccuracies in the injunction. that fail to specify the type of products
First, it complains that the modified injunction (prohibited or allowed) that each clause
uses t he term “physically different” concerns. Moreover, Diamond & Gem points
ambiguously, and that such broad language to the injunction’s failure to mention pieces
can lead to imprecise interpretations of which imported into the United States before 1957,
products it is prohibited from selling. Martin’s which, by the terms of Martin’s I, Diamond &
responds that “physically different” becomes Gem may sell.6
something of a term of art for purposes of this
dispute. Finally, Diamond & Gem challenges the
injunction’s language that allows Diamond &
Gem to sell Herend products that are of the
4
(...continued)
complaint).
6
See Martin’s, 112 F.3d at 1304 (“[T]he
5
See Ashe v. Corley, 992 F.2d 540, 542 (5th injunction should be modified to allow the sale of
Cir. 1993) (finding district court’s failure to set out Herend pieces which were imported to this country
its reasons for denial unfortunate but not fatal before Martin’s became Herendi’s exclusive
when the reasons are ample and obvious). distributor in 1957.”).

6
same quality as the products “which have ever more restrictive than what is required by
been sold” by Martin’s. Diamond & Gem as- Martin’s I. The injunction should read “and
serts that this language is not consistent with are of the same qualit y” instead of “or which
Martin’s I, in which we stated that Diamond & are of the same quality.” As a result of the
Gem could sell any pieces “ever approved . . . discrepancies we have noted, we remand for
for importation and sale in this country,” the district court to modify the injunction.
including “any Herend piece offered in a
Martin’s catalogue.” Id. (emphasis added). IV.
After remand, Diamond & Gem reasserted
“An order granting or denying a preliminary its wrongful seizure counterclaim against
injunction will be reversed only upon a Martin’s. Martin’s moved for partial summary
showing that the district court abused its judgment to establish, inter alia, that when it
discretion,” but “legal determinations are obtained the ex parte order for the seizure, it
subject to plenary review on appeal.” did not act in bad faith as a matter of law. The
Lakedreams v. Taylor, 932 F.2d 1103, 1007 district court granted the motion, and
(5th Cir. 1991). Because in Martin’s I we Diamond & Gem appeals.
articulated a legal standard for when products
sold by Diamond & Gem would be held to We review summary judgments de novo,
infringe Martin’s’s trademark rights, the using the same standard employed by the dis-
portions of the amended permanent injunction trict court.7 Summary judgment is appropriate
that speak to those standards should be re- when there is no genuine issue of material fact
viewed de novo to ensure that they are and the moving party is entitled to judgment as
consistent with Martin’s I. We conclude that a matter of law.8 We view all factual issues in
they are not fully consistent. the light most favorable to the non-moving
party. See Chide, 974 F.2d at 656.
Diamond & Gem correctly observes that
“not” needs to be inserted before “of the same The wrongful seizure counterclaim asserted
quality” and that the injunction should permit by Diamond & Gem is predicated on
Diamond & Gem to sell pieces imported into 15 U.S.C. § 1116(d), which provides for the
this country before 1957. Moreover, because recovery of damages caused by a wrongful
the injunction requires that the products must seizure and permits recovery of punitive
have actually been “sold”SSrather than merely damages “in instances where the seizure was
“approved” or “offered in a Martin’s cata- sought in bad faith.” The legislative history of
logue”SSit places an improper limit on those the Lanham Act establishes that a seizure can
products that Diamond & Gem can permissibly
sell.

We also observe that the critical part of the 7
See, e.g., Williams v. Scott, 35 F.3d 159, 161
modified injunction proscribes Diamond & (5th Cir. 1994); Thompson v. Georgia Pac. Corp.,
Gem from involvement with the subject pro- 993 F.3d 1166, 1167-69 (5th Cir. 1993).
ducts that have ever been sold in the United
States “or which are of the same quality from 8
See FED. R. CIV. P. 56(c); Celotex Corp. v.
the same product line . . . .” This wording is Catrett, 477 U.S. 317, 322-23 (1986); King v.
Chide, 974 F.2d 653, 656 (5th Cir. 1992).

7
be wrongful if brought “in bad faith.”9 A intentionally trafficked in known counterfeits
seizure can be wrongful also if the items seized in order to file a suit.” S. REP. NO. 98-526,
are predominantly legitimate.10 Martin’s at 19. Accordingly, the court used the right
sought summary judgment only on the bad standard for finding bad faith.
faith issue, which relates to both the wrongful
seizure counterclaim and the punitive damages Diamond & Gem’s second criticism is the
claim. It did not seek summary judgment on district court’s alleged failure to consider mul-
whether any non-infringing merchandise was tiple fact issues that might rebut a finding of no
seized (though the jury subsequently found bad faith. Material facts sufficient to
that the seizure was not wrongful). overcome summary judgment are those that
affect the outcome of litigation. See Kennett-
Diamond & Gem contends that the court Murray Corp. v. Bone, 622 F.2d 887, 892 (5th
erred in granting summary judgment by Cir. 1980). Once a summary judgment motion
applying the wrong legal standard and ignoring is made, “an adverse party may not rest upon
“numerous fact issues.” These arguments are the mere allegations or denials of his pleading,
without merit. but his respo nse . . . must set forth specific
facts showing the there is a genuine issue for
First, Diamond & Gem contends that the trial.” FED. R. CIV. P. 56(e).
standard for bad faith is an objective one that
can be evinced by “anticompetitive motive” Diamond & Gem has presented no material
coupled with “knowing lack of need for a seiz- fact, or anything rising above the level of bare
ure.” Despite Diamond & Gem’s assertions, accusation, that Martin’s acted in bad faith.
there is not such a large gulf between the stan- Although Diamond & Gem spends
dard it enunciates and the one used by the dis- considerable time developing its theory that
trict court: namely, whether Martin’s sought Martin’s sought the seizure in retaliation for an
the seizure knowing it was baseless.11 The earlier dispute over counterfeiting, there is not
district court also noted that a good faith belief a single fact that tends to show Martin’s
that an operation is selling counterfeit goods obtained the seizure order with knowledge that
need not even be true: “[A] plaintiff need not it was baseless.
have conclusive proof that the defendant has
In addition, much of the evidence Diamond
& Gem points to as establishing an issue of
9
See Senate Comm. on the Judiciary, S. REP. material fact was not even submitted in
NO. 98-526, at 8 (1984), reprinted in 1984 opposition to the summary judgment motion.
U.S.C.C.A.N. 3627, 3634. As a result, this evidence, even assuming it
10
could raise a genuine issue of material fact as
See id. at 16 (“[T]he mere fact that a few to Martin’s bad faith, is irrelevant. When we
non-counterfeit items may have been seized does
consider an appeal of a summary judgment,
not make the seizure as a whole wrongful.”).
“our review is confined to an examination of
11
See S. REP. NO. 98-526, at 19 (“Should a materials before the lower court at the time the
plaintiff plead or pursue a suit when it is clear that ruling was made; subsequent materials are
the suit is baseless, however, this provision would
make the plaintiff liable in damages to the
victimized defendant.”).

8
irrelevant.”12 counterfeit goods; (2) that the “regular, estab-
lished” nature of the business required this
Diamond & Gem also criticizes the decision burden shifting; and (3) that 15 U.S.C.
to authorize seizure in the first place, but as § 1116(d)(4)(B) also requires shifting the bur-
Martin’s points out, the sole issue is whether den to Martin’s to disprove Diamond & Gem’s
Martin’s may have acted in bad faith, not a “innocence.” We disagree.
second-guessing of the seizure. Martin’s, on
the other hand, reproduces testimony from We review jury instructions for harmful er-
various company officials articulating their be- ror. Even if an instruction erroneously states
lief that Diamond & Gem was selling the applicable law or provides insufficient
counterfeit Herend porcelain. guidance, we will not disturb the judgment un-
less the error could have affected the outcome
At the ex parte hearing, Martin’s presented of the trial. See Arleth v. Freeport-McMoran
a legal memorandum in support of its request Oil & Gas Co., 2 F.3d 630, 634 (5th Cir.
for the seizure; the memorandum included the 1993); Colburn v. Bunge Towing, Inc.,
reasons for suspecting Diamond & Gem of 883 F.2d 372, 377 (5th Cir. 1989).
counterfeiting.13 The district court found no
evidence by Diamond & Gem to rebut the The district court correctly stated the law.
showing by Martin’s that it did not act in bad Diamond & Gem filed its counterclaim alleging
faith, and the record reveals none either. For that Martin’s conducted a wrongful seizure of
these reasons, the court was correct in grant- its inventory. Accordingly, Diamond & Gem
ing summary judgment in favor of Martin’s on has the burden of establishing all the elements
the issue of bad faith. of its claim. See, e.g., Rhodes v. Guiberson
Oil Tools, 75 F.3d 989, 992 (5th Cir. 1996)
V. (en banc) (holding that plaintiff had the burden
Diamond & Gem contends that the court of proof to establish her prima facie case).
erred in its instruction to the jury that it, not That burden requires that Diamond & Gem es-
Martin’s, had the burden of proof on Diamond tablish that the seizure was in fact wrongful.
& Gem’s wrongful seizure counterclaim. In
support of this contention, Diamond & Gem None of the reasons cited by Diamond &
argues (1) that Martin’s I conclusively found Gem demonstrates that Martin’s should have
that Diamond & Gem had not sold any borne the proof to disprove Diamond & Gem’s
counterclaim. First, Martin’s I did not estab-
lish that the seizure was wrongful or that the
12
Nissho-Iwai Am. Corp. v. Kline, 845 F.2d goods seized were all authentic. Instead, this
1300, 1307 (5th Cir. 1988); Ingalls Iron Works court held only that at the first trial Martin’s
Co. v. Freuhauf Corp., 518 F.2d 966, 967 (5th had not met its burden to prevail on summary
Cir. 1975).
judgment that the seizure was lawful. Second,
13
As Martin’s points out, at least one court has the fact that Diamond & Gem was an “estab-
found this kind of showing sufficient to negate lished, regular business” does not shift the bur-
claims of bad faith when seeking a seizure order. den at trial on a wrongful seizure counter-
See General Elec. Co. v. Speicher, 676 F. Supp. claim. The status of a business as “estab-
1421, 1434 (N.D. Ind. 1988), rev’d on other lished” and “regular” is relevant only as a fac-
grounds, 877 F.2d 531, 538 (7th Cir. 1989).

9
tor in determining whether a seizure order the statute or in Martin’s I shifts the burden to
should be issued at all.14 Martin’s to disprove Diamond & Gem’s coun-
terclaim, the jury instructions were proper.
The statute does not in any way, directly or
indirectly, shift the burden of proof for a VI.
wrongful counterclaim. The wrongful seizure Diamond & Gem argues that the district
provision of the Lanham Act is not in court, in the same order in which it granted
§ 1116(d)(4) but in § 1116(d)(11). Thus, Martin’s partial summary judgment, improp-
§ 1116(d)(11) and its supporting legislative erly granted a motion by Martin’s to strike or
history establish the standards by which exclude evidence Diamond & Gem sought to
wrongful seizure claims may be pursued, and introduce during the second trial on the
§ 1116(d)(4) has nothing to do with those wrongful seizure counterclaim. Diamond &
standards. Gem sought to introduce the testimony, in the
form of declarations of seven witnesses, that
Second, § 1116(d)(11) says nothing about Diamond & Gem contends would further bol-
the burden of proof and thus gives no in- ster the claim that it never sold counterfeit
dication that we should abandon the general Herend porcelain.
rule that the party asserting a claim carries the
burden of proof. Third, § 1116(d)(11) does We review refusals to reopen discovery for
not mention or refer to § 1116(d)(4) or give abuse of discretion. Keyes v. Lauga, 635 F.2d
any indication that any of § 1116(d)(4)’s pro- 330, 335 (5th Cir. Unit A Jan. 1981). The
visions were meant to govern, or even be rele- district court’s discretion in managing trials
vant to, § 1116(d)(11). “extends on remand to all areas not covered by
the higher court’s mandate.” See Cleveland v.
Fourth, § 1116(d)(4) on its face describes Piper Aircraft Corp., 985 F.2d 1438, 1449
only the findings a district court must make (10th Cir. 1993). If the court perceives “mani-
before it enters a seizure order. It thus is up to fest injustice” in limiting evidentiary proof at a
the district court, not defendants, to determine new trial, however, it may, with proper notice,
whether the evidence supports entry of those allow additional witnesses and relevant proof.
findings. The court made such findings here See id. at 1450.
and confirmed them when it entered a pre-
liminary injunction. The court granted the motion by Martin’s
because the “discovery deadline expired long
Fifth, § 1116(d)(4) says nothing about the ago” and because at the time of the 1995 trial,
burden of proof in a wrongful seizure coun- it was Diamond & Gem that sought an expe-
terclaim and thus would not support Diamond dited trial schedule. Moreover, Diamond &
& Gem’s argument even if it were intended to Gem never formally moved to have discovery
apply to § 1116(d)(11). Because nothing in reopened, and the court was skeptical that
Diamond & Gem would prevail, even if it had
filed, because it likely would not be able to
14
See S. REP. NO. 98-526, at 15 (“The
Committee does not intend that these orders be
used against reputable businesses except under
unusual circumstances.”).

10
demonstrate “manifest injustice.”15 Based on
Diamond & Gem’s post-remand proffering of
additional evidence without any explanation of
why it did not offer it at the first trial, and
based on the injustice that might result for
Martin’s in having to prepare for this new evi-
dence, the court did not abuse its discretion in
limiting Diamond & Gem to the witnesses and
evidence it offered at the first trial.

VII.
In summary, we affirm in part the denial of
Diamond & Gem’s motion to amend and clar-
ify the effect of the injunction, but we remand
the injunction for further revision consistent
with Martin’s I and this opinion. The partial
summary judgment in favor of Martin’s on the
question of bad faith is affirmed, and we con-
clude that the court did not err in charging the
jury that Diamond & Gem had the burden of
proof on its wrongful seizure counterclaim and
did not abuse its discretion in limiting Dia-
mond & Gem to the evidence it offered at the
first trial.

The judgment is AFFIRMED in part,
REVERSED in part, and REMANDED.

15
See American Int’l Trading Corp. v. Petro-
leos Mexicanos, 835 F.2d 536, 539 (5th Cir. 1987)
(“If the defendants knew or should have known that
the witnesses were necessary, then the exclusion of
those witnesses was not manifestly unjust.”).

11