author: GENE CARTER, District Judge.

text:
    L.L. BEAN, INC., Plaintiff, v. DRAKE PUBLISHING, INC., Gloria Leonard, Louis Montesano, Nina Malkin, Linda Francischelli, Kevin Goodman, Kenneth Kimmel, Larry Graver, Arnold Held, Bruce Jacobsen, L.E. Goodman, Richard Crespo, Marty Puntus, Jerry Levine, Susan Ercolano, Yamael Bonheur, and Joy Bonheur, Defendants.
    Civ. No. 84-0305 P.
    United States District Court, D. Maine.
    Jan. 16, 1986.

      George S. Isaacson, Alfred C. Frawley, Brann & Isaacson, Lewiston, Me., David Wolf, Wolf, Greenfield & Sacks, Boston, Mass., for plaintiff.

      Elliott L. Epstein, Isaacson, Hark & Epstein, Lewiston, Me., Norman S. Beier, Lawrence E. Abelman, Abelman, Frayne, Rezac & Schwab, New York City, for defendants.
   ORDER ON PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

Plaintiff owns the registered trademarks “Bean,” “Bean’s” and “L.L. Bean” and uses them in its mail order catalog for marketing sporting goods and wearing apparel. Defendants publish High Society, a magazine which describes itself as providing erotic entertainment. At pages 36 and 37 of the October 1984 issue of High Society, there is material identified as “L.L. Beam’s Sex Catalog.” In this action Plaintiff seeks damages and equitable relief under both federal and state law for alleged trademark dilution, infringement, unfair competition, deceptive trade practices, interference with prospective business advantage, and trade libel. Defendants have moved for summary judgment on all counts, and Plaintiff has filed a cross-motion for summary judgment on all but Count VI. Count VIII, Plaintiff’s claim for punitive damages, is not discussed in Defendants’ submissions and the resolution of Plaintiff’s motion does not necessitate addressing that claim at this time. The Court will address the counts brought under federal law first.

Count II

Count II seeks relief for trademark infringement under section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), which provides that:

(1) Any person who shall, without the consent of the registrant—
(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive;
shall be liable in a civil action by the registrant for the remedies hereinafter provided.

Defendants concede, for purposes of this motion, that Plaintiff has registered trademarks in “Bean,” “Bean’s” and “L.L. Bean.” They also concede that “L.L. Beam’s” and “Beam’s,” terms used in their catalog, are colorable imitations of the “Bean’s” trademark. Defendants contend, however, that Plaintiff cannot prove the required element of likelihood of confusion. See Pignons, S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 486-87 (1st Cir.1981).

In Pignons the Court of Appeals set forth several factors to be considered in assessing likelihood of confusion: the similarity of the marks; the similarity of the goods; the relationship between the parties’ channels of trade; the relationship between the parties’ advertising; the classes of prospective purchasers; evidence of actual confusion; the defendant’s intent in adopting its mark; and the strength of the plaintiff’s mark. Id.

In considering the similarity of the marks, the Court first notes Defendants’ concession that their use of L.L. Beam is a colorable imitation of the L.L. Bean trademark. Similarity, however, “is determined on the basis of the total effect of the designation, rather than a comparison of individual features.” Id. at 487. Often, similar marks are not as likely to be confused when they are used in conjunction with the clearly displayed name and/or logo of the manufacturer. Defendants suggest that the L.L. Beam mark is used in conjunction with the name High Society and its source is, therefore, not likely to be confused with the real L.L. Bean. The name High Society is displayed prominently on the cover and repeatedly throughout the magazine. The table of contents shows the two in conjunction. The name High Society does not, however, appear on the particular pages on which the sex catalog is found. The total effect of the designation, which bears on the factor of similarity, is unclear and best left for resolution by a trier of fact.

Although the Court of Appeals affirmed the granting of summary judgment in Pignons, it did so because “[tjaking everything in Pignons’ favor, still none of the factors relevant to a finding of likelihood of confusion supports Pignon’s position.” In this case Plaintiff has submitted data generated by a commissioned market survey which could be interpreted as showing that at least 11.5% of those surveyed were in fact confused as to the source of the “L.L. Beam Sex Catalog.” Plaintiff has also submitted expert testimony in affidavit form verifying this conclusion of the survey.

Relying on Warner Bros., Inc. v. American Broadcasting Cos., Inc., 720 F.2d 231, 245 (2nd Cir.1983), Defendants argue that the Court shall decide as a matter of law that its allegedly infringing use of the trademark is not confusingly similar and that once such a determination has been made the conclusion should not be altered by survey evidence. The Court cannot agree. Warner Bros, was a copyright case in which similarity or copying was the primary issue. As the Court of Appeals for the First Circuit stated in Pignons, however, “[cjonfusion over the nature of the parties’ business relationship may be as objectionable for purposes of trademark infringement as is confusion between their goods.” Pignons, 657 F.2d at 490. Surveys seem a particularly apt manner of assessing this aspect of a trademark infringement claim.

Defendants also suggest in their reply memorandum that the survey is flawed in its methodology. They argue, for example, that the survey did not necessarily reflect confusion in the minds of any relevant consumers, namely Bean customers or prospective customers. Bean's submissions indicate, however, that their customers fall, in varying percentages, into all economic groups and that over 25% of all households in the United States receive a Christmas mailing from them. It appears to the Court that a shopping mall intercept would have some overlap with Bean’s prospective customers since Plaintiff avowedly is trying to expand its market from its already large base. Moreover, with the O’Reilly affidavit, Plaintiff has provided support for the survey’s methodology and results. Defendants have not yet presented anything substantive attacking the approval of the study and the Court is unprepared to find the study inadmissible on the basis of Defendants’ vague suggestions. Therefore, viewing the evidence in the light most favorable to the nonmoving party, the Court finds that Plaintiff has shown some evidence of actual confusion.

In considering some of the other factors mentioned in Pignons, the Court notes that Plaintiff has submitted affidavit evidence indicating that its trademarks are very strong and valuable. Defendants’ intent in imitating the mark appears, from the description of the sex catalog in the magazine’s table of contents, to be an intent to parody or satirize. Plaintiff disputes this characterization of Defendants’ intent, pointing to certain testimony of Drake’s employees. It is not necessary to examine the other factors to see that there exist genuine issues of material fact on the issue of likelihood of confusion, an essential element of any trademark infringement claim. These issues must be resolved at trial. Thus, both parties’ motions for summary judgment on Count II must be denied.

Count III

Count III of the Complaint seeks relief under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which provides:

Any person who shall ... use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or symbols ténding falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, ... shall be liable to a civil action ... by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

Defendants argue that in the First Circuit two essential elements of a section 43(a) claim are competition between the parties and likelihood of confusion by the alleged infringer’s use of the owner’s mark. Defendants cite Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366 (1st Cir.1980), as establishing that the parties must be competitors for plaintiff to state a claim under section 43(a). In Rovira the Court of Appeals stated that section 43(a) “creates a federal law of unfair competition by providing a statutory remedy to a party aggrieved by a competitor’s ‘false designation of origin’ of his product even though he does not have a federally registered trademark.” Id. at 372.

The Court does not construe the First Circuit’s words in Rovira as creating a requirement that the parties be in direct competition. In the more recent case of Purolator, Inc. v. EFRA Distributors, Inc., 687 F.2d 554, 561 (1st Cir.1982), the Court elaborated on the remedy provided by section 43(a):

It is designed to reach, among other things, attempts to appropriate the goodwill associated with a competitor’s trademark by means of confusingly similar marking and packaging, which would create the impression that the products of the defendant originated with the plaintiff. Again, a showing that the marks or packaging of defendant’s create a likelihood of confusion with the products of the plaintiff will be a key to establishing a claim of false designation of origin.

The protection of goodwill afforded by section 43(a) extends to “any person damaged by the use of any such false description or representation.” 15 U.S.C. § 1125(a); Pignons, 657 F.2d at 493. Persons can be damaged by appropriation of their trademarks and the goodwill associated therewith whether or not they are in direct competition with the alleged infringer. The broad language of the statute, providing a remedy to “any person” appears to recognize this and other courts have so held in cases similar to this one. See, e.g., Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F.Supp. 366, 374 (S.D.N.Y.1979); aff'd 604 F.2d 200 (2d Cir.1979); St. Charles Mfg. Co. v. St. Charles Furniture Corp., 482 F.Supp. 397 (N.D.Ill.1979). The Court finds, therefore, that direct competition is not a necessary element for a claim brought under section 43(a). It is enough to state a claim in this case that Plaintiff advertises in magazines and Defendant is a magazine displaying its color-able imitation of Plaintiff’s marks in the format of a magazine advertisement. Since a genuine issue of material fact exists on the element of likelihood of confusion, summary judgment is inappropriate for either party on Count III.

Count IV

Count IV sets forth a claim for unfair competition under the common law. Defendants assert that they are entitled to summary judgment because likelihood of confusion is an essential element of such an action. The Court has already determined that a genuine question of fact exists on that issue.

Count V

The complaint also alleges a violation of Maine’s Deceptive Trade Practices Act, 10 M.R.S.A. § 1212. The Court agrees with the Defendants that likelihood of confusion must be proved before violation of that statute can be established. Because a genuine issue of material fact remains on the issue of likelihood of confusion, summary judgment is inappropriate.

Count I

Count I seeks relief under the Maine trademark dilution statute, 10 M.R.S.A. § 1530. That statute provides:

Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark registered under this chapter ... shall be a ground for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of the goods or services.

This statute has not been recently construed by the Law Court. The Court of Appeals for the First Circuit construed an identical Massachusetts statute in Pignons. The Court stated that for a plaintiff to sustain an action under the statute, it must show that its mark is distinctive and that defendant’s use of a similar mark has created the likelihood of dilution. Pignons, 657 F.2d at 483, 494. Plaintiff has submitted undisputed evidence that its mark is distinctive and strong.

The Court in Pignons pointed out, and Defendants have acknowledged, that there are generally three interpretations given to the term trademark dilution. One refers to the injury to the mark caused by actual or potential consumer confusion. Pignons, 657 F.2d at 494. As has been discussed previously, there remains a genuine issue of fact on this issue; thus summary judgment is inappropriate on this theory.

Trademark dilution also has been defined as use of a mark by defendant in a way that detracts from, draws on or otherwise appropriates the goodwill and reputation associated with the plaintiff’s mark. Id. Defendants argue that the statute cannot reasonably be construed to encompass literary satires and that the L.L. Beam catalog was intended solely as such a satire. For this proposition, Defendants rely on Tetley, Inc. v. Topps Chewing Gum, Inc., 556 F.Supp. 785 (E.D.N.Y.1983), in which the plaintiff sought relief under New York’s antidilution statute, inter alia, for defendant’s inclusion in its Wacky Package of a child’s sticker in the form of a Tetley Tea box, bearing the mark Petley Flea Bags. The Court in Tetley denied the injunction, stating that plaintiff had offered no proof that its mark was truly distinctive or that anyone would reach the conclusion that the parody would result in images of impurity in the minds of its customers. Such connotations would obviously tarnish the affirmative associations the mark had come to convey. Tetley, 556 F.Supp. at 794. Plaintiff’s failure to present evidence on the critical issues permitted the court to find that “the broad humor defendant employs serves to prevent the type of blurring which might result from a more subtle or insidious effort at humor at plaintiff’s expense.” Id. at 794. It is clear that parody per se is not protected from injunction under the antidilution statute. Evidence of the effect of the attempted parody is critical.

In this case, Plaintiff has presented evidence of the likelihood its mark will be tarnished by the L.L. Beam Sex Catalog. The affidavit of Richard T. O’Reilly, a consultant to corporations and advertising agencies on marketing and advertising, states:

9....
The image of L.L. Bean is clean, wholesome, and outdoorsy in contrast to High Society magazine and the use of L.L. Beam in the magazine. In my opinion, High Society used the name because of the high quality image of the L.L. Bean name and used the lookalike association to make the Sex Catalog more attention-getting.
10. The coarse and tawdry products shown in the Six [sic] Catalog, which many of survey respondents (including a significant number that were not confused) associated with L.L. Bean is totally opposite to the high quality image which L.L. Bean seeks to maintain. The magazine as a whole conveys a message of coarseness and baseness which is opposite to L.L. Bean’s image—
11. In my experience, the trademarks “L.L. Bean” and “Bean’s” are among the best known and highly regarded trademarks in the retail field____Any negative association with L.L. Bean is significant, for which the company would necessarily and justifiably have deep concern, because it is essential to maintain the high quality, strongly favorable image the name possesses with the public.
12. It is my opinion, based on forty years of experience in the marketing and advertising of consumer products, that L.L. Bean’s trademark and name has been damaged, through the publication of the L.L. Beam Sex Catalog by High Society magazine.

Plaintiff also has submitted the affidavit of Seth M. Siegel, vice president of a New York trademark licensing company. In paragraph 10 of the affidavit, Siegel states:

Adverse associations, such as that between L.L. Bean and High Society magazine endanger the integrity and strength of the mark. An authorized use by High Society would create a different market awareness of L.L. Bean from that which it has developed and maintained in the past.

These factual assertions by Plaintiff remain undisputed by Defendants. In Tiffany and Co. v. Boston Club, Inc., 231 F.Supp. 836 (D.Mass.1964), the court granted an injunction under the Massachusetts antidilution statute where the evidence showed that the name Tiffany was associated with quality and defendants had used the name Tiffany’s in conjunction with a radio program which was “really terrible,” “boring” and “stunk.” Id. at 844. The court stated that “the program presented graphic evidence of the risks of tarnishment to which a party in the position of plaintiff is exposed if his valuable trade name is put beyond his own control and subjected to the vagaries of a stranger’s business.” Id. It is clear, then, that Plaintiff has made out a case for the injunctive relief provided by Maine’s antidilution statute, 10 M.R.S.A. § 1530.

Defendants contend, however, that any such injunctive relief would violate their first amendment rights. That argument was thoroughly addressed in Dallas Cowboy Cheerleaders, where the court affirmed the granting of a preliminary injunction against the showing of a movie depicting actresses in uniforms like plaintiffs’ performing a variety of sexual acts:

Plaintiff’s trademark is in the nature of a property right, ... and as such it need not “yield to the exercise of First Amendment rights under circumstances where adequate alternative avenues of communication exist.” Lloyd Corp. v. Tanner, 407 U.S. 551 [92 S.Ct. 2219, 33 L.Ed.2d 131] ... (1972). Because there are numerous ways in which defendants may comment on “sexuality in athletics” without infringing plaintiff’s trademark, the district court had not encroached upon their first amendment rights in granting a preliminary injunction____
For similar reasons, the preliminary injunction did not constitute an unconstitutional “prior restraint.” This is not a case of government censorship, but a private plaintiff’s attempt to protect its property rights. The propriety of a preliminary injunction where such relief is sought is so clear that courts have often issued an injunction without even mentioning the first amendment____The prohibition of the Lanham Act is content neutral ..., and therefore does not arouse the fears that trigger the application of constitutional “prior restraint” principles.

Dallas Cowboy Cheerleaders, Inc., 604 F.2d at 206 (citations omitted).

Similarly, the Constitution would not be offended by the grant of an injunction to prevent trademark dilution. As the court stated in Sykes Laboratory, Inc. v. Kalvin, 610 F.Supp. 849, 859 (C.D.Cal.1985):

The state has a strong interest in protecting distinctive trademarks from harmful uses by business competition, even in the absence of confusion____ If injunctive relief were not available to prevent dilution of a trademark “then any unauthorized reproduction of a trademark or mark would be without remedy.” Coca Cola Co., 346 F.Supp.1183 (E.D.N.Y.1972).

The Court will, therefore, issue an appropriate injunction on Plaintiff’s antidilution claim.

Count VI

In Count VI Plaintiff seeks relief for Defendants’ alleged interference with Plaintiff’s prospective business advantage. In light of the Law Court’s recent decision in DiPietro v. Casco Northern Bank, 490 A.2d 215 (Me.1985), Plaintiff does not oppose Defendants’ motion for summary judgment on this count. Having examined DiPietro, the Court is satisfied that Defendants are entitled to summary judgment as a matter of law. In that case the Law Court indicated that any extension of decisional law concerning the tort of interference would likely include the element of fraud or intimidation. Plaintiff in this case has alleged neither.

Count VII

In Count VII Plaintiff seeks relief for trade libel, alleging that Defendants’ publication of the sex catalog has caused Plaintiff to be scorned and ridiculed by virtue of its wrongful association with Defendants’ magazine. In its brief, Plaintiff argues that it “is entitled to compensation when its goodwill and trade names have been, through no fault of its own, exposed to unseemly associations.” Plaintiff’s memorandum at 39-40. As support for this assertion, Plaintiff relies primarily on Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 408 F.Supp. 1219 (D.Colo.1976). In Big O, the Court discussed the extension of defamation law to the protection of property interests such as trademarks and goodwill:

Initially recovery was limited to falsehoods injurious to the ownership of land. More recently recovery was recognized for any injury to personal property and to any interference with the plaintiff’s business resulting in some form of customer diversion. The word “disparagement” has been used to describe these various kinds of interference with commercial or economic relations through injurious falsehood.

Id. at 1234.

Since Plaintiff’s claim for trade libel is essentially the same as a claim for tortious interference with commercial or economic relations, id., see also W. Prosser, The Law of Torts at 915-16 (1971), Count VII fails to state a claim. Although Plaintiff cites Tillson v. Robbins, 68 Me. 295 (1878), a Maine case discussing defamation of a person in his business, it is clear from its submission that it is in fact alleging injuiy to its trademarks and goodwill. As Prosser states in his discussion of the tort which he terms injurious falsehood: “Because of its ancient, left handed association with defamation, the kind of interference by falsehoods which are not personally defamatory, and yet cause pecuniary loss, has for some centuries been regarded as a more or less distinct tort in itself.” Prosser, at 915. As was stated previously, and as Plaintiff apparently conceded, it has not alleged the requisite elements of the tort of interference under Maine law. DiPietro v. Casco Northern Bank, 490 A.2d 215.

Accordingly, it is ORDERED that Plaintiffs and Defendants’ cross-motions for summary judgment be, and they are hereby, DENIED on Counts II, III, IV and V. Defendants’ motion for summary judgment on Counts VI and VII is GRANTED, and Counts VI and VII are hereby DISMISSED. Finally, Plaintiff’s motion for summary judgment on Count I is GRANTED. Defendant is enjoined under 10 M.R. S.A. § 1530 from again publishing the “L.L. Beam Sex Catalog,” or further distributing the “L.L. Beam Sex Catalog” contained in the October 1984 issue of High Society magazine or making any other use of facsimiles of L.L. Bean’s trademarks.

      . The Court in Coca Cola Co. v. Gemini Rising, Inc., 346 F.Supp. 1183 (E.D.N.Y.1972) aptly discussed the relevance of competition in an action brought under § 1114(a) of the Lanham Act:
      Admittedly the parties are not in competition in the ordinary sense. "But recognition ... that [defendant is] not making infringing sales of a kind of goods that plaintiff sells under a trade mark, does not end the matter." Hobart Manufacturing Company v. Kitchen Aid Service, Inc., 260 F.Supp. 559, 561 (E.D.N.Y.1966). Here there is no question that both are seeking to attract public attention and patronage for their respective products by the graphic display of a distinctive and widely known trademark. That trademark belongs to and is uniquely identified with plaintiff and its products. Plaintiffs property right in its mark clearly extends to its reproduction and publication in advertising and for other promotional uses regarding its products. In this case defendant’s product — a simulated bill poster — is itself one of the common forms of advertising utilized by plaintiff.
      Similarly, in this case the record shows that Plaintiff advertises in magazines and Defendants’ Sex Catalog is in the format of a magazine advertisement.

      . An element of malice, similar to the fraud or intimidation element in Maine, is required to make out the tort of disparagement or trade libel discussed in Big O. See Big-O, 561 F.2d 1365 (10th Cir.1977).


source: Caselaw Access Project

author: GONZALEZ, District Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. ONE COLT MACHINE GUN, MODEL MG-52-2, .50 CALIBER, AIRCRAFT SERIAL NO. C-2428-HB, and 363 Rounds .50 Caliber Ammunition, Defendants.
    No. 84-8510-Civ.
    United States District Court, S.D. Florida, N.D.
    Jan. 16, 1986.
    Alan Mishael, Asst. U.S. Atty., Miami, Fla., for plaintiff.
    Stephen Pave, South Miami, Fla., for defendants.
   FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL JUDGMENT

GONZALEZ, District Judge.

THIS CAUSE was heard by the court at a non-jury trial held on December 19, 1985, wherein the plaintiff sought civil forfeiture of the defendants pursuant to Title 18 U.S.C., section 924 and Title 26 U.S.C., section 5872. The court has heard and considered testimony and evidence submitted on behalf of the parties. The court has also made certain determinations as to the credibility of witnesses and documentary evidence. The court now makes and enters the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. The defendants in this action are an automatic .50 caliber machine gun, Colt model MG52-2, serial number C-2428-HB and 363 rounds of assorted .50 caliber ammunition.

2. The claimant in this action is Richard Allen Wilson. Mr. Wilson was the registered owner of the machine gun and the ammunition at the time they were seized for forfeiture on June 20, 1984. He therefore possesses standing to contest their forfeiture.

3. On June 19, 1984, at the Phil Foster Boat Ramp in Palm Beach County, Florida, the claimant and two (2) other individuals loaded the defendants into the claimant’s vessel. They then proceeded “40 miles out” of port.

4. The court finds that the phrase “40 miles out” meant that the claimant was 40 miles away from port, not necessarily 40 miles east of the port.

5. The court further finds that the claimant went 40 miles north from port to approximately Vero Beach, Florida, as the claimant and his passengers were able to see the towers in Vero Beach, Florida. At times the vessel was more than three (3) miles from shore; it was never more than 12 miles east of the coastline.

6. The purpose of the claimant’s trip was to verify certain Loran coordinates that he anticipated purchasing from his passenger, Nelson Wait. These coordinates, written in a ledger-type notebook, were in code because of their commercial value.

7. The claimant and his passengers also caught approximately 600 pounds of fish for future sale.

8. At approximately 1:00 a.m., on June 20, 1984, U.S. Customs Officer Ed Lamoy and two (2) Palm Beach County Sheriff’s Deputies observed the claimant’s vessel near the Phil Foster Boat Ramp. Officer Lamoy approached the vessel and identified himself. The claimant told the Officer that he had a semi-automatic rifle and a .50 caliber machine gun on board.

9. After the claimant informed the Officer that he had been “40 miles out”, he was advised that a seizure was being made. The claimant was informed that it was a violation of United States law to bring a machine gun into the United States without permission from the Bureau of Alcohol, Tobacco and Firearms.

10. When the vessel was inventoried, the Officers found the defendants, a semiautomatic rifle, Loran coordinates written on business-type cards and a ledger-type notebook with numbers written in it.

11. U.S. Customs Officer Joseph Goulet was able to interpret and plot the coordinates found on the business cards. Of the 328 coordinates interpreted, 326 coordinates represented positions in the northwest portion of the Little Bahamas Bank.

12. Officer Goulet was unable to interpret and plot the coordinates found in the ledger notebook. This inability is consistent with Mr. Wait’s representations that the coordinates were coded because of their commercial value.

13. U.S. Customs Officer Richard Zobel testified in rebuttal that on November 14, 1984, the claimant told the Officer that he was a smuggler. The court finds specifically that the statement was not an admission of any wrong-doing but merely an off-the-cuff comment made to irritate the Officer.

14. The court makes no findings as to the claimant’s purpose for having the defendants aboard his vessel as such a finding is not relevant to this case.

15. The court finds that the claimant has proven by a preponderance of the evidence that the defendants were not transported in interstate or foreign commerce nor were they imported or brought into the United States on June 20, 1984. Thus, the claimant did not violate any laws or regulations of the United States.

CONCLUSIONS OF LAW

1. This court possesses jurisdiction to adjudicate this case pursuant to Title 28 U.S.C., sections 1345 and 1355.

2. The United States alleges that the defendants are subject to forfeiture pursuant to Title 18 U.S.C., section 924 and Title 26 U.S.C., section 5872. Section 924(d) provides:

Any firearm or ammunition involved in or used or intended to be used in, any violation of the provisions of this chapter or any rule or regulation promulgated thereunder, or any violation of any other criminal law of the United States, shall be subject to seizure and forfeiture and all provisions of the Internal Revenue Code of 1954 relating to the seizure, forfeiture, and disposition of firearms, as defined in section 5845(a) of the Code, shall, so far as applicable, extend to seizures and forfeitures under the provisions of this chapter.

Section 5872(a) provides:

Any firearm involved in any violation of the provisions of this chapter shall be subject to seizure and forfeiture, and (except as provided in subsection (b)) all the provisions of internal revenue laws relating to searches, seizures, and forfeitures of unstamped articles are extended to and made to apply to the articles taxed under this chapter, and the persons to whom this chapter applies.

3. Under Title 18, section 922, certain actions involving weapons are unlawful. Section 922(a)(4) specifically provides that it is unlawful

for any person, other than a licensed importer, licensed manufacturer, licensed dealer, or licensed collector, to transport in interstate or foreign commerce any destructive device, machine-gun (as defined in section 5845 of the Internal Revenue Code of 1954), short-barreled shotgun, or short-barreled rifle, except as specifically authorized by the Secretary consistent with public safety and necessity;

The claimant is not a licensed importer, licensed manufacturer, licensed dealer or licensed collector of firearms.

4. The United States also alleges that the claimant violated Title 26 U.S.C., section 5844 which provides that “[n]o firearm shall be imported or brought into the United States or any territory under its control or jurisdiction unless the importer establishes ... [certain exceptions not relevant herein.]”

5. Title 18 U.S.C., section 10 provides that

[t]he term “interstate commerce”, as used in this title, includes commerce between one State, Territory, Possession, or the District of Columbia and another State, Territory, Possession, or the District of Columbia.
The term “foreign commerce”, as used in this title, includes commerce with a foreign country.

Additionally, Title 18 U.S.C., section 921(a)(2) defines the term “interstate or foreign commerce” to include

commerce between any place in a State and any place outside of that State, or within any possession of the United States (not including the Canal Zone) or the District of Columbia, but such term does not include commerce between places within the same State but through any place outside of that State____

6. The term “import or brought into” is not defined in the Internal Revenue Code. The term “importer” is defined in Title 18 U.S.C., section 921(a)(9) to mean

any person engaged in the business of importing or bringing firearms or ammunition into the United States for the purpose of sale or distribution.

7. The territorial waters of the United States extend three (3) miles from its shores. United States v. Louisiana, 363 U.S. 1, 80 S.Ct. 961, 4 L.Ed.2d 1025 (1960); United States v. McRary, 665 F.2d 674 (5th Cir.1982). The area between three (3) miles from shore and 12 miles from shore is known as the contiguous zone. Although this area is part of the high seas, the United States exercises control over foreign vessels within this area to enforce customs, fiscal, immigration and sanitary regulations. United States v. McRary, id.; United States v. Warren, 578 F.2d 1058 (5th Cir.1978).

8. In this matter, the claimant has proven by a preponderance of the evidence that the defendants were not transported in interstate or foreign commerce.

In United States v. McRary, supra at 677-78, the court construed a definition of “interstate or foreign commerce” similar to the definition contained in title 18 U.S.C., section 921(a)(2). The court, reviewing a kidnapping conviction, determined that “transport in foreign commerce” requires “a forced departure from the United States and a subsequent involuntary entry into a foreign state.” Id. at 677.

This court is likewise compelled to find that absent evidence that the defendants departed from the United States and entered into a foreign state, Title 18 U.S.C., section 922(a)(4) was not violated by the claimant. The evidence presented proved by a preponderance that the claimant was in the contiguous area; he did not, however, enter into any foreign state.

Additionally, the court finds that the claimant’s activities are exempted from the definition of “interstate or foreign commerce.” Title 18 U.S.C., section 921(a)(2) specifically excludes “commerce between places within the same state but through any place outside the state.” On July 19, 1984, the claimant departed from Palm Beach County, Florida, traveled outside the three (3) mile limit, caught fish for future sale and returned to Palm Beach County, Florida. His activities, therefore, fall within the statutory exception to “interstate or foreign commerce.”

9. The evidence presented further establishes that the claimant did not violate Title 26 U.S.C., section 5844 by importing or bringing the defendants into the United States. To constitute a violation of this section, the claimant had to intend to sell or distribute the defendants within the United States. See, 18 U.S.C. § 921(a)(9). The evidence reveals that the claimant considered the defendants, especially the machine gun, as prized possessions. They were on the vessel so that the claimant could show them off to his companions. There was no intent to sell or distribute them.

Further, the claimant had the defendants in his possession when he departed from the boat ramp; he remained within the contiguous zone for the entire journey; and he had the defendants when he returned to the boat ramp. The court finds that to import or bring something into the United States, there must be some evidence that the items came into the United States from a foreign state. The evidence presented by the claimant refutes this requirement.

10. The court concludes that although the United States has satisfied its burden of demonstrating probable cause to support forfeiture of the machine gun and ammunition, the claimant has proven by a preponderance of evidence his defenses to forfeiture.

11. The defendants, therefore, are not subject to forfeiture under Title 18 U.S.C., section 924 or Title 26 U.S.C., section 5872. Thus, the United States is not entitled to a judgment of forfeiture.

Accordingly, it is hereby

ORDERED AND ADJUDGED that Judgment be and the same is entered in favor of the claimant and against the United States.

It is further ORDERED AND ADJUDGED that the claimant is entitled to the return of his property. The United States shall return the machine gun and ammunition to the claimant within 20 days of the filing of this Order.


author: GEORGE KENDALL SHARP, District Judge.

text:
    Terry JORGENSON and T.D.J., Inc., a Florida Corporation, d/b/a Porky’s, Plaintiffs, v. COUNTY OF VOLUSIA and Edwin H. Duff, II, in his official capacity as Sheriff of Volusia County, Defendants.
    No. 86-41-CIV-ORL.
    United States District Court, M.D. Florida, Orlando Division.
    Jan. 17, 1986.
    Eric A. Latinsky, Daytona Beach, Fla., Fred W. Fendt, Deland, Fla., for plaintiffs.
    Daniel D. Eckert, Deland, Fla., for defendants.
   ORDER

GEORGE KENDALL SHARP, District Judge.

Plaintiffs have filed a complaint, and supporting memorandum of law with appendix requesting a temporary restraining order, permanent injunction and declaratory judgment with respect to the enforcement of Volusia County Ordinance No. 86-1, which prohibits nude or semi-nude entertainment in commercial establishments at which alcoholic beverages are offered for sale or consumption on the premises. Plaintiff Jorgenson is the sole stockholder of Florida corporation T.D.J., Inc., which owns and operates a business establishment known as “Porky’s,” located at 2400 International Speedway Boulevard, DeLand, in an unincorporated area of Volusia County, Florida. Porky’s, which opened on December 2, 1985, is licensed by the State of Florida to sell alcoholic beverages for consumption on the premises, and it also provides, as entertainment, female dancers who perform topless. Plaintiffs represent that the topless dance presented at Porky’s is nonobscene, that it is available to consenting adults only, and that it is protected by the First Amendment to the United States Constitution.

Citizens of the community, offended by the opening of Porky’s, amassed what plaintiffs have described in their memorandum as a “public outcry.” This community response was characterized not only by picketing and general complaining, but also the Greater DeLand Ministerial Association adopted a resolution requesting the Volusia County Council to pass an ordinance banning topless dancing and other public sexual exploitation in all unincorporated areas of the county. On December 5, 1985, the County Council addressed the community repercussions from the opening of Porky’s, the transcript of which is part of plaintiffs’ appendix. Essentially, the citizens present expressed concern for the moral welfare of the community because of the potential for immoral and criminal conduct engendered by a topless dancing establishment. Similar experiences of other Florida cities, such as Orlando and Daytona Beach, were specifically mentioned.

On December 9,1985, the County Council passed Ordinance No. 86-1, effective within the unincorporated areas of Volusia County, known in short form as the Adult Entertainment Ordinance of Volusia County, Florida. Section 2 of the ordinance, “Legislative Authorization,” states that it is:

enacted in the interest of the public health, peace, safety, morals and general welfare of the citizens and inhabitants of Volusia County, Florida, pursuant to the Florida Constitution and laws of the State of Florida, Sec. 102 of the Volusia County Chapter, and the authority of the County to regulate the sale and consumption of alcoholic beverages, pursuant to the Twenty-First Amendment to the Constitution of the United States.

Section 4, “Findings of Fact,” states that the County Council finds that:

[e]vidence has been propounded that indicates that nudity and sexual conduct and depiction thereof coupled with alcohol in public places begets undesirable behavior, and that prostitution, attempted rape, rape, murder, and assaults on police officers have occurred in and around establishments dealing in alcoholic beverages where nude and sexual conduct and depiction thereof is permitted.

Section 6, the definitional section, defines “[a]lcoholic beverages” to be beverages containing more than one percent alcohol by weight and “[e]stablishment dealing in alcoholic beverages” to be:

[a]ny business or commercial establishment ... [public or private] including those licensed by the state for sale and/or service of alcoholic beverages, and any bottle club; hotel; motel; restaurant; night club; country club; cabaret; meeting facility utilized by any religious, social, fraternal or similar organization; business or commercial establishment where a product or article is sold, dispensed, served or provided with the knowledge, actual or implied, that the same will be, or is intended to be mixed, combined with or drunk in connection or combination with an alcoholic beverage on the premises of said business or commercial establishment; or business or commercial establishment where the consumption of alcoholic beverages is permitted.

Section 7 prohibits specific sexual activity and display, and, in relevant part, pertains to topless dancing in establishments “dealing in alcoholic beverages:”

b. No female person shall expose to public view any portion of her breast below the top of the areola or any simulation thereof in the establishment dealing in alcoholic beverages.
d. No person maintaining, owning, or operating an establishment dealing in alcoholic beverages shall suffer or permit any female person to expose to public view any portion of her breasts below the top of the areola or any simulation thereof within the establishment dealing in alcoholic beverages.

Section 8 provides as penalties for violators of the ordinance a fine not greater than $500.00 or imprisonment in county jail no longer than 60 days or both. § 125.69, Fla.Stat. (1985).

Section 9 provides for the severability of any portion of the ordinance found to be invalid or unconstitutional by a court of competent jurisdiction. Pursuant to section 10 of the ordinance, it will become effective on January 19, 1986. Plaintiffs represent that they and their employees will suffer the threat of arrest on or prior to January 19, 1986, should a temporary restraining order and preliminary injunction not issue.

Although the United States Supreme Court has recognized that “nude dancing is not without its First Amendment protections from official regulation,” Schad v. Mount Ephraim, 452 U.S. 61, 66, 101 S.Ct. 2176, 2181, 68 L.Ed.2d 671 (1981), in New York State Liquor Authority v. Bellanca, 452 U.S. 714, 101 S.Ct. 2599, 69 L.Ed.2d 357 (1981), it addressed “the power of a State to prohibit topless dancing in an establishment licensed by the State to serve liquor.” While acknowledging that such dancing has the “barest minimum” First Amendment protection, the Court recognized that the broad powers of the States to regulate the sale of liquor under the Twenty-first Amendment outweighed any First Amendment interest. Id. at 716-17, 101 S.Ct. at 2601 (quoting Doran v. Salem Inn, Inc., 422 U.S. 922, 932-33, 95 S.Ct. 2561, 2568-69, 45 L.Ed.2d 648 (1975)); California v. LaRue, 409 U.S. 109, 114, 93 S.Ct. 390, 395, 34 L.Ed.2d 342 (1972) (“While the States, vested as they are with general police power, require no specific grant of authority in the Federal Constitution to legislate with respect to matters traditionally within the scope of the police power, the broad sweep of the Twenty-first Amendment has been recognized as conferring something more than the normal state authority over public health, welfare, and morals.”). Bellanca held that:

Whatever artistic or communicative value may attach to topless dancing is overcome by the State’s exercise of its broad powers under the Twenty-first Amendment. Although some may quarrel with the wisdom of such legislation and may consider topless dancing a harmless diversion, the Twenty-first Amendment makes that a policy judgment for the state legislature, not the courts.

452 U.S. at 718, 101 S.Ct. at 2602.

Following Bellanca, the Eleventh Circuit decided two Florida cases involving municipal ordinances prohibiting topless dancing in commercial establishments where alcoholic beverages were offered for sale for consumption on the premises, similar to Volusia County Ordinance 86-1. Krueger v. City of Pensacola, 759 F.2d 851, 853-54 n. 3 (11th Cir.1985); Grand Faloon Tavern, Inc. v. Wicker, 670 F.2d 943, 944-45 n. 2 (11th Cir.), cert. denied, 459 U.S. 859, 103 S.Ct. 132, 74 L.Ed.2d 113 (1982) (City of Cocoa Beach). In both cases, Bellanca and Twenty-first Amendment analysis were distinguished based upon Board of County Commissioners of Lee County v. Dexterhouse, 348 So.2d 916, 918 (Fla.App.1977), aff'd, 364 So.2d 449 (Fla.1978), which held that, in Florida, this Twenty-first Amendment regulatory authority had not been delegated to municipalities. Krueger, 759 F.2d at 854-55 (citing Grand Faloon, 670 F.2d at 944); Grand Faloon, 670 F.2d at 944 n. 1. These cases, therefore, were decided “under the stricter standard typically used to review an infringement on a protected liberty interest justified solely under the government’s police power,” or the four-part test enunciated in United States v. O’Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 1679, 20 L.Ed.2d 672 (1968) (Although incidentally impacting on the First Amendment, a governmental regulation is sufficiently justified “[1] if it is within the constitutional power of the government; [2] if it furthers an important or substantial governmental interest; [3] if the governmental interest is unrelated to the suppression of free expression; and [4] if the incidental restriction on ... First Amendment freedoms is no greater than is essential to the furtherance of that interest.”). Krueger, 759 F.2d at 854-56, 856 n. 5; see Grand Faloon, 670 F.2d at 947-52. Grand Faloon held that the Cocoa Beach ordinance met the O’Brien test, finding substantial documentation that there was increased criminal activity, a significant governmental interest, in establishments that offered both alcoholic beverages and topless dancing and, consequently, upheld the ordinance. 670 F.2d at 947-52. In contrast, Krueger found allegations of increased crime at topless bars to be speculative and that “[e]ven if there were sufficient facts to support the actual efficacy of the ordinance, the City Council has failed to establish that the legitimate purpose was actually considered by the council in making its determination.” 759 F.2d at 855, 856. These cases demonstrate the rigor of the O’Brien standard which is required when an impacted First Amendment liberty is justified solely under a government’s police power as opposed to Twenty-first Amendment analysis.

On August 30, 1985, the Supreme Court of Florida held that a Daytona Beach ordinance prohibiting topless dancing in establishments dealing in alcoholic beverages, similar to Volusia County Ordinance No. 86-1 and the ordinances in Grand Faloon and Krueger, was valid under Bellanca and the Twenty-first Amendment in which state police power is inherent, and that it was neither vague nor overbroad. City of Daytona Beach v. Del Percio, 476 So.2d 197, 199-206 (Fla.1985). Addressing the delegation permitted under the Twenty-first Amendment, Del Percio found that the Bellanca holding that “[t]he state’s power to ban the sale of alcoholic beverages entirely includes the lesser power to ban the sale of liquor on premises where topless dancing occurs” was applicable to Florida cities and counties, based upon the Florida Constitution and statutes. Id. at 201 (quoting Bellanca, 452 U.S. at 717, 101 S.Ct. at 2601.) Stating that topless dancing is nonobscene, thereby overcoming the potential obstacle of the inability of counties and municipalities to regulate obscene exhibitions, which would remove First Amendment protection, Del Percio, emphatically stated: “Florida municipalities (and counties, see Fillingim v. State, 446 So.2d 1099 (Fla. 1st DCA 1984)) thus have the authority to exercise the regulatory power of the twenty-first amendment recognized in New York State Liquor Authority v. Bellanca.” (citation omitted) Id. at 201 (emphasis added). Therefore, this Court finds the Florida constitutional language as interpreted by the Florida Statutes and enunciated by the Supreme Court of Florida equally applicable to county legislation banning topless dancing in establishments dealing in alcoholic beverages. Although the Aei/awca/Twenty-first Amendment rationale was sufficient to support municipal and county authority to prohibit topless dancing in bars, Del Percio fortified this holding by finding such regulation also to be available under the police power, which is inherent in the Twenty-first Amendment. Id. at 203-05.

With respect to vagueness, Del Percio quotes Broadrick v. Oklahoma, 413 U.S. 601, 608, 93 S.Ct. 2908, 2913-14, 37 L.Ed.2d 830 (1973) that “ ‘words inevitably contain germs of uncertainty’ but when regulations ‘are set out in terms that the ordinary person exercising ordinary common sense can sufficiently understand and comply with, [there is no] sacrifice to the public interest.’ ” Id. at 200. In their complaint, plaintiffs have asked this Court to issue a declaratory decree stating “how much exposure of the female breast is necessary to constitute a violation of the ordinance.” Reference to section 7 b. and d. of Volusia County Ordinance 86-1 set out above is as clear to this Court as was the similarly worded ordinance in Del Percio to the Florida Supreme Court: “The plain meaning of the statute is, as the City suggests, that no portion of the breast directly or laterally below the top of the areola may be exposed to public view.” Del Percio, 476 So.2d at 200.

Likewise, finding the overbreath doctrine inapplicable, Del Percio stated:

In the first amendment area, this over-breadth argument is permitted because of the judicial assumption that an over-broad statute may well have a chilling effect on protected expression. An over-broad regulation may not be enforced until the scope of regulation is narrowed by a limiting construction or partial invalidation to remove the threat to protected expression. “Application of the overbreath doctrine in this manner is, manifestly, strong medicine. It has been employed by the Court sparingly and only as a last resort.” (quoting Broadrick v. Oklahoma, 413 U.S. at 613 [93 S.Ct. at 2916])....
However, the ordinance doesn’t chill such behavior [topless dancing], it prohibits it. And this prohibition of a very narrow range of expression, subject only to the barest minimum of first amendment protection, seems well within the scope of permissible regulation found in the United States Supreme Court’s Bellanca decision. The “strong medicine” of the overbreath doctrine is not available to cure the chill.

Del Percio, 476 So.2d at 202, 203.

Following Del Percio, the Eleventh Circuit decided Leverett v. City of Pinellas Park, 775 F.2d 1536 (11th Cir.1985), striking a municipal ordinance that prohibited “nude or semi-nude entertainment in any commercial establishment” as being unconstitutional and overbroad. Id. at 1537, 1540-41. Leverett, however, is distinguishable because the business establishment involved, which offered nude dancing, was not licensed to serve alcohol, although patrons, apparently, were allowed to bring in alcoholic beverages for consumption while viewing the dancing. Id. at 1537. In a telling footnote, the Leverett court stated:

The parties spent much of their effort in this case arguing about the significance of the fact that alcohol is consumed at Strip Ahoy. Section 16-112, however, applies to nude or semi-nude entertainment in any “commercial establishment.” The ordinance clearly does not regulate protected expression as an incident to the regulation of alcohol. That Florida may have delegated to municipalities its power under the Twenty-first Amendment, City of Daytona Beach v. Del Percio, 476 So.2d 197 (Fla.1985), is therefore of no help to the City in this case.

Id. at 1540 n. 2 (emphasis in original and added).

Leverett, therefore, did not analyze or strike the ordinance under the Twenty-first Amendment but rather under the “stricter standard” whereby a protected interest can be impinged upon only if justified by the government’s police power. Id. at 1540. Under that stringent standard, Leverett, as Krueger, found the city’s “conclusory assertion of the factual basis and motivation” underlying the ordinance to be insufficient to tread upon a First Amendment right. Id. The Eleventh Circuit clearly indicated that the analysis would have been different under the Twenty-first Amendment regulation of protected expression incident to regulation of alcohol. Id. at n. 2.

In light of Del Percio, a case virtually identical to that of plaintiffs, and the Florida Constitution and statutory interpretation enunciated by the Florida Supreme Court supporting Bellanca and Twenty-first Amendment analysis where regulation of alcohol is concerned, this Court finds it inconceivable that plaintiffs would analogize their case with Grand Faloon and Krueger since these cases were decided before Del Percio when another state-court case, dictating the O’Brien test, was operable. The Florida Supreme Court has stated plainly and blatantly that Bellanca and the Twenty-first Amendment are now the current analysis for cases involving ordinances prohibiting topless dancing in establishments dealing in alcohol on the premises. A legislative decision has been made, now upheld by the judicial decision in Del Percio.

The Court finds it reprehensible that plaintiffs’ counsel, particularly, Mr. Latinsky, omitted Bellanca and Del Percio from the supporting memorandum of law, especially, when he personally represented respondents in Del Percio. Del Percio, 476 So.2d at 199. It is abundantly evident to the Court that plaintiffs’ counsel are aware of the Florida Supreme Court decision and that they deliberately chose not to cite that case and Bellanca, the controlling United States Supreme Court case, let alone attempt to distinguish them. It is furthermore obvious to the Court that plaintiffs’ counsel urged the Court to be guided by Krueger and Leverett because, in those cases, the ordinances prohibiting topless dancing were not upheld, irrespective of the fact that the former was decided before Del Percio and the latter did not involve an establishment which sold alcoholic beverages, necessarily removing it from Twenty-first Amendment analysis.

Plaintiffs’ counsel have violated Rule 11 of the Federal Rules of Civil Procedure wherein an attorney, by his/hei; signature on a pleading, certifies “that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose____” In a similar violation of Rule 11, Golden Eagle Distributing Corp. v. Burroughs Corp., 103 F.R.D. 124 (N.D.Cal.1984), the court sanctioned plaintiff’s counsel for failure to cite recent and controlling authority in the jurisdiction directly mandating the opposite result from a former, never overruled, holding relied upon by plaintiffs. The Court stated:

The duty of candor is a necessary corollary of the certification required by Rule 11. A court has a right to expect that counsel will state the controlling law fairly and fully; indeed, unless that is done the court cannot perform its task properly. A lawyer must not misstate the law, fail to disclose adverse authority (not disclosed by his opponent), or omit facts critical to the application of the rule of law relied on.

Id. at 127.

The Court recognizes that this failure to cite and/or distinguish controlling authority is not in a trial context and that defendants have filed a memorandum in opposition to plaintiffs’ motion for a temporary restraining order citing the correct authority. Nevertheless, the Court views this omission by plaintiffs’ counsel as so misleading and unethical as to come within the purview of Disciplinary Rule 7-106(B)(l) of the Code of Professional Responsibility, which states that “[i]n presenting a matter to a tribunal, a lawyer shall disclose: (1) Legal authority in the controlling jurisdiction known to him to be directly adverse to the position of his client____” See Piambino v. Bailey, 757 F.2d 1112, 1131 n. 44 (11th Cir.1985). A temporary restraining order is characteristically an extraordinary, ex parte proceeding, which makes accurate representation of the facts and law of crucial importance to the Court. Furthermore, ABA Model Rule of Professional Conduct 3.3 states that “[a] lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal____” The accompanying comment makes plain that “[ljegal argument based on a knowingly false representation of law constitutes dishonesty toward the tribunal.” See Golden Eagle, 103 F.R.D. at 127-28.

In addition to the legal omissions of plaintiffs’ counsel, they also were procedurely deficient. Local Rule 4.05, which incorporates Rule 65(b) of the Federal Rules of Civil Procedure, sets forth the requirements for obtaining a temporary restraining order. Specifically, Local Rule 4.05(b)(l)-(4) clearly describe exactly what must be filed and represented to the Court. Plaintiffs did not file a separate motion for temporary order in accordance with Local Rule 4.05(b)(1). Furthermore, both Local Rule 4.05(b)(2) and (b)(4) require a showing of imminent irreparable injury disallowing notice in the verified complaint or accompanying affidavits and in the supporting legal memorandum. Whatever imminence has occurred is plaintiffs own creation and the Court is not sympathetic to their position. Volusia County Ordinance No. 86-1 was passed on December 9, 1985, and plaintiffs have delayed over a month until January 13, 1986, to file their request for a temporary restraining order, claiming that they will be irreparably injured when the ordinance becomes effective on January 19, 1986. Plaintiffs’ speculative representations that Porky’s will cease business if the ordinance is enforced is unconvincing to the Court, given the fact plaintiffs’ female dancers can continue to entertain in appropriate clothing designated by the ordinance. The formerly topless bar and client of Mr. Latinsky in Daytona Beach has obviously managed to survive as plaintiffs’ counsel should be well aware, despite enforcement of a similar ordinance in that city.

In light of the controlling case law, plaintiffs’ allegation that they will ultimately prevail on the merits of their claim, pursuant to Local Rule 4.05(b)(4)(i) is unlikely. The concerns of potential harm that might be caused to opposing parties and to the public interest of Local Rule 4.05(b)(4)(iii) and (iv) merge given the strong, adverse community reaction to the opening of Porky’s. The County Council, as the citizens elected representatives, has legislated on behalf of the community. The harm that the community sought to prevent will continue to occur if the ordinance were not enforced. “[T]he city’s interest in attempting to preserve the quality of urban life is one that must be accorded high respect.” Young v. American Mini Theatres, Inc., 427 U.S. 50, 71, 96 S.Ct. 2440, 2452-53, 49 L.Ed.2d 310 (1976).

Accordingly, plaintiffs’ request for a temporary restraining order is DENIED. Pursuant to Rule 11 of the Federal Rules of Civil Procedure, the Court imposes the sanction of a $500.00 fine on plaintiffs’ counsel for their misleading and unethical representation of the controlling law in Florida regarding an ordinance governing sexual display in establishments dealing in alcoholic beverages legislated under the Twenty-first Amendment. The hearing on the preliminary injunction, which has been noticed for January 27, 1986, at 12:00 p.m., will be restricted to examination of portions of Volusia County Ordinance 86-1 which plaintiffs believe to be vague or overbroad.


author: KRAM, District Judge.

text:
    The VIDEO CONNECTION OF AMERICA, INC., Plaintiff, v. PRIORITY CONCEPTS, INC., et al., Defendants.
    No. 85 Civ. 2296 (SWK).
    United States District Court, S.D. New York.
    Jan. 17, 1986.

      Edwards & Angelí by David M. Olaser, Alfred R. Paliani, New York City, for plaintiff.
    Yellen & Herstic by Barry J. Yellen, New York City, for defendants.
   KRAM, District Judge.

Plaintiff commenced this suit in New York State Supreme Court, claiming that defendant had breached its contract and sought damages and an injunction ordering defendants to cease operating. Defendants counterclaimed and removed the action to this Court, pursuant to 28 U.S.C. § 1441(a), alleging diversity jurisdiction. Plaintiff now moves to remand, pursuant to 28 U.S.C. § 1447(c), claiming that the action was improperly removed because this court does not have original jurisdiction over the action. Because defendants have not met their burden of proof as to the propriety of removal, and since on the face of the complaint, this Court lacks jurisdiction, the motion to remand is GRANTED.

FACTUAL BACKGROUND

Plaintiff, owner of the trademark “The Video Connection” and licensor of retail stores in that name, executed a franchise agreement with defendant corporation (“franchisee”). Under the agreement, franchisee promised to pay a monthly royalty fee based on a percentage of its monthly revenues. Plaintiff alleges that franchisee has failed to pay royalties since January 10, 1984. In the complaint filed in state court on April 2, 1985, plaintiff did not allege an amount in controversy. Answering the complaint, defendants counterclaimed for damages in excess of $10,000 on the grounds, inter alia, of deceit, and also sought declaratory relief. Defendants then removed the action to this Court on the basis of diversity jurisdiction.

Although admitting to the parties’ diversity of citizenship, plaintiff claims remand is appropriate because federal courts do not have jurisdiction over a diversity action that does not allege the jurisdictional amount. In support of federal jurisdiction, defendants argue that should they lose on the merits, plaintiff’s damages would exceed $10,000.

THE LAW

When the propriety of removal under 28 U.S.C. § 1441(a) is challenged, the removing party has the burden to establish that the federal court has original jurisdiction over the matter. When the jurisdictional basis is diversity of citizenship, the removing party must show not only diversity of the parties, but the requisite jurisdictional amount as well. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189-90, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Rosenberg v. GMV Travel, Inc., 480 F.Supp. 95, 96 (S.D.N.Y.1979).

In this case, federal jurisdiction over plaintiff’s complaint is at best uncertain since it fails to specify the amount of damages sought. Being in possession of the relevant revenue information, the franchisee should be able to reasonably estimate the alleged damages. Defendants have offered no documentary evidence in support of their contention that the complaint exceeds $10,000. Defendants have thus failed to satisfy their burden to present evidence necessary to preserve removal, and doubt as to this Court’s jurisdiction remains. See McNutt, 298 U.S. at 190, 56 S.Ct. at 785.

Remand is appropriate where jurisdiction is doubtful. Lowe v. Trans World Airlines, Inc., 396 F.Supp. 9, 12 (S.D.N.Y.1975). The parties are thus spared the possibility of relitigating the matter should an appellate court later rule that original jurisdiction was lacking. Limbach Co. v. Renaissance Center Partnership, 457 F.Supp. 347, 349 (W.D.Pa.1978). Furthermore, remanding when doubt exists avoids the possibility of extending federal jurisdiction at the expense of state sovereignty. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941).

Alternatively, this dispute may be resolved according to the “well-pleaded complaint” rule. This rule states that a plaintiff cannot create federal jurisdiction by anticipating defendant’s defenses and must instead reveal jurisdictional grounds in the complaint. Louisville and Nashville R.R. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). By analogy, whether a court may properly remand a case depends upon the contents of the complaint as drawn by plaintiff “unaided by the answer or petition for removal.” Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936). Nor does a counterclaim affect the amount in controversy. Coditron Corp. v. AFA Protective Systems, Inc., 392 F.Supp. 158, 161 (S.D.N.Y.1975). Accord Williams v. Beyer, 455 F.Supp. 482 (N.H.1978); Burton Lines v. Mansky, 265 F.Supp. 489 (M.D.N.C.1967).

The party bringing suit “is master to decide-what law he will rely upon.” The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716 (1913). Thus, even if plaintiff’s alleged damages were in excess of $10,000, plaintiff may avoid federal jurisdiction by claiming less and thus thwart attempts at removal. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 294, 58 S.Ct. 586, 593, 82 L.Ed. 845 (1938); Sponholz v. Stanislaus, 410 F.Supp. 286, 288 (S.D.N.Y.1976).

For the foregoing reasons, plaintiff’s motion to remand the action to the Supreme Court of New York, County of New York, is granted.

SO ORDERED.

      . Plaintiff claims an inability to state the amount of damages sought because defendants have not submitted revenue reports since nonpayment began. However, plaintiff has estimated damages to be well below $10,000, based on defendants past performance.

      . In defendant Phillips’ affidavit in support of federal jurisdiction, he claims that plaintiffs' recovery would exceed $10,000 “by virtue of the mathematical computation referred to in the Agreement complained in with reference to the alleged royalties.” Defendants have submitted no revenue reports to indicate how much would be owing to plaintiff.

      . Defendants have not argued in their petition for removal that the counterclaim gives this court jurisdiction over the matter now in controversy, although plaintiff seems to have inferred such.

      . Although a division among the courts exists on this issue (particularly in regard to compulsory counterclaims), this district is among the majority which strictly adheres to the well-pleaded complaint rule. See Wright, Miller, and Cooper, Federal Practice and Procedure, Jurisdiction 2d § 3706 n. 43 (1985).


author: MEREDITH, Senior District Judge.

text:
    NATIONAL CREDIT UNION ADMINISTRATION BOARD, as Liquidating Agent for Zionic Federal Credit Union, Plaintiff, v. David M.A. METZLER, Defendant.
    No. 85-0039-C-(C).
    United States District Court, E.D. Missouri, E.D.
    Jan. 17, 1986.

      Gary Feder and Lee Kline, St. Louis, Mo., for plaintiff.
    Robert Morse, Overland Park, Kan., for defendant.
   FINDINGS OF FACT & CONCLUSIONS OF LAW

MEREDITH, Senior District Judge.

Prior to trial, the parties made the following stipulations:

1. The National Credit Union Administration is an agency of the United States government and plaintiff, the National Credit Union Administration Board (NCUAB) manages said agency.

2. On June 6, 1984, Zionic Federal Credit Union was found to be insolvent and placed in involuntary liquidation; the NCUAB appointed itself as liquidating agent for Zionic.

3. On September 20, 1983, defendant made and delivered to Zionic a written promissory note for $10,000.

4. On September 23, 1983, defendant made and delivered to Zionic a written promissory note for $10,000.

5. On November 16, 1983, defendant made and delivered to Zionic a written promissory note for $8,000.

After consideration of the pleadings, the testimony, depositions and exhibits introduced at trial, the credibility of the witnesses, the parties’ supplemental briefs, and the applicable law, the Court makes the following findings of fact and conclusions of law, considering the above stipulations as incorporated thereto. Any finding of fact equally applicable as a conclusion of law is adopted as such, and conversely, any conclusion of law equally applicable as a finding of fact is adopted as such.

Findings of Fact

1. Zionic was a federally chartered credit union with its principal place of business in St. Louis, Missouri.

2. The present claim arose in the Eastern Division of the Eastern District of Missouri because payments on the notes were to be made at the offices of Zionic located in this Division.

3. Defendant made two payments to Zionic on the notes, the first for $1,823.32 and the second for $7,266.41.

4. National Stewardship Corporation (National Stewardship) is a Missouri corporation.

5. Kyle Conway was an officer and director of National Stewardship.

6. Defendant made three payments of $1,823.32, $8,190.00, and $8,962.72 to National Stewardship or Kyle Conway.

7. Defendant asserts payment as an affirmative defense pursuant to Rule 8(c) of the Federal Rules of Civil Procedure.

8. Zionic and National Stewardship were separate entities.

9. On the first $10,000 promissory note, plaintiff seeks $8,181.97 plus interest from April 23, 1984.

10. On the second $10,000 promissory note, plaintiff seeks $8,169.47 plus interest from April 23, 1984.

11. On the $8,000 promissory note, plaintiff seeks $1,473.32 plus interest from November 11, 1985.

12. Plaintiff also seeks reasonable attorneys’ fees and costs.

Conclusions of Law

1. After finding Zionic insolvent, the NCUAB had the authority to appoint itself liquidating agent for Zionic. 12 U.S.C. § 1787(a)(1) (1982).

2. As liquidating agent, the NCUAB had the power to sue in its own name, or in Zionie’s name, and to collect any debts owed to Zionic. 12 U.S.C. § 1766(b)(3)(A) (1982).

3. Any civil suit to which the NCUAB is a party is deemed to arise under the laws of the United States, and the United States district courts have original jurisdiction. 12 U.S.C. § 1789(a)(2) (1982).

4. A federal court sitting in a non-diversity case may give state law highly persuasive effect. See Justice Jackson’s concurring opinion in D’Oench, Duhme & Co. v. F.D.I.C., 315 U.S. 447, 471, 62 S.Ct. 676, 686, 86 L.Ed. 956 (1942), reh’g denied, 315 U.S. 830, 62 S.Ct. 910, 86 L.Ed. 1224 (1942).

5. The party that seeks to invoke the affirmative defense of payment has the burden of proving it. Federal Deposit Ins. Corp. v. Waldron, 630 F.2d 239, 241 (4th Cir.1980); Desjardins v. Desjardins, 308 F.2d 111, 116 (6th Cir.1962); Current News Features v. Pulitzer Pub. Co., 81 F.2d 288, 290-91 (8th Cir.1936); Hubbard v. Happens Estate, 382 S.W.2d 416, 424 (Mo.Ct.App.1964).

6. The maker of a promissory note pays a party without possession of the note at the maker’s risk. Bost v. McFarland, 229 Mo.App. 776, 81 S.W.2d 350, 353 (1935); Pulitzer Pub. Co. v. Current News Features, 94 F.2d 682, 686 (8th Cir.1938), cert. denied, 304 U.S. 570, 58 S.Ct. 1040, 82 L.Ed. 1535 (1938).

7. Paying the wrong party does not discharge the obligation of the promissory note. Whitehead v. American Security and Trust Company, 285 F.2d 282, 284 (D.C.Cir.1960).

8. Defendant has not proved that Kyle Conway or National Stewardship are agents of Zionic.

9. Accordingly, plaintiff is entitled to the relief prayed for and judgment will be entered in the amount of $17,824.76 on the notes plus interest at the rate of 15% per annum from April 23, 1984 on the balance of the two $10,000 notes ($8,181.97 and $8,169.47 respectively) and from June 28, 1984 on the balance of the $8,000 note ($1,473.32) until the date of judgment, and 7.57% from the date of judgment, plus reasonable attorneys’ fees and costs.

      . If Conway or National Stewardship were agents of Zionic, the requirements of 12 U.S.C. § 1787(i)(2) (1982) and § 1788(a)(3) (1982) would have to be met.