author: RESTANI, Judge:

text:
    Frank E. ALLEN, Plaintiff, v. Donald T. REGAN, Secretary of the Treasury, William von Raab, Commissioner of Customs, and United States Customs Service, Defendants.
    Court No. 84-11-01655.
    United States Court of International Trade.
    March 28, 1985.
    Barnes, Richardson & Colburn, James S. O’Kelly, New York City, for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, New York City, and John J. Mahon, U.S. Dept, of Justice, Civ. Div., Washington, D.C., for defendants.
   RESTANI, Judge:

On April 15, 1981, plaintiff passed the examination for a license as a customhouse broker, a key step in the process to obtain a license. The next step was an investigation into plaintiffs integrity and financial responsibility which the United States Customs Service (“Customs”), through its district director in Cleveland, Ohio, purported to begin immediately. To date, some four years later, no decision has been issued. Plaintiff now seeks a court order compelling defendants to render a decision on his application, or alternatively, a judgment overturning the alleged constructive denial of the license.

Defendants have moved to dismiss this action for lack of jurisdiction alleging that no denial of the license has occurred and that such denial is a prerequisite to suit predicated on the jurisdictional basis of 28 U.S.C. § 1581(g) (1982). Alternatively, defendants seek summary judgment dismissing this case.

The court finds defendants’ jurisdictional defense without merit. This is exactly the type of situation which is appropriate for judicial review and which Congress intended to be judicially reviewed. Whether jurisdiction is technically proper under 28 U.S.C. § 1581(g) is irrelevant because § 1581(i)(4) (1982) is clearly intended to provide a jurisdictional basis if § 1581(g) does not suffice. The proposition that this court is not empowered to review whether Customs is justified in waiting four years or more to decide a relatively simple matter, such as licensing an individual, is untenable. If, as defendants contend, there is no jurisdiction under § 1581(g) because no constructive denial may be recognized under that section, plaintiff’s remedies under § 1581(g) are manifestly inadequate. In such a situation, § 1581(i) will provide the basis of jurisdiction. Cf. United States v. Uniroyal, Inc., 69 C.C.P.A. 179, 687 F.2d 467 (1982).

Having found that it has jurisdiction, the court finds that plaintiff is entitled to a prompt decision on its application. It is clear that Customs had the right to require further investigation after questions as to plaintiff’s suitability were raised in a proceeding in district court under 19 U.S.C. § 1592. See 19 C.F.R. § 111.14(e) (1982). It is also clear that there are no statutory or regulatory time limitations placed on such an investigation, but the regulations necessarily imply some limits, so as not to render the entire process meaningless. Furthermore, Customs may have been justified initially in postponing a full scale investigation in order not to breach an order staying discovery in the § 1592 proceeding, but there is no stay now in effect which would excuse further delay.

Defendants state that they wish no time constraints put upon their investigation because they do not wish to duplicate effort which will be exerted in responding to discovery in the related district court case. This is not a persuasive reason for continued delay. Civil penalty and forfeiture actions proceed at a very different pace from that ordinarily expected in a licensing application investigation. Whether or not plaintiff has a right to a license, he certainly has a right to a decision on a license application. At the very least, 19 C.F.R. Part 111 (1984) gives him that right.

The court finds no merit in plaintiffs request for attorney’s fees. The court also finds that there is no ground for the award of a license to plaintiff on the facts involving the delay in rendering a decision.

This court is empowered to grant equitable relief. See 28 U.S.C. § 2643(c)(1) (1982). Accordingly, defendants are directed to complete their investigation pursuant to 19 C.F.R. Part 111 within 90 days of judgment in this matter, and within 30 days of completion of that investigation, to provide plaintiff with a decision with regard to his license application.

Plaintiff is directed to provide the court with a draft judgment order within 10 days.

      . 28 U.S.C. § 1581(g) (1982) states:
      (g) The Court of International Trade shall have exclusive jurisdiction of any civil action commenced to review—
      (1) any decision of the Secretary of the Treasury to deny or revoke a customhouse broker’s license under section 641(a) of the Tariff Act of 1930; and
      (2) any order of the Secretary of the Treasury to revoke or suspend a customhouse broker’s license under section 641(b) of the Tariff Act of 1930.

      . 28 U.S.C. § 1581(i) (1982) states:
      (i) In addition to the jurisdiction conferred upon the Court of International Trade by subsections (a)-(h) of this section and subject to the exception set forth in subsection (j) of this section, the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for—
      (1) revenue from imports or tonnage;
      (2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;
      (3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or
      (4) administration and enforcement with respect to the matters referred to in paragraphs (l)-(3) of this subsection and subsections (a)-(h) of this section.


source: Caselaw Access Project

author: MISHLER, District Judge.

license: Public Domain

text:
    Mary GUADANO and Robert Guadano, Plaintiffs, v. LONG ISLAND PLASTIC SURGICAL GROUP, P.C., Vincent DiGregorio, M.D. and Nassau Hospital, Defendants.
    No. CV 81-1892.
    United States District Court, E.D. New York.
    April 23, 1982.

      McCoy & Agoglia, P.C., Mineóla, N.Y., for plaintiffs; Kathleen M. Beckett, Mineo-la, N.Y., of counsel.
    Curtis, Mallet-Prevost, Colt & Mosle, New York City, for defendants Long Island Plastic Surgical Group, P.C. and Vincent DiGregorio, M.D., Peter Fleming, Jr., Martin Wendel, New York City, of counsel.
   Memorandum of Decision and Order

MISHLER, District Judge.

This diversity action was commenced by plaintiffs Mary Guadaño and her husband in June 1981. Plaintiffs seek damages for the alleged medical malpractice committed by defendant Dr. DiGregorio. Defendant Long Island Plastic Surgical Group, P.C. (“Surgical Group”) and Dr. DiGregorio presently move for an order staying this action and compelling arbitration of .this matter pursuant to the agreement of arbitration executed on May 21, 1979.

Based upon the undisputed facts in the record, we find that defendants are entitled to the requested relief since the arbitration agreement was openly and fairly entered into.

FACTS

All of the pertinent facts concerning the professional relationship between defendants and Mrs. Guadaño derive from defendants’ affidavits in support of the instant motion.

The beginning of the relationship between Dr. DiGregorio and Mrs. Guadaño dates back to April 30, 1979 when her doctor examined her for elective cosmetic surgery. After this initial examination and consultation with Mrs. Guadano’s family physician, Dr. DiGregorio scheduled the patient for admission to Nassau Hospital on May 22, 1979.

It is uncontested that the arbitration agreement and consent form were mailed to plaintiff for her review on May 10, 1979, some eleven days prior to her next scheduled office visit. In pertinent part, the agreement recited the following language: “I understand that my doctor and his associates ... have adopted the procedure of arbitration to resolve all claims and disputes that may arise in the future out of our medical relationship except for claims of money due for services rendered.” (emphasis added).

Dr. DiGregorio has no specific recollection of any discussions with Mrs. Guadaño regarding the signing of the arbitration agreement. However, it has been the practice of the Surgical Group to adhere to certain rules and procedures in attending to the administrative task of procuring a patient’s agreement to arbitrate. Mary Coley, a duly licensed registered nurse who was employed by the Surgical Group during May 1979, explained those practices and procedures. Her sworn statements constitute admissible evidence of what Mrs. Guadaño was advised prior to signing the arbitration agreement. Since plaintiffs have not responded, by affidavit or otherwise, that Mrs. Guadaño was without the benefit of .these practices and procedures, we find, based on the only evidence before us, the following:

1. Nurse Coley undertook to explain the arbitration agreement to Mrs. Guadaño during her pre-operative visit to the Surgical Group on May 21, 1979;
2. The arbitration agreement was sent to Mrs. Guadaño prior to her pre-opera-tive (May 21) visit and was accompanied with a cover letter which stated: Included in the papers that require your signature is a form consenting to the placement of any future difficulty arising between yourself, your surgeon and/or Long Island Plastic Surgical Group, P.C. into arbitration. We require your signature on this form as well as our signature for reasons that we feel benefit both parties.
By submitting any dispute to arbitration, through the American Arbitration Association, both parties have the dispute determined much more quickly than had the matter been brought to a Court of Law. Arbitration is a simplified, efficient procedure whereby both parties save a great deal of cost and time in settling any dispute. Arbitration does not take away anybody’s right to raise a dispute and have it resolved. Any dispute that could be brought to Court can be brought to arbitration. It simply substitutes one type of form for another. Instead of going through the entire Court system and have a Judge and in most cases a jury determine the issues involved, arbitration is submitted to an impartial arbitrator who makes the decisions. This saves significant Court costs for both sides and has the potential of reducing fees to the individual and expert costs to the individual.
Arbitration is merely a more efficient and less time consuming process;
3. Nurse Coley advised Mrs. Guadaño (a) that due to the increase in malpractice cases and the rise in insurance premiums, the Surgical Group felt it necessary to establish the policy of having the patient enter into binding arbitration, (b) that this policy was also attributable to mounting court costs as well as large jury awards in medical malpractice cases, (c) that the arbitration would be under the auspices of the American Arbitration Association and that the three arbitrators would be comprised of a lay person, a physician and an attorney, (d) that in agreeing to the arbitration process, she would not relinquish her right to a legal remedy for any wrongdoing which the doctor or his associates might commit but that she would be giving up her right to a trial by jury, (e) that the findings made by the American Arbitration Association were binding upon the parties, (f) that she could be represented by counsel at the arbitration procedure, and (g) that two booklets provided by the American Arbitration Association were available for her review; and
4.Nurse Coley suggested that Mrs. Guadaño speak to Dr. DiGregorio if she had any objections to or questions concerning the arbitration agreement or was reluctant to sign it.

As previously stated, the foregoing evidence has not been challenged in any meaningful respect and therefore no hearing is required.

Dr. DiGregorio’s statements concerning his general practice establish that he inquired of Mrs. Guadaño whether she had any questions regarding the arbitration agreement. The doctor recalls neither Mrs. Guadaño nor her husband, who was also present, asking any questions.

The surgery performed on Mrs. Guadaño “was elective, voluntary surgery” and was necessary for “cosmetic reasons” only. The success of the operation did not require that it be performed within any particular time frame. The operation could have been performed by any qualified plastic surgeon. Plaintiffs fail to allege any special circumstances (e.g., the parties had a prior relationship) which might indicate unequal bargaining power between Mrs. Guadaño and Dr. DiGregorio.

In opposition to defendants’ motion to stay this action and compel arbitration, plaintiffs make the following arguments: (i) the arbitration agreement is inherently inequitable since Mrs. Guadaño was asked to relinquish her constitutional right to a jury trial without the assistance of counsel, (ii) Mrs. Guadaño was not specifically advised by defendants that the arbitration agreement would encompass a claim for malpractice, (iii) the arbitration agreement constitutes a contract of adhesion because of the parties’ unequal bargaining power, and (iv) the arbitration agreement should be rescinded on the grounds of mistake.

DISCUSSION

Neither of the parties has referred us to a New York Court of Appeals case which treats the issues before us in the context of a doctor-patient relationship, nor has our research uncovered such authority. Accordingly, it is our task to determine the law of New York from the perspective of the highest court of the state. See e.g., Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832, 851 (2d Cir.1967); Harem-Christensen Cory. v. M.S. Frigo Harmony, 477 F.Supp. 694, 697 (S.D.N.Y.1979).

We reject plaintiffs’ first argument out of hand. It was not incumbent upon defendants to urge or even to advise Mrs. Guadaño to seek the assistance of counsel before she contracted to relinquish her right to a jury trial. Defendants fairly advised Mrs. Guadañó concerning the nature of the arbitration process. The cover letter which accompanied the arbitration agreement explained that decisions concerning disputes covered by the agreement would be made by an impartial arbitrator instead of either a judge or a jury. Nurse Coley indicated that defendants’ desire for arbitration was in part attributable to large jury awards in medical malpractice cases. She reiterated what was stated in the cover letter — that Mrs. Guadaño would forfeit her right to a jury trial under the arbitration agreement. We note that Mrs. Guadaño makes no allegations, either in her pleadings or elsewhere, that she failed to understand any of the implications which would ensue from the election of the arbitration process.

Plaintiffs propose a rule that encourages the advice of counsel in every instance where a contract includes an arbitration clause. Where, as here, the nature of an arbitration was fairly explained, we can conceive of no reason to adopt plaintiffs’ position. Moreover, given the high cost of obtaining legal services, the proposed rule appears inconsistent with New York State’s public policy which favors arbitration, in part, due to its virtue of conserving financial resources of the contracting parties. See e.g., Mobil Oil Indonesia, Inc. v. Asamera Oil (Indonesia) Ltd. 43 N.Y.2d 276, 281-82, 401 N.Y.S.2d 186, 188, 372 N.E.2d 21, 23 (1977); Matter of Maye, 40 N.Y.2d 113, 117-18, 386 N.Y.S.2d 69, 72, 351 N.E.2d 717, 720 (1976); see also McLaughlin, Practice Commentaries, McKinney’s Sections C7501:4-6 (1980).

Plaintiffs next seek to set aside the arbitration agreement because defendants failed to advise Mrs. Guadaño that the arbitration clause encompassed claims for medical malpractice. Plaintiffs appear to claim that the arbitration clause itself was induced by fraud which, if proven, would provide a defense to arbitration. Housekeeper v. Lourie, 39 A.D.2d 280, 333 N.Y.S.2d 932 (1st Dep’t.1972). The facts do not support the claim.

Mrs. Guadaño submitted no affidavit which would tend to establish her ignorance concerning the scope of the arbitration agreement. Furthermore, Nurse Coley’s explanation of the advantages of arbitration from the standpoint of the Surgical Group sufficiently apprised Mrs. Guadaño of this fact even if the broad language of the clause did not. Defendants did not deceive Mrs. Guadaño in any respect concerning the scope of the arbitration agreement. The uncontradicted evidence before the court requires the conclusion that the agreement was entered into openly.

The previously stated facts also require us to reject plaintiffs’ claim of mistake. See Restatement (Second) of Contracts § 20 (1981). Mrs. Guadaño had reason to know of the meaning defendants attached to the arbitration agreement. On the other hand, in light of Nurse Coley’s general practice, defendants had no reason to believe Mrs. Guadaño might believe that the all encompassing arbitration clause would exclude malpractice claims.

Finally, the facts of this case do not support the contention that the arbitration agreement is unconscionable. The consequences of the arbitration agreement were explained to Mrs. Guadaño. Mrs. Guadaño failed to assert any special need, either actual or perceived, to have Dr. DiGregorio or any of his associates at the Surgical Group perform the operation. In the face of Dr. DiGregorio’s contrary assertions contained in his affidavit, plaintiffs simply fail to make out a cáse that the arbitration clause is unconscionable. Restatement (Second) of Contracts § 208 (1981).

Defendants’ request for an order staying this action and compelling arbitration of the issues raised in the complaint is granted, and it is

SO ORDERED.

      .Following oral argument on this motion, the court, sua sponte, afforded plaintiffs twenty (20) days leave by which they were to serve and file affidavits made on personal knowledge which would be sufficient to controvert any of the facts sworn to in the affidavits submitted by defendants. No such affidavits were forthcoming. On April 5, 1982, plaintiffs’ counsel informed this court that plaintiffs would concede, for the purposes of this motion, the facts as stated in the affidavits submitted by defendants.

      . Based on the April 30 examination, Dr. DiGre-gorio concluded that plaintiff was a candidate for plastic surgery of the eyelids (a bilateral upper and lower lid blephoroplasty), an excission of the skin for the elimination of wrinkles (a rhytidectomy), and a tucking of the platelike muscle in the neck (a platysma plication). Each of these procedures were performed by Dr. Di-Gregorio in the latter part of May 1979.

      . Nurse Coley was the witness to the arbitration agreement entered into between the parties on May 21, 1979.

      . As indicated in footnote 1, the court provided plaintiffs with ample opportunity to challenge the probative value of the general practices of the Surgical Group. By failing to submit an affidavit which denies that the Surgical Group’s practices were adhered to in this case, plaintiffs have conceded, for the purposes of this motion, that such procedures in fact were performed.


author: RALPH G. THOMPSON, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Merle Ellis OWENS, Defendant.
    No. CR-83-240-T.
    United States District Court, W.D. Oklahoma.
    Nov. 28, 1983.

      William S. Price, U.S. Atty., Jim Robinson, Asst. U.S. Atty., Oklahoma City, Okl., for plaintiff.
    Frank Courbois, Fred L. Staggs, Oklahoma City, Okl., for defendant.
   MEMORANDUM OPINION AND ORDER

RALPH G. THOMPSON, District Judge.

The defendant is charged by a two count indictment, Count I charging him with conspiracy to possess cocaine with intent to distribute in violation of 21 U.S.C. § 846 and Count II charging him with possession with intent to distribute in violation of 21 U.S.C. § 841(a)(1).

Before the Court for consideration is (1) defendant’s Motion to Suppress Evidence, (2) his Motion for Judgment of Acquittal as to Count I of the Indictment, and (3) the case on its merits.

On November 14, 1983, the Court heard testimony and arguments addressed to the defendant’s Motion to Suppress Evidence, which was taken under advisement. Thereafter the defendant waived his right to a jury trial and the case was presented to the Court sitting without a jury. At the close of the government’s case the defendant moved for judgment of acquittal on Count I of the indictment on the grounds that the government had failed to present any evidence in support of it.

This Memorandum Opinion and Order contains rulings both on the defendant’s motions-as well as the Court’s findings of fact and conclusions of law from the trial.

THE CONSPIRACY COUNT

As to Count I of the indictment, the government failed to present any evidence of an agreement between the defendant and another concerning possession of the cocaine with an intent to distribute it. In the absence of evidence concerning such an agreement, a finding that the defendant conspired with others cannot be made. United States v. Vergara, 687 F.2d 57 (5th Cir.1982); United States v. Houde, 596 F.2d 696 (5th Cir.1979), cert. denied, 444 U.S. 965, 100 S.Ct. 452, 62 L.Ed.2d 377 (1979). Accordingly, the defendant’s motion for judgment of acquittal as to Count I of the indictment is sustained. Rule 29, Federal Rules of Criminal Procedure.

THE POSSESSION COUNT

As to Count II, the evidence presented at trial established that approximately 2.3 ounces of cocaine that was 88 to 89 percent pure, a triple beam scale for measuring precise quantities in small amounts, a quantity of a diluting agent, Mannitol, a quantity of marijuana, various drug paraphernalia and a loaded gun were recovered by the police in the defendant’s motel room under circumstances more specifically described hereafter. The cocaine had a “street value” of about $60,000. The defendant was the sole registered guest and occupied his motel room with a female companion for an extended period of time prior to and at the time of, his arrest. During his occupancy the defendant had received an extraordinary number of incoming telephone calls and visits of short duration by unidentified persons all of which aroused the suspicion of the motel management and prompted surveillance of the room.

These circumstances are sufficient to establish the defendant was in constructive possession of the cocaine. “Constructive possession” of a controlled substance occurs when a person does not have physical possession but does have the intent and capability of maintaining dominion and control of the substance or the ability to reduce it to actual possession. United States v. Martinez, 588 F.2d 495 (5th Cir.1979).

In view of the quantity of cocaine seized in the presence of a diluting agent, the sensitive measuring device, and the circumstances and activities described, the reasonable inference to be drawn is that the defendant intended to distribute a portion of his supply to others. United States v. Ramirez-Rodriques, 552 F.2d 883 (9th Cir.1977). 21 U.S.C. § 802(11) defines “distribute” to mean “to deliver” 21 U.S.C. § 802(8) defines “deliver” to mean “the actual, constructive, or attempted transfer of a controlled substance. The government is not required to establish the existence or anticipation of a sale.” United States v. Workopich, 479 F.2d 1142 (5th Cir.1973). Moreover, the mere passing of narcotics between two individuals for their own personal use constitutes a distribution. United States v. Branch, 483 F.2d 955 (9th Cir.1973). The defendant was the sole registered occupant of the motel room in which the cocaine was discovered. There is no evidence to indicate that the cocaine was jointly acquired by the defendant and his companion, see, United States v. Swiderski, 548 F.2d 445 (2nd Cir.1977). Even if the defendant did not intend to sell the cocaine to others, he at least possessed it with the intention of sharing it with another.

Accordingly, the evidence is sufficient to establish beyond a reasonable doubt that the defendant constructively possessed the cocaine with the intent to distribute it in violation of 21 U.S.C. § 841(a)(1), provided, the cocaine in his possession is legally admissible in his trial. Thus, the admissibility of the cocaine, as the product of a warrantless search, as challenged by the defendant’s Motion to Suppress Evidence, is the determinative issue of the case.

THE MOTION TO SUPPRESS EVIDENCE

After keeping the defendant’s room under surveillance throughout the preceding night, on the morning of September 12, 1983, Officer Epperly, accompanied by Officer Matthews, both of the Oklahoma City Police Department, returned to the motel where they requested a public records check on the license tag of the defendant’s car. They were advised that the license tag had been reported stolen. The officers kept the defendant’s room under further surveillance. Between 7:30 and 12:00 noon they observed a female looking out of the room from time to time. Additionally, it is noted that the motel manager may have requested the officers to enter the room and remove the occupants and their possessions on the basis that the defendant had registered as, and been charged for, a single occupancy whereas two persons occupied the room, and further that the defendant was unpaid beyond check-out time without permission. About noon, Officers Ep-perly and Matthews, together with another officer, Digby, devised a plan to entice the defendant out of his room, pursuant to which Digby, who was not in uniform, knocked on the door of the room and, posing as a motel employee, asked the defendant to move his car so that maintenance could be performed on the parking lot. When the defendant departed his room and got into his car, he was arrested on the felony charge of receiving stolen property. After securing the defendant, Epperly and other officers proceeded to enter the defendant’s room where they discovered the defendant’s companion asleep on & bed. Also located about the room were the marijuana cigarettes, the various items of drug-related paraphernalia, the triple beam scale, various chemicals, glassware and the loaded gun. They opened a dresser drawer and in it found two closed bags containing the cocaine. The search and seizure were conducted without their first having obtained a search warrant.

The question here is whether the extent of the search conducted in the defendant’s room can be justified as an exception to the requirement for a search warrant under the Fourth Amendment to the Constitution of the United States. A search conducted without a warrant is valid only to the extent that it complies with the particular requirements of the justifying exception unless information validly discovered during the search justifies a further search pursuant to one of the exceptions. Here the defendant was validly arrested while occupying a motor vehicle with a stolen license tag. Inasmuch as the police officers believed, not unreasonably, that the defendant had a companion in his motel room who posed a risk to their personal safety, the officers were justified under the exigent circumstances to enter the defendant’s room in order to neutralize the possibility of harm. Inasmuch as the officers were validly present in the room, they could seize any contraband or evidence of criminal activity which was in their plain view. Coolidge v. New Hampshire, supra. However, none of the generally recognized exceptions would have permitted the officers to extend their warrantless search into the contents of a closed container in a closed dresser drawer under these circumstances.

Therefore the cocaine offered as evidence against the defendant was seized by the police as the result of an unauthorized search. If the “exclusionary rule” is applied absolutely, such evidence of defendant’s guilt must be excluded and the defendant acquitted. If the rule is not applied, or if a “good faith exception” to the rule is applied, the evidence is admissible and the defendant is found guilty.

THE EXCLUSIONARY RULE

The exclusionary rule is not a part of the Fourth Amendment itself. It had its birth in 1914 when the United States Supreme Court decided Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914). There it was held that the use at trial of illegally seized evidence constituted prejudicial error. The holding was justified on the grounds that the remedy it had fashioned was necessary to protect the individual’s privacy as secured by the Fourth Amendment. More recently, the remedy fashioned in Weeks has been justified on the grounds that its “prime purpose is to deter future unlawful police conduct”. United States v. Calandra, 414 U.S. 338 at 347, 94 S.Ct. 613 at 619, 38 L.Ed.2d 561 (1974). However, decisions of the Court increasingly question the efficacy of the rule for this purpose, express concern for the high price society is paying for the doubtful beneficial effects it is providing and continue to make significant departures from its application in certain circumstances.

In his dissenting opinion in Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971) at 416, 91 S.Ct. at 2014, Chief Justice Burger stated “there is no empirical evidence to support the claim that the rule actually deters illegal conduct of law enforcement officials.” In Calandra, supra, the Court held that the rule “has never been interpreted to proscribe the use of illegally seized evidence in all proceedings or against all persons.”

In Stone v. Powell, 428 U.S. 465, 96 S.Ct. 3037, 49 L.Ed.2d 1067 (1976), the Court denied application of the rule in federal habeas corpus review of state convictions under certain conditions, while otherwise reaffirming its adherence to the rule. However, the Court also indicated that it should not be applied through a blind adherence to judicial policy:

“The disparity in particular cases between the error committed by the police officer and the windfall afforded a guilty defendant by application of the rule is contrary to the idea of proportionality that is essential to the concept of justice. Thus, although the rule is thought to deter unlawful police activity in part through the nurturing of respect for Fourth Amendment values, if applied indiscriminately it may well have the opposite effect of generating disrespect for the law and administration of justice.” 428 U.S. at 490-1, 96 .S.Ct. at 3050-1 (footnote omitted).

Protecting citizens from unlawful police conduct and all other violations of constitutional rights is profoundly laudable and necessary. However, an analysis of the controlling authorities permits the conclusion that the rule need not be applied as a matter of judicial rote and that it is not the only remedy that can be applied for a Fourth Amendment violation. It is acknowledged that, as yet, no Supreme Court decisions have expressly so held. However, while arising out of different factual circumstances, other courts have concluded that the present state of the controlling decisions does not require an absolute application of the rule and permits, at least, a good faith exception to it. See United States v. Williams, 622 F.2d 830 (5th Cir.1980), cert. denied, 449 U.S. 1127, 101 S.Ct. 946, 67 L.Ed.2d 114, which held that where law enforcement officials have acted without authority or mistakenly, yet in the reasonable good faith belief that such action was proper, the exclusionary rule shall not apply. I conclude that while the exclusionary rule remains as one of the remedies to protect against unlawful police activity, a good faith exception may apply in a proper case and, moreover, the rule is but one of several remedies that can be applied for such violations. It is neither the only remedy or deterrent nor the one required to be imposed absolutely when such a violation has occurred.

Among the other existing remedies presently available for such violations are civil suits for money damages against the erring officers, state and federal, and their employing agencies. 42 U.S.C. § 1983; Bivens v. Six Unknown Named Agents, supra. The availability of these remedies provide both redress for the individual and deterrents from further unlawful police conduct.

Given the availability of other protections in the form of remedies and deterrents, the old concept that “the criminal is to go free because the constable has blundered” is neither necessary constitutionally nor affordable socially.

In this case, the police found themselves legitimately in a room virtually overflowing with evidence of criminal activity. Their error was that they proceeded to search the contents of a closed drawer in the room without first obtaining judicial approval. Had the police officers sought such approval, it is a virtual certainty that it would have been granted. Had they first obtained a warrant it would have delayed, but not prevented, the police discovery of the evidence sought to be suppressed. While the defendant complains that his Fourth Amendment rights were violated, the remedy he seeks, i.e., the exclusion from trial of evidence clearly establishing his guilt, is not only disproportionate to the injury he has suffered, but is vastly disproportionate to society’s interest in seeing the guilty convicted without artificial obstructions.

In all of the foregoing circumstances, I find that the officers acted in the reasonable good faith that their act was proper, that the good faith exception applies and the evidence shall not be excluded by application of the rule.

Moreover, even without the application of the good faith exception, under the foregoing circumstances I find that no application of the rule is justified.

By applying the exclusionary rule only the undeniably guilty defendant will benefit by the exclusion of valid evidence establishing his guilt. As a practical consequence, as in other such cases, society will be harmed by being denied the protection it is due from the criminal justice system. The fundamental purpose of a trial, being a search for the truth, will be obstructed. It will free the guilty, produce a result that appears fictitious and absurd and foster disrespect for the law.

It is further acknowledged that no reported cases have construed the decisions this broadly. This ruling may however provide an opportunity for appellate courts to fashion at least a modified version of the rule and, if so, the case may have utility beyond its own facts.

Accordingly, the motion to suppress illegally seized evidence is denied and the evidence is admitted. It establishes beyond a reasonable doubt the defendant’s guilt of possession of cocaine with the intent to distribute as charged in Count II of the indictment. The defendant is guilty as charged. He is free to pursue the other remedies available to him for the violation of his Fourth Amendment rights.

      . There are generally nine recognized exceptions to the Fourth Amendment requirement that police officers must obtain judicial approval to conduct a search. These exceptions are as follows: (1) search conducted incident to a valid arrest, Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969); (2) a stop and frisk, Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968); (3) a search conducted under exigent circumstances that compel the search to occur, Mincey v. Arizona, 437 U.S. 385, 98 S.Ct. 2408, 57 L.Ed.2d 290 (1978); (4) a search of a motor vehicle in certain circumstances, Michigan v. Long, 463 U.S. 1032, 103 S.Ct. 3469, 77 L.Ed.2d 1201 (1983); (5) evidence in plain view, Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971); (6) airport searches to prevent air piracy; (7) border and customs searches, United States v. Ramsey, 431 U.S. 606, 97 S.Ct. 1972, 52 L.Ed.2d 617 (1977); (8) Searches conducted in a security institution such as a prison, Lanza v. New York, 370 U.S. 139, 82 S.Ct. 1218, 8 L.Ed.2d 384, (1962); and (9) a search conducted pursuant to a valid consent, Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973).

      . In Calandra, the Supreme Court refused tó extend the application of the rule to grand jury proceedings. In reaching this conclusion, the Court balanced “the potential injury to the historic role and functions of the grand jury against the potential benefits of the rule.” In United States v. Payner, 447 U.S. 727, 100 S.Ct. 2439, 65 L.Ed.2d 468 (1980), the Supreme Court refused to apply the rule at trial to evidence unlawfully seized from a third party not before the court by weighing the benefits of the rule to the detriment caused by its imposition. In reaching its conclusion, the Court cited Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437, 4 L.Ed.2d 1669 (1960), for the proposition that: “[A]riy apparent limitation upon the process of discovering truth in a federal trial ought to be imposed only upon the basis of considerations which outweigh the general need for untrammeled disclosure of competent and relevant evidence in a court of justice.” 447 U.S. at 735, 100 S.Ct. at 2446.

      . Abolition or modification of the exclusionary rule could be accomplished legislatively. However, to date, no such action has been taken by the Congress.

      . An excellent discussion of the social costs involved in the application of the exclusionary rule, and an analysis of the benefits that could be obtained through other remedies may be found in "Enforcing the Fourth Amendment by Alternatives to the Exclusionary Rule," by Judge Malcolm Richard Wilkey, 95 F.R.D. 211.

      .Such civil remedies are, after all, the remedies available to innocent victims of unlawful police conduct against whom no criminal charges are lodged. In the absence of a demonstrated need to apply the exclusionary rule for an egregious violation of the Fourth Amendment by police officers, a guilty defendant should have no greater rights, benefits or remedies than innocent victims. When the exclusionary rule in criminal cases is automatically applied, the remedies available to a guilty defendant are unjustifiably disproportionate to the remedies available to an innocent victim.


author: HEAD, District Judge.

text:
    PRO HARDWARE, INC., et al. v. HOME CENTERS OF AMERICA, INC.
    C.A. No. C-83-162.
    United States District Court, S.D. Texas, Corpus Christi Division.
    April 6, 1984.

      Camp Cuthrell, Cuthrell, Hough, Hulings & Thornton, Corpus Christi, Tex., for plaintiffs.
    Seagel V. Wheatley, Oppenheimer, Rosenberg, Kelleher & Wheatley, San Antonio, Tex., for defendant.
   ORDER GRANTING PRELIMINARY INJUNCTION

HEAD, District Judge.

This case is a dispute for the use of the word “PRO” between businesses engaged in the sale of hardware and home-improvement materials. The Plaintiffs are Pro Hardware, Inc., C.C. Distributors, Inc., and Herman R. Johnson, Sr., d/b/a Turf & Irrigation Company. Plaintiff Pro Hardware, Inc., hereinafter called “Pro Hardware,” is a New York corporation engaged in the business of providing hardware services and products through a distribution network to independently owned retail hardware, lumber and building material establishments. Pro Hardware provides technical assistance to wholesalers and retailers on how to operate a hardware store, how to market its wares, and how to buy hardware with Pro Hardware’s assistance from national manufacturers at a discount. Pro Hardware receives a commission from manufacturers for its orders. Plaintiff CC Distributors, Inc., hereinafter called “CC Distributors,” is a Texas corporation and is the local distributor for Pro Hardware services and products in Corpus Christi and the surrounding area. Plaintiff Herman Johnson, hereinafter called “Turf & Irrigation Company,” is one of eight hardware retail stores in Corpus Christi that is licensed by Pro Hardware and CC Distributing to use the mark “PRO” in connection with the operation of its 'hardware store.

Defendant Home Centers of America, Inc., hereinafter called “HOME PRO,” is a Delaware corporation with its principal offices in San Antonio, Texas. HOME PRO sells through its several retail outlets hardware, lumber, and building materials. HOME PRO views itself as a marriage of two industries — the lumber industry and the hardware industry. A HOME PRO store is named a “HOME PRO WAREHOUSE.” The use of the word “warehouse” is indicative of the marketing technique used by HOME PRO, that is, a very large building with rows and rows of merchandise stacked in warehouse fashion where the customer sees all material held by the store and selects what he wants. Pro Hardware stores, however, generally bear the tradename of the owner, or perhaps the owner’s name, in conjunction with the word “PRO,” and are much smaller in size and are generally a traditional hardware store located in a suburban shopping center.

This suit was filed after it came to the attention of Pro Hardware that HOME PRO intended to open a warehouse in Corpus Christi, Texas, and had previously done so in San Antonio. The San Antonio store openings were unknown to Pro Hardware because Pro Hardware had no distributors or stores in San Antonio.

JURISDICTION

This Court has jurisdiction over the subject matter of this suit and the parties under the Federal Trademark Act, 15 U.S.C. §§ 1051-1127, and jurisdiction is further proper under 28 U.S.C. §§ 1332, 1338(a) and 1338(b). The matter in controversy exceeds $10,000, exclusive of costs and interest. Venue is proper.

SPECIAL FACTS

The trademarks involved in this suit are owned by Pro Hardware and are registered with the United States Trademark Office as follows:

Pro Registration No. 791976 of June 29, 1966 — for “rendering technical assistance to retail hardware store operators in the fields of store planning, purchasing, advertising, sales, product planning, inventory planning, promotion, and financial guidance.”
PROMART Registration No. 964410 of July 17, 1973 — for “retail store services specializing in hardware, appliance, home and garden equipment and supplies, building supplies, and related products.”
PRO design mark, Registration No. 816358 of October 4, 1966 — “for indicating membership in a collective group associated through and with applicant and authorized and approved by applicant.”

Defendant does not dispute Pro Hardware’s ownership of the registrations or their validity. What Defendant disputes is the exclusivity of the use of the word “PRO” with respect to its own operations.

Since its organization in 1953, Plaintiff has worked with independent PRO and later PROMART dealers in the distribution and retailing of hardware and building materials and lumber to the public. The PRO program is described in Plaintiffs’ Exhibit 1, as testified by Harold Duncan, Chairman of the Board of Directors of Pro Hardware and its chief executive officer. Basically, the PRO program includes a national and international identification with the PRO mark, personalized service, extensive merchandise availability, volume buying power, inventory management, complete promotional program, store planning, merchandising aids, computer services, and retail training. The PRO buying distribution and retail system has twenty distribution centers located throughout the country, with distribution and retail facilities in Canada, United Kingdom, Italy, South Africa,' and Australia. The PRO identity has been and continues to be widely advertised. Pro Hardware has continuously advertised PRO for more than twenty years and PRO-MART for more than ten years through circulars, newspaper ads, brochures, trade journals, TV and radio.

CC Distributors also advertises and promotes the PROMA.RT marks through newspapers, brochures, and TV. Although the PRO distribution is not the exclusive business of CC Distributors, the PRO and PROMART marks have been and are used in a variety of ways in their advertising. The retail stores have sometimes incorporated PRO as part of their store names, e.g., “Town and Country Pro Hardware,” “Center Pro Hardware.” PRO retail stores are not required to use the word “PRO” in their names, however, they are all required to display it. Bud Wilkinson has advertised internationally for PRO and PRO’s slogan is “PRO advice plus a real good price.” Brochures also invite readers to “get the PRO advantage.”

Through its efforts, the PRO program has become the second largest wholesale merchandising hardware group in the country, handling a wholesale volume of 605 million dollars in 1983. The National Retail Hardware Association’s managing director testified that the word “PRO” in the field of hardware wholesaling and retailing means Pro Hardware and its PRO program.

Defendant HOME PRO was incorporated as a Delaware corporation on February 13, 1983, and in May of that year opened its first store in San Antonio under the name of HOME PRO WAREHOUSE! All of its stores bear that same name. It obtained the servicemark “HOME PRO WAREHOUSE” for use in connection with “retail hardware store services.” This application is now pending. Its prospectus is submitted as Plaintiffs’ Exhibit 86 and acknowledges competition with respect to some of its products with discount stores— local, regional and national — hardware stores, independent building supply stores, and home centers. Pro Hardware’s local retailers and distributors using the PRO. marks are included in the foregoing category-

HOME PRO uses “PRO” in a variety of ways. Obviously, it uses the word “PRO” in connection with its own name, HOME PRO WAREHOUSE. It has also used the name as part of its application, “HOME PRO,” for U.S. and Texas trademarks. PRO is used in connection with its advertising program; a character, “Joe Pro,” has been created to represent a store clerk. Defendant most frequently uses the word “PRO” in reference to store personnel, who are called the “HOME PROs,” i.e., professionals who can help the do-it-yourselfer upon entering the store. PRO is an important part of the name HOME PRO WAREHOUSE to the founders of the company. PRO was selected as a shortened form of “professional.”

CAUSE OF ACTIONS

Plaintiffs allege five causes of action. First, Defendant’s use of the mark “HOME PRO WAREHOUSE” infringes Plaintiffs’ trademarks “PROMART,” “PRO,” and “PRO” with a design, in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114; (2) Defendant’s use of the mark “HOME PRO WAREHOUSE” constitutes unfair competition by being a false designation of origin, which is unlawful under § 43(a) of the Lan-ham Act, 15 U.S.C. § 1125(a); (3) Defendant’s use of “HOME PRO WAREHOUSE” constitutes common law trademark infringement; (4) Defendant’s use of “HOME PRO WAREHOUSE” constitutes common law unfair competition; and (5) the use by Defendant of “HOME PRO WAREHOUSE” violates the Texas Deceptive Trade Practices-Consumer Protection Act, Tex.Bus. & Comm.Code, §§ 17.46(b)(1) and §§ 17.46(b)(2). Plaintiffs seek to enjoin preliminarily and permanently Defendant from using the word “PRO” in connection with its operations.

INJUNCTIVE RELIEF

A District Court should issue a preliminary injunction in a trademark case only if the Plaintiff clearly demonstrates: (1) a substantial likelihood that the Plaintiff will ultimately prevail on the merits; (2) that the Plaintiff will suffer irreparable injury unless the injunction issues; (3) that the threatened injury to the Plaintiff outweighs whatever damage the proposed injunction may cause the Defendant; and (4) that the injunction, if issued, would not be adverse to the public interest. Vision Center v. Opticks, Inc., 596 F.2d 111, 114 (5th Cir.1979). The Plaintiff has the burden of proof and persuasion for each of these four factors.

Primary reliance has been placed at the preliminary injunction hearing and in their briefs by the Plaintiffs upon an action for trademark infringement under 15 U.S.C. § 1114, which provides: “(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 to deceive ... shall be liable in a civil action by the registrant...”

The Plaintiff must show a violation of this section by proving that the Defendant has used (1) any reproduction, counterfeit, copy, or colorable imitation of a mark, (2) without the registrant’s consent, (3) in commerce, (4) in connection with the sale, offering for sale, distribution or advertising of any goods, and (5) where such use is likely to cause confusion or to cause mistake or to deceive. Boston Professional Hockey Assn., Inc. v. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004, 1009-1010 (5th Cir.1975). Section 1114 applies to servicemarks and collective membership marks, as well as to trademarks. Id.

The principal issue in this case and the issue that was tried before the Court is whether Defendant’s use of the word “PRO” is likely to cause confusion. Trademark infringement occurs only when the use sought to be enjoined is likely to confuse purchasers with respect to such things as the product source, its endorsement by the plaintiff or its connection with the plaintiff. Kentucky Fried Chicken Corp. v. Diversified Packing Corp., 549 F.2d 368, 388 (5th Cir.1977). Likelihood of confusion is a question of fact in this circuit. Exxon Corp. v. Texas Motor Exchange of Houston, Inc., 628 F.2d 500, 504 (5th Cir.1980). The likelihood of confusion is expressed in terms of the product’s typical buyer. Kentucky Fried Chicken, supra, 549 F.2d at 369, n. 26. “ ‘The general impression of the ordinary purchaser, buying under the normal prevalent conditions of the market and giving the attention such purchasers usually give in buying that class of goods, is the touchstone.’ ” Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 500-501, n. 5 (5th Cir.1979) (quoting 3 R. Callman, The Law of Unfair Competition, Trademarks and Monopolies, s. 81.2, at 577 (footnote omitted) (3d ed. 1969)). No proof of actual confusion is necessary. The likelihood of confusion is the determinative factor. World Carpets, Inc. v. Dick Littrell’s New World Carpets, 438 F.2d 482, 489 (5th Cir.1971).

To determine whether there is a likelihood of confusion, the finder of fact is required to evaluate a variety of factors: (1) the type of trademark; (2) the similarity of design; (3) similarity of product; (4) identity of retail outlets and purchasers; (5) similarity of advertising media used; (6) Defendant’s intent; and (7) actual confusion. Roto-Rooter Corp. v. O’Neal, 513 F.2d 44, 45 (5th Cir.1975). In reviewing the Roto-Rooter Cory, factors, the Court finds most of them favorable to the Plaintiffs. In reviewing all of the factors and balancing them, the Court finds that the Defendant’s use of the word “PRO” will, and does, constitute confusion with the Plaintiffs’ lawful use of their marks.

I. TYPE OF MARK

Plaintiffs’ “PRO” marks are validly registered and owned by Pro Hardware. Pro Hardware filed in the United States Patent and Trademark Office and the Office accepted affidavits under § 15 of the Lanham Act with respect to the incontestability of these registrations.

The Court concludes that the marks are incontestable under 15 U.S.C. § 1065. Since the marks are incontestable, they cannot be challenged as “merely descriptive.” Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980). The Court therefore rejects Defendant’s argument that Plaintiffs’ marks warrant little protection because they are merely descriptive.

According to National Retail and Hardware Association’s managing director, William Mashaw, “PRO” in hardware retailing and wholesaling means Pro Hardware and the PRO program. The Court finds his testimony is unbiased and credible as to the strength of the word. He was aware of only one or two other uses of the word “PRO” on hardware products such as paint.

Although “PRO” is widely used in all facets of American life, from sports figures and sports activities to toothbrushes, “PRO” is a strong mark in the hardware business. Its strength has arisen as a result of the efforts of Pro' Hardware, Inc., to build a network of wholesalers and retailers to market and sell under a Pro Hardware servicemark and trademark. Although many use “PRO” in connection with other businesses, Pro Hardware has steadfastly defended the use of the word “PRO” in the hardware field. Although there are many third-party registrations and uses of the word “PRO”, the Court concludes that the many third-party “PRO” registrations outside the hardware field are not relevant to the strength of Plaintiffs’ marks because Plaintiff does not seek protection of its PRO marks outside its own field. Amstar v. Domino Pizza, Inc., 615 F.2d 252 (5th Cir.1980).

The Court is aware that Sun Banks of Florida, Inc. v. Sun Federal Savings and Loan Assn., 651 F.2d 311 (5th Cir.1981) does not follow the distinction set forth in Amstar. Some District Courts continue to view Amstar as controlling. American Rice v. Arkansas Ricegrowers Co-op., 532 F.Supp. 1376, 1386-1387 (S.D.Tex.1982); Exxon Corp. v. Humble Exploration Co., 524 F.Supp. 450 (N.D.Tex.1981), reversed on other grounds, 695 F.2d 96 (5th Cir.1983). Additionally, the Patent and Trademark Office, Trademark Trial and Appeals Board, in BAF Industries v. Pro Specialties, Inc., 206 U.S.P.Q. 166, 175 (PATB 1980), finds third-party registrations relevant to the issue of the strength or weakness of a mark when the third-party registrations are “for goods and products identical in kind or closely related to those of applicant and opposer.” The Court finds that Plaintiffs have demonstrated that their PRO marks are strong marks within the hardware merchandising industry.

II. ACTUAL CONFUSION

Actual confusion is not required to sustain a claim of infringement under 15 U.S.C. § 1114, but in the view of the Fifth Circuit, it is the best evidence of likelihood of confusion. World Carpets v. Dick Littrell’s New World Carpets, 438 F.2d 482, 489 (5th Cir.1971). Actual confusion, if shown, is highly persuasive as to the presence of . likelihood of confusion. Sun Banks, supra, 651 F.2d at 319. In RotoRooter, the Plaintiff introduced evidence of actual confusion of four people. The Court of Appeals found that little proof of actual confusion is necessary to prove the likelihood of confusion. 513 F.2d at 46. But in Sun, the Fifth Circuit found evidence of actual confusion negligible when in three years only fifteen incidents were reported.

In this case, Plaintiffs presented five witnesses unaffiliated with Plaintiffs who in one month were confused as to the relationship between HOME PRO WAREHOUSE and Pro Hardware. Three were shoppers and two were familiar with CC Distributors’ association with Pro Hardware. The obvious confusion in the tendency of counsel to become mixed-up in using the names “HOME PRO” and “Pro Hardware” tends to indicate that the ordinary hardware/home improvement shopper would be subject to the same confusion. See LaMaur v. Revlon, Inc., 245 F.Supp. 839, 845 (D.C.Minn.1968). The Court has rejected as hearsay testimony by retail establishment owners that customers had expressed confusion. The Court considers persuasive of actual confusion, however, the fact that a neutral reporter from the Corpus Christi Caller-Times in a newspaper article about this dispute confused the two names. The Court finds that there has been actual confusion of the names.

III. DEFENDANT’S INTENT

A defendant’s intent to use another’s good name for his own benefit may alone be sufficient to justify the inference that there is confusing similarity. Exxon v. Texas Motor Exchange, supra, 628 F.2d at 506. The Court does not view this factor as solely determinative, but the Court finds it to be a strong factor. WaplesPlatter Co. v. General Foods Corp., 439 F.Supp. 551 (N.D.Tex.1977).

On this critical element of intent, the Court finds in favor of the Plaintiffs and concludes that the Defendant proceeded to use the “PRO” mark with the intent of deriving benefit from the reputation of the Plaintiffs. This finding is based, first, on a similar intrusion by Defendant on the name of another in the home center business, Home Improvement Depot. After complaint from the owner of the “Home Depot” mark, the Defendant changed its name to “Home Improvement Center.” This similar conduct is circumstantial evidence of the Defendant’s intent with respect to the “PRO” mark. Second, the Defendant’s president had knowledge on April 7, 1983, that Pro Hardware held Registration No. 791,976. Third, Defendant’s president and Defendant’s chief marketing and advertising officer have extensive experience between them in the home center and hardware industries, both wholesale and retail. Both men denied ever having heard of Pro Hardware, despite the fact that they had either worked in or supervised home center operations in the very towns in which Pro Hardware competed. The Court finds it cannot accept that men of this experience within the hardware/home center industry had not heard of a significant competitor.

IV. SIMILARITY OF THE MARK

This factor is basically an eyeball test. Exxon Corp. v. Texas Motor Exchange, supra, 628 F.2d at 504 (citing 2 J. McCarthy, Trademarks and Unfair Competition, s. 237:7 (1973)). The marks, themselves, appear below.

From Plaintiffs' Exhibit 1.

Gold arrow on red-orange background. Dark brown letters. (Pro Hardware, Inc. makes no claim to the colors in the design),

From Plaintiffs' Exhibit 76.

"HOME PRO WAREHOUSE": White letters on orange background. "HOME IMPROVEMENT MART": Black (sometimes light blue)letters on white background.

The Court does not consider there to be a difference of significance in the appearance of Pro vs. PRO. Both Plaintiffs and Defendant use PRO and Plaintiff also uses Pro.

Plaintiffs fail the eyeball test insofar as the design is concerned, but pass it in connection with the prominence and the importance that the Defendant gives with respect to the use of the word “PRO” in all of its advertising and on the face of its building. The word “PRO” itself, not specifically the design, has become the prominent feature of the Defendant’s mark because it is the element most readily associated with the products or services identified. Association of Co-op Members v. Farmland Industries, 684 F.2d 1134 (5th Cir.1982).

V. SIMILARITY OF ADVERTISING MEDIA USED

The greater the similarity in the advertising campaign used, the greater the likelihood of the confusion. Exxon v. Texas Motor Exchange, supra, 628 F.2d at 506.

Plaintiffs and Defendant use the same advertising media. Both use television, radio, newspaper ads, yellow pages, and signs identifying places of business. The Plaintiffs’ campaign is national in scope, but the Defendant’s is more local because Defendant has not yet attained a size comparable to that of Plaintiffs. There are some differences. At this moment, the Plaintiffs appear to concentrate on newspaper fliers, although they have used television in the past significantly. The Defendant relies on hard-hitting, hard-sell television commercials, citing the advantage of shopping with “the HOME PROs.” The Defendant also uses full-spread newspaper advertising rather than newspaper fliers.

V. SIMILARITY OF PRODUCTS

The greater the similarity between the products and services provided by the Defendant and Plaintiffs, the greater the likelihood of confusion. Id. The Defendant strongly stresses in its case distinctions between its business and that of the Plaintiffs. The Defendant admits that it sells nearly all of the types of items handled by Plaintiffs’ stores, but the Defendant urges that its variety of manufacturers is greater and so is its volume. That is true. The Defendant’s business is an attempt to marry the lumber business and the hardware business. According to the Defendant, the traditional hardware business is out-of-date and will soon be a victim of the new marketing by this marriage industry.

The Court finds that the Defendant sells many items not handled by the Plaintiffs, especially in terms of lumber products, some home furnishings (such as furniture), and garden supplies. The Court also finds that many of the identical products are sold. The Court further finds that Plaintiffs’ PROMART also handles lumber and other home improvement furnishings not technically considered hardware. Because of these similarities, the Court finds that there is a potential for the public to assume mistakenly that there is a connection between Plaintiffs and Defendant in the types of products sold.

VII. IDENTITY OF RETAIL OUTLETS AND PURCHASERS

The retail outlets are grossly different. Plaintiffs’ stores are traditional small hardware stores located in suburban shopping centers. Defendant’s store is a large warehouse stacked high to the ceiling, row upon row of hardware and home-improvement goods. It is this warehouse-type merchandising together with the Defendant’s use of the “PRO” name that Plaintiffs fear most. Plaintiffs fear that the use of the words, HOME PRO WAREHOUSE in the midst of Pro Hardware retail outlets will lead potential Pro Hardware store customers to assume that HOME PRO WAREHOUSE is a warehouse for Pro Hardware. That is logical, but there is no evidence that customers come to the Pro Warehouse believing it to be the “warehouse” in the area for Pro Hardware.

Target customers are not identical for Plaintiffs and Defendant. The Defendant aims at the ordinary consumer as well as at specialty and independent contractors. The Plaintiffs generally aim at the ordinary consumer of hardware or other home-improvement items.

In conclusion, considering all seven factors, the Court finds that Defendant’s use of “PRO” is likely to confuse the public. In addition to the foregoing, the Court finds that the Defendant is using a colorable imitation of the marks Pro, PRO, and PROMART, that the uses are without the registrant’s consent, that the uses are in commerce and used in connection with a sale, offering for sale, distribution, and advertising of goods. These matters were not contested by the Defendant except, by implication, the use of a colorable imitation of a mark.

Therefore, the Plaintiffs have met their burden of proving that there is a substantial likelihood that they will prevail on the merits on their 15 U.S.C. § 1114 claim.

Plaintiffs will suffer an immediate and irreparable harm because they cannot control the quality of Defendant’s goods; loss of sales in Pro Hardware stores will ultimately be felt by all Plaintiffs. Loss of control constitutes immediate and irreparable harm. American Rice, supra, 532 F.Supp. at 1389. Compensatory damages will be extremely difficult to calculate, and, thus the harm is irreparable. Id.

Unless the Defendant is enjoined, Plaintiffs’ mark will become weakened in spite of many years of effort to build it into a strong mark within the industry. Although Defendant contends it will be severely injured if the preliminary injunction issued because of advertising expenses and losses attributable to loss of recognition by the public, this argument “merits little equitable consideration in light of Defendant’s willful use of an infringing trademark.” Helene Curtis Industries v. Church and Dwight, 560 F.2d 1325, 1333 (7th Cir.1977). The choice to the Court is awarding protection to those who over a substantial number of years have built the word “PRO” into a valuable and essential asset of their business, or protecting a Johnny-come-lately who is attempting to use the name of the former. The equities fall in favor of the Plaintiffs.

Public interest is always served by requiring compliance of statutes of Congress. This is true with respect to trademark registration and upholding the purposes of the Lanham Act. American Rice, 532 F.Supp. 1389. Accordingly, the Court finds that the public interest is served by the issuance of the preliminary injunction.

CONCLUSION

The Plaintiffs have proven all elements required to obtain a preliminary injunction. Their application for a preliminary injunction is therefore GRANTED.

The Defendant is ENJOINED pending further decision by this Court from further use of the word “PRO” in association with the name of its retail stores.

IT IS FURTHER ORDERED that this injunction is STAYED until the Plaintiffs give the security required by Rule 65(c), Federal Rules of Civil Procedure.