Just Goods, Inc. v. Just, Inc.

Background

The court had previously ordered Eat Just, Inc. and its founder, Joshua Tetrick (together, “EJ”), to pay a $5,000-per-day fine for failing to comply with a term sheet that resolved the parties’ trademark dispute. The court had found that EJ remained out of compliance, and the Ninth Circuit affirmed both the contempt finding and the court’s authority to impose the per-day fine.

After the Ninth Circuit’s affirmance, the court asked the parties to brief the reasonableness of the sanction. At a January 15, 2025 hearing, the court stated that it intended to reduce the fine and consider giving the resulting money to Just Goods. The parties then submitted additional briefing about how the fine should be allocated.

Amount of the sanction

The court concluded that the fine should not run uninterrupted from July 13, 2023, because that would have produced a total exceeding $2.8 million. It reduced the amount for three reasons: the original amount seemed excessive; EJ had appealed while holding a good-faith, though misguided, belief that it might prevail; and EJ had provided financial information relevant to the burden of the sanction.

The court set the sanction at $575,000 as of January 15, 2025. It suspended the fine during the appeal, except for 60 additional days that EJ obtained to delay appellate briefing, and calculated the sanction from November 22, 2024, through January 15, 2025. The calculation was 55 days at $5,000 per day, plus 60 additional days at $5,000 per day. The court rejected EJ’s request to exclude the 60 days of briefing extensions.

Purpose and allocation

The court determined that the fine served both coercive and compensatory purposes. A coercive sanction is intended to encourage compliance with a court order; a compensatory sanction is intended to reimburse losses caused by the violation. The court found that the fine was intended both to encourage EJ to comply promptly and to compensate Just Goods for injury caused by continued violations.

The court found that Just Goods had provided credible evidence of $57,470.46 in attorney fees incurred after, and directly because of, EJ’s continued violations. It also found that Just Goods adequately showed actual loss from continuing consumer confusion and from continued infringement of its mark. The court therefore concluded that awarding part of the fine to Just Goods was proper.

Order

The court ordered EJ to pay $287,500 to the court and $287,500 to Just Goods within 15 days. It stated that any amount later determined not to be payable to Just Goods would instead be paid to the court. The total sanction as of January 15, 2025, was $575,000.

After payment, EJ must file a declaration stating the status of its compliance with the court’s orders and the term sheet, along with the date full compliance was or would be accomplished. The court also allowed a short memorandum proposing how to address any noncompliance after January 15, 2025; Just Goods could respond if it disagreed. Separately, the court granted EJ’s administrative motion to seal portions of its post-remand briefing. Judge H. Orrick ordered: “IT IS SO ORDERED.”