Just Goods, Inc. v. Just, Inc.

Background

Just Goods, Inc. (JGI) and defendants Eat Just, Inc. (formerly Just, Inc. and Hampton Creek, Inc.) and Joshua Tetrick had agreed to settle their trademark and breach-of-contract case through a binding Term Sheet. In a March 30, 2020 order, the court enforced that Term Sheet and ruled that the defendants could use “Just” only in the Frame Logo, the phrases “Eat Just” and “Make it Just,” and text used with a generic product name, such as “Just Egg.” Other uses violated the agreement. The earlier order also required the corporate name to change from “Eat JUST, Inc.” to “Eat Just, Inc.”

JGI moved for an order requiring the defendants to explain why they should not be held in civil contempt and sanctioned. Civil contempt is disobedience of a specific court order when the party has not taken all reasonable steps within its power to comply. JGI requested a finding of contempt, an order requiring compliance, a $5,000-per-day fine, and attorney fees.

Contempt findings and corrective measures

The court held the defendants in contempt for posting and keeping up Instagram videos in which employees referred to themselves as appearing for “Just,” including videos posted after the March 30 order. One person in the videos also wore a “Just for All” shirt, which the opinion says violated the trademark assigned to JGI. The defendants had not removed all of the videos while they reviewed them.

The court ruled that using “#MakeItJUST,” with only “JUST” capitalized, was not permitted by the Term Sheet. The order gave notice that this capitalization was prohibited, but the opinion does not separately state a contempt finding for that issue.

The court also held that reposting or retweeting third-party articles referring to the defendants as “JUST” counted as a prohibited use. Even though the defendants did not control the third parties’ articles, they controlled whether they approvingly shared those articles from their own or their officers’ social-media accounts. The court rejected the argument that restricting those reposts improperly burdened speech, reasoning that the dispute concerned commercial source identification rather than expressive speech.

The court required the defendants to take reasonable steps regarding employee LinkedIn profiles. They did not have to control employees’ conduct outside the scope of employment, but they had to ensure compliance by employees using LinkedIn within the scope of their employment to promote the defendants. The defendants had the burden of identifying those employees and taking corrective steps.

For seller pages on Amazon, Walmart, and Whole Foods, the court said the evidence did not establish whether the defendants could change the pages themselves. It ordered the defendants to submit an affidavit stating either that the violations had been removed or describing the process for changing the pages and the defendants’ efforts to do so.

The court found that the defendants had not taken all reasonable steps concerning the Wikipedia page because they had not provided Wikipedia with a copy of the March 30 order. It ordered an affidavit stating either that the changes had been made or detailing the defendants’ efforts and confirming that they had provided Wikipedia with the order. The court stated that further sanctions would not be imposed for the remaining Wikipedia content if the defendants could not directly edit the page, Wikipedia refused their requests, and providing the order did not change the situation.

The court also held the defendants in contempt for disseminating a Business Wire press release referring to themselves as “JUST” and for failing to provide Business Wire with a copy of the March 30 order to facilitate removal or editing. If Business Wire refused to remove the release after receiving the order, the court said it would not impose further sanctions merely because the release remained online.

The court did not find contempt for certain other alleged violations because the defendants had made unrebutted representations that they were taking reasonable steps. Regarding a Facebook event, the court required an affidavit stating either that the violation had been removed or that the defendants did not and could not control the post and describing their efforts to remedy it.

Corporate name and domain name

The defendants did not dispute that they had failed to change their corporate name as previously ordered. They argued that filing amendments in California and Delaware would be futile because the states’ secretary-of-state websites display corporate names in all capital letters. The court rejected that position, stating that the defendants were required to comply with the unambiguous order. The opinion states that the defendants had submitted amendments to both states after the court directed them to provide proof.

The court declined to order the defendants to stop using the “ju.st” domain name. Neither the Term Sheet, JGI’s motion to enforce it, nor the March 30 order addressed that domain name, and the court concluded that JGI would have needed to request specific relief in the underlying case.

Attorney fees and payment

The court interpreted the Term Sheet’s reference to a “final determination on the merits.” It ruled that this did not require the parties to wait until all appeals ended. The March 30 order was a final determination unless the Ninth Circuit later vacated it. Because the earlier order found that the defendants breached the Term Sheet and that JGI was entitled to fees, the defendants were ordered to pay the stipulated $37,500 or obtain a bond for that amount within 14 days.

The court also granted JGI’s request for $10,370 in attorney fees for the contempt dispute. It treated that amount as a civil-contempt sanction designed both to encourage compliance and to compensate JGI in part for injuries caused by noncompliance. The court did not award additional fees for work after the hearing at that point, noting that JGI had not attempted to meet and confer before filing the contempt motion.

Coexistence Agreement and disposition

JGI separately argued that the defendants had not complied with additional Term Sheet provisions concerning social-media handles, online platforms, Wikipedia and LinkedIn pages, domain names containing “Just for All,” and transfer of the “JUST FOR ALL” trademark. The court declined to decide those issues because they were not adequately developed in the briefing and could become moot through compliance. It denied that portion of JGI’s motion without prejudice, allowing JGI to present a fully briefed argument later if material noncompliance continued.

In conclusion, the court held the defendants in contempt, ordered immediate compliance with the Term Sheet, the March 30 order, and this order, and required affidavits addressing the specified violations within 14 days. The defendants were ordered to pay JGI $47,870—the $37,500 previously assessed plus the $10,370 sanction for the contempt motion—or post a bond for that amount. The court warned that additional sanctions could be imposed if the required affidavits showed inadequate compliance.