Riseandshine Corporation v. Pepsico, Inc.
- Lorna Schofield
- 1:21-cv-06324
- U.S. District Court · Southern District of New York
- 5
In RiseandShine v. Pepsico, Magistrate Judge Cave denied PepsiCo’s motion to increase the bond because the pending appeal removed that issue from district-court jurisdiction.
RiseandShine Corporation and PepsiCo, Inc.; the ruling left the $250,000 bond unchanged while PepsiCo’s appeal of the preliminary-injunction order remained pending.
What happened
RiseandShine Corporation v. Pepsico, Inc. concerned a $250,000 bond that RiseandShine had been required to post after receiving a preliminary injunction restricting PepsiCo’s use of a beverage trademark. PepsiCo asked to increase the bond to $7 million, and RiseandShine opposed the request.
The court concluded that the bond amount was one of the issues decided in the preliminary-injunction order and was being challenged in PepsiCo’s pending appeal to the Second Circuit. Because of that appeal, the district court did not have jurisdiction to change the bond amount at that time.
Magistrate Judge Sarah L. Cave denied PepsiCo’s motion. The opinion did not change the $250,000 bond amount.
The detailed version
- Riseandshine Corporation v. Pepsico, Inc. · No. 1:21-cv-06324
- Lorna Schofield
- Apr. 14, 2022
Background
RiseandShine obtained a preliminary injunction from Judge Lorna G. Schofield that, subject to stated exceptions, restricted PepsiCo from using the mark “MTN DEW RISE ENERGY” in connection with promoting, selling, or distributing single-use, canned energy beverages. The preliminary-injunction order required RiseandShine to post a $250,000 bond under Federal Rule of Civil Procedure 65(c). RiseandShine posted that bond on November 5, 2021.
PepsiCo appealed the preliminary-injunction order to the Second Circuit. While that appeal was pending, PepsiCo asked the district court to increase the bond from $250,000 to $7 million. PepsiCo argued that the existing amount was materially insufficient to cover its losses from the injunction and that RiseandShine could pay the larger amount. RiseandShine argued that the district court lacked jurisdiction to change the bond while the appeal was pending and disputed that an increase was necessary, appropriate, or feasible.
Court’s analysis
A notice of appeal generally gives the appeals court control over the issues involved in the appeal. For an appeal from a preliminary-injunction order, the district court remains without control over the questions raised and decided in that order, although other parts of the case may continue.
The court determined that the bond amount was one of the questions raised and decided in the preliminary-injunction order. The record showed that PepsiCo had contested the bond amount during the preliminary-injunction proceedings, arguing for a bond of at least $30 million, and that Judge Schofield had set the amount at $250,000. PepsiCo’s appellate brief also challenged the $250,000 amount. Because the appeal remained pending and no permanent injunction had replaced the preliminary injunction, the district court lacked jurisdiction to increase the bond at that time.
Disposition
Magistrate Judge Sarah L. Cave denied PepsiCo’s motion. The Clerk was directed to close the docket entries associated with the motion. The opinion did not decide whether a $7 million bond was necessary or feasible; it ruled that the district court could not change the bond while the relevant appeal was pending.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.