Bimbo Bakeries USA, Inc. v. Sycamore
Bimbo Bakeries USA, Inc. v. Sycamore
Opinion of the Court
Defendant United States Bakery ("U.S. Bakery") filed a Renewed Motion for Judgment as a Matter of Law ("Renewed Motion for Judgment").
*1296filed a memorandum in opposition,
Contents
Background...1296
Standard of Review...1298
Discussion...1299
Bimbo Bakeries' false advertising claim...1299
The jury appropriately decided whether the term "local" in U.S. Bakery's tagline is misleading...1300
Bimbo Bakeries' expert was properly allowed to establish consumer confusion and materiality...1302
Bimbo Bakeries' trade secret claim...1303
U.S. Bakery failed to establish that Bimbo Bakeries' trade secret is generally known or inconsistent with Bimbo Bakeries' actual practice...1303
U.S. Bakery failed to preserve its other arguments regarding Bimbo Bakeries' trade secret misappropriation claim...1304
Bimbo Bakeries' damages...1304
Order...1306
BACKGROUND
Bimbo Bakeries sued U.S. Bakery claiming it (1) falsely advertised the origin of some of its bread products by using the word "local" in a company tagline; (2) misappropriated Bimbo Bakeries' trade secret in making and selling its "granny-style" bread; (3) infringed on Bimbo Bakeries' trade dress through its packaging; and (4) caused dilution to Bimbo Bakeries' trade dress.
U.S. Bakery filed several motions in limine before trial. U.S. Bakery moved for an order declaring that the word "local," as a matter of law, is not a factual determination.
At trial, Bimbo Bakeries' expert, Glenn Christensen, presented the results of consumer surveys performed regarding U.S. Bakery's tagline to support Bimbo Bakeries' false advertising claim.
At the close of Bimbo Bakeries' case-in chief, U.S. Bakery made an oral motion for judgment as a matter of law regarding the trade secret claim on two grounds: (1) U.S. Bakery does not make its bread the same way that Bimbo Bakeries does; and (2) the trade secret is not protectable because the components are generally known.
The jury returned a verdict in favor of Bimbo Bakeries on both of its claims.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 50(a) allows a party to move for judgment as a matter of law after another party "has been fully heard on an issue during a trial."
Under Rule 59, the court may grant a new trial "after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court."
Moreover, "the jury's award is inviolate unless ... it [is] 'so excessive that it shocks the judicial conscience and raises an irresistible inference that passion, prejudice, corruption, or other improper cause invaded the trial.' "
DISCUSSION
Bimbo Bakeries' false advertising claim
Bimbo Bakeries claimed that U.S. Bakery's use of "local" in its tagline falsely advertised its bread products by "falsely suggest[ing] to consumers that [U.S. Bakery's] products are made in Utah," when in reality "the bakery products that [U.S. Bakery] sells in Utah ... are shipped from a substantial distance out of state."
(1) that [the] defendant made material false or misleading representations of fact in connection with the commercial advertising or promotion of its product; (2) in commerce; (3) that are either likely to cause confusion or mistake as to (a) the origin, association or approval of the product with or by another, or (b) the characteristics of the goods or services; and (4) injure the plaintiff.44
"To demonstrate falsity within the meaning of the Lanham Act, a plaintiff may show that the statement was literally false, either on its face or by necessary implication, or that the statement was literally true but likely to mislead or confuse consumers."
U.S. Bakery asserts that Bimbo Bakeries' false advertising claim fails as a matter of law and is unsupported by the evidence, because (1) the word "local" in U.S. Bakery's tagline is not a specific geographic place, and therefore not false or misleading; (2) Bimbo Bakeries' expert testimony was incompetent and cannot support the jury's verdict; and (3) Bimbo Bakeries failed to present evidence that the word "local" was material to a bread purchaser's decision. These arguments were previously asserted by U.S. Bakery in its motions to exclude expert witnesses, motion for summary judgment, motions in limine, and oral motion for judgment as a matter of law. For the same reasons stated in the orders on those motions, U.S. Bakery's request for judgment as a matter of law on Bimbo Bakeries' false advertising claim is denied.
The jury appropriately decided whether the term "local" in U.S. Bakery's tagline is misleading
U.S. Bakery argues that Bimbo Bakeries failed to satisfy the first element of its false advertising claim because the use of the term "local" in its tagline was not a false or misleading representation of fact about its bread product. Although it does not carry a set definition, the term "local" is a statement of fact-not a statement of general opinion-which could be found to be misleading as to the nature, characteristics, or qualities of U.S. Bakery's bread.
In support of its Renewed Motion for Judgment, U.S. Bakery cites to Forschner Group, Inc. v. Arrow Trading Co., Inc. ,
The court in Forschner Group , applying the analytical framework used to gauge the distinctiveness of trademarks to resolve a question of false designation of geographic origin,
Here, "local" is a geographically descriptive term, and Bimbo Bakeries presented evidence that U.S. Bakery used the term in a deceptive manner concerning the origin of its bread product-namely, to suggest that its bread products were particularly fresh and of high quality because they were baked within the geographic vicinity of where they were sold.
*1302Bimbo Bakeries' expert was properly allowed to establish consumer confusion and materiality
U.S. Bakery next argues that Bimbo Bakeries failed to provide valid evidence of consumer confusion in order to satisfy the third element of its false advertising claim. A plaintiff "must demonstrate, by extrinsic evidence, that the challenged [advertisements] tend to mislead or confuse consumers."
At trial, Bimbo Bakeries' expert, Dr. Christensen, presented the results of consumer surveys performed demonstrating 28% consumer confusion.
Dr. Christensen's education, experience, and qualifications qualified him to testify to quantitative surveys. Moreover, the methodology he used did not render his survey results unreliable. "Flaws in methodology typically relate only to the weight of the survey evidence."
Having received evidence of consumer confusion, the jury properly determined that U.S. Bakery's use of the term "local" was material to a bread purchaser's decision.
Bimbo Bakeries' trade secret claim
Bimbo Bakeries alleged that U.S. Bakery misappropriated Bimbo Bakeries' trade secrets by hiring a competitor's employee, Mr. Faull, and modifying its bread product to more closely resemble Bimbo Bakeries' Trade Secret Process based on confidential methods disclosed by Mr. Faull.
U.S. Bakery asserts that Bimbo Bakeries' trade secret claim fails as a matter of law and is unsupported by the evidence because (1) Bimbo Bakeries' compilation is skill and knowledge of the trade; (2) the compilation does not describe Bimbo Bakeries' actual practice; and (3) U.S. Bakery had the compilation before the time that Bimbo Bakeries asserts that U.S. Bakery stole it.
U.S. Bakery failed to establish that Bimbo Bakeries' trade secret is generally known or inconsistent with Bimbo Bakeries' actual practice
Bimbo Bakeries' trade secret is a compilation of specific ingredients and production steps. A trade secret can be a compilation that "derives economic value from not being known or readily ascertainable by others" and "is the subject of reasonable efforts to maintain its secrecy."
U.S. Bakery argues that Bimbo Bakeries' compilation is generally known and, therefore, unprotected skill and knowledge of the trade.
U.S. Bakery failed to preserve its other arguments regarding Bimbo Bakeries' trade secret misappropriation claim
U.S. Bakery further asserts that Bimbo Bakeries cannot claim the compilation is a trade secret because (1) the compilation does not reflect Bimbo Bakeries' actual practice: and (2) U.S. Bakery discovered the compilation on its own in June 2013 (five months before Bimbo Bakeries asserts that U.S. Bakery stole it).
U.S. Bakery forfeited its ability to rely on these theories because it did not pursue these defenses by motion or at trial.
Bimbo Bakeries' damages
After finding for Bimbo Bakeries on its false advertising claim, the jury awarded Bimbo Bakeries $ 8,027,720 in damages.
Remittitur is appropriate if the jury award is "so excessive as to shock the judicial conscience and to raise an irresistible inference that passion, prejudice, corruption or other improper cause invaded the trial."
At trial, Mr. Hoffman, testified regarding his calculation of damages related to U.S. Bakery's false advertising:
False Advertising Claim Damages USBs Unjust Enrichment due to False Advertising $8,027,720
This calculation was based on U.S. Bakery's profits from all eight states in which the misleading tagline was used.
As previously discussed, Bimbo Bakeries' expert, Dr. Christensen, surveyed consumers in Utah to demonstrate consumer confusion and to support Bimbo Bakeries' false advertising claim.
In ruling on pretrial motions, the court limited Bimbo Bakeries' false advertising damages to Utah, in part because Bimbo Bakeries represented that Dr. Christensen did not intend to testify regarding consumers outside of Utah.
Notwithstanding the ruling limiting damages, Mr. Hoffman nonetheless presented testimony of his calculated damages for false advertising that occurred outside of Utah. Although U.S. Bakery did not object to Mr. Hoffman's testimony at trial or seek a jury instruction limiting damages to Utah, its failure to do so then does not rise to the level of having waived its right to object now. Under the invited error doctrine, a party generally cannot complain of errors that he has himself induced or invited.
Mr. Hoffman's unjust enrichment calculations necessarily rely upon Dr. Christensen's consumer surveys and findings of consumer confusion. Bimbo Bakeries had the opportunity to present evidence related to consumer confusion in all eight states in which U.S. Bakery used its tagline. But, Bimbo Bakeries chose to limit its surveys to Utah and did not provide any basis for extrapolating the Utah data to other states. Throughout trial-during argument and in its cross-examination of Mr. Hoffman-U.S. Bakery asserted its position that damages should be limited to Utah. Based on the circumstances, U.S. Bakery cannot be found to have sought out or affirmatively approved the failure to limit either Mr. Hoffman's testimony or the jury instructions regarding damages.
Ultimately, Bimbo Bakeries presented sufficient evidence to allow its false advertising claim to proceed to the jury, but only with respect to consumer confusion in Utah and damages from false advertising in Utah. Bimbo Bakeries did not provide any foundation to seek damages outside of Utah. Having determined that the jury should have limited damages to Utah, the $ 8,027,720 award is not supported by the evidence and is legally insufficient. However, the award can be remitted without a new trial. The jury chose to adopt Mr. Hoffman's method of calculation. At trial, Mr. Hoffman calculated $ 83,398 in profits from U.S. Bakery's use of the disputed tagline in Utah.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Renewed Motion for *1307Judgment
• U.S. Bakery's request for judgment as a matter of law pursuant to Rule 50 is DENIED.
• U.S. Bakery's request for a new trial pursuant to Rule 59 is DENIED.
• U.S. Bakery's request for remittitur is GRANTED. The amount of damages awarded for false advertising in the jury's verdict101 is remitted to $ 83,398. An amended judgment will be entered consistent with this ruling.
Renewed Motion for Judgment as a Matter of Law ("Renewed Motion for Judgment"), docket no. 555, filed April 26, 2018 (Sealed Motion, docket no. 546, filed Apr. 26, 2018).
Plaintiff's Opposition to United States Bakery, Inc's Renewed Motion for Judgment as a Matter of Law ("Opposition"), docket no. 584, filed May 10, 2018 (Sealed Opposition, docket no. 586, filed May 10, 2018).
Defendant United States Bakery's Reply in Support of Renewed Motion for Judgment as a Matter of Law ("Reply"), docket no. 601, filed May 31, 2018 (Sealed Reply, docket no. 606, filed June 1, 2018).
Renewed Motion for Judgment 1-2; Amended Complaint, docket no. 37, filed Dec. 15, 2014. Bimbo Bakeries also sued Leland Sycamore ("Sycamore") for trade secret misappropriation. Sycamore filed a motion for judgment as a matter of law, which was addressed separately. See Motion for Judgment as a Matter of Law, Motion for a New Trial or Remittitur or for an Altered or Amended Judgment ("Renewed Motion for Judgment"), docket no. 544, filed Apr. 25, 2018 (Sealed Motion, docket no. 546, filed Apr. 25, 2018); Memorandum Decision and Order Denying [544] Sycamore's Renewed Motion for Judgment, docket no. 616, entered Dec. 10, 2018.
Motion for Full or Partial Summary Judgment, docket no. 119, filed May 17, 2016.
Sealed Memorandum Decision and Order Granting in Part and Denying in Part Defendant's [119] Motion for Summary Judgment, docket no. 250, filed Apr. 28, 2017 (Redacted Order, docket no. 257, entered July 20, 2017). Summary judgment was granted as to Bimbo Bakeries' trade dress infringement claims. Id.
Sealed Memorandum Decision and Order Granting in Part and Denying in Part Defendant's [119] Motion for Summary Judgment, docket no. 250, entered Apr. 28, 2017 (Redacted Order, docket no. 257).
Sealed Memorandum Decision and Order on Motions to Exclude Expert Witnesses ("Orders on Motions to Exclude"), docket no. 244, entered Mar. 2, 2017 (Redacted Order, docket no. 248). In briefing, Bimbo Bakeries represented that the surveys and testimony of its expert, Dr. Christensen, were limited to Utah and southern Idaho. Id. 8. Ultimately, Dr. Christensen only conducted consumer surveys in Utah related to the false advertising claim.
United States Bakery, Inc.'s Motion in Limine No. 12 (Local), docket no. 279, filed Aug. 22, 2017.
Docket Text Order Denying [279] Motion in Limine re: Meaning of Term "Local," docket no. 347, entered Aug. 31, 2017.
United States Bakery, Inc.'s Motion in Limine No. 1 (Scope of Consumer Confusion), docket no. 264, filed Aug. 22, 2017.
Docket Text Order Denying [264] Motion in Limine re: Consumer Confusion, docket no. 364, entered Sept. 6, 2017.
United States Bakery, Inc.'s Motion in Limine No. 10 (Lost Profits - False Advertising), docket no. 277, filed Aug. 22, 2017.
Docket Text Order Denying [277] Motion in Limine re: Lost Profits - False Advertising, docket no. 350, entered Aug. 31, 2017.
Trial Tr., vol. III, 10:13-97:6, Sept. 27, 2017, docket no. 459. U.S. Bakery moved to exclude testimony from Dr. Christensen and Mr. Hoffman. See Motion to Exclude Expert Glenn L. Christensen, docket no. 104, filed May 16, 2016; Motion to Exclude Expert Richard S. Hoffman, docket no. 127, filed May 17, 2016. Both motions were denied. See Order on Motions to Exclude, docket no. 244.
Trial Tr., vol. IV, 98:09-160:5, Sept. 28, 2017, docket no. 460. Bimbo Bakeries did not pursue a "lost profits" calculation for false advertising damages at trial, mooting U.S. Bakeries' [277] Motion in Limine re: Lost Profits False Advertising.
Trial Tr., vol. VII, 158:11-247:18, Oct. 3, 2017, docket no. 494.
Trial Tr., vol. VI, 124:13-200:21, Oct. 4, 2017, docket no. 463.
Opposition 15; Trial Tr., vol. V, 58:24-62:17, Sept. 29, 2017, docket no. 461.
Opposition 15; Trial Tr., vol. IX, 36:9-40:14, Oct. 5, 2017, docket no. 464.
Opposition 15; Trial Tr., vol. IX, 38:19-39:15. In other words, U.S. Bakery asserted that Bimbo Bakeries failed to show that there was a binding confidentiality obligation between certain individuals to not disclose information. Trial Tr., vol. IX, 47:18-22.
Opposition 15; Trial Tr., vol. IX, 39:16-40:14.
Trial Tr., vol. IX, 41:3-43:20.
Trial Tr., vol. IX, 43:1-20.
Special Verdict, docket no. 451, entered Oct. 6, 2017.
Judgment in a Civil Case, docket no. 537, entered Mar. 29, 2018. A judgment was also entered against Sycamore for trade secret misappropriation in the amount of $ 526,314. Id.
Fed. R. Civ. P. 50(a).
Id. 50(b).
See id. 50(a)-(b).
See Bannister v. State Farm Mut. Auto Ins. Co. ,
Fed. R. Civ. P. 59(a)(1)(A).
Black v. Hieb's Enters, Inc.,
Spahr v. Ferber Resorts ,
Biocore, Inc. v. Khosrowshahi ,
Biocore, Inc. ,
Megadyne Med. Prod., Inc. v. Aspen Lab., Inc. ,
Amended Complaint ¶¶ 35-37, docket no. 37.
Zoller Lab. LLC v. NBTY Inc. ,
Intermountain Stroke Ctr., Inc. v. Intermountain Health Care, Inc. ,
Zoller Lab. LLC ,
U.S. Bakery argues that "local" is a statement of puffery and therefore not actionable under the Lanham Act. This argument is not persuasive. "Puffery is a term of art used to characterize those vague generalities that no reasonable person would rely on as assertions of particular facts." Intermountain Stroke Ctr. v. Intermountain Health Care ,
The Lanham Act "encompasses more than literal falsehoods, because otherwise, clever use of innuendo, indirect intimations, and ambiguous suggestions could shield the advertisement from scrutiny precisely when protection against such sophisticated deception is most needed." Intermountain Stroke Ctr. ,
Renewed Motion for Judgment 13; Reply 2.
Forschner Group, Inc. ,
See Opposition 4. At trial, Bimbo Bakeries offered expert testimony with consumer surveys to support that "local" "at least means in state."
Icon Health & Fitness, Inc. v. Nautilus Grp., Inc. , No. 1:02-cv-00109-TC,
Trial Tr., Vol. III, 12:10-22, Sept. 27, 2017, docket no. 459.
Renewed Motion for Judgment 11-13.
United States Bakery, Inc.'s Motion in Limine No. 1 (Scope of Consumer Confusion), docket no. 264, filed Aug. 22, 2017.
Motion to Exclude Opinions and Testimony of Plaintiff's Expert, Dr. Glenn L. Christensen, and Supporting Memorandum, docket 104, filed May 16, 2016.
Docket Text Order Denying [264] Motion in Limine re: Consumer Confusion, docket no. 364, entered Sept. 6, 2017; Order on Motions to Exclude 11, docket 244 (Redacted Order, docket no. 248).
OraLabs, Inc. v. The Kind Group, LLC ,
"The type of evidence needed to prove materiality ... varies depending on what type of recovery the plaintiff seeks. Plaintiffs looking to recover monetary damages for false or misleading advertising that is not literally false must prove actual deception ... [through] evidence of actual consumer reaction to the challenged advertising or surveys showing that a substantial number of consumers were actually misled by the advertisements." Pizza Hut, Inc. v. Papa John's Intern, Inc. ,
McCarthy on Trademarks and Unfair Competition § 27:35 (5th ed.).
Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave. ,
Opposition 5-6. In its Opposition, Bimbo Bakeries cites to testimony where U.S. Bakery's witnesses admitted it would be reasonable for a consumer seeing the tagline to believe that the produce being sold was baked in the state where it was being purchased. Plaintiff's Record of Deposition Testimony Read or Shown by Video at Trial, Ex. 8, Video Deposition of Jessica Larson at 29-30, docket 444-8.
Amended Complaint ¶ 25, docket no. 37.
Water & Energy Sys. Tech., Inc. v. Keil ,
CDC Restoration & Constr., LC v. Tradesmen Contractors, LLC ,
Brigham Young Univ. v. Pfizer, Inc. ,
USA Power, LLC v. PacifiCorp ,
Renewed Motion for Judgment 15.
Motion for Full or Partial Summary Judgment, docket no. 119, filed May 17, 2016; Sealed Memorandum Decision and Order Granting in Part and Denying in Part Defendant's [119] Motion for Summary Judgment, docket no. 250, entered Apr. 28, 2017 (Redacted Order, docket no. 257).
Opposition 21.
Renewed Motion for Judgment 17-18.
Instead, U.S. Bakery filed a motion in limine alleging that Bimbo Bakeries had not disclosed and described its secret recipe with enough detail to enable the jury to determine if a trade secret exists. United States Bakery, Inc.'s Motion in Limine No. 14 (Trade Dress [sic] Description), docket no. 285, filed Aug. 22, 2017. The motion in limine was denied based upon the court's ruling on U.S. Bakery's motion for summary judgment, finding that Bimbo Bakeries had sufficiently defined its trade secret to allow the jury to determine whether Bimbo Bakeries had a protectable trade secret. Docket Text Order Denying [272] Motion in Limine re: Trade Secret Description and Denying [285] Motion in Limine re: Trade Secret Description, entered Sept. 19, 2017.
Home Loan Inv. Co. v. St. Paul Mercury Ins. Co. ,
Wright & Miller , 11 Fed. Prac. & Proc. Civ. § 2805 (3d ed.) ("A principle that strikes very deep is that a new trial will not be granted [under Rule 59(a) ] on grounds not called to the court's attention during trial unless the error was so fundamental that gross injustice would result ..., and a party may not seek a second trial on the basis of a theory not urged at the first trial."); see also Sheedy v. BSB Props, LC ,
Special Verdict, docket no. 451; Judgment in a Civil Case, docket no. 537, entered Mar. 29, 2018.
Malandris v. Merrill Lynch, Pierce, Fenner & Smith, Inc. ,
Mason v. Texaco, Inc. ,
Prager v. Campbell County Mem'l Hosp. ,
Trial Tr., vol. IV, 98:09-160:5, Sept.28, 2017, docket no. 460; Trial Ex. 239.
Trial Tr., vol. IV, 99:8-15; 117:21-23; 157:8-15; Trial Ex. 239; Trial Ex. 366; Reply 9.
Rebuttal Report of Dr. Glenn L. Christensen ¶ 25, at 10, Trial Ex. 181 ("In study three, the guiding question is similar - is there a substantial and 'not insubstantial' number of sliced packaged bread buyers within Utah who receive a false or misleading impression from the Defendant's ad and is that message material to their bread purchase.").
Trial Tr., vol. III, 63:21-64:2.
Trial Tr., vol. III, 64:3-22.
Order on Motions to Exclude, at 8, docket no. 244 (Redacted Order, docket no. 248).
Sealed Memorandum Decision and Order Granting in Part and Denying in Part Defendant's [119] Motion for Summary Judgment, at 17, docket no. 250, entered Apr. 28, 2017 (Redacted Order, docket no. 257). The order inadvertently refers to Dr. Christensen, instead of Mr. Hoffman. This mistake is understandable given that Mr. Hoffman's damage calculations depend upon Dr. Christensen's consumer results to establish false advertising as a threshold matter. Additionally, as previously stated, Bimbo Bakeries opted not to conduct consumer surveys outside of Utah.
Brown v. Presbyterian Healthcare Serv. ,
United States v. Thornton ,
Brown ,
Rebuttal Expert Witness Report, Schedule 3.1, at 42, Trial Ex. 179; Trial Tr. vol. IV, 118:2-13.
Docket no. 555.
Docket no. 451.
Reference
- Full Case Name
- BIMBO BAKERIES USA, INC. v. Leland SYCAMORE and United States Bakery, Inc.
- Status
- Published