In trademark disputes, the courts are inclined to respect corporate identities
ARGUMENT ANALYSIS
On Wednesday, the justices heard arguments regarding Dewberry Group, Inc. and Dewberry Engineers, Inc. (Aashish Kiphayet via Shutterstock)
The justices showed little appetite for breaking new ground when they heard argument on Wednesday in Dewberry Group v. Dewberry Engineers, a long-running dispute between similarly named groups of real-estate companies. The question before them is whether to uphold the judgment of a lower court that awarded damages for profits earned not only by the entity named as a defendant in the lawsuit, but also by several other entities that were not parties to the litigation.
From the earliest moment of argument by Thomas Hungar, representing the Dewberry Group’s effort to limit the damage award, it seemed clear that none of the justices were interested in affirming the lower court’s decision. The question, rather, was how much they would say beyond a succinct expression of disagreement.
When Hungar told Justice Sonia Sotomayor that the line of reasoning about which she was questioning him was “never made in this case and is not presented,” she brushed him aside commenting that he raised “an issue of remand” to be decided “in the discretion of the courts below,” reflecting her off-hand assumption that the lower court’s decision would be vacated and the case sent back for further proceedings on that basis.
To offer a sense of the various ideas that populated the argument — Sotomayor spent much of her time on the idea, found in the government’s brief, that the defendant might have sold services to related parties at unduly low prices, depressing its profits. Her perusal of the government’s “friend of the court” brief, which contended that the lower courts’ decisions were incorrect but also disagreed with Dewberry Group’s argument regarding how the profits should be calculated, left her interested in exploring a “simple theory” under which the court would “estimate how much th
would have received if there had been an arm’s length transaction, what would have been the value of their services, and if they would have received that, what’s the profit that they would have made.”
Although Sotomayor’s comments suggested a willingness to address some of the new justifications raised in the briefs to the justices, Justice Samuel Alito repeatedly offered a different perspective. He said, “if the judgment in question cannot be sustained on the basis that was adopted by court of appeals, then why would we go any further” and suggest a theory to the lower courts when the case returns? Observing that effort, Justice Neil Gorsuch pressed Lin hard and – though reasonable minds might differ – came pretty close to extracting an explicit concession that the rationale for the lower court’s opinion was indefensible.[e defendant]I would not think it will take the justices long to decide this one. At the oral argument, not a single word was spoken to suggest that anyone would want to affirm the lower court’s decision. There does not seem to be any disagreement over what exactly is wrong with this decision: When you choose the defendants, it’s usually the entities whose profits can be extracted as damages. The only thing that remains to be decided is what the Supreme Court will say to lower courts about various arguments raised in the Supreme Court briefing, which have never been brought up before these courts. It is difficult to imagine that the justices would take so long to come to an agreement on this question.
