Judges tend to respect corporate identity in trademark disputes

ARGUMENT ANALYSIS

The judges showed little appetite for breaking new ground when they heard arguments on Wednesday Dewberry Group v. Dewberry Engineersa long-running dispute between similarly named groups of property companies. The issue 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 defendant in the lawsuit, but also by several other entities that were not parties to the trial.

From the earliest point of argument by Thomas Hungar, who represented the Dewberry Group’s efforts to limit damages, it seemed clear that neither judge was interested in affirming the lower court’s decision. Rather, the question was how much they would say beyond a brief expression of disagreement.

When Hungar told Justice Sonia Sotomayor that the reasoning she questioned him about “was never presented in this case and has not been presented,” she brushed him aside, commenting that he raised “a question of custody” that should decided “in the discretion of the courts below,” reflecting her direct assumption that the lower court’s decision would be vacated and the case remanded for further proceedings on that basis.

To give a sense of the various ideas that filled the argument – Sotomayor spent much of her time on the idea, found in the government’s solicitation, that the defendant may have sold services to related parties at unnecessarily low prices, depressing its profits. Her reading of the government’s “friend of the court” brief, which argued that the lower courts’ rulings were wrong but also disagreed with the Dewberry Group’s argument about how the profits should be calculated, left her interested in exploring a “simple theory” , after which the court would “estimate how much th[e defendant] 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 it, what is the profit they would have made.”

Although Sotomayor’s comments indicated a willingness to address some of the new grounds raised in the briefs to the justices, Justice Samuel Alito repeatedly offered a different perspective. As he put it, “if the judgment at issue cannot be sustained on the basis adopted by the Court of Appeals, why should we go forward” and merely propose a theory for the lower court to consider when the case returns to it.

Similarly, Judge Amy Coney Barrett pressed Nicholas Crown, representing the government, to explain why the government would not “be satisfied that we just answer” the question presented in the case and then “just leave it to the lower court .” It “seems to me that that might be a pretty short opinion,” said Barrett, for whom it was central that “we did not grant cert on these other issues that were not reviewed below.”

When Elbert Lin stood up to defend the lower court’s decision, he valiantly tried to walk a narrow path in which he did not admit that the lower court’s decision was wrong, but at the same time did not try to defend the reasoning it offered to support. the. After observing this effort, Judge Neil Gorsuch pushed Lin hard and—though reasonable opinions may differ—came pretty close to extracting an explicit admission that the reasoning behind the lower court’s opinion was indefensible.

I don’t think it will take the judges long to decide this one. Not a word was said during the oral argument to suggest that anyone would propose to affirm the decision below. Nor does there seem to be any disagreement about what exactly is wrong with that decision: Generally, when you choose the defendants, you choose the entities whose profits you can extract as damages. The only thing that needs to be decided is what the court will say to the lower courts about the various arguments put forward in the briefing in the Supreme Court, which have not previously been raised before these courts. It is hard to imagine the judges taking a long time to agree on that question.