Derek and Constance Lee Corporation, a California corporation, DBA Great River Food v. Kim Seng Company

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DEREK AND CONSTANCE LEE
CORPORATION, a California
corporation, DBA Great River Food,
Plaintiff-counter-defendant -
Appellant,
v.
KIM SENG COMPANY,
Defendant-counter-claimant -
Appellee.
No. 10-55721
D.C. No. 2:05-cv-03635-ABC-
MAN
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, Chief District Judge, Presiding
Argued and Submitted December 7, 2011
Pasadena, California
Before: B. FLETCHER, SILVERMAN, and WARDLAW, Circuit Judges.
Derek and Constance Lee Corp. dba Great River Food Corp. (“Great River”)
appeals from the district court’s order denying Great River’s request for an order of
FILED
FEB 01 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

-- 1 of 4 --

2
civil contempt against Kim Seng Co. (“Kim Seng”) for failure to comply with the
district court’s March 10, 2008, injunction. We have jurisdiction under 28 U.S.C.
§ 1291, and we affirm.
The district court did not abuse its discretion in concluding that Great River
was barred by laches from seeking contempt sanctions against Kim Seng. Its
findings that Great River’s delay was unreasonable and caused prejudice to Kim
Seng are supported in the record. See Couveau v. Am. Airlines, Inc., 218 F.3d
1078, 1083 (9th Cir. 2000) (“To establish laches a defendant must prove both an
unreasonable delay by the plaintiff and prejudice to itself.”). Great River knew
that Kim Seng was selling products with packaging that Great River claimed
violated the injunction as early as September 2008. Yet Great River failed to act
for one full year. Then, upon discovering that Kim Seng’s products were being
sold in markets, Great River still did nothing for five months. Under these
circumstances, the district court did not commit a clear error of judgment in
concluding that the doctrine of laches precluded sanctions. See Danjaq LLC v.
Sony Corp., 263 F.3d 942, 955 (9th Cir. 2001) (the unreasonable delay element of
laches is satisfied where plaintiff offers “no viable justification” for delay); Miller
v. Glenn Miller Prods., Inc., 454 F.3d 975, 999 (9th Cir. 2006) (“A defendant may
establish prejudice by showing that during the delay, it invested money to expand

-- 2 of 4 --

3
its business or entered into business transactions based on his presumed rights.”)
Nor did the district court err in concluding that Kim Seng had substantially
complied with the injunction. Paragraph Two of the injunction provided that Kim
Seng could use its Old Man Que Huong Brand mark, registration No. 2311982,
“but only in conjunction with a graphic of a walking bearded farmer.” Kim Seng
requested a clarification, to which the district court responded that “Defendant
cannot use Plaintiff’s Que Huong trademark except in connection with the Oldman
Que Huong Brand in conjunction with the graphic of a walking bearded farmer,
period.” The district court correctly concluded that Kim Seng’s interpretation of
this ambiguous order was reasonable. Therefore, the packaging which featured the
phrase “Old Man Que Huong Brand” in the surround of the graphic of a walking
bearded farmer clearly complied with the terms of the injunction. The words “Que
Huong Brand” otherwise were used only in proximity to the graphic and therefore
did not violate the injunction. We agree with the district court that Kim Seng’s
actions “appear[] to be based on a good faith and reasonable interpretation of the
[court’s order].” Go-Video, Inc. v. Motion Picture Ass’n of Am. (In re Dual-Deck
Video Cassette Recorder Antitrust Litig.), 10 F.3d 693, 695 (9th Cir. 1993)
(internal quotation marks and citation omitted).
AFFIRMED.

-- 3 of 4 --

Lee Corp. v. Kim Seng Co., 10-55721
SILVERMAN, Circuit Judge, concurring:
I do not agree that the injunction is ambiguous, but I do agree that the
district court did not abuse its discretion in ruling that Great River’s contempt
motion is barred by laches.
FILED
FEB 01 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

-- 4 of 4 --