The U.S. Court of Appeals for the Third Circuit recently upheld a contempt ruling against a promoter and his family who violated an injunction by continuing to promote doo-wop group The Drifters after he was found to have no rights to the Drifters name and enjoined from using it. Marshak v. Treadwell et al., Case No. 08-1771 (3d Cir., July 2, 2009) (Fuentes, J.).
The Drifters were a popular Motown group that started performing in the 1950s best known for songs such as “Under the Boardwalk” and “Some Kind of Wonderful.” Managed first by music executive George Treadwell and, after he passed away, his wife Faye Treadwell, the Drifters persisted as an entity for nearly two decades. During that time the Treadwells hired and paid the individual performers as employees, replacing them frequently. Consequently, the membership of the group was constantly in flux.
By 1970, the Drifters had largely stopped performing in the United States. Seeing an opportunity, rock magazine editor Larry Marshak reunited some of the former group members who had been replaced over the years by the Treadwells for a series of reunion concerts. The concerts were successful. Marshak signed the former members and marketed them as “The Drifters” for the next three decades.
Marshak’s promotion of The Drifters spurred numerous legal battles between himself and former manager Faye Treadwell. After a series of lawsuits spanning many years, it was finally concluded that Marshak had no rights in The Drifters trademark because he had procured the registration through fraud and that Treadwell still retained rights in The Drifters trademark. In 1999, on the heels of this conclusion, a district court issued an injunction to bar Marshak from promoting The Drifters.
The Drifters group assembled by Marshak did not disappear. Instead, Marshak enlisted various family members and business associates to continue promoting the group in his place. In 2006, Treadwell sought a contempt order, claiming the injunction was enforceable against parties other than Marshak—specifically, the companies and employees associated with Marshak who continued to market The Drifters after the issuance of the injunction in 1999. The district court agreed and issued the contempt order against Marshak, but awarded Treadwell only attorneys’ fees, not compensatory damages for Marshak’s years of use of The Drifters trademark.
Both parties appealed the contempt ruling. Marshak challenged the underlying ruling, while Treadwell sought greater damages to compensate her for the years of unauthorized use. The Third Circuit upheld the district court’s order, finding no clear error and “ample support for the District Court’s contempt findings” against Marshak and his associates. Moreover, it held that attorneys’ fees were an insufficient remedy for Marshak’s violation and that Treadwell was entitled to a greater damages award, finding that, “Marshak and his associates were sanctioned for violating the court’s injunction, but were permitted by the court to keep whatever profits they gained as a result of their disregard for [the District Court’s] injunction. This, we believe, was an abuse of discretion.” Accordingly, the Third Circuit remanded the matter for an order of accounting.