Opinion
Case No.: 2:02-CV-1008TS
September 8, 2003
L. Grant Foster, Holland Hart LLP, Salt Lake City, Utah, for Plaintiff Nordstrom, Inc.
William O. Ferron, Jr., Seed Intellectual Property Law Group, PLLC, Seattle, WA, for Plaintiff Nordstrom, Inc.
Peter H. Barlow, Esq., STRONG HANNI, Salt Lake City, Utah, for Defendants
ORDER DENYING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT
The Court having considered the motion by Defendants Yancey Department Store Outlet, L.L.C. ("Yancey LLC") and Scott E. Yancey ("Yancey"), an individual, for partial summary judgment dismiss Yancey from this action with prejudice, and having considered the submissions of the parties, the record herein, and the law, makes the following findings of fact and conclusions of law:
1. The Court rejects Defendants' arguments that Utah law, including Utah Code Ann. § 48-2c-104, bars all individual liability of members and managers of a limited liability company ("LLC") for claims of trademark infringement and unfair competition.
2. Like corporate officers, an LLC member or manager "may be held personally liable for his or her tortuous conduct." Ditty v. Checkright, Ltd., Inc., 973 F. Supp. 1320, 1337 (D. Utah 1977). LLC members and managers may be personally liable for trademark infringement and unfair competition of the LLC when they are "a moving, active conscious force behind the infringement." Novell, Inc. v. Network Trade Center, Inc., 25 F. Supp.2d 1218, 1231 (D. Utah 1997), Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1021 (9th Cir. 1985) (corporate officer or director "personally liable for all torts in which he authorizes or directs or in which he participates, notwithstanding that he acted as an agent of the corporation and not on his own behalf")
The LLC member or manager "need not be aware that his conduct will result in infringement." Novell, 25 F. Supp.2d at 1231.
3. Further discovery is needed in this case to determine whether Yancey's conduct with respect to the alleged acts of trademark infringement and unfair competition is sufficient to hold him personally liable for such acts.
4. The Defendants' motion for summary judgment, which relied on its theory that Utah law bars all personal liability of LLC members and directors for trademark infringement and unfair competition, is denied without prejudice. Should farther discovery evidence that Yancey's conduct does not meet the standards for personal liability of an LLC member or manager, Defendants may file a motion seeking dismissal under the standards described herein.
ACCORDINGLY, IT IS HEREBY ORDERED that:
Defendants' Motion for Partial Summary Judgment is DENIED without prejudice.