Opinion
B151626.
7-30-2003
THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, Plaintiff and Appellant, v. BELLOS SPORTING GOODS, Defendant and Respondent.
California State University Office of General Counsel, Christine Helwick and Leroy Anderson; Lascher & Lascher and Wendy Cole Lascher for Plaintiff and Appellant. Christie, Parker & Hale, David A. Dillard and Charles R. Halloran as Amicus Curiae on behalf of Plaintiff and Appellant. Smith, Tardiff & Crandall and Neil S. Tardiff for Defendant and Respondent.
OPINION ON REHEARING
The Board of Trustees of the California State University (CSU) brought this action to enjoin Bellos Sporting Goods (Bellos) from selling articles of clothing and other items that have the words "Cal Poly" applied to them. The trial court denied CSUs request for injunctive relief. But the trial court granted a limited injunction requiring Bellos to attach a disclaimer that the product is not sponsored by or connected with California Polytechnic State University, San Luis Obispo.
CSU appeals. We conclude that Education Code section 89005.5, as recently amended, applies here. We reverse and remand for further proceedings to allow Bellos to raise defenses it may have to the amended statute.
All statutory references are to the Education Code unless otherwise stated.
FACTS
California Polytechnic State University, San Luis Obispo (University) was founded in 1901. The University, its students and the community refer to it as "Cal Poly," among other names. The University has sold banners, clothing and other items bearing the words "Cal Poly," at least since 1940.
Bellos was established in 1945, and has been at the same location in the City of San Luis Obispo since then. There is only one store. In 1949, Bellos began selling articles of clothing bearing the words "Cal Poly." Those articles of clothing have included lettermans jackets, baseball caps, sweatshirts and T-shirts. Bellos continues to sell similar items. Other stores in the area also sold Cal Poly clothing over the years.
No one objected until 1993. In that year, a foundation affiliated with the University opened a clothing and gift store in downtown San Luis Obispo. The foundation demanded that Bellos and other stores stop selling Cal Poly goods. Only Bellos refused to comply.
CSU brought this action claiming the words "Cal Poly" as its trademark and that section 89005.5 prohibits Bellos from commercially exploiting the words without its permission. The trial court found that the words "Cal Poly" were generic and thus not entitled to trademark protection. The court also concluded that section 89005.5 does not prohibit Bellos from using the words "Cal Poly." It only prohibits use of the words in ways that create the impression a product is endorsed or connected with one of the CSU campuses.
DISCUSSION
I
At the time the trial court rendered judgment, section 89005.5 did not expressly protect CSUs interest in the same California Polytechnic State University or in the abbreviation Cal Poly. Nor did the section expressly prohibit commercial use of the names without CSUs consent.
Prior to the amendment, section 89005.5 provided in part: "The name California State University is the property of the state. No person shall, without the permission of the Trustees of the California State University, use this name, or any abbreviation of it or any name of which these words are a part, in any of the following ways: [P] . . .[P] (2) To imply, indicate or otherwise suggest that any such organization, or any product or service of such organization, is connected or affiliated with, or is endorsed, favored, or supported by, or is opposed by the California State University."
After the trial court rendered judgment, the Legislature amended section 89005.5. As amended, section 89005.5, subdivision (a)(1)(C)(i) expressly provides that the name "California Polytechnic State University, San Luis Obispo" is the property of the state. Section 89005.5, subdivision (a)(1)(D)(viii) provides that abbreviations of the name, including but not limited to "Cal Poly," are the property of the state. In addition to prohibiting the implication or suggestion that a product is endorsed by or connected with one of the CSU campuses, section 89005.5, subdivision (a)(2)(B) now provides in part, "The permission of the Trustees [of CSU] is required before any name listed in this subdivision may be used for any commercial purpose."
(Amended by Stats. 2001, ch. 219, § 1 (Assem. Bill No. 1719).)
There is no dispute that Bellos has been using the name "Cal Poly" for commercial purposes without the permission of the trustees. Bellos asserts its right to continue to do so. Bellos argues that the amendments to section 89005.5 should not be applied retroactively. It relies on the long established rule that an amended statute applies prospectively unless the Legislature plainly intended it to apply retroactively. (Citing Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1207, 246 Cal. Rptr. 629, 753 P.2d 585.)
CSU replies that it is not seeking retroactive application of the amended statute. All it seeks is prospective injunction to prevent Bellos from continuing to use the name "Cal Poly" for commercial purposes.
Indeed, all injunctions are prospective in nature. A court cannot stop what has already happened. CSU seeks no damages or other sanctions arising from previous conduct. It is not seeking a retroactive application of the statute.
When the law changes after judgment in the trial court, but before the appeal is determined, "the rule is well settled that on appeals involving injunction decrees, the law in effect when the appellate court renders its opinion must be applied. [Citation.]" (Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist. (1935) 3 Cal.2d 489, 527-528, 45 P.2d 972.) Thus we must apply section 89005.5 as amended.
Bellos argues the rule requiring an appellate court to decide its opinion under current law applies only when the injunction has been granted. In such a case, enforcement of the judgment may require further supervision by the court. Bellos distinguishes this case in that here the injunction was denied.
The only authority Bellos cites in support of its argument is Mendly v. County of Los Angeles (1994) 23 Cal.App.4th 1193, 1212. But Mendly does not support Bellos argument. There the court discussed the Legislatures power over a final judicial decision. Here we are not concerned with a final judicial decision, the matter is under appeal. (See Beckman v. Thompson (1992) 4 Cal.App.4th 481, 489 ["If the judgment is not yet final because it is on appeal, the appellate court has a duty to apply the law as it exists when the appellate court renders its decision"].)
There is no reason in law or logic for applying on appeal section 89005.5 as it existed at the time of the judgment. It makes no sense to affirm a judgment denying an injunction based on what the law used to be.
Moreover, there is the matter of judicial economy. If we were to hold that the amendments to section 89005.5 do not apply here, it would not preclude CSU from filing another case under the amended statute. Because there is a change in the law, prior determination would not be res judicata nor would it collaterally estop CSU from litigating the same question. (Powers v. Floersheim (1967) 256 Cal. App. 2d 223, 230, 63 Cal. Rptr. 913 [denial of injunction in previous case did not collaterally estop state from litigating the same question in subsequent case following change in applicable law].)
II
Bellos raises a number of constitutional challenges to the application of the amendments to section 89005.5.
Bellos argues the application of the amended statute here is a clear violation of the separation of powers doctrine. (Cal. Const., art. III, § 3.) The separation of powers doctrine prevents the Legislature from rejecting judgments with which it disagrees. (Mendly v. County of Los Angeles, supra, 23 Cal.App.4th at p. 1212.) But the doctrine is limited to final judgments. (Ibid.) A judgment on appeal is not final. (See Beckman v. Thompson, supra, 4 Cal.App.4th at p. 489.)
Bellos argues the amended section violates free speech protections of the United States and California Constitutions. (U.S. Const., 1st Amend.; Cal. Const., art. I, § 2.) But section 89005.5 only affects commercial speech. Commercial speech receives a limited form of First Amendment protection. (San Francisco Arts & Athletics, Inc. v. U.S. Olympic Committee (1987) 483 U.S. 522, 535, 97 L. Ed. 2d 427, 107 S. Ct. 2971.) "When a word acquires value as the result of organization and the expenditure of labor, skill, and money by an entity, that entity constitutionally may obtain a limited property right in the word. [Citations.]" (Id. at p. 532 [the First Amendment does not prohibit Congress from granting exclusive use of the word "Olympic" where Congress could reasonably conclude the word has acquired value as a result of organization and the expenditure of labor, skill and money].) Here the Legislature could reasonably conclude that the words "Cal Poly" have acquired value as a result of organization and the expenditure of labor, skill and money by CSU. Bellos has no constitutional right to commercially exploit the value of the universitys hard-won reputation. For this reason, we need not decide whether the words "Cal Poly" are generic under trademark law. These words are no less specific than the word "Olympic."
Bellos argues section 89005.5 violates due process in that it is indefinite and vague. (U.S. Const., 14th Amend.; Cal. Const., art I, § 7.) Due process does not require statutory language so precise that its application is entirely free from doubt in every circumstance. All that is required is statutory language reasonably free from uncertainty. (Wingfield v. Fielder (1972) 29 Cal. App. 3d 209, 219, 105 Cal. Rptr. 619.)
Here Bellos does not suggest in what way the statute is indefinite and vague. The statute prohibits the commercial use of the name "Cal Poly" without the consent of CSUs trustees. There is nothing indefinite or vague about that.
Bellos contends that section 89005.5 is preempted by federal trademark law, the Lanham Act of 1946 (15 U.S.C., § 1051 et seq.). Bellos provides no supporting analysis. It cites Gibson v. World Savings & Loan Assn. (2002) 103 Cal.App.4th 1291. But Gibson concerns only whether the California unfair competition law (Bus. & Prof. Code, § 17200) is preempted by the federal Home Owners Loan Act (12 U.S.C., § 1461 et seq.) Gibson does point out, however, the well settled rule that a federal statute will not preempt a state statute unless there is a clear manifestation of the intention to do so. (Gibson,supra, at p. 1296.) Here Bellos points to no such clear manifestation of the intention to preempt section 89005.5.
In its petition for rehearing, Bellos argues that the application of the amended statute would violate the constitutional ban on ex post facto laws. But the ban on ex post facto laws applies only to the retrospective application of a criminal statute. (7 Witkin, Summary of Cal. Law (9th ed. 1990) Constitutional Law, § 419, p. 601.) Here CSU is not seeking retrospective application of the statute. Moreover, although subdivision (c) of section 89005.5 provides that violation of the section is a misdemeanor, CSU is not seeking to apply the criminal portion of the statute. This is purely a civil action. The ban on ex post facto laws does not apply here.
Bellos argues that the trial court lacks jurisdiction to enjoin a criminal act. (Citing Civ. Code, § 3369.) It is true equity has no jurisdiction to enjoin an act merely because it is criminal. (Dandini v. Dandini (1948) 86 Cal. App. 2d 478, 488, 195 P.2d 871; Herald v. Glendale Lodge No. 1289 B.P.O.E. of U.S. (1920) 46 Cal.App. 325, 332, 189 P. 329.) But it is also true that equity will enjoin an act that assails property rights, even through the act is a crime. (Ibid.) Here CSU is simply trying to preserve its property rights. The trial court has jurisdiction to issue an injunction to protect them.
Initially, we reversed with directions to issue injunctive relief barring use of the words "Cal Poly." In its petition for rehearing, Bellos complains that the disposition unfairly prevents it from raising other defenses it may have to the amended statute.
One such defense Bellos raised for the first time on appeal at oral argument is estoppel. Bellos does not argue that the amended statute raises issues of estoppel that did not exist prior to the amendments. Instead, Bellos asserts in its petition for rehearing that it submitted substantial evidence at trial that CSU trustees impliedly and expressly consented to Bellos use of the words "Cal Poly" for over half a century. It claimed Bellos has obtained a property right to use those words.
Bellos fails to cite where in the record there is evidence of such consent. Nor does Bellos point to any of the trial courts findings that even suggest grounds for estoppel. At best, the findings show CSU was silent until 1993, when a foundation affiliated with CSU sent Bellos a cease and desist letter. CSUs silence gives Bellos no more than a revocable license. (See Menendez v. Holt (1888) 128 U.S. 514, 524, 32 L. Ed. 526, 9 S. Ct. 143.) In any event, estoppel requires Bellos to show prejudice. (See Cerritos Valley Bank v. Stirling (2000) 81 Cal.App.4th 1108, 1117.) Bellos petition for rehearing does not even hint at how it might have been prejudiced. Indeed, presumably it profited from the sale of "Cal Poly" goods. Noteworthy is that it continued to sell Cal Poly items even after it was informed in 1993 of CSUs objections.
Although Bellos claim of estoppel existed prior to the amendments to the statute, conceivably there may be other claims uniquely related to the amended statute on which Bellos did not receive a hearing in the trial court. Whether such defenses exist remain to be seen, but Bellos has a right to a hearing.
The judgment is reversed and remanded for further proceedings consistent with this opinion. Costs are awarded to appellant.
We concur: YEGAN, J., PERREN, J.