Third Cir. Upholds Contempt Order In 'Drifters' Case

The U.S. Court of Appeals for the Third Circuit upheld a finding of contempt against associates, family employees and corporate successors-in-interest of music promoter Larry Marshak over use of the name of The Drifters vocal group. But the appeals court strengthened remedies that plaintiff Faye Treadwell, widow of former Drifters manager George Treadwell, had been awarded by the district court in the contempt proceeding. Marshak v. Treadwell, 08-1771.

Faye Treadwell sued Marshak in the 1990s. In 1999, the U.S. District Court for the District of New Jersey issued a permanent injunction finding that Larry Marshak had fraudulently acquired a federal trademark for “The Drifters” while Treadwell continued to have common law rights in the name. In 2006, Treadwell filed a motion for contempt over Marshak's continued use of The Drifters' name. The district judge presiding at that time granted the motion but limited Treadwell's recovery only to attorney fees.

The Third Circuit emphasized that the original judge in 1999 had “enjoined Marshak and his company from marketing The Drifters anywhere ' not On Broadway, not Up On the Roof, and not Under the Boardwalk ' and ordered a full accounting of profits.”

The appeals court explained: “As the case progressed, Marshak decided to slowly dissolve [his promotion company] RCI. His wife Andrea Marshak, who had long worked for RCI, immediately stepped into the breach and formed DCPM ' a company that would essentially replicate the work of RCI. She then invited Paula Marshak [Marshak's sister-in-law], [Charles] Mehlich, and [Dave] Revels ' all past employees of Marshak/RCI ' to become co-owners of DCPM. In Paula Marshak's own words, DCPM 'picked up where RCI left off' ' doing the same work as Marshak and RCI, only under a different name. Even the place of business stayed the same ' DCPM, owned and operated by the same personnel that previously ran RCI, found a home in Marshak's basement.”

The appeals court noted that after the original injunction had been issued, Marshak's attorney, Lowell Davis, approached Barry Singer, who founded Singer Management to market The Drifters. According to the court: “Then, shockingly, Singer invited Mehlich, a co-owner of DCPM, to become a co-owner of Singer Management, and moved the operation to ' where else? ' Marshak's basement. Thus, after a year's interlude, The Drifters were once again being marketed out of the same basement office by the same people.”

(All these individuals but Revels were held in contempt. The appeals court reversed the contempt finding against Revels because he hadn't been named in Treadwell's contempt motion.)

The Third Circuit reinstated the 1999 judge's order for an accounting of the Marshak parties' Drifters profits. The appeals court observed: “We believe that limiting Treadwell's remedies to mere attorneys' fees would result in the perversity of imposing less demanding remedies on [the Marshak parties] after the finding of contempt than were imposed before the finding of contempt.”