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Lawyer Of The Year 2003

Douglas A. Dozeman - Grand Rapids

Born: 1957

Education: Wayne State University (1983); Calvin College (1979)

Admitted to Bar: 1983

Experience: Partner, chair of Litigation Practice Group, Warner, Norcross and Judd, LLP

Legal affiliations: American Bar Association; Federal Bar Association; State Bar of Michigan Real Estate Section, Condemnation Group; Grand Rapids Bar Association

The quiet, confident manner in which Douglas A. Dozeman talks about the five years of litigation for his clients, Joseph Shields, Thomas Rinks and their company, Wrench, LLC, is almost disarming.

It's one of his biggest cases. It features a small dog, a giant fast food company and an eye-popping $41 million federal court judgment for his clients.

In 1995, Shields and Rinks, who started out in the T-shirt business, created a licensed character, "Psycho Chihuahua," described as a small, cool dog with a big attitude. They licensed the character to several merchandizing firms. Later, at a trade show, the two met Taco Bell executives, who asked them to develop Psycho Chihuahua into a live-action character. Wrench did so and produced ideas, advertising storyboards and specific commercial executions. A number of meetings took place to discuss and fine-tune the concepts.

Then, Taco Bell broke off the talks. A few months later, Shields and Rinks were watching television and saw a Taco Bell commercial featuring a tiny talking Chihuahua. Lots of folks who heard the dog speak went out and ordered bags of burritos.

Shields and Rinks went out and hired Dozeman.

Q. How did you get this case?

A. My clients are local guys from Grand Rapids. When they realized they had a problem with Taco Bell, Tom Rinks, one of the two plaintiffs, knew someone in our firm who talked to them and got them in touch with me.

Q. What made your clients realize they had a problem with Taco Bell?

A. It was patently obvious. They had negotiated with Taco Bell for about a year for the use of their licensed character "Psycho Chihuahua" and to adapt that licensed character for use in Taco Bell ads. After a year of negotiations, including people flying back and forth between here and California with detailed contract proposals, talks suddenly broke off and three months later — voila! Taco Bell had a Chihuahua on their commercials. It was pretty obvious once my clients saw the ads.

Q. When you initially filed the case in the Western District of Michigan, didn't Judge Gordon Quist throw the entire thing out just before trial?

A. He did. He threw it out on summary judgment on grounds of federal copyright pre-emption. We had an implied contract claim that stated Taco Bell understood that, if it used time and materials, it would have to pay for them. Taco Bell argued, and the judge agreed, that because the subject matter of the implied contract was "copyrightable" material, we either had a copyright claim or we had nothing. That is, because it's "copyrightable," we had a copyright claim and the federal copyright act was intended to pre-empt the field from any state-law claims on the same subject matter.

Q. You appealed to the Sixth Circuit, which reinstated the case. What was the basis of the decision?

A. The Sixth Circuit unanimously overturned the decision on federal copyright pre-emption. The court essentially said, "It really doesn't matter what the subject matter of the contract is. You can always have the freedom to contract between parties, even if it is on 'copyrightable' material." Therefore, the federal copyright act does not pre-empt private contracts.

Q. You pleaded a mixture of tort and contract claims against Taco Bell, but only the contract claim went to trial. What happened to the tort claims?

A. The Sixth Circuit overturned the judge's opinion and returned the case for trial. Before trial, we again faced a summary judgment motion on the tort claims. Taco Bell argued that you can't have tort claims on the same subject matter as the contract. The court agreed with that and tossed all the tort claims. Therefore, when we went to trial, the only claim left was the implied contract claim.

Q. What was the biggest hurdle you had to overcome once you were in front of the jury?

A. The biggest hurdle was to show that the dog being used in the commercials was actually the same as the ideas and concepts that the plaintiffs conveyed to Taco Bell over the course of that year. In other words, that they were using our dog.

Q. What proofs did you present?

A. We had an overwhelming amount of documentary evidence that showed not only that these parties had been meeting over the course of a year, but that they had solicited ideas and concepts from the plaintiffs; and that the plaintiffs had produced lots of materials, including specific ad executions, storyboards, and the very ideas that found expression in the first Taco Bell commercials that came out. The documentation was so overwhelming that I don't think there was a doubt in anyone's mind at the end of the day those were the ideas that were used.

We were able to show by documents that were discovered from Taco Bell and from their advertising agency ... that those ideas not only went through the contact person we had ... the head of licensing at Taco Bell ... [but he] in turn, had communicated those ideas and the materials to virtually everybody in top management at Taco Bell and, in fact, those materials had physically found their way into the ad agency.

Q. During trial, was there any "defining moment," one that made you sit back and think, "We've got this one in the bag?"

A. I don't think you ever feel that way entirely until the jury comes back in. But we always felt very confident that, once we got to a jury, the evidence in the case was so convincing, so complete, so overwhelming that once you heard all of the evidence, it was pretty darn hard to convince yourself that they hadn't taken the plaintiffs' ideas and used them in their campaign.

Q. The jury returned a verdict of $30 million. Were you surprised by the size of the verdict?

A. I wasn't entirely surprised by it. They came out to the penny with what we asked for. The number that we asked for was not just some number out of the air — it was based on a licensing proposal that was actually given to Taco Bell back in 1997 when they were in the midst of negotiating. They asked, essentially, "How much is this going to cost us?" The plaintiffs' agent gave them a detailed proposal, a basic, run-of-the-mill licensing proposal that you would use for any licensed property, which is based on percentages. They used this as their exclusive ad campaign for two-and-a-half years. They spent $500 million on it.

Q. Judge Quist recently tacked on an $11 million interest award for pre- and post-judgment interest after ruling that interest is not suspended during the pendency of an appeal. [This issue is governed by state law and the thrust of Judge Quist's ruling was that the Michigan Supreme Court would not find that the prejudgment interest statute has an exception for appeal periods.] As I'm sure you're well aware, the Michigan Supreme Court is hearing arguments on that very issue in the Morales case.

A. We're acutely aware of that.

Q. How confident are you, and for what reasons, that the Michigan Supreme Court will read the law the same way as Judge Quist?

A. I predict they will go along with what Judge Quist predicted they would do. You're aware of the tenor of our present Michigan Supreme Court.

Q. There are a number of "textualists" on the court.

A. Exactly. Because of that, if you look at the interest statute itself, it simply says that interest runs from the date of the complaint until the judgment is satisfied. It doesn't make any exceptions to the running of that interest.

What has happened over the years is that a few Court of Appeals panels have held on equitable grounds that in certain circumstances, it isn't fair to have interest run for this whole period. In one case, a court had lost a file for a while, and recently, there was another case that said, "during the pendency of an appeal, it's not fair."

Well, there's nothing in the statute to indicate that's the way you should go, so the textualist majority on the court shouldn't go along with that way of thinking. But if you think about it even further, those exceptions don't even make any sense because the purpose of the interest statute is to make the plaintiff whole. If they were denied the use of funds that they were owed over a period of time, the interest statute is supposed to make them whole for that delay. It doesn't matter why the case ran as long as it did, whether a file was lost or an appeal was taken, the defendant has the use of those funds throughout that period, no matter whose fault that is. There's no logical reason to say that the defendant is excused from paying interest during that period when they had use of the money. This is just a "time-value of money" principle.

Q. Has the federal jury verdict been appealed?

A. Yes. Notice of appeal has been filed. We have cross-appealed on the dismissal of the tort claims and we have a briefing schedule, so we're off to the races.

Q. Have you and your clients given any thought to a settlement to foreclose the appeal?

A. I don't really want to discuss settlement.

Q. When do you think your clients will see a check from Taco Bell?

A. That's more in Taco Bell's control than ours. We're assuming that this case could go the distance on the appeal. That could be another 18 months to two years.

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