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MAISON LAZARD ET COMPAGNIE v. MANFRA

May 11, 1984

MAISON LAZARD ET COMPAGNIE, NUMIVEST INTERNATIONAL CO., and NUMIVEST HOLDING CORP., Plaintiffs, against MANFRA, TORDELLA & BROOKS, INC. and RONALD E. BRIGANDI CO., INC., Defendants.


The opinion of the court was delivered by: KNAPP

MEMORANDUM & ORDER

WHITMAN KNAPP, D.J.

 This action arises out of the sale of coins minted to commemorate the 1984 Los Angeles Olympic Games. In an effort to raise money for the games Congress, in July 1982, passed the Olympic Commemorative Coin Act, Public Law 97-220, 31 U.S.C. § 324 note, providing for the minting and sale of Olympic Commemorative Coins to be minted by the United States Mint and issued by the United States Department of the Treasury ("Treasury").In May 1983, pursuant to §§ 4 and 5 of the Act, Treasury awarded to plaintiffs the exclusive rights to market and sell the coins outside the United States. Pursuant to § 7 of the Act, Treasury entered into an Implementation Agreement with plaintiffs which provided that:

 Treasury assigns to Contractor [plaintiffs] the exclusive rights to market the Coins in all areas outside of the United States or its possessions (except United States Military and Diplomatic Establishments outside of the United States.

 To protect the exclusivity of the rights granted to plaintiff, the Agreement provided that:

 Treasury agrees that it will prohibit domestic bulk purchasers from selling, directly or indirectly, Olympic Coins to persons outside the United States.

 Subsequent to its agreement with plaintiffs, Treasury contracted with domestic bulk purchasers for sale and distribution of the coins within the United States. In June 1983 Treasury made such a contract with defendant Manfra, Tordella & Brooks, Inc. ("Manfra"). The agreement between the parties included the provision that:

 BUYER [the domestic bulk purchaser] shall not be permitted to market or sell Olympic Coins, directly or indirectly, outside the United States, including U.S. military and diplomatic establishments outside the United States, nor shall BUYER be permitted to aid or assist anyone else to do so, whether by direct or indirect sale, conditional sale, consignment, assignment, or transfer of ownership interest.

 Plaintiffs allege that Manfra, in violation of its obligation not to do so, arranged to sell the coins for resale outside the United States. Plaintiffs further allege that Manfra arranged a sham deal with defendant Brigandi, a New York corporation, to make it appear that Manfra sold the coins to Brigandi, which in turn sold and shipped the coins out of the country. In reality, plaintiffs contend, Brigandi never possessed or controlled the coins and was fully aware that the invoices it provided were to be used by Manfra to cover up the sales wich it was prohibited from making.

 Aside from the claim of conversion which has been withdrawn, plaintiffs allege the following causes of action: breach of contract, unfair competition under the Lanham Act and under New York law, interference with business relations, and a claim for punitive damages; the validity of each is disputed by defendants. For the reasons that follow we sustain each of plaintiffs' claims, except the one for puntive damages as to which we defer decision.

 A. The Contract Claim

 It seems to us there could be no clearer indication of a contract for the benefit of a third party than one whose provisions are inserted for the express purpose of fulfilling one of the contractor's obligations to such third party. Defendants, relying on the doctrine of expressio unius est exclusio alterius, point to the circumstance that their contract expressly provides that the government and various Olympic Committees may enforce it, but says nothing about plaintiffs' power to do so. As to that we agree with Judge Freedman's observation in Durnin v. Allentown Federal Savings & Loan Association (E.D.Pa. 1963) 218 F. Supp. 716, 719, that the doctrine is "at best an unreliable basis for ascertaining intention," assuming "too much foresight in the draftsmen." Obviously this particular draftsman had been told to put something in the contract to please the Olympic Committees, and there is no reason to assume that he was trying to in any way cut back on the rights which the government had agreed to provide for the plaintiffs. Plaintiffs were clearly third-party beneficiaries of the Bulk Purchase Agreement between Treasury and Manfra, and have a cause of action for breach thereof.

 B. Federal Unfair Competition

 This claim is only advanced on behalf of plaintiff Maison Lazard, a citizen of France, who invokes the protections of the Paris Convention and the Lanham Act. Under the Lanham Act, 15 U.S.C. § 1501 et seq., "[a]ny person whose country of origin is a party to any convention or treaty relating to trademarks, trade or commerical names, or the repression of unfair competition, to which the United States is also a party," 15 U.S.C. § 1126(b), "shall be entitled to effective protection against unfair competition." 15 U.S.C. § 1126(h). The Paris Convention, to which the United States and France are both signatories, assures nationals of such countries "effective protection against unfair competition." On the basis of these provisions, plaintiff Maison Lazard asserts a federal cause of action for acts of unfair ...


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