Global Apogee v. Sugarfina, inc.

Filing 48

ORDER re Defendant's Motion to Enforce Plan Injunction and Release Provisions 45 by Judge Ronald S.W. Lew. The Court GRANTS Sugarfina's Motion. The Court ORDERS Plaintiff to dismiss its claims against Sugarfina within seven (7) days of the date of this Order. The Court STAYS this Action against Defendants Resnick and O'Neill through May 28, 2021. (lom)

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1 Release Provisions [45] (“Motion”). Having reviewed all 2 papers submitted pertaining to this Motion, the Court 3 NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS 4 Sugarfina’s Motion. 5 I. BACKGROUND 6 A. Factual Background 7 Plaintiff is the holder of the registered “CANDY- 8 GRAM” trademark (“CANDY-GRAM”), No. 1,943,440. 9 ¶ 15, ECF No. 1. Compl. The registration covers “Candy” in 10 Class 30 and "Greeting Cards" in Class 16. Id. 11 Plaintiff has used CANDY-GRAM continuously in 12 interstate commerce in connection with the sales of 13 candy and greeting cards since it was issued in 1995, 14 and has renewed it every ten years. Id. ¶ 17. 15 Plaintiff uses CANDY-GRAM on its website, 16 www.candygram.com, and in its 800-candygram toll 17 number. 18 Id. ¶ 18. Sugarfina is a luxury candy boutique. Id. ¶ 9. 19 Sugarfina’s website features the option “Candygram,” 20 which allows customers to send candy products with 21 messages through its website and in-store kiosks. 22 ¶¶ 26-27. Id. Plaintiff contends that no later than 23 February 2018, Sugarfina began infringing on 24 Plaintiff’s CANDY-GRAM mark as well as its common law 25 rights to the CANDY-GRAM service mark. 26 Id. ¶ 2. Plaintiff sent a cease and desist letter to 27 Sugarfina on April 26, 2018, regarding Sugarfina’s 28 alleged trademark infringement, but Sugarfina has 2 1 refused to comply with the request. Id. ¶¶ 19-20. 2 B. Procedural Background 3 On June 11, 2018, Plaintiff filed its Complaint [1] 4 asserting nine causes of action.1 On October 10, 2018, 5 the Court granted in part and denied in part [15] 6 Defendants’ Motion to Dismiss. 7 Sugarfina filed a Notice of Filing Bankruptcy with 8 the Court on September 16, 2019 [37]. On April 14, 9 2020, the Court stayed this Action [42] pending the 10 Confirmation Hearing in Sugarfina’s bankruptcy 11 proceedings. 12 On May 26, 2020, Sugarfina filed its Status and 13 Result of Bankruptcy Court Hearing [43], explaining 14 that the Bankruptcy Court entered an order confirming 15 Sugarfina’s Plan of Reorganization (the “Plan”). On 16 June 1, 2020, Sugarfina filed a Supplemental Notice Re: 17 Status and Result of Bankruptcy Court Hearing [44], 18 detailing that the Plan had become effective as of May 19 28, 2020. 20 Sugarfina filed the instant Motion [45] on June 24, 21 2020. Plaintiff failed to oppose, and Sugarfina then 22 filed a Notice of Non-Opposition [46] on July 17, 2020. 23 /// 24 1 Plaintiff asserts the following causes of Action: (1) 25 Federal Trademark Infringement; (2) Federal Trademark Dilution; (3) Unfair Competition, Trade Dress Infringement, and False 26 Designation of Origin; (4) California Common Law Unfair 27 Competition; (5) Unfair Competition; (6) Common Law Infringement of Trademark; (7) Common Law Infringement of Service Mark; (8) 28 Tortious Interference with Prospective Business Relationship; and (9) Unjust Enrichment. 3 1 2 II. DISCUSSION Bankruptcy courts have the authority to grant 3 injunctive relief under section 105(a) of the 4 Bankruptcy Code. See 11 U.S.C. § 105 (“The court may 5 issue any order, process, or judgment that is necessary 6 or appropriate to carry out the provisions of this 7 title.”); see also In re Breul, 533 B.R. 782, 791 8 (Bankr. C.D. Cal. 2015) (noting that the bankruptcy 9 court has the power to enforce discharge injunctions 10 pursuant to its authority under section 105(a)). 11 Additionally, “ section 105 permits the court to issue 12 both preliminary and permanent injunctions after 13 confirmation of a plan to protect the debtor and the 14 administration of the bankruptcy estate.” In re Am. 15 Hardwoods, Inc., 885 F.2d 621, 625 (9th Cir. 1989). 16 Here, the Bankruptcy Court, in its Confirmation 17 Order, approved the discharge, injunction, and release 18 provisions in the Plan. See Ex. 1 to Supp. Notice re: 19 Status and Result of Bankruptcy Court Hearing 20 (“Confirmation Order”) ¶¶ 19-20, ECF No. 44-1; see also 21 Ex. 3 to Supp. Notice re: Status and Result of 22 Bankruptcy Court Hearing (“Plan”) § 8.01, ECF No. 44-3. 23 Specifically, the Plan release claims and enjoins the 24 pursuit of new claims against Sugarfina: 25 26 27 FROM AND AFTER THE EFFECTIVE DATE, ALL ENTITIES ARE PERMANENTLY ENJOINED FROM COMMENCING OR CONTINUING IN ANY MANNER, ANY CAUSE OF ACTION RELEASED OR TO BE RELEASED PURSUANT TO THE PLAN OR THE CONFIRMATION ORDER. 28 4 1 Plan § 8.05(a). The Plan also provides for a limited 2 injunction against Defendants Resnick and O’Neill: 3 UNLESS AGREED IN WRITING OTHERWISE BY THE REORGANIZED DEBTOR, LITIGATION AND/OR ANY 4 CONTINUATION OF THE INSURED LITIGATION (TO THE EXTENT NOT RELEASED OR DISCHARGED HEREUNDER), 5 SHALL BE ENJOINED FOR A PERIOD OF TWELVE (12) MONTHS FOLLOWING THE EFFECTIVE DATE. 6 Id. § 8.06. The Plan defines the “Insured Litigation” 7 as, among others: 8 9 10 11 12 (b) that certain litigation currently pending as Global Apogee v. Sugarfina, Inc., et al., with the District Court for the Central District of California as Case No. 2:18-cv-05162, and (c) any other claim or cause of action filed or raised or that may in the future be filed or raised against a non-Debtor beneficiary of the D&O Insurance Policies for which there is coverage under such Insurance Policies. 13 Id. 14 The Bankruptcy Court approved the release 15 provisions in the Plan, stating: 16 17 18 Except as modified herein, the releases and exculpation provisions contained in the Plan, including but not limited to, those provided in Article VIII of the Plan, are hereby authorized, approved, and binding on all Persons and Entities described therein . . . . 19 20 Confirmation Order ¶ 19. The Bankruptcy Court also 21 approved the injunction provisions: 22 23 24 25 26 27 28 Pursuant to Article VIII of the Plan, except as otherwise expressly provided in the Plan or this Order, from and after the Effective Date, all Persons and Entitles are, to the fullest extent provided under section 524 and other applicable provisions of the Bankruptcy Code, permanently enjoined from (i) commencing or continuing, in any manner or in any place, any suit, action or other proceeding; (ii) enforcing, attaching, collecting, or recovering in any manner any judgment, award, decree, or order; (iii) creating, perfecting, or enforcing any Lien or encumbrance; (iv) asserting a 5 1 2 3 4 5 setoff or right of subrogation of any kind; or (v) commencing or continuing in any manner any action or other proceeding of any kind, in each case on account of or with respect to any claim, demand, liability, obligation, debt, right, cause of action, equity interest, or remedy released or to be released, settled or to be settled or discharged or to be discharged under the Plan or this Order against any person or entity so released or discharged . . . . 6 7 Id. ¶ 20. 8 Because the Bankruptcy Court approved the Plan and 9 confirmed the relevant discharge, injunction, and 10 release provisions in its Confirmation Order, Plaintiff 11 is effectively enjoined from continuing this Action. 12 Pursuant to the Plan and Confirmation Order, the Action 13 should be dismissed as to Suagrfina and stayed as to 14 Defendants Resnick and O’Neill until after May 28, 15 2021. 16 Accordingly, the Court GRANTS Sugarfina’s Motion. 17 See In re Kalikow, 602 F.3d 82, 93 (2d Cir. 2010) 18 (affirming grant of an enforcement motion that 19 “[sought] to enforce an injunction already in 20 place—[one] that was created by sections 1141 and 524 21 of the Bankruptcy Code and the express terms of the 22 [Plan] and Confirmation Order”). Additionally, 23 Plaintiff failed to oppose the instant Motion, which 24 the Court deems as consent to granting the instant 25 Motion. See C.D. Cal. L.R. 7-12 (“The failure to file 26 any required document . . . may be deemed consent to 27 the granting . . . of the motion . . . .”). 28 6 1 2 III. CONCLUSION Based on the foregoing, the Court GRANTS 3 Sugarfina’s Motion. The Court ORDERS Plaintiff to 4 dismiss its claims against Sugarfina within seven (7) 5 days of the date of this Order. The Court STAYS this 6 Action against Defendants Resnick and O’Neill through 7 May 28, 2021. 8 9 10 IT IS SO ORDERED. 11 12 DATED: September __, 2020 8 /s/ Ronald S.W. Lew 13 HONORABLE RONALD S.W. LEW Senior U.S. District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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