Telebrands Corp v. Marc Glassman, Inc. et al
ORDER: The undersigned construes the plaintiff's motion 39 as a motion for certification of facts pursuant to 28 U.S.C. 636(e)(6) and so construed, grants the motion. The defendant's cross-motion 45 for sanctions is denied. See attached ruling. Signed by Judge Donna F. Martinez on 3/28/12. (Constantine, A.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
MARC GLASSMAN, INC. and
MAGIC CREATIONS, INC.,
CASE NO. 3:09CV734(RNC)
RULING AND ORDER
The plaintiff, Telebrands Corp., brought this action against
The parties settled the case.
As part of
the settlement agreement, the defendant agreed to the entry of a
"application for a contempt citation."
responds with a "cross-motion for sanctions."
States District Judge Robert N. Chatigny referred the motions to
(Doc. ##43, 51.)
A court may "hold a party in contempt for violation of a court
order when 'the order violated by the contemnor is clear and
unambiguous, the proof of non-compliance is clear and convincing,
and the contemnor was not reasonably diligent in attempting to
Southern New England Telephone Co. v. Global NAPs Inc.,
624 F.3d 123, 145 (2d Cir. 2010).
"It need not be established that
the violation was willful."
Paramedics Electromedicina Comercial,
Ltda v. GE Medical Systems Information Technologies, Inc., 369 F.3d
645, 6557 (2d Cir. 2004).
Magistrate Judge's Authority Regarding a Motion for Contempt
"United States magistrate judges have limited civil contempt
Funnekotter v. Republic of Zimbabwe, No. 09 Civ.
08168(CM)(THK), 2011 WL 5517860, at *2 (S.D.N.Y. Nov. 10, 2011).
magistrate judges, when addressing a motion for civil contempt, are
informed by the provisions of 28 U.S.C. § 636(e)."1
(N.D.N.Y. Oct. 24, 2011).
NXIVM Corp. v.
"Under that section, in a case other
than one over which the magistrate judge presides with a consent of
the parties under 28 U.S.C. § 636(c), a magistrate judge is not
authorized to issue a final contempt order."
magistrate judge's function in a 'non-consent' case is to certify
Section 636(e)(6)(B)(iii) of Title 28 of the United States
Code provides that in civil, non-consent cases, where an act
constitutes a civil contempt,
the magistrate judge shall forthwith certify the facts to
a district judge and may serve or cause to be served,
upon any person whose behavior is brought into question
under this paragraph, an order requiring such person to
appear before a district judge upon a day certain to show
cause why that person should not be adjudged in contempt
by reason of the facts so certified. The district judge
shall thereupon hear the evidence as to the act or
conduct complained of and, if it is such as to warrant
punishment, punish such persons in the same manner and to
that same extent as for a contempt committed before a
facts relevant to the issue of civil contempt to the district
Id. (citing cases).
"The certification of facts under
section 636(e) serves to determine whether the moving party can
adduce sufficient evidence to establish a prima facie case of
Church v. Steller, 35 F. Supp.2d 215, 217 (N.D.N.Y.
See Toxey v. United States, No. 10 Civ. 3339(RJH)(KNF),
2011 WL 4057665, at *2 (S.D.N.Y. Aug. 25, 2011)("In certifying the
facts under Section 636(e), the magistrate judge's role is 'to
determine whether the moving party can adduce sufficient evidence
to establish a prima facie case of contempt.'"); Bowens v. Atlantic
Maint. Corp., 546 F. Supp.2d 55, 71 (E.D.N.Y. 2008)(same).
The district judge, upon certification of the facts, is
"required to conduct a de novo hearing at which issues of fact and
credibility determinations are to be made." Bowens, 546 F. Supp.2d
See NXIVM Corp. v. Bouchey, No. 1:11–MC–0058, 2011 WL
5080322, at *4 (N.D.N.Y. Oct. 24, 2011) (same).
"Only a district
court may resolve issues of credibility and fact."
Supp.2d at 217.
Church, 35 F.
See Toxey, 2011 WL 4057665, at *2 ("only the
respecting an allegation of contempt of court"); Brother v. BFP
Investments, Ltd., No. 03-60129-CIV, 2010 WL 2978077, at *5 n.4
(S.D. Fla. June 1, 2010)("Only a district court may resolve issues
of credibility and fact in contempt context.")
conduct of a party constitutes contempt and any sanctions therefor
are committed to the discretion of the district court."
Steller, 35 F. Supp.2d 215, 217 (N.D.N.Y. 1999).
III. Certification of Facts
This magistrate judge therefore must construe the plaintiff's
application as a motion for certification of facts pursuant to 28
U.S.C. § 636(e)(6).
So construed, the motion is granted.
The court has considered the affidavits submitted by the
parties in the light most favorable to the plaintiff as the moving
See Yash Raj Films (USA), Inc. v. Bobby Music Co. &
Sporting Goods, Inc., No. 01-CV-8378, 2006 WL 2792756, at *2
(E.D.N.Y. Sept. 27, 2006); Church, 35 F. Supp.2d at 217.
certified facts do not constitute findings of fact; they are only
facts gleaned from the submissions with an eye toward determining
establish a prima facie case of contempt."
Church, 35 F. Supp.2d
The following facts are certified:
The plaintiff sells a product known as the PED EGG foot file.
It is an egg shaped, precision foot file designed to remove
calluses and dead skin from feet.
product has a unique and distinctive shape.
and trademarked protected.
It is copyright
In May 2009, the plaintiff sued the
defendant alleging that it copied the plaintiff's design and sold
counterfeit PED EGG products.
In the fall of 2009,
the parties reached a settlement agreement.
As part of the
settlement, the plaintiff filed a "Motion for Entry of Stipulated
Final Judgment and Order on Consent" which the court granted. (Doc.
The parties' Stipulated Order contains a permanent
court-ordered injunction prohibiting the defendant from displaying,
offering for sale and/or selling counterfeit PED EGG products. The
stipulated permanent injunction states in relevant part:
Magic Creations, its owners, shareholders, officers,
directors, agents, employees and attorneys, those persons
directly or indirectly controlled by it, and those
persons in active concert or participation with it and
those who receive actual notice of this Order by personal
service or otherwise, are hereby permanently enjoined
from infringing Telebrands' copyrighted works . . .
including but not limited to . . . displaying,
distributing, selling, offering for sale, promoting,
importing and/or advertising any product that contains
substantial material copied from and substantially
similar to the Copyrighted Works.
(Doc. #33.) Pursuant to the court's order, the "Court shall retain
jurisdiction to enforce the terms of this Stipulated Final Judgment
and Order on Consent."
distributors, John Clark ("Clark"), attended the Associated Surplus
Dealers ("ASD") trade show in Las Vegas.
(Doc. #42, Clark Decl.
The ASD trade show is a surplus and closeout show of consumer
goods. (Id.) The defendant Magic Creations had reserved booths at
the ASD trade show.
(Doc. #42, Clark Decl. ¶4.)
One of Clark's
customers told Clark that he had purchased 600 PED EGG products
(Doc. #42, Clark Decl. ¶6.)
When Clark and his
customer went to the booths, Clark saw a sample PED EGG product
offered for sale on the wall of the Magic Creations booth.
#42, Clark Decl. ¶7.)
The booth in which the PED EGG product was
displayed and offered for sale was identified with a large sign
that said "Magic Creations." (Doc. #56, Clark Reply Decl. ¶3; doc.
#69 Clark Decl. ¶7.)
The booth was not divided or sectioned into
any visibly separate areas, did not bear any sign identifying any
other vendor, and appeared to be operated by a single vendor, Magic
(Doc. #56, Clark Reply Decl. ¶3.)
The trade show
directory confirmed that the booth belonged to Magic Creations.
The people working in the booth did not wear nametags or
anything else to suggest that they represented any company other
than Magic Creations.
(Doc. #56, Clark Reply Decl. ¶5.)
individual in the booth, Eli Moustakis, gave Clark the PED EGG as
(Doc. #42, Clark Decl. ¶7.)
Photos of the sample show
that the sample is virtually identical to the plaintiff's product.2
(Doc. #42, Clark Decl. Ex. C.)
Whether the Order is Clear and Unambiguous
The parties do not dispute that the court order at issue is
clear and unambiguous.
It plainly proscribes the defendant, its
For purposes of this motion, the defendant does not appear to
contest that the product was a counterfeit PED EGG product.
owners, shareholders, officers, directors, agents, employees and
attorneys, those persons directly or indirectly controlled by it,
and those persons in active concert or participation with it" from
"displaying, distributing, selling, offering for sale, promoting,
importing and/or advertising" counterfeit PED EGG products. (Doc.
Whether Proof of Noncompliance is Clear and Convincing
The "clear and convincing standard requires a quantum of proof
adequate to demonstrate a reasonable certainty that a violation
Levin v. Tiber Holding Corp., 277 F.3d 243, 250 (2d
The defendant contends that it did not violate the court's
order because it did not offer the PED EGG products for sale–
another company did.
According to Michael Rubino ("Rubino"), the
("Malnekoff"), to use some space in the defendant's booths at the
The defendant maintains that it "had no idea what
Malnekoff was selling" and no control over what it sold.
at 5; doc. #47, Rubino Decl. ¶8; doc. #49, Moustakis Decl. ¶3.)
The defendant asserts that Malnekoff is a separate entity and that
the defendant does not control either Malnekoff or Moustakis.
The defendant disputes the plaintiff's description of the
trade show display and contends that the space Malnekoff used was
conspicuously different from that used by the defendant.
#65, Rubino Reply Decl. ¶4.)
The defendant claims that the "two
booths were separated by a 15 foot wide wall" and that Malnekoff
did not display a Magic Creations sign.3
(Doc. #65, Rubino Reply
Decl. ¶6; Moustakis Reply. Decl. ¶¶3-6.)
The defendant maintains
that after the plaintiff filed the instant contempt motion, Rubino
told Clark (the plaintiff's distributor who purchased the PED EGG
products at the ASD trade show) that the defendant "had nothing to
do with the activity that occurred in the booths operated by
(Doc. #46 at 12; Doc. #47, Rubino Decl. ¶10).
told this to the plaintiff but the plaintiff did not withdraw its
(Doc. #46 at 6.)
The plaintiff later filed a lawsuit
The defendant contends that the plaintiff "must have
obtained the PED EGG depicted in the Illinois complaint" from the
ASD trade show and "[t]hus plaintiff knew that Malnekoff was a
separate entity who independently operated booths at the ASD trade
(Doc. #46 at 7.)
The defendant argues that these facts preclude the court from
finding it in contempt. However, in the procedural posture of this
motion, the undersigned need not, indeed cannot, resolve these
"The duty of a magistrate under the contempt
certification provision is simply to investigate whether further
contempt proceedings are warranted . . . ." 91 C.J.S. United States
Magistrates § 12 (2012). See Church v. Steller, 35 F. Supp.2d 215,
The defendant does not claim that Malnekoff had its own sign.
217 (N.D.N.Y. 1999)(in context of a motion for contempt, "[o]nly a
district court may resolve issues of credibility and fact.")
district judge must resolve these factual issues and determine
whether the defendant should be adjudged in contempt.
Whether the Defendant Was Reasonably Diligent in Attempting to
On the record before the court, the plaintiff has adduced
sufficient evidence to show that the defendant was not "reasonably
Equal Employment Opportunity Comm'n v. Local 638, 753
F.2d 1172, 1178 (2d Cir. 1985).
Viewing the facts in the light most favorable to the plaintiff
as the moving party, Church v. Stellar, 35 F. Supp. 2d 215, 217
(N.D.N.Y. 1999), the enjoined counterfeit PED EGG product was
offered for sale at a trade show from a booth registered to Magic
Creations and that had a sign that said Magic Creations.
plaintiff has demonstrated the existence of evidence which, if
credited, would constitute contempt.
Defendant's Cross-Motion for Sanctions (Doc. #46)
The defendant argues that the plaintiff does not have
a "colorable basis in fact" for its contempt claim and that "the
The defendant initially moved for the imposition of sanctions
on two grounds: Fed. R. Civ. P. 11 and the court's inherent
authority. The defendant subsequently withdrew the Rule 11 motion.
(Doc. #65 at 14.)
claim was brought in bad faith." (Doc. #65 at 14.)
The district court possesses the inherent power to impose
sanctions against a party who has "acted in bad faith, vexatiously,
wantonly, or for oppressive reasons." Chambers v. NASCO, Inc., 501
U.S. 32, 44-45 (1992).
"Because of the very potency of the
inherent power to sanction, the Supreme Court has warned that it
should only be exercised with restraint and discretion."
v. Vlack, No. 3:07cv1178(JCH), 2010 WL 2232480, at *3 (D. Conn. May
26, 2010)(internal quotation marks and citations omitted).
An award of sanctions under the court's inherent power
requires both clear evidence that the challenged actions
are entirely without color, and [are taken] for reasons
of harassment or delay or for other improper purposes[,]
and a high degree of specificity in the factual findings
of [the] lower courts. . . . A claim is colorable when it
has some legal and factual support, considered in light
of the reasonable beliefs of the individual making the
Revson v. Cinque & Cinque, P.C., 221 F.3d 71, 79 (2d Cir. 2000).
See, e.g., Schlaifer Nance & Co., Inc. v. Estate of Andy Warhol,
194 F.3d 323, 338 (2d Cir. 1999) (sanctions imposed pursuant to
court's inherent powers doctrine requires highly specific finding
of bad faith).
The defendant maintains that sanctions are warranted because
the "[p]laintiff knew or should have known that the alleged PED EGG
products purportedly sold at the ASD trade show were sold by
Malnekoff, not Magic Creations."
(Doc. #46, Def's Mtn at 10.)
support, the defendant points to Rubino's assertion that he told
Clark that the booths at the trade show were under the control of
Malnekoff, not the defendant.
(Rubino Decl. ¶10.)
It also points
out that the plaintiff is attempting to recover damages in the
Illinois lawsuit against Malnekoff Enterprises and Eli Moustakis
"for the same activity" that it seeks to recover from the defendent
in this application. (Doc. #46 at 10.)
The defendant has not met its burden of showing that the
plaintiff's motion was "entirely without color" and motivated by
Milltex Industries Corp. v. Jacquard Lace
Co., Ltd., 55 F.3d 34, 38 (2d Cir. 1995).
The plaintiff was not
required to credit the secondhand statement from Rubino disclaiming
any knowledge or involvement.
The record evidence indicates that
the plaintiff had a reasonable basis for its motion.
As to the
Illinois lawsuit, the plaintiff's motion for contempt concerns the
defendant's actions at the ASD trade show whereas the plaintiff's
lawsuit against Malnekoff and Moustakis in Illinois arises out of
Illinois." Telebrands Corp. v. Malnekoff Enterprises, Inc. and Eli
Moustakis, 1:11cv2190 (N.D. Ill.) (Compl. ¶26.).
contempt motion is not duplicative of the Illinois lawsuit.
defendant has not shown, as it must, that the plaintiff's motion
was "entirely without color."
1272 (2d Cir. 1986).
Oliveri v. Thompson, 803 F.2d 1265,
The defendant's cross-motion for sanctions
(doc. #46) is denied.5
This magistrate judge has the authority to issue a final
ruling on the motion for sanctions. See Scotch Games Call Co.,
Inc. v. Lucky Strike Bait Works, Ltd., 148 F.R.D. 65 (W.D.N.Y.
For these reasons, the plaintiff's motion for certification of
facts pursuant to 28 U.S.C. § 636(e)(6) (doc. #39) is granted and
the defendant's cross-motion for sanctions (doc. #45) is denied.
SO ORDERED at Hartford, Connecticut this 28th day of March,
Donna F. Martinez
United States Magistrate Judge
1993) (Imposition of sanctions pursuant to the court's inherent
authority is a nondispositive matter.)
Because the ruling is
nondispositive of the case, it need not be in the form of a
recommended ruling. See 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P.
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