Vineyard Vines, LLC v. Macbeth Collection, LLC
Filing
134
RULING granting, in part, and denying, in part, 113 MOTION to Enforce Judgment Seeking Additional Relief. Signed by Judge Sarah A. L. Merriam on 12/5/2018. (Katz, S.)
Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 1 of 44
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
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:
VINEYARD VINES, LLC
:
:
v.
:
:
MACBETH COLLECTION, L.L.C.,
:
et al.
:
:
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Civil No. 3:14CV01096(SALM)
December 5, 2018
RULING RE: MOTION FOR ADDITIONAL RELIEF [Doc. #113]
Plaintiff Vineyard Vines, LLC (“plaintiff”) has filed a
motion seeking additional relief. Plaintiff asserts that
defendants MacBeth Collection, L.L.C., MacBeth Collection By
Margaret Josephs, LLC, MacBeth Designs LLC, and Margaret Josephs
(collectively, “defendants”), violated the Permanent Injunction
and Final Judgment on Consent (Doc. #70) entered in this case.
See Doc. #113. For the reasons set forth herein, the Court
GRANTS, in part, and DENIES, in part, plaintiff’s Motion for
Additional Relief [Doc. #113].
I.
BACKGROUND
On July 30, 2014, plaintiff commenced this action against
defendants alleging that defendants were creating and
distributing products that infringed plaintiff’s intellectual
property rights. See Docs. #1; #11. The parties eventually
reached an agreement to resolve the action, the full terms and
conditions of which were set forth in a settlement agreement
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dated June 15, 2015. See Doc. #95. Pursuant to the settlement
agreement, the parties executed and filed with the Court a
proposed permanent injunction and final judgment on consent. See
Doc. #67.
On June 17, 2015, the Court entered a Permanent Injunction
and Final Judgment on Consent (“Final Judgment”). See Doc. #70.
The Final Judgment required defendants to pay plaintiff $300,000
(“Judgment Amount”), as damages stemming from defendants’
infringement of plaintiff’s intellectual property rights. See
Doc. #70 at 4. The Judgment Amount was to be paid in five
installments according to a schedule set forth in the Final
Judgment (“Payment Schedule”). See id. at 5. Specifically,
defendants were required to pay $75,000 by August 15, 2015,
$75,000 by November 15, 2015, $50,000 by February 15, 2016,
$50,000 by May 15, 2016, and $50,000 by August 15, 2016. See id.
The Final Judgment imposed a permanent injunction (the
“Permanent Injunction”). See id. at 2-4. The Final Judgment also
provided that
in the event Defendants violate this Injunction, breach
the Settlement Agreement, or fail to timely pay an
installment payment, [plaintiff] shall be entitled to:
(a) liquidated damages in the amount of Five Hundred
Thousand Dollars ($500,000); and (b) recovery of its
actual expenses, including reasonable attorneys’ fees,
associated with the enforcement of the Settlement
Agreement and this Injunction[.]
Id. at 6.
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Defendants paid the first installment of $75,000, as
required by the Final Judgment, on August 15, 2015. See Docs.
#113-3 at 2; #120-1 at 6. However, defendants failed to pay the
second installment due on November 15, 2015. See id. On November
15, 2015, defendants filed a motion to seal, indicating that
they expected to file a Motion to Modify Consent Judgment, and
asking the Court to seal any such motion. See Doc. #72. The
motion to seal asserted that the motion and exhibits were “being
filed contemporaneously” with the motion to seal, but they were
not in fact filed. Id. at 1. The Court conducted a telephonic
conference with the parties regarding the motion, and then
entered an order directing “the parties to meet and confer in
good faith to resolve their disputes before filing any motions
to enforce or modify the settlement agreement.” Doc. #74.
The parties never filed a motion to modify the settlement
agreement, but they apparently agreed to modify the Payment
Schedule on their own. See Docs. #113-3 at 2; #120-1 at 6.
Plaintiff “informally agreed” to modify the payment schedule in
exchange for an additional payment of $20,000 from defendants
(the “Additional Debt”). Doc. #113-3 at 2. Defendants paid an
additional $115,000 pursuant to the voluntarily modified payment
terms.1 See id. On November 1, 2016, defendant MacBeth Designs
Defendants contend that they paid an additional $5,000 they
incurred under the modified payment terms on February 29, 2016.
1
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LLC filed a petition for Chapter 11 relief under the United
States Bankruptcy Code. See Doc. #120-1 at 7. Defendants missed
the next payment due under the modified schedule on November 15,
2016. See Docs. #113-3 at 2; #120-1 at 6-8. $110,000 of the
Judgment Amount and the $20,000 in “Additional Debt” remained
unpaid. See id.
On December 30, 2016, plaintiff filed a motion seeking an
order enforcing the Final Judgment, based on defendants’ alleged
failure to abide by the payment schedule in the Final Judgment.
See Doc. #77. On February 3, 2017, defendants filed a response
to plaintiff’s motion, asserting that it was impossible for
defendants to comply with the payment schedule. See Doc. #85 at
2. Plaintiff filed a reply on February 14, 2017. See Doc. #87.
The Court held an in-person status conference regarding
plaintiff’s motion for an order enforcing the Final Judgment on
February 16, 2017. See Doc. #91. During the conference, the
Court noted that an award of some attorneys’ fees would be
appropriate upon resolution of the dispute and “reminded
See Doc. #120-1 at 6. Plaintiff does not address this assertion.
See Docs. #113-3 at 2; #113 at 1-2. Therefore, the $5,000 does
not appear to be in dispute. The Court notes that, as will be
discussed further, any informal agreement to make additional
payments is beyond the scope of the jurisdiction retained by
this Court to enforce the Final Judgment. See Barcia v. Sitkin,
367 F.3d 87, 106 (2d Cir. 2004) (“[A] district court may not
impose obligations on a party that are not unambiguously
mandated by the decree itself[.]”) (quotation marks and citation
omitted)).
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defendant Margaret Josephs that she remains personally liable
for the outstanding judgment, notwithstanding any bankruptcy
proceedings for corporate defendants.” Id. at 2. The Court also
ordered Ms. Josephs to “make a diligent and concerted effort to
stop third party vendors from importing, exporting, shipping,
delivering, holding for sale, offering for sale, selling,
distributing, returning, transferring and/or otherwise moving or
disposing of in any manner any infringing products.” Id. The
Court held a follow-up telephonic status conference on March 22,
2017. See Doc. #106. The Court then issued an order instructing
plaintiff to file a formal motion if it “seeks additional relief
from the Court[.]” Doc. #105 at 2.
On June 30, 2017, plaintiff filed the motion for additional
relief currently before the Court. See Doc. #113. In light of
plaintiff’s filing of the motion for additional relief, the
Court denied as moot plaintiff’s motion seeking an order
enforcing the Final Judgment (Doc. #77). See Doc. #114.2
Plaintiff asserts that it is entitled to additional relief based
on defendants’ alleged violation of both the Payment Schedule
and the Permanent Injunction in the Final Judgment. See Docs.
Plaintiff expressly incorporates its prior motion, as well as
the responsive pleadings, docketed at Doc. #85 and Doc. #87,
into its instant motion. See Doc. #113-2 at 4. All of the relief
sought in the prior motion is also sought in the instant motion,
so no separate consideration of the original motion is required
in this ruling.
2
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#113; #113-2. Plaintiff asks the Court to enter a judgment
against defendants MacBeth Collection, L.L.C., MacBeth
Collection By Margaret Josephs, LLC, and Margaret Josephs,
jointly and severally,3 awarding plaintiff the unpaid $110,000 of
the Judgment Amount, $20,000 in Additional Debt, $500,000 in
liquidated damages, $8,600,000 in statutory damages, and
$201,657.21 in expenses and attorneys’ fees it asserts were
incurred enforcing the Final Judgment. See Doc. #113 at 1.
Plaintiff also moves the Court for:
an Order directing Defendants to immediately cease and
desist from any and all further violations of the
Permanent Injunction and Final Judgment on Consent (DKT.
70), to immediately recall, remove and ready for
destruction any and all of Defendants’ illegal and
illicit Infringing Products from the marketplace, in
transit or in inventory, as well as any and all related
marketing and advertising materials or references
present in any media, electronic media or otherwise.
Id. at 2. Finally, plaintiff moves the Court for “an Order
imposing coercive sanctions on Defendants[,]” see Doc. #113 at
2, and asks the Court to hold defendants in civil contempt, see
Doc. #113-2 at 7.
Defendants filed a response on August 9, 2017, arguing that
plaintiff’s claims pertaining to alleged violations of the
Permanent Injunction are barred by the doctrine of laches; that
Plaintiff does not seek relief against defendant MacBeth
Designs LLC because it is in bankruptcy proceedings in the
United States Bankruptcy Court for the District of New Jersey.
See Doc. #113-2 at 2 n.1.
3
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defendants have complied with the Permanent Injunction; and that
the liquidated damages provision included in the Final Judgment
is punitive and, as a result, unenforceable. See Doc. #120.
Plaintiff filed a reply on September 6, 2017. See Doc. #123.
Defendants filed a supplemental response on September 28, 2017,
see Doc. #129, and plaintiff filed a sur-reply on October 19,
2017, see Doc. #132.
II.
DISCUSSION
A.
Defendants’ Laches Defense
The Court turns first to defendants’ affirmative defense of
laches. Defendants argue that “the entirety of the plaintiff’s
trademark and related claims are barred by the doctrine of
laches.” Doc. #120 at 13. Defendants assert that plaintiff knew
or should have known about any alleged violation of the
Permanent Injunction long before filing the motion at issue
here, but that plaintiff did not complain of an alleged
violation at any point in 2016. See id. at 14. Defendants claim
they were prejudiced by plaintiff’s delay, because they would
have taken steps to “have the third-party cease and desist.” Id.
at 15. Plaintiff contends that defendants are barred from
asserting laches because they intended to infringe plaintiff’s
intellectual property rights. See Doc. #123 at 6. Plaintiff
further argues that even if the defendants can assert laches,
the defense fails. See id. at 6-7. Plaintiff claims it did not
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delay in taking action, because it consistently put defendants
on notice that infringing products were in the marketplace, and
because the majority of the products at issue are new to the
marketplace. See id. Plaintiff further contends that defendants
did not suffer prejudice, because defendants “neither report
suffering economic prejudice or provide evidence of a change in
economic position during the purported period of delay.” Id. at
7.
Actions to enforce consent judgments can be subject to a
defense of laches. See Brennan v. Nassau Cty., 352 F.3d 60, 63
(2d Cir. 2003). Laches
is an equitable defense that bars a plaintiff’s
equitable claim where he is guilty of unreasonable and
inexcusable delay that has resulted in prejudice to the
defendant. A party asserting the defense of laches must
establish that: (1) the plaintiff knew of the
defendant’s misconduct; (2) the plaintiff inexcusably
delayed in taking action; and (3) the defendant was
prejudiced by the delay.
Ikelionwu v. United States, 150 F.3d 233, 237 (2d Cir. 1998)
(quotation marks and citations omitted).
Here, plaintiff believed that defendants were in violation
of the Permanent Injunction before seeking court intervention.
Plaintiff did not, however, inexcusably delay taking action.
Plaintiff, through its counsel, sent three emails to defendants
informing them of alleged violations. On November 20, 2015,
Attorney Todd Sharinn, counsel for plaintiff, emailed Attorney
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Tim Frawley, counsel for defendants, demanding that defendants
“cease[] and desist[] from their continued material breach of
the ... Order” and attaching screen shots of allegedly
infringing products being sold on third-party websites. Doc.
#113-10 at 1-7. On December 4, 2015, Attorney Sharinn again
emailed Attorney Frawley, stating that “several of the entities
that originally offered for sale and sold the subject
counterfeit goods are again selling the same” and that plaintiff
“discovered new entities who are also selling these illegal
goods.” Doc. #113-9 at 26. On November 10, 2016, Attorney
Sharinn emailed Attorney David Edelberg,4 attaching “examples of
infringing goods still offered by the MacBeth entities.” Id. at
32-35. These communications were sufficient to put defendants on
notice of plaintiff’s objections to the allegedly infringing
activity. See VOX Amplification Ltd. v. Meussdorffer, 50 F.
Supp. 3d 355, 364-65 (E.D.N.Y. 2014) (finding allegedly
infringing party’s receipt of cease and desist letters defeated
its defense of laches) (collecting cases). Plaintiff’s counsel
also raised concerns regarding potential violations of the
Permanent Injunction during a status conference with the Court
and counsel for defendants on November 19, 2015. See Doc. #76 at
Attorney Edelberg is defendant MacBeth Designs LLC’s bankruptcy
counsel. See Doc. #113-20 at 22.
4
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11. Plaintiff first filed a formal motion seeking to enforce the
Permanent Injunction on December 30, 2016. See Doc. #77.
Thus, only seven weeks elapsed between the last email
contact regarding violations of the Permanent Injunction
asserted by plaintiff, and the filing of the formal motion to
enforce. Although there was a delay of approximately 11 months
between the December 4, 2015, email and the November 10, 2016,
email, defendants offer no argument as to why that particular
delay was unreasonable. “[L]aches is an equitable, hence
flexible, doctrine, and no length of time is considered per se
unreasonable.” Whitfield v. Anheuser-Busch, Inc., 820 F.2d 243,
245 (8th Cir. 1987). Here, plaintiff and defendants engaged in
substantial discussions regarding potential infringing conduct
in late 2015, and defendants undertook to address plaintiff’s
concerns. It was not unreasonable for plaintiff to allow some
months to pass, to permit the measures taken by plaintiff to
have an effect. Indeed, defendants submit an affidavit
indicating that as a result of their actions in 2015, at one
point, “there was no indication that any” infringing products
remained available in the marketplace. Doc. #120-1 at 5.
Furthermore, defendants make only a conclusory assertion
that the delay in filing a formal motion has prejudiced them.
“To prevail on the affirmative defense of laches, a defendant
must prove that it has been prejudiced by the plaintiff’s
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unreasonable delay in bringing the action.” Mashantucket Pequot
Tribe v. Redican, 403 F. Supp. 2d 184, 198 (D. Conn. 2005).
Here, defendants have not shown that they actually changed their
position in any way as a result of any purported delay. To the
contrary, they contend that they were actively attempting to
prevent third parties from distributing infringing products
throughout the relevant time period. See Docs. #120-1 at 4 (“On
December 21, 2015 MacBeth again contacted Albert Shammah of SSS
Design to cease and desist with any marketing concerning the
whale.”); #120 at 16 (“MacBeth continually contacted any and all
vendors that were using the whale image when it became so
aware.”).
Accordingly, defendants have failed to meet their burden of
establishing a defense of laches, and plaintiff’s claims are not
barred by that doctrine. The Court will thus proceed to consider
the merits of plaintiff’s motion.
B.
Failure to Pay Judgment/Settlement Amount
Plaintiff asks the Court to award it $110,000, which it
asserts is the outstanding portion of the Judgment Amount owed
by defendants. Defendants do not dispute that they have failed
to pay the full $300,000 Judgment Amount, and the parties agree
that $110,000 of the Judgment Amount remains unpaid. See Docs.
#129 at 6; #120 at 7; #113-3 at 2. Accordingly, plaintiff’s
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request for an award of $110,000, representing the unpaid
portion of the Judgment Amount is GRANTED.
C.
“Additional Debt”
Plaintiff asks the Court to award it $20,000 in “Additional
Debt” it asserts is owed by defendants. See Doc. #113 at 1. The
parties do not dispute that plaintiff agreed to modify the
Payment Schedule in exchange for an additional payment by
defendants, and that $20,000 of Additional Debt remains unpaid.
See Docs. #113-3 at 2; #120-1 at 6. However, neither party
offers any discussion of whether it is appropriate for the Court
to enforce this alleged informal agreement to modify the Final
Judgment.
On November 19, 2015, the Court issued an Order indicating
that any motion to modify the terms of the Final Judgment should
be filed on the public docket, see Doc. #74, but the parties
never filed such a motion. Thus, any informal agreement between
the parties to modify the terms of the judgment is beyond the
scope of the jurisdiction retained by this Court to enforce the
Final Judgment.
The Second Circuit has addressed the proper manner in which
a trial court may interpret and enforce a judgment entered on
consent:
In interpreting a consent decree, we have recognized
that courts must abide by the express terms of a consent
decree and may not impose supplementary obligations on
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the parties even to fulfill the purposes of the decree
more effectively. A court may not replace the terms of
a consent decree with its own, no matter how much of an
improvement it would make in effectuating the decree’s
goals. Consistent with this narrow construction, we have
held that a district court may not impose obligations on
a party that are not unambiguously mandated by the decree
itself.
Barcia, 367 F.3d at 106 (internal citations and quotation marks
omitted). The Court cannot, here, add to the Final Judgment a
requirement that defendants pay an additional $20,000 not
contemplated by that Judgment.
Furthermore, the Settlement Agreement entered into by the
parties includes an explicit merger clause, stating that the
Agreement “may not be altered, amended or modified, except in a
writing signed by all Parties.” Doc. #95 at 18. No such writing
has been produced. And, again, even if the parties voluntarily
agreed to alter the Settlement Agreement, they did not seek any
modification to the Judgment. Accordingly, plaintiff’s request
that the Court award it $20,000 in Additional Debt is DENIED.
D.
Violation of the Permanent Injunction
Plaintiff contends that defendants have violated the
Permanent Injunction. While plaintiff’s argument as to exactly
how defendants have violated the Permanent Injunction is less
than clear, the Court identifies two theories under which such
violation could be found, based on the record before the Court.
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First, plaintiff points to numerous instances in which
products bearing marks that would violate the Permanent
Injunction have been found for sale in the marketplace, after
the entry of judgment in this matter. Plaintiff has offered no
evidence that defendants themselves have licensed or sold
infringing products after the entry of the Permanent Injunction.
The Court therefore construes this argument as relying on one or
more of the following provisions of the Permanent Injunction:
a.
The provision barring defendants and “confederates and
any other persons or entities acting in concert or participation
with them” from offering for sale any infringing products. Doc.
#70 at 2.
b.
The provision barring defendants from “enabling others
to sell or pass off” infringing items as genuine products. Id.
at 3.
c.
The provision barring defendants from “assisting,
aiding, or abetting any other person or business entity” in
violating any term of the Permanent Injunction. Id. at 4.
The Court will refer to conduct prohibited by these
provisions of the Permanent Injunction as “Enabling Violations”
for purposes of this ruling.
Second, plaintiff affirmatively asserts that defendants
violated the Permanent Injunction by telling a licensee, Access
Bags, which was in possession of infringing product, that Access
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Bags could sell the infringing products, after the Permanent
Injunction entered, barring any such sale. Such an action by
defendants would violate any of the above provisions.
The Court will evaluate plaintiff’s claim under each of
these alternate theories. As a threshold matter, however, the
Court must determine the standard of proof applicable to this
claim. Neither party articulates the standard of proof that must
be met by plaintiff in establishing that the Permanent
Injunction has been violated for purposes of awarding liquidated
damages.5
A consent judgment, such as the one entered in this case,
has “a dual character, a ‘hybrid nature’ that reflects
attributes of both a contract and a judicial decree.” Kozlowski
v. Coughlin, 871 F.2d 241, 245 (2d Cir. 1989) (quoting Local
Number 93, Int’l Assoc. of Firefighters v. Cleveland, 478 U.S.
501, 519 (1986)). Although the Permanent Injunction at issue
here has been ordered by the Court, it was agreed upon by the
parties. As such, it “is a contract between the parties, and
should be interpreted accordingly.” Tourangeau v. Uniroyal,
Inc., 101 F.3d 300, 307 (2d Cir. 1996); see also United States
v. ITT Cont’l Baking Co., 420 U.S. 223, 238 (“[A] consent decree
The parties correctly identify the standard applicable to
plaintiff’s motion for a finding of contempt. Such a finding
would require proof by clear and convincing evidence. See King
v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995).
5
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or order is to be construed for enforcement purposes basically
as a contract[.]”); Whitmire v. Corbel & Co., 977 F. Supp. 290,
293 (S.D.N.Y. 1997) (“Consent judgments are agreements between
parties to litigation and, therefore, should be construed as
contracts.”).
Under Connecticut law, a party asserting a breach of
contract has the burden of proving that breach by a
preponderance of the evidence.6 See, e.g., Franco v. Yale Univ.,
238 F. Supp. 2d 449, 453 (D. Conn. 2002), aff’d, 80 F. App’x 707
(2d Cir. 2003); see also Madigan v. Hous. Auth. of Town of E.
Hartford, 113 A.3d 1018, 1029 n.2 (Conn. App. 2015) (affirming
jury instruction stating that “the burden of proof is on the
plaintiff to prove by a preponderance of the evidence that the
defendant breached his contract of employment”); Chieffalo v.
Norden Sys., Inc., 714 A.2d 1261, 1264 (Conn. App. 1998). Cf.
E.E.O.C. v. New York Times Co., No. 92CV6548(RPP), 1998 WL
474201, at *14 (S.D.N.Y. Aug. 13, 1998) (finding violation of a
consent decree by the preponderance of the evidence standard),
aff’d in part, rev’d in part, 196 F.3d 72 (2d Cir. 1999).
Preponderance is not a terribly demanding standard. “To
establish a fact by a preponderance of the evidence means to
prove that the fact is more likely true than not true.” Fischl
6
The parties do not contest that Connecticut law applies.
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v. Armitage, 128 F.3d 50, 55 (2d Cir. 1997). “The burden of
showing something by a preponderance of the evidence ... simply
requires the trier of fact to believe that the existence of a
fact is more probable than its nonexistence before [she] may
find in favor of the party who has the burden to persuade the
judge of the fact’s existence.” Concrete Pipe & Prods. of Cal.,
Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S.
602, 622 (1993) (internal citations and quotation marks
omitted).
“Proof by a preponderance means that the petitioner must
adduce evidence that makes the existence of a contested fact
more likely than not. In other words, the petitioner’s proof
needs only tip the scale by the slightest evidentiary margins.”
Negron v. Mallon Chevrolet, Inc., No. 3:08CV182(TPS), 2011 WL
6034477, at *7 (D. Conn. Dec. 5, 2011) (citations and quotation
marks omitted). “[A] fact has been proven by a preponderance of
the evidence if it finds that the scales tip, however slightly,
in favor of the party with the burden of proof as to that fact.”
Ostrowski v. Atl. Mut. Ins. Cos., 968 F.2d 171, 187 (2d Cir.
1992) (citations and quotation marks omitted).
1.
Infringing Products in the Marketplace
Plaintiff has submitted exhibits, in connection with its
briefing, that it asserts establish that infringing products,
licensed or manufactured by defendants, continued to be
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available in the marketplace after entry of the Permanent
Injunction. Many of these exhibits are “screen shots” of
internet sites offering infringing products for sale. See, e.g.,
Docs. #113-9 (Ex. 3); #113-11 (Ex. 5); #113-12 (Ex. 6); #113-13
(Ex. 7); #113-14 (Ex. 8); #113-15 (Ex. 9); #113-16 (Ex. 10).
Plaintiff has provided exhibits indicating that counsel for
plaintiff was able to purchase two potentially infringing items.
The first is an item described as “Macbeth Women’s Meet Shorty
Short Willy Prep,” a pair of shorts featuring the whale logo at
the heart of this action, purchased from an internet retailer on
April 6, 2017, well after entry of the Permanent Injunction. See
Doc. #113-13 (Ex. 7). The second is an item advertised as a
“Macbeth Collection Blue Whale Tote Bag” featuring another
version of the disputed whale logo, purchased from an internet
retailer on May 17, 2017, again, well after entry of the
Permanent Injunction.7 See Doc. #113-14 (Ex. 8).
These exhibits were submitted by plaintiff’s counsel, as
attachments to an affidavit of counsel. The affidavit states
This product bears a tag indicating it was manufactured by
Access Bags, see Doc. #113-14 at 11 (Ex. 8), and thus will be
relevant to the discussion of the alleged violation of the
Permanent Injunction involving that company as well. In this
context, however, it is discussed solely as an allegedly
infringing product found on the market after entry of the
Permanent Injunction.
7
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that the attachments are “[t]rue and accurate screenshots of
webpages[.]” Doc. #113-6 at 2.
The exhibits do, indeed, support a finding that infringing
products either made or licensed by defendants remained
available in the marketplace after the entry of the Permanent
Injunction. The mere availability of such products in the
marketplace, however, does not establish that any defendant has
actually engaged in conduct that violates the Permanent
Injunction.
As noted above, to establish that the defendants have
engaged in Enabling Violations of the Permanent Injunction,
plaintiff must show that the persons offering infringing items
for sale are “confederates” or “acting in concert or
participation with” defendants; that defendants are “enabling
others to sell” infringing items; or that defendants are
“assisting, aiding, or abetting any other person or business
entity” in violating the Permanent Injunction. Doc. #70 at 2-4.
Plaintiff has not provided any evidence that could support a
finding, by a preponderance, that any defendant engaged in any
Enabling Violations of the Permanent Injunction. The mere
availability of the infringing products on the internet is
insufficient to meet plaintiff’s burden.
One exhibit provided suggests the possibility of collusion
between defendants and those offering infringing products.
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Counsel for plaintiff provides an email that he sent to counsel
for defendants on December 4, 2015, alleging that “contraband
products originating from MacBeth Defendants” remain available
on the internet, and asserting:
As for your clients’ “knowledge” or lack thereof, since
making you aware of these violations certain of the
offenders have once again removed all references of such
goods from their websites. Thus and contrary to your
clients’ claims of ignorance, the fact that certain of
the entities identified have now ceased sales on two (2)
separate occasions following Vineyard Vines demands to
the MacBeth Defendants is strong evidence of the MacBeth
Defendants’ participation in and ability to stop further
illegal and illicit use of Vineyard Vines IP by the
entities identified.
Doc. #113-9 at 26 (Ex. 3) (sic). While this email refers to
“strong evidence,” it in fact does not provide any admissible
evidence. The affidavit to which this email is attached attests
that the attachment is a true and correct copy of the email sent
to counsel. See Doc. #113-6 at 1. However, the allegations set
forth in that email are just that: allegations. Plaintiff’s
counsel infers from his observations of internet sites that
defendants continue to be involved in the marketing of available
products. However, no actual evidence of any such involvement is
in fact presented.
Furthermore, the Court notes that to the extent plaintiff
alleges that the defendants had the “ability to stop further”
sales of infringing products, Doc. #113-9 at 26 (Ex. 3), the
Permanent Injunction does not impose any affirmative duty on
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defendants to do so. The Permanent Injunction does not include
any provision requiring defendants to affirmatively attempt to
stop any third party from engaging in infringing activity.
Rather, the Permanent Injunction appropriately bars defendants
from engaging in either direct or Enabling Violations. Plaintiff
points to no provision of the Permanent Injunction that would
require defendants to seek out third parties and attempt to stop
them from selling items that might once have been licensed or
produced by defendants.8
In sum, plaintiff has presented a great deal of material
documenting its belief that infringing products remained on the
marketplace well after entry of the Permanent Injunction. It has
Plaintiff appears to conflate the Permanent Injunction – which
is the subject of the Motion to Enforce – with an Order the
Court entered in 2017, after, and distinct from, the Permanent
Injunction itself. In that Order, the Court directed defendant
Josephs to “make a diligent and concerted effort to stop third
party vendors from importing, exporting, shipping, delivering,
holding for sale, offering for sale, selling, distributing,
returning, transferring and/or otherwise moving or disposing of
in any manner any infringing products.” Doc. #91 at 2. Defendant
Josephs filed responses, including an Affidavit, demonstrating
her compliance with that Order. See Docs. #101; #102; #103. To
the extent plaintiff asserts violations of that Court Order, the
remedy for any such violations would not be found in the
provisions of the Permanent Injunction, as the Permanent
Injunction itself does not include these directives to defendant
Josephs. Rather, the remedy for violation of the Court Order
would be a finding of contempt. As set forth elsewhere in this
ruling, the standard for a finding of contempt is clear and
convincing evidence. The Court does not find clear and
convincing evidence that defendant Josephs – the only defendant
to whom the Court Order was directed – has violated that Order.
8
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not, however, produced evidence sufficient to establish that any
defendant has actually violated any provision of the Permanent
Injunction in relation to the ongoing presence of those products
on the market. Accordingly, the Court finds that plaintiff has
not met its burden of establishing a violation of the Permanent
Injunction under this theory.
2.
Access Bags
Plaintiff also asserts that defendants have violated the
Permanent Injunction by specifically authorizing and/or
directing a third party, Access Bags, to sell infringing
products after entry of the Permanent Injunction. The Court
finds that, under this theory, plaintiff has met its burden of
proof, and has submitted evidence sufficient to establish that
defendants violated the Permanent Injunction.
As noted above, plaintiff has provided records of a purchase
of a case of 36 “Macbeth Collection Blue Whale Tote Bags” from
an online retailer on May 17, 2017. See Doc. #113-14 (Ex. 8).
These bags, which feature the “infringing whale” logo at issue
in the underlying litigation, bear tags branding them as
“MACBETH COLLECTION BY MARGARET JOSEPHS.” See id. at 10. These
tags also bear the name “Access Bag N’ Pack” and the address and
website for Access Bags. See id. at 11. Counsel for plaintiff
has provided a sworn affidavit averring that these are “[t]rue
and accurate electronic printouts of email receipts and
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photographs evidencing the May 17, 2017 purchase of an
Infringing Product[.]” Doc. #113-6 at 2.
As to this purchase, plaintiff has produced evidence
demonstrating that defendants “enable[ed] others to sell or pass
off” the infringing item(s). Doc. #70 at 3. Specifically,
plaintiff has produced an affidavit of Kurt Simonides, the
“founder and President of Access Bag N’ Pack, Inc., a New York
corporation founded in 1991 (‘Access Bags’).” Doc. #132-1 at 1.
Simonides avers that Access Bags entered into a License
Agreement with MacBeth Group, and provides a copy of that
Agreement. See Docs. #132-1 at 2; #132-3. Simonides attests that
among the items Access Bags was licensed to produce were the
“Whale Tote Bags” referred to in Doc. #113-14, described above.
Simonides asserts that after producing these bags, he received
an email from Josephs, with a copy to Ralph Nasar, stating that
the bags would not be purchased. “We will have to have an
unloading Plan without branding on it :( I am devastated for
both of us.” Doc. #132-5 at 2.9 Simonides knew Nasar to be “Vice
When these events allegedly occurred, a preliminary injunction
was in place. See Doc. #35. However, that preliminary injunction
by its own terms was to remain in effect only until “final
adjudication of this matter[.]” Id. at 4. Furthermore, a
permanent injunction replaces any preliminary injunction
previously entered. See F.T.C. v. Verity Int’l, Ltd., 443 F.3d
48, 56 (2d Cir. 2006). Thus, the Court considers these events as
context for the claim that the Permanent Injunction now in
effect was violated, not as independent violations.
9
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 24 of 44
President of ‘The MacBeth Group, Inc.’” and it was Nasar who
introduced Simonides to Josephs for the first time, in 2012.
Doc. #132-1 at 1.
On November 18, 2014, Simonides received another email, this
time from Nasar with Josephs copied, stating: “The whale bag
from the style attached we need taken off online sites right
away, we are having a legal issue for the whale and are waiting
on a resolution.” Doc. #132-6 at 1. Simonides asserts that Nasar
gave him “further oral instructions to ‘hold off’ on selling any
more whale product,” and that Access Bags therefore removed the
Whale Tote Bags from the items to be shipped out for sale. Doc.
#132-1 at 2.
Simonides then attests as follows:
Throughout early 2015, I then had several conversations
with Ralph Nasar about the status of the Whale Trademark
dispute as Access Bags continued to “sit on” its
significant inventory of Whale Tote Bags. Specifically,
Ralph Nasar repeatedly told me to continue to hold on to
the Whale Tote Bags as the Whale Trademark dispute was
being resolved, although it was a “state by state”
process that would take time.
Id. at 3. On April 30, 2015, Simonides attests, he “noticed
online that defendants were again using a whale image similar to
the Whale Trademark, only with a water spout added to the whale
icon design.” Id. He sent a text message to Nasar at that time,
inquiring whether putting “the water spout above the whale to
get around [the] lawsuit[]” would “work”. Doc. #132-8. Nasar
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 25 of 44
responded: “That should get us around lawsuit. As it’s a
different whale. We did pull all whales off website for the time
being though.” Id. In light of this communication, and a
continuing “pattern of reassurance[,]” Simonides continued to
“sit on the Whale Tote Bags” rather than selling them. Doc.
#132-1 at 3.
On May 20, 2015, Nasar emailed Simonides stating that “the
issue with the whale bag which the case will end this week and
we will have an answer on.” Doc. #132-10 at 2. Again, Simonides
held the Whale Tote Bags off the market in reliance on this
representation. See Doc. #132-1 at 3. Simonides avers:
In late 2015, Ralph Nasar informed me on a telephone
call that the Whale Trademark dispute with Vineyard
Vines was resolved, and as such Access Bags could now
sell off the remaining Whale Tote Bags inventory. Based
on these assurances, Access Bags put the Whale Tote Bags
back into the marketplace in early 2016.
Doc. #132-1 at 3.
Defendants have submitted an affidavit of Josephs
contradicting some of the statements made by Simonides. See Doc.
#120-1. Specifically, Josephs attests that “MacBeth also
contacted Access Bag N’ Pack who marketed totes with a whale
icon. They were instructed to destroy all such items.” Doc.
#120-1 at 4. In support of this assertion, Josephs points to an
email from Nasar to defendants’ counsel (with a copy to Josephs)
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dated April 21, 2015. See Doc. #120-3 at 25 (Ex. G).10 That email
states that MacBeth has “to end the contract with[]” Access
Bags, as MacBeth has “signed another Licensee to take over this
category and we have had issues on both ends since the
beginning.” Id. The email continues:
We just had a call with them and instead of arguing and
fighting we all decided its better to just walk away as
friends.
This company also has some backpacks with whale icon on
it that we told them they have to destroy because of
vineyard vines issue. They have agreed.
We need a basic letter drawn up for both parties to sign.
In that agreement it should say that they can not and
will not sell in anyway the bag with whale icon.
They can no longer produce any other Macbeth product and
they have a 1 year sell off period on current inventory.
Both parties will walk away from this deal and nobody
will owe money to either party.
Id. (sic)11
The “basic letter” agreement contemplated by this email has
not been produced by defendants. No other evidence supporting
the claims made in this email is provided by defendants. Defense
counsel’s affidavit does not address the substance of this
email, rather, it simply avers that the copy attached is true
and correct. See Doc. #120-2 at 2.
The Josephs Affidavit refers to Exhibit F, but this appears to
be a typographical error, as the only exhibit that purports to
support her claims as to Access Bags is Exhibit G.
10
Simonides asserts in his affidavit that the representations in
this email are untrue, and that he never “had a conversation
about destroying ‘whale icon’ products.” Doc. #132-1 at 3.
11
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 27 of 44
It is noteworthy that the email described above is provided
together with a series of other exhibits relating to other third
party licensees or vendors of defendants’ products. The other
exhibits generally consist of emails sent by defendants directly
to the third parties, directing them not to sell infringing
products. See generally, Doc. #120-3. As to Access Bags,
however, no direct evidence of contact is offered. Indeed,
defendants have not even offered an affidavit of Nasar to attest
to the truthfulness and accuracy of the email to counsel.
Josephs’ own affidavit referencing the email makes no reference
to any phone call with representatives of Access Bags, or to any
letter agreement terminating MacBeth’s relationship with Access
Bags. The Affidavit further makes no claim that Josephs had
personal knowledge of, or direct involvement in, any instruction
to Access Bags to destroy any Infringing Products. Rather,
Josephs’ affidavit states simply that “MacBeth” contacted Access
Bags, without specifying who acted on behalf of MacBeth, and how
any such contact occurred. See Doc. #120-1 at 4.
Defendants have thus failed to proffer any competent
evidence that contradicts Simonides’ claims regarding his
communications with Nasar and Josephs. Furthermore, the evidence
that has been proffered supports an inference that no phone call
occurred on or about April 21, 2015, in which Access Bags was
instructed to destroy all Whale Tote Bags. In particular, if
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such a call in fact occurred on April 21, 2015, the text
messages between Nasar and Simonides on April 30, 2015, in which
Simonides expressly refers to the totes and Nasar indicates that
whale products have been removed from the website “for the time
being,” Doc. #132-8 at 2, would make no sense. Likewise, there
is no reason that Nasar would have emailed Simonides on May 20,
2015, assuring him that issues relating to the “whale bag” would
be resolved shortly, if Nasar had already instructed Simonides
to destroy the bags. See Doc. #132-10.12 Furthermore, defendants
have provided an email from counsel for defendants to counsel
for Access Bags, dated February 16, 2017, directing Access Bags
“to refrain from further sale or distribution of the whale
bags.” Doc. #120-3 at 31. This email, which was forwarded to
Josephs immediately after sending, does not make any reference
to any prior direction by defendants to Access Bags to stop
selling or distributing any products. See id.
Nasar was acting on behalf of defendants in his dealings
with Simonides and Access Bags. Defendants do not dispute this.
Indeed, Josephs’ representation in her affidavit that “MacBeth”
contacted Access Bags, based on and incorporating Nasar’s email
The Court notes that defendants have not contested the
authenticity of either the text message or the email proffered
by plaintiff.
12
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 29 of 44
claiming that he contacted Access Bags, confirms that Nasar was
acting on behalf of defendants.
The evidence proffered establishes, by a preponderance,
that defendants and their agents “enabl[ed] others” –specifically, Access Bags -- “to sell or pass off” infringing
items, Doc. #70 at 3, by informing Access Bags that the bags
could be sold, after entry of the Permanent Injunction, as
genuine products. The evidence further establishes, by a
preponderance, that defendants “assist[ed], aid[ed] or abet[ed]”
Access Bags in violating the Permanent Injunction, Doc. #70 at
4, by informing Access Bags that infringing products could be
sold, after entry of the Permanent Injunction.
Accordingly, the Court finds by a preponderance of the
evidence that defendants violated the Permanent Injunction.
E.
Enforceability of Liquidated Damages Clause
Plaintiff seeks an award of $500,000 pursuant to the
liquidated damages clause of the Final Judgment. See Doc. #113
at 1. The Final Judgment states: “[I]n the event Defendants
violate this Injunction, breach the Settlement Agreement, or
fail to timely pay an installment payment, Vineyard Vines shall
be entitled to ... liquidated damages in the amount of Five
Hundred Thousand Dollars ($500,000.00)[.]” Doc. #70 at 6.
Plaintiff argues the Court should require payment of liquidated
damages because “Defendants failed on multiple occasions to
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fulfill most of the duties and obligations to which they agreed
in the Settlement Agreement[,]” the clause was “bargained for
and determined to be a reasonably just amount that Defendants
agreed to be bound by[,]” and the amount is “neither
disproportionate nor overly penal[.]” Doc. #113-2 at 17-19.
Specifically, plaintiff asserts that the liquidated damages
clause should be triggered by (a) defendants’ failure to pay the
full Judgment Amount and/or (b) defendants’ violation of the
Permanent Injunction. See generally id.13
1.
Failure to Pay the Full Judgment Amount as a
Basis for Award of Liquidated Damages
Defendants assert that their failure to pay the full
Judgment Amount should not entitle plaintiff to liquidated
damages. Defendants argue that enforcing the clause based solely
on the failure to make complete and timely payment would
constitute an unenforceable penalty upon defendants. See Doc.
#120 at 21-22.
Plaintiff has met its burden of establishing that
defendants “fail[ed] to timely pay an installment payment,”
which is sufficient to trigger the liquidated damages clause,
Plaintiff’s prior motion to enforce (Doc. #70) limited its
assertions regarding the liquidated damages clause to a claim
that the failure to pay the Judgment Amount should trigger the
liquidated damages clause. The instant motion alleges that, in
addition, violations of the Permanent Injunction have occurred
that are sufficient to trigger the liquidated damages clause.
See Doc. #113-2 at 17-19.
13
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 31 of 44
under the plain language of the Settlement Agreement. Doc. #70
at 6. “Under Connecticut law, a judgment entered in accordance
with a stipulation of the parties is to be regarded and
construed as a contract.” Lee v. BSB Greenwich Mortg. Ltd.
P’ship, 267 F.3d 172, 178 (2d Cir. 2001) (quotation marks and
citations omitted).14 A party asserting a breach of contract
bears the burden of proving that breach by a preponderance of
the evidence. See, e.g., Elec. Contractors, Inc. v. Pike Co.,
No. 3:11CV01449(JAM), 2015 WL 3453348, at *13 (D. Conn. May 29,
2015); Madigan, 113 A.3d at 1030. Plaintiff has met this burden
as to defendants’ failure to make timely payments of the
Judgment Amount.
However, enforcement of a liquidated damages clause is not
automatic. In Connecticut, there is a “clearly established
public policy against the enforcement of penalty clauses in
contracts.” HH E. Parcel, LLC v. Handy & Harman, Inc., 947 A.2d
916, 926 (Conn. 2008). A liquidated damages clause is
enforceable
if three conditions are satisfied: (1) The damage which
was to be expected as a result of a breach of the
contract was uncertain in amount or difficult to prove;
(2) there was an intent on the part of the parties to
liquidate damages in advance; and (3) the amount
stipulated was reasonable in the sense that it was not
greatly disproportionate to the amount of the damage
which, as the parties looked forward, seemed to be the
As previously noted, the parties do not dispute that
Connecticut law applies.
14
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 32 of 44
presumable loss which would be sustained by the
contractee in the event of a breach of the contract.
Id. at 927 (citations and quotation marks omitted). “A breaching
party seeking to nullify a contract clause that fixes an amount
as damages for the breach bears the burden of proving that the
agreed upon amount so far exceeds any actual damages as to be in
the nature of a penalty.” Am. Car Rental, Inc. v. Comm’r of
Consumer Prot., 869 A.2d 1198, 1210 (Conn. 2005).
As to defendants’ failure to pay the full Judgment Amount,
enforcement of the liquidated damages clause would not be
appropriate. The amount unpaid is $110,000 – barely one-fifth of
the liquidated damages sought. The damage that could result from
failure to pay was known in advance; it is, simply, the failure
to receive a set amount of funds. Enforcement of the liquidated
damages clause in this context would be purely punitive.
Accordingly, the Court declines to award liquidated damages
based on defendants’ failure to pay the full Judgment Amount.
Cf. Bill v. Cusano, No. CV-06-5005899-S, 2009 WL 1959473, at *3
(Conn. Super. Ct. June 8, 2009) (“The damages that the plaintiff
suffered as a result of the defendants’ breach of the contract,
if any, were so substantially less than the $50,000 provided for
in the liquidated damages clause that to enforce the clause
would be tantamount to imposing an unfair and unreasonable
penalty.”); Zalonski v. McMahon, 220 A.2d 35, 37 (Conn. Cir. Ct.
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 33 of 44
1966) (finding liquidated damages clause unenforceable where the
“damage as the result of a breach could quite easily be
ascertained, and it would not be difficult to prove damage”).
2.
Violation of the Permanent Injunction as a Basis
for Award of Liquidated Damages
The liquidated damages analysis is different as to the
allegation that defendants violated the Permanent Injunction. As
to the Permanent Injunction, the requirements for enforcement of
a liquidated damages clause are met. The damage to be expected
from a breach of the Permanent Injunction would be “uncertain in
amount or difficult to prove;” the parties manifested an intent
“to liquidate damages in advance;” and the $500,000 amount
agreed upon is not “greatly disproportionate to the amount of
the damage which” might be expected from such a breach. HH E.
Parcel, LLC, 947 A.2d at 927 (citations and quotation marks
omitted).
Plaintiff asserts that these requirements are met as to any
violation of the Permanent Injunction, and defendants do not
seriously dispute the assertion. Notably, defendants offer no
evidence suggesting that the liquidated damages amount exceeds
plaintiff’s actual damages, let alone that the liquidated
damages amount is “greatly disproportionate” to any such
damages. Accordingly, if plaintiff has established that
defendants have, in fact, violated the Permanent Injunction,
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then enforcement of the liquidated damages provision would be
appropriate on that basis. The Court has determined that
plaintiff has established, by a preponderance of the evidence,
that defendants have violated the Permanent Injunction.
Accordingly, an award of liquidated damages is appropriate, and
plaintiff’s request for an award of liquidated damages is
GRANTED. The Court orders defendants to pay plaintiff the amount
of $500,000, pursuant to the stipulated Final Judgment.
F.
Statutory Damages
Plaintiff next asks the Court to award it $8,600,000 in
asserted statutory damages for infringement of registered
trademarks pursuant to 15 U.S.C. §1117(c) and registered
copyrights pursuant to 17 U.S.C. §504(c). See Doc. #113-2 at 10.
Plaintiff argues that an award of statutory damages is warranted
because defendants continue to willfully infringe on plaintiff’s
registered trademarks and copyrights. See id. at 15. Defendants
respond in a cursory fashion that plaintiff is “not entitled to
... statutory damages[.]” Doc. #120 at 22.
The Court concludes that statutory damages are not
available to plaintiff in these circumstances. In this case,
plaintiff elected to resolve its claims against defendants by
way of a settlement and Stipulated Final Judgment. The relief
for any violation of that Judgment, and the Permanent Injunction
it encompasses, is not rescission of the agreement or
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 35 of 44
invalidation of the Judgment. It is, instead, the remedies set
forth in the Settlement Agreement and Final Judgment.15
“It is well settled that a seller may not retain a
stipulated sum as liquidated damages and also recover actual
damages.” Hanson Dev. Co. v. E. Great Plains Shopping Ctr.,
Inc., 485 A.2d 1296, 1299 (Conn. 1985); see also Dean v.
Connecticut Tobacco Corp., 92 A. 408, 411 (Conn. 1914) (“The
parties having stipulated in advance as to the amount of damages
recoverable, further recovery, or recovery upon some other
basis, could not, of course, be had.”).
The Court has found that an award of liquidated damages is
appropriate here. Accordingly, actual damages are not available.
“Both actual damages and liquidated damages cannot be awarded.”
Sanitary Servs. Corp. v. Greenfield Vill. Ass’n, Inc., 651 A.2d
269, 271 (Conn. App. Ct. 1994); see also Camp v. Cohn, 201 A.2d
187, 189 (Conn. 1964) (Where parties agree upon a liquidated
damages provision, “the stipulated sum could be recovered, but
no other sum could be recovered as actual damages.”).
Furthermore, plaintiff has not proven that it has suffered
actual damages sufficient to trigger an award of statutory
damages. Rather, plaintiff has proven, by a preponderance of the
The Court offers no opinion on whether plaintiff might have
the right to file a further civil action against defendants for
any alleged additional conduct occurring after the Judgment was
entered, for which remedy is not sought in this action.
15
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 36 of 44
evidence, that defendants have violated the Permanent
Injunction, and that its damages as a result of that violation
are unknown, and the Court has therefore awarded liquidated
damages. Accordingly, plaintiff’s request that the Court award
$8,600,000 in statutory damages is DENIED.
G.
Contempt
Plaintiff asserts: “Because Defendants have failed to
comply with any of the Court’s Orders, most notably the Final
Judgment, and have blatantly disregarded the law, Vineyard Vines
is entitled to a finding of civil contempt against Defendants in
this action.” Doc. #113-2 at 9. Plaintiff does not articulate a
particular rule or statute16 under which it seeks a finding of
contempt, but instead appears to rely upon the Court’s “inherent
authority to enforce compliance” with its orders. Id. at 7.
Plaintiff moves the Court for “an Order imposing coercive
sanctions on Defendants[.]” Doc. #113 at 2. However, plaintiff
Plaintiff does not, for instance, rely upon Rule
37(b)(2)(A)(vii) (allowing a court to “treat[] as contempt of
court the failure to obey any [discovery] order”) or Rule 16(f)
(authorizing the application of 37(b)(2)(A)(vii) where a party
fails to obey a pretrial order). Plaintiff also does not appear
to rely on Rule 70(e), which provides that a party may be held
in contempt if it fails to comply with a judgment requiring that
party “to perform any ... specific act[.]” Fed. R. Civ. P.
70(e).
16
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 37 of 44
does not elaborate on this request, and does not explain what
imposition of a “coercive sanction” would achieve in this case.17
“[C]ourts have inherent power to enforce compliance with
their lawful orders through civil contempt.” Shillitani v.
United States, 384 U.S. 364, 370 (1966). In enforcing the terms
of a Judgment, a court may use any enforcement tool at its
disposal, including civil contempt, and is not limited to “the
remedial contractual terms agreed upon by the parties because a
consent judgment contemplates judicial interests apart from
those of the litigants.” United States v. N.Y.C. Dist. Council
of N.Y.C., 229 F. App’x 14, 17–18 (2d Cir. 2007) (quotation
marks and citations omitted).
The standard for contempt is strict, and “the power of a
district court to impose contempt liability is carefully
limited[.]” CBS Broad. Inc. v. FilmOn.com, Inc., 814 F.3d 91, 98
(2d Cir. 2016) (citation and quotation marks omitted). “A
contempt order is warranted only where the moving party
establishes by clear and convincing evidence that the alleged
contemnor violated the district court’s edict[]” by showing
“that (1) the order the contemnor failed to comply with is clear
and unambiguous, (2) the proof of noncompliance is clear and
Indeed, it is not clear what additional relief plaintiff would
seek in connection with any finding of contempt, nor what
additional relief would be of benefit to plaintiff.
17
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 38 of 44
convincing, and (3) the contemnor has not diligently attempted
to comply in a reasonable manner.” King, 65 F.3d at 1058. “[T]he
moving party ... bears the burden of establishing [these] three
factors[.]” Latino Officers Ass’n City of New York, Inc. v. City
of New York, 558 F.3d 159, 164 (2d Cir. 2009). “[A] contempt
order is a potent weapon that is inappropriate if there is a
fair ground of doubt as to the wrongfulness of the defendant’s
conduct[.]” Id. (quotation marks and citations omitted).
The Court has found, as set forth above, that plaintiff has
established by a preponderance of the evidence that defendants
have violated the Permanent Injunction. The Court does not find,
however, that the evidence proffered rises to the level of clear
and convincing. The Court’s finding regarding the violation of
the Permanent Injunction is limited to defendants’ contacts with
a single third party licensee. The evidence proffered is
limited, and contested (although weakly) in part. Plaintiff has
met its burden by a preponderance, but not by clear and
convincing evidence.
To the extent plaintiff seeks a finding of contempt based
on defendants’ failure to pay the full amount of the money
judgment, the Court declines to hold defendants in contempt on
this basis. Indeed, it is inappropriate to use the Court’s
contempt power to enforce a money judgment. See Ecopetrol S.A.
v. Offshore Expl. & Prod. LLC, 172 F. Supp. 3d 691, 698
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(S.D.N.Y. 2016) (“[C]ontempt power should not be used to enforce
a money judgment[.]”); Nykcool A.B. v. Pac. Fruit Inc., No.
10CV3867(LAK)(AJP), 2012 WL 1255019, at *8 (S.D.N.Y. Apr. 16,
2012) (“While a court may hold a disobedient party in contempt
to enforce a judgment for a specific act pursuant to Rule 70,
Rule 70’s equitable remedies are not appropriate to enforce a
money judgment.”); Shuffler v. Heritage Bank, 720 F.2d 1141,
1147 (9th Cir. 1983) (“The proper means for [a party] to secure
compliance with a money judgment is to seek a writ of execution,
not to obtain a fine of contempt for the period of nonpayment.”).
Furthermore, the Court declines, as a matter of discretion,
to hold defendants in contempt. “The judicial contempt power is
a potent weapon.” Int’l Longshoremen’s Ass’n, Local 1291 v.
Philadelphia Marine Trade Ass’n, 389 U.S. 64, 76 (1967). As the
Second Circuit has cautioned, “the court must not lightly invoke
its contempt power.” In re Attorney Gen. of U.S., 596 F.2d 58,
65 (2d Cir. 1979). This is true because the “exercise of the
contempt power is awesome in its implications.” United States v.
Wendy, 575 F.2d 1025, 1030 (2d Cir. 1978). Here, the Court finds
that the circumstances do not support a finding of contempt.
Accordingly, plaintiff’s motion for a finding of contempt
is DENIED.
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H.
Costs and Attorneys’ Fees
Finally, plaintiff asks the Court to award it “$201,657.21
in Vineyard Vines’ actual expenses, including reasonable
attorneys’ fees, associated with the enforcement of the Consent
Judgment.” Doc. #113 at 1. Plaintiff argues that defendants’
“willful failures to abide by Court order and the parties’
agreement ha[ve] forced Vineyard Vines to reengage in expensive,
taxing and unnecessary litigation for which it must be
compensated under the so-ordered provisions of the Final
Judgment.” Doc. #113-2 at 20. Defendants do not expressly
contest that plaintiff is entitled to attorneys’ fees, but they
characterize the amount of fees requested as “astronomical[.]”
Doc. #120 at 3.
The Final Judgment provides that “in the event Defendants
violate this Injunction, breach the Settlement Agreement, or
fail to timely pay an installment payment, Vineyard Vines shall
be entitled to ... recovery of its actual expenses, including
reasonable attorneys’ fees, associated with the enforcement of
the Settlement Agreement and this Injunction[.]” Doc. #70 at 6.
Defendants do not dispute that they have they have failed
to pay the full Judgment Amount in accordance with the Payment
Schedule set forth in the Final Judgment. See Docs. #129 at 6;
#120 at 7. The Court has found that defendants violated the
Permanent Injunction. Therefore, plaintiff is entitled to
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recover its actual expenses, including reasonable attorneys’
fees.
“A district court has considerable discretion in
determining a reasonable attorneys’ fee amount, and its
assignment of a lodestar figure will result in a presumptively
reasonable fee.” Midamines SPRL Ltd. v. KBC Bank N.V., No.
161048, 2017 WL 6029541, at *1 (2d Cir. Dec. 6, 2017) (quotation
marks and citation omitted).
To evaluate a request for attorneys’ fees, courts must
conduct a lodestar analysis, which calculates reasonable
attorneys’ fees by multiplying the reasonable hours
expended on the action by a reasonable hourly rate. If
at the time the work was performed, a reasonable attorney
would have engaged in similar time expenditures, then
the number of hours proffered is reasonable. As to the
hourly rate, a district court has discretion but should
begin generally with the prevailing market rates in the
relevant community.
CSL Silicones, Inc. v. Midsun Grp. Inc., No. 3:14CV01897(CSH),
2017 WL 1399630, at *2 (D. Conn. Apr. 18, 2017). The party
seeking an award of fees must provide “contemporaneous time
records. These records should specify, for each attorney, the
date, the hours expended, and the nature of the work done.” New
York State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d
1136, 1148 (2d Cir. 1983).
Here, plaintiff has not submitted sufficient information to
enable the Court to determine a reasonable attorneys’ fee
amount. The time records submitted by plaintiff are redacted,
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and they do not indicate the nature of the work done. See Docs.
#113-4; #113-5.18 Many of the time records also fail to indicate
which attorney or other person expended the hours indicated. See
id. The “expenses” are listed only by amount, with no indication
of why they were incurred, or for what. See id. Furthermore, no
information has been provided regarding the reasonableness of
the hourly rates sought.
Therefore, plaintiff’s request for an award of actual
expenses, including reasonable attorneys’ fees, associated with
the enforcement of the Final Judgment is GRANTED, contingent
upon the provision of additional information. The Court will
determine what amount of attorneys’ fees and costs should be
awarded after reviewing plaintiff’s unredacted billing
statements. Plaintiff shall file a supplemental memorandum in
support of the request for an award of fees and costs, on or
before January 11, 2019. Plaintiff shall file, together with
this memorandum, under seal, detailed, contemporaneous time
records that specify, for each attorney, the date, the hours
expended, and the nature of the work done.
The Court notes that any award of fees and costs may be
limited to those aspects of plaintiff’s motion that were
granted, and thus knowing the nature of work performed is
particularly significant.
18
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III. CONCLUSION
Accordingly, for the reasons set forth above, the Court
GRANTS, in part, and DENIES, in part, plaintiff’s Motion for
Additional Relief [Doc. #113]:
•
Plaintiff’s motion for an order of civil contempt is
DENIED;
•
Plaintiff’s motion for an award of $110,000, representing
the unpaid portion of the Judgment Amount is GRANTED;
•
Plaintiff’s motion for an award of $20,000 in Additional
Debt is DENIED;
•
Plaintiff’s motion for an award of $500,000 in liquidated
damages is GRANTED;
•
Plaintiff’s motion for $8,600,000 in statutory damages is
DENIED; and
•
Plaintiff’s motion for actual expenses, including
reasonable attorneys’ fees, associated with the enforcement
of the Final Judgment is provisionally GRANTED, in whole or
in part, contingent upon the provision of additional
information. Plaintiff shall file a supplemental memorandum
on or before January 11, 2019.
A separate judgment will enter against defendants MacBeth
Collection, L.L.C., MacBeth Collection By Margaret Josephs, LLC,
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Case 3:14-cv-01096-SALM Document 134 Filed 12/05/18 Page 44 of 44
and Margaret Josephs, jointly and severally, in the following
amounts:
•
$110,000 of the unpaid Judgment Amount;
•
$500,000 in liquidated damages; and
•
An amount of actual expenses, including reasonable
attorneys’ fees, to be determined in a subsequent order.
The Court further orders Defendants to immediately cease and
desist from any and all violations of the Permanent Injunction
and Final Judgment on Consent (Doc. #70).
SO ORDERED at New Haven, Connecticut, this 5th day of
December, 2018.
/s/
HON. SARAH A. L. MERRIAM
UNITED STATES MAGISTRATE JUDGE
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