Coach, Inc. v. Quinn et al

Filing 52

MEMORANDUM AND ORDER - Coach's motion for default judgment (filing 49 ) is granted. Judgment will be entered for Coach, and against Quinn, in the amount of $5,000.00. Quinn is permanently enjoined from using Coach's marks, or any othe r mark alone or in connection with another word or symbol which is confusingly similar to Coach's marks, or which is likely to cause confusion or mistake or to deceive. A separate judgment will be entered. Ordered by Judge John M. Gerrard. (Copy mailed to pro se party) (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
COACH, INC. and COACH
SERVICES, INC.
8:16-CV-338
Plaintiffs,
vs.

MEMORANDUM AND ORDER

RAJA D. QUINN, d/b/a
WHOLESALE OUTLET, a/k/a RAJA
DEJOURN FASHIONS & FAWAZ
MUMTAZ RETAIL OUTLET,
Defendant.
This matter is before the Court on the renewed motion for default
judgment (filing 49) filed by the plaintiffs, Coach, Inc. and Coach Services,
Inc. (collectively, Coach). The Court will grant the motion and award $5,000
in damages.
The Court's Memorandum and Order of November 2, 2017 (filing 40)
set forth the Court's findings that the admitted allegations of Coach's
complaint constitute a legitimate cause of action against defendant Raja
Quinn for both mark infringement and unfair competition under the Lanham
Act, 15 U.S.C. § 1051 et seq., and violation of the Nebraska Uniform
Deceptive Trade Practices Act (UDTPA), Neb. Rev. Stat. § 87-301 et seq.
Filing 40 at 5-6. The Court's Memorandum and Order also set forth the
Court's finding that Coach was entitled to a permanent injunction to be
entered at final judgment. Filing 40 at 6-7. The only pending issues
unresolved by the Court's Memorandum and Order were damages and
attorney fees. See filing 40 at 11-12.

DAMAGES
The Lanham Act permits a plaintiff to recover the defendant's profits,
any damages sustained by the plaintiff, and the costs of the action. 15 U.S.C.
§ 1117(a). But in a case involving the use of a counterfeit mark, a plaintiff
may instead elect to recover
an award of statutory damages for any such use in connection
with the sale, offering for sale, or distribution of goods or services
in the amount of-(1) not less than $1,000 or more than $200,000 per
counterfeit mark per type of goods or services sold, offered
for sale, or distributed, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark
was willful, not more than $2,000,000 per counterfeit mark
per type of goods or services sold, offered for sale, or
distributed, as the court considers just.
§ 1117(c). Coach has made such an election in this case.
Coach has moved for an award of $400,000. Filing 50 at 12. The Court
has already found that Quinn's conduct was willful, and willfulness may also
be inferred from a failure to defend. Filing 40 at 8. And as the Court outlined
in its previous memorandum and order, § 1117(c) itself does not provide
guidelines for the Court in determining an appropriate award, instead
leaving it to the Court's discretion to award an amount it "considers just."
Filing 40 at 7-9 (collecting cases). The Court must exercise discretion in
examining whatever facts and considerations are available in a setting of
limited information. Filing 40 at 9.

2

The plaintiff, however, should not secure a windfall. See Yelp Inc. v.
Catron, 70 F. Supp. 3d 1082, 1089 (N.D. Cal. 2014); Rolls-Royce PLC v. RollsRoyce USA, Inc., 688 F. Supp. 2d 150, 157 (E.D.N.Y. 2010); Century 21 Real
Estate LLC v. Bercosa Corp., 666 F. Supp. 2d 274, 293 (E.D.N.Y. 2009). And,
analogizing to the similarly worded statutory damages provision of the
Copyright Act, 17 U.S.C. § 504(c), the Court considers
(1) the defendant's expenses saved and profits reaped; (2) the
plaintiff's lost revenue; (3) the value of the trademark; (4) general
deterrence; (5) the willfulness of the defendant's conduct; (6) the
defendant's cooperation in providing records from which to
determine the value of the infringing products; and (7) specific
deterrence of the defendant.
Filing 40 at 9.
But in this case, the Court has very little to work with when
considering those factors. In its previous Memorandum and Order, the Court
observed that Coach ought to be able to provide evidence of the value of its
marks. Filing 40 at 10. And, the Court suggested, Coach might be able to
present evidence of how much revenue a business like Quinn's would be
expected to generate, or how much revenue Coach might have lost. Filing 40
at 10. "[E]vidence of hypothetical fees and projected revenues (or any other
evidence Coach is able to provide) might give the Court a basis," the Court
advised, "not just to approximate profits and damages, but also determine
what amount would serve as appropriate deterrence." Filing 40 at 11.
Coach offered the Court very little additional help in that regard. See
filing 50. In fact, while Coach alleged that the counterfeit sunglasses at issue
here were purchased for $35, filing 1 at 12, Coach hasn't even offered the
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Court evidence of the retail price of a genuine pair of Coach sunglasses. Nor
has Coach offered the Court anything more than speculation upon which to
assess the general scope of Quinn's infringing activity—so, at the end of the
day, all the Court has is one pair of phony $35 sunglasses.
And what remains problematic for the Court is that there is no reason
to believe Coach lost revenue from Quinn's infringement of Coach's marks.
Quinn's storefront shop wasn't on an upscale boulevard, between Burberry
and Stuart Weitzman—it was in a working-class business district where his
nearest neighbors, it appears, were a taquería, a head shop, a thrift store,
and Dollar General. That is to say, there is absolutely no reason to believe
anyone purchasing ersatz "Coach" sunglasses from a small store in South
Omaha was a lost customer for genuine Coach merchandise, or had any
illusions about what was being purchased. And the Court's overarching
obligation to award damages that the Court "considers just" does not permit
it to enter a six-figure judgment against a business that was almost certainly
not worth that much, lock, stock, and barrel.1
While the Court has considered all the factors listed above, the Court
finds that the most relevant factors in this case are the defendant's profits,
general deterrence, and specific deterrence of the defendant. The Court finds
that those interests are sufficiently served by statutory damages under the
Lanham Act in the amount of $5,000.00.
ATTORNEY'S FEES
Coach has also moved for costs and attorney's fees. The UDTPA
provides that costs shall be allowed to a prevailing party and that attorney's

1

The Court is not persuaded that Quinn's promotional, self-aggrandizing tweets, see filing

50 at 9, should be taken seriously, or that they are particularly relevant to this case.

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fees may be allowed if the party charged with a deceptive trade practice has
willfully engaged in the trade practice knowing it to be deceptive. Neb. Rev.
Stat. § 87-303.2 The Court has already determined that Quinn's conduct was
willful. But while Coach asserts it is "entitled to an award" of costs and
attorney's fees, filing 50 at 10, only the costs are mandatory under the
UDTPA. See § 87-303(b). Whether attorney fees should be awarded is
entrusted to the Court "in its discretion," and while Quinn has obviously not
asserted a viable defense, the Court also finds nothing particularly
exceptional about this case. See id.; ADT Sec. Servs., Inc. v. A/C Sec. Sys.,
Inc., 736 N.W.2d 737, 767-68 (Neb. Ct. App. 2007).
But there is a more pressing problem with Coach's request for costs and
attorney's fees, and that is that Coach's evidentiary showing in support of its
request is wholly insufficient—and not for the first time. Coach previously
asked for attorney's fees. See filing 39 at 9. But, the Court explained,
it is well established that the burden rests with counsel to
establish the factual basis to support an award of attorney fees.
Counsel has yet to provide the Court with any, much less
sufficient, evidence of its costs and fees incurred, or a basis for
evaluating the fairness and reasonability of those fees. As such,
the Court will consider Coach's request for attorney fees at final
judgment based on evidence—should counsel choose to present
any—of reasonable fees incurred.

2

Coach seems to have abandoned its claim for attorney fees under the Lanham Act. See

filing 50 at 10-11.

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Filing 40 at 12 (citations omitted). Coach now asks for $90,329.50 in
attorney's fees and costs. Filing 50 at 10.
But Coach's support for that request is an affidavit in which counsel
avers that they have spent $90,329.50 "on behalf of Coach throughout this
litigation" in "attorneys' fees and costs." Filing 50-5 at 1. Then, Coach sets
forth the hourly billing rates for the three lawyers who've appeared for Coach
in this case. Filing 50-5 at 2. And counsel opines that amount "is fair,
reasonable and appropriate[.]" Filing 50-5 at 2.
Coach has not, however, presented the Court with evidence from which
it can actually assess the reasonableness of the requested attorney's fees.
Courts utilize two main approaches to analyzing a request for
attorney fees. Under the "lodestar" methodology, the hours
expended by an attorney are multiplied by a reasonable hourly
rate of compensation so as to produce a fee amount which can be
adjusted, up or down, to reflect the individualized characteristics
of a given action. Another method, the "percentage of the benefit"
approach, permits an award of fees that is equal to some fraction
of the common fund that the attorneys were successful in
gathering during the course of the litigation.
Johnston v. Comerica Mortg. Corp., 83 F.3d 241, 244-45 (8th Cir. 1996). It
doesn't seem like Coach is suggesting a "percentage of the benefit"
approach—and even if it was, the percentage of the benefit method is limited
to circumstances in which the attorneys have gathered a common fund
during the course of the litigation. See, Blum v. Stenson, 465 U.S. 886, 900
n.16 (1984); In re Life Time Fitness, Inc., Tel. Consumer Prot. Act (TCPA)
Litig., 847 F.3d 619, 622-23 (8th Cir. 2017); Petrovic v. Amoco Oil Co., 200
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F.3d 1140, 1157 (8th Cir. 1999); Johnston, 83 F.3d at 244-45. And this is not
a common-fund case.3
So, the Court must rely on the lodestar approach, but lacks any basis
for applying it—that is, the Court has no information about how many hours
were spent by counsel on this case, or how those hours were used.
The most useful starting point for determining the amount of a
reasonable fee is the number of hours reasonably expended on
the litigation multiplied by a reasonable hourly rate. This
calculation provides an objective basis on which to make an
initial estimate of the value of a lawyer's services. The party
seeking an award of fees should submit evidence supporting the
hours worked and rates claimed.
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Here, the Court has not even
been told what part of the requested award is costs, and what part is
attorney's fees. Without a breakdown of the costs, the Court cannot assess
which (if any) of those costs are actually recoverable. See 28 U.S.C. § 1920;
Fed. R. Civ. P. 54(d); Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437,
441 (1987). Without knowing how many hours were spent working on the
case, the Court cannot even begin a lodestar analysis. And without knowing
how those hours were used, the Court cannot find support for the
counterintuitive conclusion that it was fair and reasonable to incur over

3

And even in a common-fund case, the lodestar method serves to double-check the result of

the percentage-of-the-fund method. In re Life Time Fitness, 847 F.3d at 622-23; Petrovic,
200 F.3d at 1157.

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$90,000 in costs and fees for a scorched-earth pursuit of the vendor of a pair
of knockoff sunglasses.
Based on that evidentiary insufficiency, the Court will deny Coach's
request for costs and attorney's fees at this point. Coach may still file a postjudgment motion for costs and attorney's fees pursuant to Rule 54(d). Should
Coach decide to do so, counsel's attention should be drawn to the principles
and authorities set forth above, as well as this Court's local rules,
particularly NECivR 54.1, 54.3, and 54.4.
IT IS ORDERED:
1.

Coach's motion for default judgment (filing 49) is granted.

2.

Judgment will be entered for Coach, and against Quinn, in
the amount of $5,000.00.

3.

Quinn is permanently enjoined from using Coach's marks,
or any other mark alone or in connection with another word
or symbol which is confusingly similar to Coach's marks, or
which is likely to cause confusion or mistake or to deceive.

4.

A separate judgment will be entered.

Dated this 22nd day of May, 2018.
BY THE COURT:

John M. Gerrard
United States District Judge
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