LPD New York, LLC v. Adidas America, Inc. et al
Filing
66
ORDER denying 59 Motion for Reconsideration; denying 60 Motion for Reconsideration. For the reasons discussed in the attached Memorandum and Order, the Court denies the motion for reconsideration and declines to certify the contract formation issue for appeal to the Second Circuit. Ordered by Judge Margo K. Brodie on 12/11/2017. (Chu, Chan Hee)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------LPD NEW YORK, LLC,
Plaintiff,
MEMORANDUM & ORDER
15-CV-6360 (MKB) (RLM)
v.
ADIDAS AMERICA, INC. and ADIDAS AG,
Defendants.
--------------------------------------------------------------MARGO K. BRODIE, United States District Judge:
Plaintiff LPD New York, LLC (“LPD”) commenced the above-captioned action against
Defendants Adidas America, Inc. (“Adidas America”) and Adidas AG on November 5, 2015,
bringing claims for breach of contract, defamation and unjust enrichment. (Compl. ¶¶ 1, 104–16,
126–31, Docket Entry No. 1.) LPD also sought relief under the Declaratory Judgment Act, 28
U.S.C. §§ 2201, 2202, pertaining to disputes regarding its use of Defendants’ trademarks.
(Id. ¶¶ 117–25.) Defendant Adidas America moved to dismiss the Complaint for failure to state a
claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.1 (Def. Adidas America Mot. to Dismiss (“Adidas Am. Mot.”), Docket Entry No. 20;
Def. Adidas America Mem. in Supp. of Adidas Am. Mot. (“Adidas Am. Mem.”), Docket Entry
No. 21.) LPD moved for partial summary judgment on its claims for breach of contract,
defamation and declaratory relief, pursuant to Rule 56 of the Federal Rules of Civil Procedure.
(Pl. Mot. for Summ. J. (“Pl. Mot.”), Docket Entry No. 24.)
1
In its motion to dismiss, Defendant Adidas America explained that Adidas AG, while
named in the Complaint, had not been served. (Def. Adidas America Mot. to Dismiss (“Adidas
Am. Mot.”) 1 n.1, Docket Entry No. 20.) Thus, for purposes of that motion to dismiss, the
undersigned counsel only appeared on behalf of Defendant Adidas America. (Id.)
By order dated April 6, 2016, the Court referred both motions to Chief Magistrate Judge
Roanne L. Mann. (Order dated Apr. 6, 2016.) By report and recommendation dated August 25,
2016 (the “R&R”), Judge Mann recommended that the Court grant Adidas America’s motion to
dismiss LPD’s breach of contract and declaratory judgment claims, deny the motion as to LPD’s
defamation and unjust enrichment claims, and deny LPD’s motion for partial summary
judgment. (R&R, Docket Entry No. 39.) LPD objected to the R&R in part. (Pl. Obj. to the
R&R (“Pl. Obj.”), Docket Entry No. 49.) Adidas America did not file objections.
By Memorandum and Order dated March 27, 2017 (the “March 2017 Decision”), the
Court adopted Judge Mann’s recommendations in their entirety. See LPD New York, LLC v.
Adidas Am., Inc., No. 15-CV-6360, 2017 WL 1162181 (E.D.N.Y. Mar. 27, 2017). The Court
granted Defendants’ motion to dismiss LPD’s breach of contract and declaratory relief claims,
denied the motion as to the defamation and unjust enrichment claims, denied LPD’s motion for
summary judgment as to the defamation, breach of contract and declaratory relief claims, and
granted LPD leave to amend the Complaint to assert quasi-contract claims.2 See id. at *1.
LPD now moves the Court to reconsider the portion of the March 2017 Decision
dismissing LPD’s breach of contract and declaratory judgment claims, and alternatively moves
the Court to certify the contract formation issue for appeal in the event the Court denies the
reconsideration motion. (Pl. Mot. for Recons. (“Pl. Recons. Mot.”), Docket Entry No. 59; Pl.
2
On June 27, 2016, after Adidas America moved to dismiss and LPD moved for
summary judgment, LPD served Adidas AG with the summons and Complaint. (Adidas AG
Letter dated July 18, 2016, Docket Entry No. 37.) On September 6, 2016, Adidas AG moved to
dismiss the Complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal
Rules of Civil Procedure and for failure to state a claim upon which relief may be granted
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Def. Adidas AG Mot. to
Dismiss (“Adidas AG Mot.”), Docket Entry No. 40.) The Court denied Adidas AG’s separate
motion to dismiss for lack of personal jurisdiction, which was filed after the R&R. LPD N.Y.,
LLC v. Adidas Am., Inc., No. 15-CV-6360, 2017 WL 1162181, at *1 (E.D.N.Y. Mar. 27, 2017).
2
Mem. in Supp. of Pl. Recons. Mot. (“Pl. Recons. Mem.”), Docket Entry No. 60.) For the reasons
discussed below, the Court denies LPD’s reconsideration motion in its entirety.
I.
Background
The Court assumes familiarity with the facts as detailed in the R&R and the March 27,
2017 Decision and provides only a summary of the pertinent facts and procedural background.
See LPD, 2017 WL 1162181.
a. Factual background
LPD is a fashion company that creates “streetwear” products. (Compl. ¶¶ 15–16.) In
October of 2013, Defendants contacted LPD to discuss a possible “collaboration” in which LPD
would create unique streetwear-style designs for Defendants’ brand and five National Collegiate
Athletic Association (“NCAA”) basketball teams sponsored by Defendants.3 (Id. ¶ 19.) LPD
expressed interest in the collaboration and later developed two design “capsules” for the
collaboration: a “Classics Capsule” and a “Collaboration Capsule.” (Id. ¶¶ 20–21.) The Classics
Capsule consisted of “a series of design proposals for NCAA Basketball Teams, which included
prints for tee shirts, basketball jerseys, basketball shorts, and team jackets” that Defendants
would help design in collaboration with LPD. (Id. ¶ 21.) The Collaboration Capsule consisted
of “a series of design proposals for basketball jerseys, tee-shirts, outerwear, jackets, hats, shorts,
sports bras, lanyards and pants” for an athletic-streetwear collection designed primarily by LPD.
(Id.) After receiving some preliminary prints for the Classics Capsule, Defendants responded
that they were “excited” about the designs. (Id. ¶¶ 22–23.)
On November 17, 2013, LPD asked Defendants how the pieces from the Classics
3
Throughout the Complaint, LPD refers to Adidas America and Adidas AG as one entity,
Adidas. (See Compl., Docket Entry No. 1.) Thus, the Court is unable to determine what
allegations relate to Adidas America, Adidas AG, or both.
3
Capsule “should/will be branded (with both LPD and Adidas logos) and how/where they will be
distributed (in Adidas’ stores/distributors or otherwise).” (Id. ¶ 24.) Defendants responded that
“the rules are really what [the parties] want them to be” because the project was the first time
Adidas’ basketball division was “coordinating with a fashion brand.” (Id. ¶ 25.) Defendants
subsequently proposed that:
Branding
Due to NCAA rules the uniforms can only be branded
adidas. So our actual on court product we will be badged as
adidas.
There is an opportunity for co-branding on your retail pieces
and our Satin Jacket. Our designers could collab for a cool
jocktag or woven label that would be badged with both
logos.
If you want to just badge your product LPD only we
understand the option but we would want to at least show a
true collaboration to demonstrate “court to street.”
Retail
This part is also new.
But after having [internal]
discussion[s] . . . we have a few options of where we would
retail.
Adidas.com — Our own retail would love to feature this [as]
an exclusive collection. Your retail pieces are at a price point
where we could feature our retail shorts with your retail
pieces and make it an exclusive release online.
Your retailers — because these pieces are at a higher price
point than our sales reps deal with your access to boutique
and footprint accounts.
NYC stop-in-shop. We would do an in-store collab where
we split the store in half with your retail and some of our
higher price point retail and highlight this collection but gain
momentum for both brands.
Or the option of all [three]. Let me know your thought as I
think we will have to write our rules because this has not
happened with an actual on-court kit before.
4
(Id. (alterations in original).) LPD replied that it liked the idea of the collaboration and wanted
to get to work on the tags and labels for the pieces, was interested in exploring all of the
proposed retail options, and could get to work on “visuals” as soon as it had “samples of the first
approved products.” (Id. ¶ 26.) In addition, LPD asked if “it would be possible to get a letter of
intent for the collaboration.” (Id.) Defendants thought “a letter of intent [would be] perfect” and
agreed to “work on putting some of this into a document with the purpose of this along with
details.” (Id. ¶ 27 (alterations omitted).)
On January 13, 2014, LPD informed Defendants that it was going to begin creating
samples from the Classics Capsule design proposal. (Id. ¶ 29.) On February 25, 2014, LPD sent
Defendants “a concept proposal for the Collaboration Capsule.” (Id. ¶ 33.) By March of 2014,
Defendants had not responded, and LPD followed up to get Defendants’ feedback regarding the
Collaboration Capsule and a letter of intent. (Id. ¶ 34.) A week later, Defendants replied, stating
that they approved of the designs for the Collaboration Capsule and that “[t]he letter of intent is a
work in progress” due to some “development[al] boundaries.” (Id. ¶ 35.) Defendants also
provided “some key next steps,” which included finalization of the “[l]etter of intent.” (Id.)
LPD then asked how the parties would divide or allocate the “sales and profits,” to which
Defendants responded that the products from the Classics Capsule would be provided to the
NCAA teams at no cost. (Id. ¶¶ 36–37.) Defendants further stated that their licensed apparel
division would purchase the Collaboration Capsule materials related to the NCAA teams, the
“royalties [from those sales] would go to the schools,” and the “capsule collection profits would
likely be primarily profits to LPD” because Defendants’ products were mainly “on court school
products.” (Id. ¶ 37.) Defendants also stated that the details of the collaboration would be
finalized and confirmed “once the mission statement is complete.” (Id.) In response, LPD asked
5
that Defendants “just let [LPD] know the specifics and that everything is confirmed once
[Defendants] know[] for sure.” (Id. ¶ 38.)
After beginning to make arrangements to prepare samples of products for both capsules,
LPD contacted Defendants to determine who would cover the costs of producing the samples and
to specify the location of the manufacturing for the final products. (Id. ¶¶ 39, 41.) Defendants
gave LPD a “budget code” to pay for the production of the samples and stated that the final
products would be manufactured in Defendants’ facilities. (Id. ¶¶ 40, 42.) Because LPD’s
“pattern-and-sample maker” refused to accept Defendants budget code to cover the sample
production costs, LPD paid the costs and sought reimbursement from Defendants. (Id. ¶ 47.)
On June 12, 2014, Defendants notified LPD that there was a “large re-alignment within
[its] group,” [placing] many of [Defendants’] projects . . . on hold.” (Id. ¶ 50.) Nevertheless,
Defendants told LPD that it wanted to finalize and launch the collaboration and instructed LPD
to do the following: (1) send the “art” from the capsules for Defendants to review, (2) send
information regarding the Classics Capsule for Defendants’ “teams” to “agree and sign off,” and
(3) keep any information regarding the teams involved in the collaboration confidential. (Id.)
Defendants also agreed to reimburse the sample production costs and told LPD that further
details regarding the collaboration should be handled in “the next few weeks.” (Id.) As to the
prices for the collaboration products, LPD informed Defendants that they could not “pin down
exact[] [pricing] since it depends on production (specifically whether LPD is producing the
pieces here or at [Defendants’] facilities abroad and how many units . . . are ordered.”). (Id. ¶ 51
(alterations omitted).) LPD also requested “some sort of confirmation that the collaboration . . .
will be happening.” (Id.) Defendants responded that “the collaboration would only be
confirmed once [Defendants] were ‘100% on board’” and could “dedicate more funding for the
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collaboration.” (Id. ¶ 52.)
The following week, LPD followed up, again asking about the location of the
manufacturing and also sending Defendants its final design proposal for the collaboration.
(Id. ¶ 53.) Defendants responded that “upper management approved the designs” and gave LPD
“‘permission to move forward’ with the collaboration.” (Id. ¶ 54.) Defendants subsequently sent
LPD sample products that it produced based on the Classics Capsule and allowed LPD to pitch
products from both capsules to potential buyers. (Id. ¶¶ 56–57.) Thereafter, LPD notified
Defendants that its buyers were interested in the products and inquired as to the status of the
reimbursement for the sample production costs it had incurred. (Id. ¶¶ 58–59.) Defendants
expressed their intent to reimburse the sample production costs, noted that they were having a
meeting soon to discuss “a marketing budget and promotional plan,” and stated that they had
“enough signoff to continue to push through and continue on with the collab[oration].” (Id. ¶ 60
(alterations omitted).) During a subsequent telephone call, LPD informed Defendants it would
soon begin producing “marketing materials” to promote the collaboration. (Id. ¶ 63.)
On September 8, 2014, LPD began selling women’s clothing items from the
collaboration.4 (Id. ¶ 69.) LPD also secured promotional publications with several online and
print media outlets and continued to promote the collaboration in various places. (Id. ¶¶ 69, 72–
73, 76.) As part of its promotion efforts, LPD created a “provocative” marketing video for the
Collaboration Capsule. (Id. ¶ 76.) In November of 2014, V Magazine reached out to LPD,
seeking to secure an exclusive feature of the Collaboration Capsule. (Id. ¶ 77.) LPD agreed.
(Id. ¶ 78.) After V Magazine published the feature, a representative from Defendants called one
4
It is unclear from the Complaint whether the sales were from the Classics Capsule, the
Collaboration Capsule, or both.
7
of V Magazine’s senior editors and told her that the collaboration was “illegitimate.” (Id. ¶¶ 79–
80.) As a result, V Magazine withdrew the feature. (Id. ¶ 82.)
After getting in touch with the representative who had contacted V Magazine, LPD
provided him with information about Defendants’ personnel through whom the collaboration had
been taking place. (Id. ¶¶ 83–84.) LPD also reached out to their contacts at Defendants’
company, seeking clarification of the basis for the statement made by Defendants’ representative
to V Magazine. (Id. ¶ 85.) Defendants responded that the promotional material regarding the
collaboration “took another route” than what the parties had discussed and “raised some flags”
with its public relations team. (Id. ¶ 86.) Defendants also told LPD that the executive who
approved the collaboration was no longer with the company and while they “did provide initial
green lights to proceed, . . . all content needed to be approved by [Defendants’] higher ups.”
(Id.) LPD expressed its confusion and sent Defendants copies of all the materials it had
regarding the collaboration. (Id. ¶ 87.) Defendants then told LPD that the “products are good to
go” but the promotional video could not be shown anymore and any sales from the Classics
Capsule had to be placed on hold because it could cause legal issues with the NCAA teams.
(Id. ¶ 88.)
LPD continued to promote and sell items from the Collaboration Capsule but, in January
of 2015, a buyer refused to accept delivery and pay for the items because he doubted the
legitimacy of the collaboration. (Id. ¶¶ 90, 94–95.) To resolve the issue, LPD requested that
Defendants send the buyer a letter confirming the collaboration’s legitimacy. (Id. ¶ 96.)
Defendants sent the letter but the buyer requested additional assurance, and LPD requested
further confirmation of the collaboration. (Id. ¶¶ 97–99.)
8
In May of 2015, Defendants sent LPD a “back-dated licensing agreement” dated June 1,
2014, which provided that LPD had the right to “use the [A]didas name and the Three-Stripes
trademark” for both capsules “provided LPD paid 10% royalties” to Defendants. (Id. ¶ 100.)
The proposed licensing agreement also sought to “terminate LPD’s right to manufacture and sell
pieces from the Classics and Collaboration Capsules” as of May 1, 2015. (Id.) LPD refused to
sign the agreement and again requested reimbursement for the sample production costs. (Id.
¶¶ 101–02.) Defendants threatened to sue LPD for trademark infringement. (Id. ¶ 102.)
b. Procedural background
Based on the foregoing, LPD filed the Complaint in this action, bringing claims for, inter
alia, breach of contract and seeking declaratory relief pertaining to disputes regarding its use of
Defendants’ trademarks. (Id. ¶¶ 1, 104–26.) After Defendants moved to dismiss and LPD
moved for partial summary judgment, the Court referred both motions to Judge Mann. (Order
dated Apr. 6, 2016.)
As relevant here, Judge Mann recommended that the Court dismiss the breach of contract
claim, finding that LPD’s allegations failed to show the formation of a contract. (R&R 21–25.)
Judge Mann also recommended that the Court dismiss LPD’s trademark abandonment claims
because, even assuming that Defendants gave LPD a license to use their trademarks, Defendants
exercised sufficient control over LPD’s use of their trademarks. (Id. at 28–30.)
LPD objected to the R&R, arguing that Judge Mann erred in recommending dismissal of
the breach of contract claim because: (1) neither party expressed an intention not to be bound
absent a formalized agreement; (2) the parties abandoned any intention to formalize an
agreement; (3) the absence of a formal agreement does not preclude finding that the parties
formed a contract; (4) the parties agreed on the “material terms” of the contract and New York
9
law gap-fills any terms that were not agreed upon; and (5) Defendants’ conduct “expressly
recognized” the existence of a contract. (Pl. Obj. 22–34, 37–42.) LPD also argued that Judge
Mann erred because Defendants “expressly authorized” LPD to use Defendants’ trademarks and
Defendants granted LPD a “naked license” because they never inspected the quality of the
collaboration merchandise. (Pl. Obj. 42–44.) Because LPD objected to Judge Mann’s
recommendations as to LPD’s breach of contract and trademark abandonment claims, the Court
reviewed Defendants’ motion as to those claims de novo. See LPD, 2017 WL 1162181, at *4,
*6–14.
In the March 2017 Decision, the Court dismissed LPD’s breach of contract claim because
LPD’s allegations failed to establish the existence of a binding contract between LPD and
Defendants. See id. at *6–13. Because the parties never executed a formal written contract, the
Court analyzed whether the parties had entered either a Type I or Type II preliminary agreement.
See id. The Court explained that under Second Circuit law:
to determine if an agreement is a Type I preliminary agreement
[courts must consider] (1) whether there is an expressed reservation
of right not to be bound in the absence of a writing; (2) whether there
has been partial performance of the contract; (3) whether all the
terms of the alleged contract have been agreed upon; and (4) whether
the agreement at issue is the type of agreement that is usually
committed to writing, . . . [and] to determine if an agreement is a
Type II preliminary agreement [courts must consider] (1) whether
the intent to be bound is revealed by the language of the agreement;
(2) the context of the negotiations; (3) the existence of open terms;
(4) partial performance; and (5) the necessity of putting the
agreement in final form, as indicated by the customary form of such
transactions.
Id. at *7–8 (quoting Vacold LLC v. Cerami, 545 F.3d 114, 124 & n.2 (2d Cir. 2008)). The Court
found that LPD failed to establish the existence of a contract because:
The two most important factors — intent of the parties and open
material terms — weigh heavily in Defendants’ favor, the context of
the negotiations also weighs in Defendants’ favor, partial
10
performance weighs slightly in [LPD’s] favor, and whether the
agreement is customarily reduced to writing does not weigh in favor
of either party.
Id. at *13. The Court also dismissed LPD’s trademark abandonment claim because:
[LPD’s] primary argument is that Defendants failed to physically
inspect the final merchandise produced. The law, however, does not
require physical inspection of products; it requires [LPD] to show
that Defendants exercised no control over the nature or quality of
the goods or services provided in connection with the mark.
Id. at *14 (citation and internal quotation marks omitted).
II. Discussion
a. Standard of review
The standard for granting a motion for reconsideration is strict, and “[r]econsideration
will generally be denied unless the moving party can point to controlling decisions or data that
the court overlooked — matters, in other words, that might reasonably be expected to alter the
conclusion reached by the court.” Cedar Petrochem., Inc. v. Dongbu Hannong Chem. Co., Ltd.,
628 F. App’x 793, 796 (2d Cir. 2015) (quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257
(2d Cir. 1995)); see also Oparah v. N.Y.C. Dep’t of Educ., 670 F. App’x 25, 26 (2d Cir. 2016)
(“The standard for granting a motion to reconsider ‘is strict, and reconsideration will generally
be denied unless the moving party can point to controlling decisions or data that the court
overlooked.’” (quoting Shrader, 70 F.3d at 257)); see also Local Civ. R. 6.3 (The moving party
must “set[] forth concisely the matters or controlling decisions which counsel believes the Court
has overlooked.”).
It is thus well settled that a motion for reconsideration is “not a vehicle for relitigating old
issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise
taking a ‘second bite at the apple.’” Salveson v. JP Morgan Chase & Co., 663 F. App’x 71, 75–
76 (2d Cir. 2016) (quoting Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d
11
Cir. 2012)). A motion for reconsideration is “neither an occasion for repeating old arguments
previously rejected nor an opportunity for making new arguments that could have previously
been made.” Salveson v. JP Morgan Chase & Co., 166 F. Supp. 3d 242, 248 (E.D.N.Y. 2016)
(quoting Simon v. Smith & Nephew, Inc., 18 F. Supp. 3d 423, 425 (S.D.N.Y. 2014)), aff’d,
663 F. App’x 71 (2d Cir. 2016). In order to prevail on a motion for reconsideration, “the moving
party must demonstrate that the Court overlooked controlling decisions or factual matters that
were put before the Court on the underlying motion.” Lichtenberg v. Besicorp Grp. Inc., 28 F.
App’x 73, 75 (2d Cir. 2002) (citations and internal quotation marks omitted); see also Stoner v.
Young Concert Artists, Inc., No. 11-CV-7279, 2013 WL 2425137, at *1 (S.D.N.Y. May 20, 2013)
(“A motion for reconsideration is an extraordinary remedy, and this Court will not reconsider
issues already examined simply because [a party] is dissatisfied with the outcome of his case. To
do otherwise would be a waste of judicial resources.” (alteration in original)).
b. Reconsideration
LPD argues that the Court should reconsider the March 2017 Decision as to LPD’s
breach of contract and trademark abandonment claims. (Pl. Recons. Mem. 1–26.) The Court
separately addresses LPD’s arguments as to each claim.
i.
Breach of contract claim
LPD argues that the Court erred in finding that the parties lacked a binding contract and,
therefore, in dismissing its breach of contract claims because the Court: (1) resolved disputed
issues of fact, (2) required LPD to establish that Defendants intended to be bound absent a
binding agreement, when such a burden was Defendants’, and (3) failed to assess all the
allegations and draw all reasonable inferences in LPD’s favor. (Pl. Recons. Mem. 1–25.) These
arguments are meritless.
12
1. The Court only addressed undisputed facts and decided issues
of law
LPD argues that the Court resolved disputed issues of fact because “the question of
whether a contract has been formed is a question of fact.” (Pl. Recons. Mem. 3–5 (alterations
and internal quotation marks omitted) (citing Vacold, 545 F.3d at 123)).
In Vacold LLC v. Cerami, the Second Circuit addressed whether the parties entered a
binding contract, where the parties failed to execute a formal written contract. 545 F.3d at 123.
The Court explained that when presented with issues of contract formation, “whether a binding
agreement exists is a legal issue, not a factual one.” Id. (citing Shann v. Dunk, 84 F.3d 73, 77 (2d
Cir. 1996)). The Court further explained that in cases where the parties “do[] not present
disputes about whether particular communications were sent, whether particular words were
uttered, or whether the parties entered into prior oral agreements,” then “nothing remains for a
jury to resolve[;] [t]he dispute instead, is about the legal significance of those facts.” Id. In
addition, the Court explained that “where the evidentiary foundation for determining the
formation of the parties’ contract is either undisputed or consists of writings, contract formation
is a question of law.” Id. (alterations and internal quotation marks omitted). The Court declined
to accept the unqualified statement made by the First Circuit and quoted by LPD, which states
that “so long as the evidence does not point unerringly in a single direction but is capable of
supporting conflicting inferences, the question of whether a contract has been formed . . . is a
question of fact.” Id. (quoting Cellin Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1, 7
(1st Cir. 1994)); (Pl. Recons. Mot. 3 (quoting same).). The Court proceeded to determine
whether the parties formed a binding contract because “the evidentiary foundation consist[ed]
entirely of writings.” Id.
Here, the Court looked only to the Complaint, which alleges that the parties completed a
13
binding contract and supports the allegations by reciting email exchanges between the two
parties. See LPD, 2017 WL 1162181, at *1–5; (Compl. ¶¶ 15–103). The Court assumed the
truth of the factual allegations in the Complaint and determined that LPD failed to establish that
the parties entered a binding contract. See LPD, 2017 WL 1162181, at *1 n.1, *6–13. The Court
therefore did not resolve disputed issues of fact; the Court only resolved an issue of law based on
the facts LPD alleged in the Complaint. See Vacold, 545 F.3d at 123; see also Brown v. Cara,
420 F.3d 148, 153 (2d Cir. 2005) (holding that “where a question of intention is determinable by
written agreements, the question is one of law”); cf. Consarc Corp. v. Marine Midland Bank,
N.A., 996 F.2d 568, 576 (2d Cir. 1993) (holding, in a case involving disputed allegations as to
whether oral statements aided in or created a binding contract, that contract formation was “a
question of fact to be presented for resolution of the factfinder at trial” (citations omitted)).
2. The Court applied the controlling law correctly in determining
that LPD failed to establish Defendants’ intent to be bound
absent a formal written contract
LPD argues that the Court applied controlling law incorrectly by placing the burden on
LPD to establish that the parties intended to be bound absent a formal written contract because
Defendants’ “bear[] the burden of proving an ‘express’ reservation of the right not to be bound
absent the execution of [a] formal agreement.” (Pl. Recons. Mot. 5.)
To defeat a motion to dismiss, a plaintiff’s complaint must set forth plausible allegations
that state a claim for relief, which entails setting forth allegations to support each element of the
alleged legal violation and applies to “all civil actions and proceedings in the United States
district courts.” See Ashcroft v. Iqbal, 556 U.S. 662, 678–80, 684 (2009) (citation omitted).
Stating a breach of contract claim requires a plaintiff to establish the parties’ intent to be bound
to an agreement. Vacold, 545 F.3d 123–25; Brown, 420 F.3d at 153–54. If a plaintiff’s
allegations establish that a preliminary agreement constitutes a binding contract, a defendant may
14
nevertheless defeat a breach of contract claim by pointing to language in the agreement that
establishes that “the parties will not be bound in the absence of a further, definitive written
agreement.” Vacold, 545 F.3d at 125; see also Adjustrite Sys. Inc. v. GAB Bus. Servs., Inc., 145
F.3d 543, 550 (2d Cir. 1998). Importantly, however, “[a] reservation of [the] right not to be
bound presumes that there is some expression of commitment or agreement in the writing to
begin with,” and therefore, “[t]he fact that [an] [a]greement contains no express reservation of
the right not to be bound is not dispositive.” Adjustrite, 145 F.3d at 550 n.7. On the other hand,
“where the parties contemplate further negotiations and the execution of a formal instrument, a
preliminary agreement does not create a binding contract.” Id. at 548 (citing Shann, 84 F.3d at
77). “[A] party that wishes to be bound can very easily protect itself by refusing to accept
language that shows an intent not to be bound.” Miller v. Tawii, 165 F. Supp. 2d 487, 492
(S.D.N.Y. 2001) (emphasis in original); see also Adjustrite, 145 F.3d at 550 n.7.
As discussed in the March 2017 Decision, the allegations in the Complaint fail to
establish that the parties intended to be bound because during the parties’ communications,
Defendants repeatedly expressed their intention to complete a formal written agreement, which
the parties never completed. LPD, 2017 WL 1162181, at *8–9. Because LPD points to no
controlling law that the Court overlooked in analyzing whether the parties intended to be bound
and only reargues its previously rejected position on the parties’ intent to be bound,
reconsideration is unwarranted.5 See Salveson, 663 F. App’x at 75–76 (holding that a motion for
5
LPD makes an additional argument regarding the Court’s analysis of the parties’ intent
to be bound, asserting that “LPD has not alleged that the . . . emails constituted preliminary
manifestations of assent to contract formation that created binding obligations, [but]
[Defendants] claim[] that those [e]mails prove that it did not intend to be contractually bound.”
(Pl. Recons. Mem. 7.) This argument directly contradicts LPD’s prior assertions. (See Compl. ¶
105 (alleging that the “written exchanges [between] LPD and adidas formed a contract”); Pl.
15
reconsideration is “not a vehicle for relitigating old issues, presenting the case under new
theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple”
(citation and internal quotation marks omitted)); Cedar Petrochem., 628 F. App’x at 796 (holding
that “[r]econsideration will generally be denied unless the moving party can point to controlling
decisions or data that the court overlooked” (citation omitted)).
3. The Court assessed all relevant allegations and drew all
reasonable inferences in LPD’s favor
LPD argues that the Court overlooked relevant allegations and failed to construe them in
its favor in determining that Defendants failed to express an intent to be bound absent a formal
written contract. (Pl. Recons. Mot. 8–14.) The Court has reviewed LPD’s arguments, the
allegations in the Complaint and the Court’s analysis finding that the Defendants lacked the
intent to be bound absent a formal agreement, and LPD points to no relevant allegations the
Court overlooked. While LPD may disagree with the Court’s determination of the legal
significance of its allegations, reconsideration is unwarranted based on LPD’s disagreement with
the Court’s determination. See Salveson, 663 F. App’x at 75–76; Cedar Petrochem., 628
F. App’x at 796.
Accordingly, the Court declines to reconsider the March 2017 Decision as to LPD’s
breach of contract claim.6
Obj. 24–25 (arguing that the parties email “exchanges confirmed the [p]arties’ agreement” and
“proceed[ed] to formalize their contract via email”); Pl. Recons. Mem. 11 (arguing that “the[]
[email] exchanges illustrate that the parties intended to finalize their contract, if at all, via
email”).) Because other than the emails, there is no basis to find that the parties entered a
binding preliminary agreement, the Court rejects LPD’s argument.
6
LPD makes three additional arguments for reconsideration. First, LPD argues that the
Court erred in finding that the partial-performance factor did not weigh heavily in LPD’s favor.
(Pl. Recons. Mem. 15–18.) In the March 2017 Decision, the Court found that the partialperformance factor weighed slightly in LPD’s favor. LPD, 2017 WL 1162181, at *9. Because
16
ii. Trademark abandonment claim
LPD’s argues that the Court should reconsider its dismissal of its trademark abandonment
claim simply because LPD believes the Court misinterpreted the district court’s findings in
Hawaii Pacific Apparel Group Incorporated v. Cleveland Browns Football Company LLC, 418
F. Supp. 2d 501, 506–08 (S.D.N.Y. 2006). (Pl. Recons. Mem. 25–26.) Although the Court found
LPD’s arguments merely repeat its prior arguments, (see Pl. Obj. 31–33, 39–40), lack any
explanation of why assigning more weight to the partial-performance factor would have changed
the Court’s decision, and fail to point to any relevant facts or controlling law the Court
overlooked, reconsideration is unwarranted. See Salveson v. JP Morgan Chase & Co.,
663 F. App’x 71, 75–76 (2d Cir. 2016) (holding that a motion for reconsideration is “not a
vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on
the merits, or otherwise taking a ‘second bite at the apple’” (citation omitted)); Cedar
Petrochem., Inc. v. Dongbu Hannong Chem. Co., Ltd., 628 F. App’x 793, 796 (2d Cir. 2015)
(holding that “[r]econsideration will generally be denied unless the moving party can point to
controlling decisions or data that the court overlooked” (citation omitted)).
Second, LPD argues that the Court misapplied the law in assessing the significance of the
material open terms, (Pl. Recons. Mem. 19–23), but because LPD’s arguments on the issue
merely repeat the arguments the Court previously rejected, (see Pl. Obj. 30–31; LPD, 2017 WL
1162181, at *10–11), and do not point to any relevant facts or controlling law the Court
overlooked, reconsideration is inappropriate, see Salveson, 663 F. App’x at 75–76; Cedar
Petrochem., 628 F. App’x at 796.
Finally, LPD argues that the Court erred in finding that the customarily-reduced-towriting factor weighed in neither parties’ favor because the alleged agreement “was a first-of-itskind arrangement, it cannot be said that the agreement was one that is customarily reduced to
writing.” (Pl. Recons. Mem. 23; see also Pl. Obj. 28 (arguing same).) As the Court noted in the
March 2017 Decision:
In determining whether an agreement is of the type that parties
customarily reduce to writing, courts in this Circuit consider: (1) the
size and complexity of the transaction; (2) the duration of the
contract; (3) the subject matter of the contract; and (4) the amount
of money to be exchanged.
LPD, 207 WL 1162181, at *11 (citing Rubenstein v. Clark & Green, Inc., 395 F. App’x. 786, 790
(2d Cir. 2010)). The Court found that because LPD “fail[ed] to set forth any allegations
pertaining to the size and complexity of the contract, the duration of the contract or the amount
of money at issue, . . . the Court is unable to evaluate ‘whether the agreement is of a type usually
reduced to writing’ due to the lack of information regarding the alleged agreement.” See id. at
*12 (citing Vacold LLC v. Cerami, 545 F.3d 114, 125 (2d Cir. 2008)); see also Vacold, 545 F.3d
at 125 (“[W]hether the agreement is of the type usually reduced to writing, . . . does not aid our
analysis because we cannot discern what is usual in this context.”). LPD points to no controlling
authority undermining the Court’s decision or any facts the Court overlooked that are relevant to
determining if an agreement should customarily be reduced to writing.
17
Hawaii Pacific “instructive” and disagrees with LPD’s assertion that the Court misinterpreted the
case, Hawaii Pacific was only one of a number of cases cited in support of the finding that
LPD’s trademark abandonment claims fails because LPD “faces a high burden of proof” and “the
record demonstrates that Defendants exercised control over [LPD’s] use of Defendants’
trademarks.” LPD, 2017 WL 1162181, at *13–14 (citing Gen. Motors Corp. v. Gibson Chem. &
Oil Corp., 786 F.2d 105, 110 (2d Cir. 1986); Fendi Adele S.R.L. v. Burlington Coat Factory
Warehouse Corp., 689 F. Supp. 2d 585, 596 (S.D.N.Y. 2010); Patsy’s Italian Rest., Inc. v. Banas,
508 F. Supp. 2d 194, 212 (E.D.N.Y. 2007); Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 293 F.
Supp. 892, 917–18 (S.D.N.Y. 1968)). Reconsideration is therefore unwarranted as LPD points to
no relevant facts or controlling law the Court overlooked. See Salveson, 663 F. App’x at 75–76;
Cedar Petrochem., 628 F. App’x at 796.
c.
Certification to appeal
LPD argues that if the Court declines to grant its motion for reconsideration, the Court
should “enter a final judgment dismissing LPD’s breach-of-contract and declaratory-judgment
causes of action,” allowing for appeal of the issue of contract formation. (Pl. Recons. Mem. 2
n.1.) Defendants oppose the request, arguing that certification is inappropriate because the
remaining quasi-contract, i.e. promissory estoppel, and unjust enrichments claims are
“‘inherently inseparable’ from and ‘inextricably interrelated’” with the dismissed claims. (Defs.
Mem. in Opp’n to Pl. Recons. Mot. (“Defs. Opp’n.”) 7–9, Docket Entry No. 63.)
Certification pursuant to Rule 54(b) of the Federal Rules of Civil Procedure is a
“permissive, not mandatory, mechanism to be ‘exercised in the interests of sound judicial
administration.’” B.V. v. Allergan, Inc., No. 12-CV-2650, 2016 WL 3390802, at *2 (S.D.N.Y.
June 14, 2016) (citing Curtiss-Wriqht Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980)). Given the
18
“historic federal policy against piecemeal appeals,” “the court’s power to enter . . . a final
judgment [should] be ‘exercised sparingly.’” Curtiss-Wright Corp., 446 U.S. at 8; Harriscom
Svenska AB v. Harris Corp., 947 F.2d 627, 629 (2d Cir. 1991)). Accordingly, certification is only
appropriate where there is “no just reason for delay.” Fed. R. Civ. P. 54(b); Cullen v. Margiotta,
618 F.2d 226, 228 (2d Cir. 1980).
Here, the dismissed and pending claims are “closely related and stem from essentially the
same factual allegations.” Cullen, 618 F.2d at 228; NYSA Series Tr. v. Dessein, 631 F. App’x 54,
56 (2d Cir. 2015). As Plaintiff acknowledges, a determination of an enforceable contract on
appeal would “moot” the remaining claims because they “aris[e] out of the same subject matter.”
(See Pl. Reply to Defs. Opp’n. (“Pl. Reply”) 15, Docket Entry No. 64.) (“[I]f [the Second
Circuit] held that a contract was formed as a matter of law, LPD’s quasi-contract and unjust
enrichment claims would be mooted.”); see also Digizip.com, Inc. v. Verizon Servs. Corp., 139 F.
Supp. 3d 670, 682 (S.D.N.Y. 2015) (dismissing unjust enrichment claims that were “duplicative”
of claims based on breach of enforceable contracts).7 The quasi-contract, unjust enrichment, and
breach of contract claims are also all “closely related” because they require similar factual and
legal inquiries. See Adiel v. Coca-Cola Bottling Co. of New York, No. 95-CV-0725, 1995 WL
733587, at *1 (S.D.N.Y. Dec. 11, 1995) (“It is possible, since [the promissory estoppel claim] is
7
Plaintiff also fails to allege “unusual hardship” justifying certification. See Adrian v.
Town of Yorktown, 210 F. App’x 131, 133 (2d Cir. 2006) (citing Hogan v. Consol. Rail Corp.,
961 F.2d 1021, 1028 (2d Cir. 1992)). Plaintiff argues that further discovery will be required
should the Second Circuit reverse the Court’s earlier decision on contract formation. “However,
such ‘hardships are inherent in every denial of Rule 54(b) certification, and hardly rise to the
level of hardships that warrant immediate appeal.’” Negrete v. Citibank, N.A., No. 15-CV-7250,
2017 WL 2963494, at *2 (S.D.N.Y. July 11, 2017) (citation omitted). “Moreover, given the
factual overlaps discussed, . . . it is not clear that the parties’ discovery would be ‘considerably
more extensive’ than would occur at present were Plaintiff[] to prevail on appeal.” Id. (citation
omitted).
19
closely related to the dismissed contract claims and stems from the same factual allegations, that
the trial of the [promissory estoppel claim] could bring to light facts that would have a bearing
on the propriety of [the dismissal] of the other claims.” (alterations in original)) (citing
Harriscom Svenska AB Harris Corp., 947 F.2d at 630); see also Negrete v. Citibank, N.A., No.
15-CV-7250, 2017 WL 2963494, at *2 (S.D.N.Y. July 11, 2017) (denying certification because
dismissed and remaining claims arose out of the same factual circumstances, even if implicating
different legal questions). Indeed, as Plaintiff recognizes, litigants often plead these claims in the
alternative because their viability are interdependent on the existence or lack thereof a single
element — an enforceable contract. (Pl. Mem. in Opp’n to Def. Mot. to Dismiss (“Pl. 12(b)(6)
Opp’n”) 2, Docket Entry No. 23 (“[E]ven if the Court determines that the . . . contract is
unenforceable for indefiniteness, [Plaintiff] is still entitled to recover its damages under quasicontractual theories of liability.”)); Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of
New Jersey, Inc., 448 F.3d 573, 586–87 (2d Cir. 2006) (pleading unjust enrichment in the
alternative to contract claims); Patchen v. Gov’t Emp’r Ins. Co., 759 F. Supp. 2d 241, 250
(E.D.N.Y. 2011) (noting that “a plaintiff may proceed in the alternative on both contract
and quasi-contract claims” where a genuine dispute exists as to the existence of a contract).
Moreover, the Court’s “disposition of one or more of the remaining claims could render [the
Second Circuit’s] opinion advisory or moot.” Ginett v. Computer Task Grp., Inc., 962 F.2d 1085,
1095 (2d Cir. 1992). Because the closely related nature of all the claims, determinations of fact
or law in resolving the pending claims may adversely impact the viability of a contract claim,
thereby mooting an appellate decision on contract formation. See Adiel, 1995 WL 733587, at *1;
see also In re Bayou Hedge Fund Litig., No. 06-CV-3026, 2007 WL 2363622, at *4 (S.D.N.Y.
Aug. 16, 2007) (finding that an adverse finding common to all the claims would render appellate
20
review of dismissed claims advisory or moot).
III. Conclusion
For the foregoing reasons, the Court denies LPD’s motion for reconsideration and
declines to certify the contract formation issue for appeal to the Second Circuit.
SO ORDERED:
s/ MKB
MARGO K. BRODIE
United States District Judge
Dated: December 11, 2017
Brooklyn, New York
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