Halo Optical Products, Inc. et al v. Liberty Sport, Inc.
Filing
45
MEMORANDUM-DECISION AND ORDER denying 37 Motion for Modification of the Preliminary Injunction to require security from Plaintiffs: The Court hereby ORDERS that this Court's Memorandum-Decision and Order dated June 24, 2014 (Dkt.No. 34) is he reby amended to indicate that Plaintiffs are not required to post a bond; and the Court further ORDERS that Defendant's motion for modification of the preliminary injunction to require security from Plaintiffs is DENIED; and the Court further ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 7/23/2014. (ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
HALO OPTICAL PRODUCTS, INC. and HALO
SPORTS AND SAFETY, INC.,
Plaintiffs/Counter Defendants,
vs.
6:14-cv-282
(MAD/TWD)
LIBERTY SPORTS, INC., formerly known as
LIBERTY OPTICAL MANUFACTURING
COMPANY, INC.,
Defendant/Counter Claimant.
____________________________________________
APPEARANCES:
OF COUNSEL:
MCNAMEE, LOCHNER, TITUS &
WILLIAMS, P.C.
677 Broadway
Albany, New York 12207
Attorneys for Plaintiffs/Counter Defendants
G. KIMBALL WILLIAMS, ESQ.
LERNER, DAVID, LITTENBERG,
KRUMHOLZ & MENTLIK, LLP
600 South Avenue West
Westfield, New Jersey 07090
Attorneys for Defendant/Counter Claimant
GREGG A. PARADISE, ESQ.
RAYMOND B. CHURCHILL, JR., ESQ.
ROBERT B. HANDER, ESQ.
O'CONNELL & ARONOWITZ, P.C.
54 State Street
9th Floor
Albany, New York 12207
Attorneys for Defendant/Counter Claimant
JEFFREY J. SHERRIN, ESQ.
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
Plaintiffs Halo Optical Products, Inc. and Halo Sports and Safety, Inc. (collectively,
"Halo") commenced this action on March 13, 2014, alleging trademark infringement and breach
of contract by Defendant Liberty Sports, Inc. ("Liberty"). See Dkt. No. 1. In a MemorandumDecision and Order dated June 24, 2014 ("June 24 Order"), this Court granted Halo's motion for a
preliminary injunction, enjoining Liberty during the pendency of this action from "(1) ordering,
purchasing, marketing or selling REC SPECS eyewear, or sports protective eyewear that
competes with REC SPECS eyewear, or (2) if Liberty does order, purchase, market or sell REC
SPECS eyewear, or sports protective eyewear that competes with REC SPECS eyewear, that it do
so in accordance with the parties' agreements, and the custom and practice implementing them as
discussed herein[.]" Dkt. No. 34 at 31 (emphasis omitted). Currently before the Court is
Defendant's motion for modification of the preliminary injunction to require security from Halo.
See Dkt. No. 37.
II. BACKGROUND
The Court assumes the parties' familiarity with the background of this case, as detailed in
the June 24 Order, and will discuss only those allegations and facts relevant to disposition of the
pending motion.
III. DISCUSSION
In support of its current motion, Liberty argues that pursuant to Fed. R. Civ. P. 65(c), the
Court must require Halo to post a bond in an amount sufficient to cover any losses Liberty will
sustain during the pendency of this lawsuit should it later be found that Liberty was wrongfully
enjoined. See Dkt. No. 37-1 at 2. Liberty asserts that since it is not currently paying Halo for the
markups that Halo charges upon inspection of the products, and the injunction requires Liberty to
pay said markups, Halo should post a bond in the amount of $820,780.00 to cover the markup
2
cost that Liberty will pay Halo throughout this action. See id. at 3-4. Liberty made no such claim
during oral argument or in its papers before the Court issued a preliminary injunction, and it was
only after the injunction was issued that Liberty indicated that it sought a bond specifically to
cover the markups.
Rule 65(c) provides that "the court may issue a preliminary injunction or a temporary
restraining order only if the movant gives security in an amount that the court considers proper to
pay the costs and damages sustained by any party found to have been wrongfully enjoined or
restrained." Fed. R. Civ. P. 65(c). The purpose of the bond is to "assure[] the enjoined party that
it may readily collect damages from the funds posted in the event that it was wrongfully enjoined,
. . . without further litigation and without regard to the possible insolvency of the plaintiff."
Nokia Corp. v. InterDigital, Inc., 645 F.3d 553, 557 (2d Cir. 2011) (citation omitted). "Although
the rule is couched in mandatory language, the Second Circuit has held that 'the District Court is
vested with wide discretion in the matter of security,' and that it may be 'proper for the court to
require no bond where there has been no proof of likelihood of harm.'" Eastman Kodak Co. v.
Collins Ink Corp., 821 F. Supp. 2d 582, 590 (W.D.N.Y. 2011) (quoting Doctor's Assocs. v. Stuart,
85 F.3d 975, 985 (2d Cir. 1996)) (other citations omitted). "'[B]ecause, under Fed. R. Civ. P.
65(c), the amount of any bond to be given upon the issuance of a preliminary injunction rests
within the sound discretion of the trial court, the district court may dispense with the filing of a
bond.'" Stuart, 85 F.3d at 985 (quotation omitted).
In the present matter, Liberty has not sufficiently shown that it will face a likelihood of
harm in the absence of a bond. The harm that Liberty alleges is the required payment of markups
to Halo during the pendency of this action. See Dkt. No. 37-1 at 2. Although Liberty has recently
stopped paying Halo for markups, this Court found in the June 24 Order that Liberty paid Halo
3
markups from 1983 until January 2014. See Dkt. No. 34 at 21. Since Liberty paid this markup
cost for over thirty years pursuant to the parties' understanding of the agreements, and only
recently stopped (which the Court found was likely a breach of the parties' contract in the June 24
Order), continuing to pay the markup cost without security of a bond presents no harm to Liberty.
See Eastman Kodak Co., 821 F. Supp. 2d at 590 ("[a]ll that this injunction does is require [the
enjoined party] to continue to perform under the contract, as it has been doing for years. That
hardly constitutes a cognizable 'harm' to [the enjoined party]") (citation omitted); see also Rex
Medical L.P. v. Angiotech Pharmaceuticals (US), Inc., 754 F. Supp. 2d 616, 627 (S.D.N.Y. 2010)
("the 'damage' to [defendant] is nonexistent, because being forced to comply with contractual
obligations that a party voluntarily entered into is simply not the sort of 'damage' that is
compensable at law"). Moreover, this Court found in the June 24 Order that Halo is likely to
succeed on the merits on its breach of contract and trademark infringement claims, and if Halo
does succeed, Liberty will be required to pay the markup price. See Dkt. No. 34 at 15-27. Since
Liberty does not face a likelihood of harm in the absence of a bond, Halo is not required to post
one.
Accordingly, Liberty's motion for modification of the preliminary injunction to require
security from Halo is denied.
IV. CONCLUSION
After carefully reviewing the entire record in this manner, the parties' submissions and the
applicable law, and for the above-stated reasons, the Court hereby
4
ORDERS that this Court's Memorandum-Decision and Order dated June 24, 2014 (Dkt.
No. 34) is hereby amended to indicate that Plaintiffs are not required to post a bond;1 and the
Court further
ORDERS that Defendant's motion for modification of the preliminary injunction to
require security from Plaintiffs is DENIED; and the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision
and Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: July 23, 2014
Albany, New York
1
See Corning Inc. v. PicVue Electronics, Ltd., 365 F.3d 156 (2d Cir. 2004).
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?