JLM Couture, Inc. v. Gutman

Filing 482

MEMORANDUM ORDER denying 476 Motion for Reconsideration re 476 MOTION for Reconsideration re; 474 Order, Set Deadlines/Hearings, filed by Hayley Paige Gutman. For the foregoing reasons, Ms. Gutman's Motion for Reco nsideration is denied in its entirety. The parties' opening briefs regarding the issues on remand from the Second Circuit are due by March 29, 2024. This case remains referred to Magistrate Judge Cave for general pretrial management. This Memorandum Order resolves docket entry no. 476. SO ORDERED. (Signed by Judge Laura Taylor Swain on 3/28/2024) (vfr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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JLM COUTURE, INC.,
Plaintiff,
-v-

No. 20-CV-10575-LTS-SLC

HAYLEY PAIGE GUTMAN, et al.,
Defendants.
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MEMORANDUM ORDER
Before the Court is the motion of Defendant Hayley Paige Gutman (“Ms.
Gutman” or “Defendant”) for reconsideration of the Court’s March 1, 2024, Order Requesting
Additional Briefing and Modifying the Preliminary Injunction (docket entry no. 474 (the
“Order”)). (Docket entry no. 476 (the “Motion”).) Specifically, Ms. Gutman requests, pursuant
to Local Civil Rule 6.3, that the Court modify the Order to (a) lift the preliminary injunction
enforcing Paragraph 10(e) of the Contract 1 and (b) return the Accounts 2 to Ms. Gutman while
the Court considers the issues on remand. (Id. at 2-3.) JLM Couture Inc. (“JLM” or “Plaintiff”)
1

The “Contract” comprises the 2011 employment agreement (docket entry no. 14, Ex. 2),
as amended by the 2014 amendment extending that agreement through August 1, 2019
(id. Ex. 62), and the February 12, 2019, notice letter exercising Plaintiff’s option to
further extend Defendant’s employment term by three years through August 1, 2022 (id.
Ex. 66). “Paragraph 10(e)” refers to the provision of the Contract that reads: “In the
event that the Company files an application to register the Trademark or Trademarks,
Employee agrees that for a period of five years following termination of her employment,
she shall not be identified to the trade or consuming public as the designer, and her role
as designer shall not be used to promote the sale, of any goods in competition with goods
manufactured and sold by the Company.”

2

The “Accounts” are the Instagram account, created on or about April 6, 2012, and the
Pinterest account, created on November 3, 2011, that use the handle
“@misshayleypaige.” (See docket entry no. 471 (the “Second Circuit Opinion”) at 5.)

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has filed its opposition to the motion for reconsideration (docket entry no. 480 (“Pl. Mem.”)) and
Ms. Gutman filed a reply (docket entry no. 481 (“Reply”)). The Court has thoroughly reviewed
the parties’ submissions. For the following reasons, Ms. Gutman’s motion is denied in its
entirety.
BACKGROUND
As stated in the Order, the Court assumes the parties’ familiarity with the factual
background and procedural history of the case and adopts the findings of fact previously set forth
in its March 4, 2021, Memorandum Opinion and Order granting the Preliminary Injunction
(docket entry no. 109); June 2, 2021, Memorandum Opinion and Order clarifying the
Preliminary Injunction (docket entry no. 176); September 8, 2021, Memorandum Opinion and
Order finding Ms. Gutman in contempt of the Preliminary Injunction (docket entry no. 234);
February 14, 2022, Memorandum Opinion and Order Modifying the Preliminary Injunction
(docket entry no. 326); and March 14, 2023, Amended Opinion and Order Modifying the
Preliminary Injunction (docket entry no. 431). 3
DISCUSSION
“Reconsideration of a court’s previous order is an extraordinary remedy to be
employed sparingly in the interests of finality and conservation of scarce judicial resources.”
MPD Accessories B.V. v. Urban Outfitters, Inc., No. 12-CV-6501-LTS-KNF, 2014 WL
3439316, at *1 (S.D.N.Y. July 15, 2014) (internal quotation marks and citations omitted). To
prevail on a motion for reconsideration under Local Rule 6.3, the movant must point to an
“intervening change in controlling law, the availability of new evidence, or the need to correct a

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Ms. Gutman’s Motion did not take issue with the adoption of the factual background and
relevant procedural history in the Order.

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clear error or prevent manifest injustice.” Nguyen v. MaxPoint Interactive, Inc., No. 15-CV6880-LTS, 2017 WL 3084583, at *1 (S.D.N.Y. 2017) (quoting Virgin Atl. Airways Ltd. v. Nat’l
Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)). A motion for reconsideration does not
serve as “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.” Cohen v. New York
City Dep’t of Educ., No. 19-CV-3863-LTS-SDA, 2021 WL 2158018, at *2 (S.D.N.Y. May 26,
2021) (quoting Analytical Surv., Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012)).
To the contrary, reconsideration is not warranted “[u]nless 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. . . .” Id. (quoting Shrader v.
CSX Transp., Inc., 70 F.3d 255, 256 (2d Cir. 1995)).
Here, Ms. Gutman identifies no intervening change of controlling law warranting
reconsideration of the Order, nor does she identify any new evidence made available or identify
clear error by the Court. Instead, Ms. Gutman identifies a number of points of disagreement with
the Court’s analysis and application of the Second Circuit Opinion that “affirm[ed] in part and
vacate[d] in part the district court’s March 14, 2023, order modifying its preliminary injunction
and remand[ed] for further proceedings consistent with [its] opinion.” (Second Circuit Opinion
at 25.)
Application of Paragraph 10(e)
Ms. Gutman makes three arguments related to the Order’s modification of the
Preliminary Injunction to enjoin Ms. Gutman from violating Paragraph 10(e) of the Contract
pending the Court’s consideration of the reasonableness of the breadth and temporal scope of the
restriction on remand. The Court considers each in turn:

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First, Ms. Gutman cites the Second Circuit Opinion to argue that “she has been
subject to a non-compete for more than three years[,]” and that “[l]ocking an individual out of
the workforce through non-compete provisions or orders for more than three consecutive years is
not permissible under New York law.” (Motion at 2.) However, this argument obfuscates the
reality that (i) prior to July 31, 2022, Ms. Gutman’s employment had not terminated, and she was
being held to compliance with a different provision of the Agreement (see Second Circuit
Opinion at 7); (ii) “Paragraph 10(e) has been enforced as a post-employment non-compete since
August 1, 2022, i.e., for less than two years[;]” and (iii) “New York courts routinely enforce
reasonable non-competes for a period of two years or shorter.” (Order at 11 (citing Payment All.
Int’l, Inc. v. Ferreira, 530 F. Supp. 2d 477, 485 (S.D.N.Y. 2007)) (emphasis added).) In short,
Ms. Gutman’s argument regarding the length of the restriction does not justify reconsideration of
the Order.
Second, Ms. Gutman argues that “[b]ecause the Order reinstates [the] restriction,
without considering the reasonableness of this non-compete under New York law, it is not
consistent with the Second Circuit Opinion.” (Motion at 2.) The Court did, in fact, consider the
reasonableness of Paragraph 10(e) under New York law in its Order. (See Order at 9-12.) The
Court specifically analyzed the relevant “three-prong test” to assess the reasonableness of
Paragraph 10(e) and concluded that “the restrictive covenant, which, inter alia, prohibits
identification of Ms. Gutman as a designer in connection with competing goods, is not
unreasonable, overbroad or unduly burdensome” under that test. (Id. at 10-11.) The Court
further considered the length of the restriction in light of the Court’s ability to shorten or amend
a restrictive covenant under New York law. (Id. at 11-12.) Because the Court conducted the
analysis required at this juncture, Ms. Gutman’s argument cannot “reasonably be expected to

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alter the conclusion reached by the court” upon reconsideration. Cohen, 2021 WL 2158018, at
*2.
Third, Ms. Gutman argues that “harm to [Ms. Gutman] in reinstituting this relief
before giving full consideration to the issues on remand is too great” because “she is in a very
poor financial position” while, in contrast, “JLM is now in bankruptcy and does not appear to be
producing new Hayley Paige-branded products.” (Motion at 2-3.) Ms. Gutman, however, does
not argue that JLM has ceased to advertise or sell Hayley Paige-branded products. Therefore,
Ms. Gutman merely articulates a disagreement with the Court’s analysis of the potential harms
relevant to the reasonableness of the temporary enforcement of Paragraph 10(e). The Court
determined that (1) “JLM is likely to be able to establish that Ms. Gutman . . . could have an
unfair competitive advantage over JLM should she appeal to customers and prospective
customers to abandon JLM for another manufacturer[,]” and (2) notwithstanding the enforcement
of Paragraph 10(e), Ms. Gutman retains “the ability to continue to use her talents as an
uncredited designer of competitive goods or the (new) name and face of non-competing goods
during the restricted period.” (Order at 10-11.) In other words, Ms. Gutman’s argument fails to
“point to. . . data . . . that the court overlooked . . . that might reasonably be expected to alter the
conclusion reached by the court” and justify reconsideration. Cohen, 2021 WL 2158018, at *2.
In sum, Ms. Gutman’s request to reconsider the Court’s modification of the
Preliminary Injunction is denied.
Control of the Accounts
Ms. Gutman insists that, while the issues on remand are being resolved, she is
entitled to “sole and exclusive control” over the Accounts because “[t]he Second Circuit has
ruled that it is improper to order injunctive relief with respect to the . . . Accounts without first

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assessing the issue of who likely owns those accounts[,]” and “the Order does not address the
issue of ownership. . . .” (Motion at 3.) She further argues that a return to shared access is not
the relevant “status quo” absent injunctive relief because “at the start of this proceeding [Ms.
Gutman] had sole and exclusive control” of the Accounts. (Id. at 4 n.5.) While Ms. Gutman
includes an abundance of quotations from the Second Circuit Opinion to support her argument
(id. at 4-5), she does not explain how the Court committed “clear error” that requires
reconsideration of its Order. Nguyen, 2017 WL 3084583, at *1. As the Court explained in its
Order, the Second Circuit Opinion (1) concluded that the Court “erred by modifying its
preliminary injunction to give JLM exclusive control over the Disputed Accounts” and
(2) explicitly defined the relevant “status quo” as “a return to shared access to” the Accounts.
(Order at 2, 5-6 (quoting Second Circuit Opinion at 15, 22) (emphasis added).) 4 Because Ms.
Gutman’s argument contradicting the Court’s interpretation of the Second Circuit Opinion
“merely expresses a disagreement with the Court and does not identify clear error,”
reconsideration is not justified. Noel v. City of New York, No. 15-CV-5236-LTS-KHP, 2023
WL 8850070, at *4 (S.D.N.Y. Dec. 21, 2023).
CONCLUSION
For the foregoing reasons, Ms. Gutman’s Motion for Reconsideration is denied in
its entirety. The parties’ opening briefs regarding the issues on remand from the Second Circuit

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Ms. Gutman insists that “[t]he Orders’ discussion of the ‘status quo’ improperly conflates
two separate legal issues” to the extent that, although “[t]he Second Circuit discussed the
‘status quo’ for purposes of determining whether the injunction JLM seeks is mandatory .
. . this analysis does not change the fact that at the start of this proceeding [Ms. Gutman]
had sole and exclusive control of” the Accounts. (Motion at 4 n.5.) However, because
Ms. Gutman points to no legal authority to support the distinction upon which this
argument relies, she has not shown that the Court overlooked controlling decisions or
otherwise committed clear error. Cohen, 2021 WL 2158018, at *2.

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are due by March 29, 2024. This case remains referred to Magistrate Judge Cave for general
pretrial management. This Memorandum Order resolves docket entry no. 476.
SO ORDERED.
Dated: March 28, 2024
New York, New York

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/s/_ Laura Taylor Swain__________
LAURA TAYLOR SWAIN
Chief United States District Judge

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