Kim v. Coach, Inc, et al

Filing 6

ANSWER to 4 Amended Complaint Defenses, and Affirmative Defenses, and, COUNTERCLAIM against plaintiff Jay Carlson, Carlson Legal, Christopher Carney, Carney Gillespie & Isitt PLLC by Coach, Inc..(Keehnel, Stellman)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 v. JAY CARLSON, a Washington resident; CARLSON LEGAL, a Washington resident; CHRISTOPHER CARNEY, a Washington resident; CARNEY GILLESPIE & ISITT PLLC, a Washington PLLC, Counterclaim defendants.

THE HONORABLE RICARDO S. MARTINEZ

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE GINA KIM, on behalf of a class consisting of herself and all other persons similarly situated, Plaintiffs, v. COACH, INC., a Maryland corporation, and COACH SERVICES, INC., a Maryland corporation, Defendants, and, as to Coach, Inc., counterclaim plaintiff, NO. 2:11-cv-00214-RSM COACH, INC.'S ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO FIRST AMENDED COMPLAINT, AND COUNTERCLAIMS

Defendant Coach, Inc. ( "Coach") hereby answers the First Amended Complaint (the "Amended Complaint") filed by plaintiff Gina Kim on behalf of a putative class consisting of Ms. Kim and all other Washington residents similarly situated, and filed by plaintiffs Jay Carlson, Carlson Legal, Christopher Carney, Carney Gillespie & Isitt PLLC, Jason B. Moore,
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS ­ 1 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

and Van Eyk & Moore, PLLC. Coach's answer, defenses, affirmative defenses, and counterclaims are based on information and knowledge thus far secured by Coach, and Coach reserves the right to amend or supplement its answer, defenses, affirmative defenses, and counterclaims based on facts later discovered, pleaded, or offered. To the extent that any express or implied allegations in the Amended Complaint are not specifically admitted herein, Coach hereby denies any such allegations. ANSWER TO THE FIRST AMENDED COMPLAINT SUMMARY Coach denies each and every allegation in plaintiffs' "Summary," except to admit that its law firm Gibney, Anthony & Flaherty, LLP ("Gibney") monitors certain items listed for sale on eBay, that Gibney alerts eBay when counterfeit Coach products are detected, that Gibney delivers communications to sellers when counterfeit Coach products are detected, and that Ms. Kim is a former Coach employee. Coach specifically denies that it "is trying to force all consumers to purchase Coach products" only in Coach's retail stores. Coach specifically denies that it "wantonly accuses consumers of infringing its trademarks . . . ." Coach specifically denies that it makes any accusations of counterfeiting "[w]ithout investigating the validity of its allegations . . . ." Coach specifically denies that it "fails to conduct even a minimally reasonable investigation into its counterfeiting claims . . . ." I. NATURE OF PLAINTIFF'S CLAIMS

To the extent that this section contains allegations of fact, Coach denies the allegations contained therein, except to state that counsel for Coach indicated to counsel for Ms. Kim that counsel for Ms. Kim had committed actionable defamation that would be the subject of a claim. Coach specifically denies that any threats were made. II. 1. PARTIES Coach denies that Ms. Kim is representative of any purported class in this

matter. As to the remaining allegations in Paragraph 1, Coach lacks sufficient knowledge or
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 2 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 2. Coach denies that the putative class described in Paragraph 2 is valid under

Fed.R.Civ.P. 23. As to the remaining allegations in Paragraph 2, Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 3. Coach admits that Coach, Inc. and Coach Services, Inc. are Maryland

corporations and that their principal places of business are not in Washington. The meaning of the term "extensive" is undefined and, on that basis, Coach denies the remaining allegations in Paragraph 3. 4. Coach denies that counsel for Ms. Kim "have been directly threatened with a

defamation lawsuit by Coach's counsel." As to the remaining allegations in Paragraph 4, Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations, except to acknowledge that Ms. Kim's lawyers have been made named plaintiffs in this lawsuit. III. 1. JURISDICTION AND VENUE Answering Paragraph 1, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 2. Paragraph 2 contains legal conclusions to which no response is necessary. To

the extent that Paragraph 2 contains allegations of fact, Coach admits that the Amended Complaint purports to invoke jurisdiction under 28 U.S.C. §§ 1331, 1332, 1367, and 2201-02. 3. Coach admits that it markets and sells trademarked goods in Washington.

Coach denies the remaining allegations in Paragraph 3. 4. Paragraph 4 contains legal conclusions to which no response is necessary. To

the extent that Paragraph 4 contains allegations of fact, Coach admits that the Amended
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 3 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Complaint purports to invoke venue under 28 U.S.C. §§ 1391(a), (b), & (c). IV. 1. FACTS COMMON TO ALL COUNTS Answering Paragraph 1, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 2. Answering Paragraph 2, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 1. "VIOLATION OF THE WASHINGTON CONSUMER PROTECTION ACT" 1. herein. 2. Paragraph 2 contains legal conclusions to which no response is necessary. To Coach incorporates and realleges the preceding paragraphs as if set forth fully

the extent that Paragraph 2 contains allegations of fact, Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 3. Coach admits that, in October 2010, Gibney notified eBay that Gibney believed,

on the basis of Ms. Kim's eBay listing, that a handbag listed for sale by Ms. Kim is counterfeit and infringed Coach's trademarks. Coach denies the remaining allegations in Paragraph 3. Coach specifically denies that it acted "without conducting any reasonable investigation." 4. Coach admits that the listing referenced in the preceding paragraph was briefly

removed from eBay but denies that Ms. Kim's characterization, which implies that the listing was never re-instated, is accurate. Coach further denies that it made any claims at all. As to the remaining allegations in Paragraph 4, Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 5. Coach admits that, on or about October 8, 2010, Gibney sent a letter to Ms. Kim
DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 4 NO. 2:11-cv-00214-RSM
WEST\223262591.5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

regarding her eBay listing. Coach denies that Ms. Kim's characterization of the letter is accurate or complete, and submits that the letter is the best evidence of its contents. 6. Answering Paragraph 6, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 7. 8. 9. 10. 11. 2. Coach denies the allegations contained in Paragraph 7. Coach denies the allegations contained in Paragraph 8. Coach denies the allegations contained in Paragraph 9. Coach denies the allegations contained in Paragraph 10. Coach denies the allegations contained in Paragraph 11.

"MISREPRESENTATION OF TRADEMARK INFRINGEMENT IN VIOLATION OF 17 U.S.C. 512(f), AND DECLARATORY JUDGMENT" 1. Coach incorporates and realleges the preceding paragraphs as if set forth fully

herein. 2. 3. Coach admits the allegations in Paragraph 2. Coach admits that, in October 2010, Gibney notified eBay that Gibney believed,

on the basis of Ms. Kim's eBay listing, that a handbag listed for sale by Ms. Kim is counterfeit and infringed Coach's trademarks. Coach denies the remaining allegations in Paragraph 3. 4. Coach admits that, on October 8, 2010, Gibney sent a letter to Ms. Kim

regarding her eBay listing. Coach denies that Ms. Kim's characterization of the letter is accurate or complete, and submits that the letter is the best evidence of its contents. Coach denies the remaining allegations in Paragraph 4. 5. Answering Paragraph 5, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 6. Coach denies the allegations in Paragraph 6.
DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 5 NO. 2:11-cv-00214-RSM
WEST\223262591.5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 herein. 4. herein. 3.

7. 8. 9.

Coach denies the allegations in Paragraph 7. Coach denies the allegations in Paragraph 8. Coach denies the allegations in Paragraph 9.

"DEFAMATION BY DEFENDANT AGAINST PLAINTIFF" 1. Coach incorporates and realleges the preceding paragraphs as if set forth fully

2.

Coach admits that, in October 2010, Gibney notified eBay that Gibney believed,

on the basis of Ms. Kim's eBay listing, that a handbag listed for sale by Ms. Kim is counterfeit and infringed Coach's trademarks. Coach denies the remaining allegations in Paragraph 2. 3. 4. Coach denies the allegations in Paragraph 3. Answering Paragraph 4, Coach lacks sufficient knowledge or information to

form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 5. 6. 7. Coach denies the allegations in Paragraph 5. Coach denies the allegations in Paragraph 6. Coach denies the allegations in Paragraph 7.

"TORTIOUS INTERFERENCE WITH A BUSINESS EXPECTANCY" 1. Coach incorporates and realleges the preceding paragraphs as if set forth fully

2.

Coach admits that, in October 2010, Gibney notified eBay that Gibney believed,

on the basis of Ms. Kim's eBay listing, that a handbag listed for sale by Ms. Kim is counterfeit and infringed Coach's trademarks. Coach denies the remaining allegations in Paragraph 2. 3. Coach admits that, on October 8, 2010, Gibney sent a letter to Ms. Kim

regarding her eBay listing. Coach denies that Ms. Kim's characterization of the letter is accurate or complete, and submits that the letter is the best evidence of its contents. 4. Coach denies the allegations in Paragraph 4.
DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 6 NO. 2:11-cv-00214-RSM
WEST\223262591.5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 5.

5.

Coach denies the allegations in Paragraph 5.

"DECLARATION OF NO DEFAMATION BY PLAINTIFF'S COUNSEL" 1. Coach admits that it has hired counsel named Stellman Keehnel, who practices

at DLA Piper in Seattle. Coach further admits that Mr. Keehnel has been in communication with counsel for Ms. Kim. Coach further admits that, as of the filing of the Amended Complaint, Mr. Keehnel had not yet filed a notice of appearance in this matter because there was no occasion to do so, as the time for Coach to appear and respond, following service of process, had not run. Coach denies the remaining allegations in Paragraph 1. Coach specifically denies that Mr. Keehnel has been in "regular communication" with counsel for Ms. Kim. Coach specifically denies that Mr. Keehnel was under any obligation to appear in this case because of "repeated written and oral requests" to appear. 2. Coach denies that Mr. Keehnel sent counsel for Ms. Kim a letter dated February

27, 2011. Coach denies that counsel for Ms. Kim's characterization of any letter sent by Mr. Keehnel is accurate or complete, and submits that the best evidence of the contents of any letter sent to Ms. Kim's counsel is such letter. 3. Coach again denies that Mr. Keehnel sent counsel for Ms. Kim a letter dated

February 27, 2011. Coach admits that, in a February 17, 2011 letter, Mr. Keehnel informed counsel for Ms. Kim that they committed defamation. Coach denies that counsel for Ms. Kim's characterization of any letter sent by Mr. Keehnel is accurate or complete, and submits that the best evidence of the contents of any letter sent to Ms. Kim's counsel is such letter. 4. Coach denies that any "threat" was made. Coach admits that Mr. Keehnel

informed counsel for Ms. Kim that counsel for Ms. Kim committed defamation and that a claim would be filed. Coach denies the remaining allegations in Paragraph 4. 5. 6. Coach denies the allegations in Paragraph 5. Coach denies that the description of counsel for Ms. Kim's actions during the

interview ­ that they "repeated the allegations in the Complaint and answered questions about
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 7 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

the case" ­ is accurate or complete. As to the remaining allegations in Paragraph 6, Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegations contained therein and, on that basis, denies such allegations. 7. Coach admits that Gibney sent Ms. Kim a letter, although Coach denies that

counsel for Ms. Kim's characterization of the letter is accurate or complete, and submits that the letter is the best evidence of its contents. Coach admits that Ms. Kim is a former Coach employee. Coach lacks sufficient knowledge or information to form a belief as to the truth of the allegation that "[t]he actual product was depicted in photographs taken by Ms. Kim and posted in the eBay.com advertisement . . . ." Coach denies the remaining allegations in Paragraph 7. Coach specifically denies that the defamatory statements by counsel for Ms. Kim were substantially true. Coach specifically denies that Coach "failed to reasonably investigate" the authenticity of the product. Coach specifically denies that "[i]f Coach had reasonably investigated that issue, they could have easily discovered that the product was genuine." Coach specifically denies that counsel for Ms. Kim had a "good faith basis to assert that Coach failed to investigate, and the statement was substantially true." Coach specifically denies that "[t]here has been no defamation against Coach." 8. Coach admits that its brand is famous. Coach lacks sufficient knowledge or

information to form a belief as to the truth of the allegation regarding "the reason the media was interested in this Complaint in the first place . . . ." The meaning of the phrase "great deal of money" is undefined and, on that basis, Coach denies the allegation regarding the amount of money it spends on marketing. Coach denies the remaining allegations in Paragraph 8. 9. V. 1. Coach denies the allegations in Paragraph 9. CLASS ALLEGATIONS Paragraph 1 contains legal conclusions to which no response is necessary. To

the extent that Paragraph 1 contains allegations of fact, Coach denies the allegations in Paragraph 1.
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 8 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

2. 3.

Coach denies the allegations in Paragraph 2. Paragraph 3 contains legal conclusions to which no response is necessary. To

the extent that Paragraph 3 contains allegations of fact, Coach denies the allegations in Paragraph 3. 4. 5. 6. 7. 8. VI. Coach denies the allegations in Paragraph 4. Coach denies the allegations in Paragraph 5. Coach denies the allegations in Paragraph 6. Coach denies the allegations in Paragraph 7. No response is necessary to Paragraph 8. PRAYER FOR RELIEF

Coach denies that Ms. Kim is entitled to the relief sought in the Amended Complaint or to any other relief. DEFENSES AND AFFIRMATIVE DEFENSES As separate and distinct defenses and affirmative defenses to the Amended Complaint, Coach further alleges as follows, without admission that Coach carries the burden of proof on any of the defenses set forth below: 1. Failure to State a Claim. The Amended Complaint fails to state a claim for

which relief can be granted. 2. Unclean Hands. Ms. Kim is not entitled to obtain recovery for damages she has

incurred, if any, arising out of her own wrongful conduct. 3. Prior Breach. Each and every one of Ms. Kim's causes of action in the

Amended Complaint is barred by the doctrine of prior breach. 4. Intervening Cause. Each and every one of Ms. Kim's causes of action in the

Amended Complaint is barred by the doctrine of intervening cause. 5. Kim's Own Conduct. Each and every one of Ms. Kim's causes of action in the

Amended Complaint is barred by Ms. Kim's own conduct.
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 9 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

6.

Estoppel. Each and every one of Ms. Kim's causes of action in the Amended

Complaint is barred by the doctrine of estoppel. 7. Justification. Each and every one of Ms. Kim's causes of action in the

Amended Complaint is barred by the doctrine of justification. 8. 9. Truth. Ms. Kim's claim for defamation is barred by the doctrine of truth. Lack of Damages. The Amended Complaint, and each purported claim by

Ms. Kim for relief therein, is barred because Ms. Kim has not suffered any damages as a result of any acts, conduct, or omissions by Coach. 10. Failure to Mitigate. Ms. Kim is precluded from pursuing her Amended

Complaint and each claim for relief therein because Ms. Kim has failed to mitigate her damages, if any, which she seeks to recover. 11. Successful Mitigation of Damages. Ms. Kim is precluded from pursuing her

Amended Complaint and each claim for relief therein because Ms. Kim has successfully mitigated her damages, such that there are no damages to recover. 12. Justifiable Reliance. Coach justifiably relied on Ms. Kim's false statement that

the subject bag is "NEW." In fact, the subject bag was six or seven years old at the time Ms. Kim falsely represented that the bag is "NEW." 13. 14. requirement. 15. Counsel Not Qualified. Ms. Kim's selected counsel are not qualified to serve No Typicality. Ms. Kim is not typical of the class she purports to represent. No Numerosity. The putative class does not satisfy the numerosity

as class counsel. 16. inappropriate. 17. Failure to Join Necessary Party. Each and every one of Ms. Kim's causes of No Predominance. Individual issues predominate, rendering class treatment

action in the Amended Complaint is barred by Ms. Kim's failure to join a necessary party.
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 10 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

18.

Right to Assert Additional Defenses. The above defenses and affirmative

defenses are based on the facts and information currently known to Coach. Coach reserves the right to amend or add defenses or affirmative defenses based on facts later discovered, pleaded or offered.

COUNTERCLAIMS Counterclaim plaintiff Coach, Inc. ("Coach") alleges as follows: INTRODUCTION Coach asserts a straightforward defamation case against certain of plaintiff Ms. Kim's lawyers who sought publicity of this lawsuit and then made false statements about Coach outside the lawsuit. Coach does not assert a counterclaim against Ms. Kim. Defendants Jay Carlson and Christopher Carney appeared on a television newscast and deliberately stated false information about Coach. Mr. Carlson pretended to read from a letter sent to his client by an attorney at the law firm of Gibney, Anthony & Flaherty, on behalf of Coach. But the words that Mr. Carlson spoke ­ "You have committed trademark infringement and we are going to sue you for two million dollars" ­ do not appear in the letter. Mr. Carney, without justification, accused Coach of making "threats" without conducting any investigation. In fact, an investigation was conducted, and Mr. Carney's representation to the contrary with reckless disregard for the truth was calculated to inflict maximum reputational injury to Coach, and to cause consumers not to do business with Coach. Mr. Carlson and Mr. Carney did not speak pursuant to any privilege. As a direct result of their purposefully false statements, Coach has suffered and continues to suffer enormous injury in the marketplace, as news outlets, blogs, and the like have republished one-sided stories based on the defendants' fabricated "evidence" and baseless accusations.

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 11 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 6. 1.

PARTIES Plaintiff Coach, Inc. is a Maryland corporation with its principal place of

business in New York, NY. 2. On information and belief, defendant Jay Carlson is, and was at all times

relevant herein, a resident of Washington. 3. On information and belief, Carlson Legal is the name under which defendant

Mr. Carlson does business. Insufficient publicly available information is available to ascertain the nature of "Carlson Legal." Insofar as Carlson Legal is a legal entity with an existence separate from Mr. Carlson, on information and belief, Carlson Legal is a resident of Washington. Insofar as Carlson Legal is a legal entity with an existence separate from Mr. Carlson, Carlson Legal is counsel for Ms. Kim, and therefore a plaintiff in the Amended Complaint and a counterclaim defendant. 4. On information and belief, defendant Christopher Carney is, and was at all times

relevant herein, a resident of Washington. 5. Carney Gillespie & Isitt PLLC is a Washington PLLC with its principal place of

business in Washington. Carney Gillespie & Isitt PLLC is counsel for Ms. Kim and therefore a plaintiff in the Amended Complaint and a counterclaim defendant. JURISDICTION AND VENUE This Court has original diversity jurisdiction over these counterclaims under

28 U.S.C. § 1332, because the action is between citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs. Coach's damages exceed $75,000, exclusive of interest and costs. 7. Venue is proper in this District under 28 U.S.C. § 1391 because, on information

and belief, this is a diversity action in a judicial district where any (counterclaim) defendant resides and all of the counterclaim defendants reside in the same state. Venue is also proper

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 12 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

under 28 U.S.C. § 1391 because this is a judicial district in which a substantial part of the events or omissions giving rise to the counterclaims occurred. GENERAL ALLEGATIONS 8. Coach is a leading designer, producer, and marketer of accessories and gifts,

including handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear, gloves, scarves, fragrance, and fine jewelry bearing the COACH trademark and other associated marks. 9. Coach's reputation for high quality workmanship and creative design is critical

to Coach's business model. Coach relies heavily on the enormous goodwill that it enjoys with respect to its well-known and highly-regarded brand. 10. its business. 11. As with other designers and producers of consumer products, Coach is faced Impairment of Coach's reputation directly diminishes Coach's ability to conduct

with the insurmountable task of policing its intellectual property and protecting itself and consumers from counterfeit merchandise. 12. Removing suspicious listings is a routine function that eBay undertakes in

connection with its efforts to limit the potential for massive counterfeiting on eBay. If eBay were not permitted to remove suspicious listings, it would have no ability to control counterfeiting. Similarly, if intellectual property rights holders were not able to request removal of suspicious listings ­ especially when the listing itself inaccurately describes the product at issue ­ then websites like eBay would be overrun with counterfeit merchandise, to the detriment of the websites, the producers, and consumers. 13. In late September or early October 2010, Ms. Kim listed a handbag on

eBay.com as "NEW." Ms. Kim also advertised the bag as a COACH handbag. 14. Purporting to act on behalf of Coach, the law firm Gibney, Anthony & Flaherty

LLP ("Gibney") conducted an investigation of the handbag listing. Gibney concluded,
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 13 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

correctly, that if the bag were "NEW," it is not an authentic COACH handbag. 15. On information and belief, in October 2010, eBay.com removed Ms. Kim's

handbag listing for a short time in connection with suspicion that Ms. Kim was selling a counterfeit bag. 16. Shortly after Ms. Kim's listing was removed from eBay, Gibney sent Ms. Kim a

letter, which letter is attached as Exhibit A. Ms. Kim received the letter, contacted Gibney, and her listing with eBay was reinstated almost immediately thereafter. 17. On February 8, 2011, the counterclaim defendants filed the above-captioned

lawsuit on behalf of Ms. Kim in this Court. 18. On February 9, 2011, the counterclaim defendants appeared on a television

newscast on KING 5 news in Seattle. 19. As part of the newscast, Mr. Carlson purported to read from the letter that

Gibney sent to Ms. Kim. Representing that he was reading from the letter, Mr. Carlson stated as follows: You have committed trademark infringement and we are going to sue you for two million dollars. 20. While making the above statement, Mr. Carlson looked at the letter and pointed

to the text to indicate that he was, in fact, reading from the letter. The only fair conclusion to the viewer was that the letter from Gibney included Mr. Carlson's statement. 21. In fact, as is clear from Exhibit A, the letter contains no such statement. Mr.

Carlson's statement was false. 22. the matter: She acquired her Coach bags directly from Coach, they are unquestionably legitimate. Clearly Coach did nothing to investigate their threats against her. Later in the same newscast, Mr. Carney made the following statement regarding

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 14 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 falsity. false. herein.

23.

Mr. Carney's statement was false. Mr. Carney failed to conduct any inquiry

before making such a statement, and, with total disregard for the truth of his statement, falsely asserted that Coach uses accusations of trademark infringement to stifle second-hand sales of authentic products. 24. Mr. Carlson and Mr. Carney sought maximum publicity for their false and

defamatory statements, for the purpose of ensuring that the false information would reach a large audience, including consumers and potential consumers of Coach products. 25. Mr. Carlson's and Mr. Carney's statements did in fact reach a large audience,

including Coach consumers and potential consumers of Coach products, and affected the decisions such persons made concerning Coach products. 26. The widespread dissemination of Mr. Carlson's and Mr. Carney's false

information about Coach has severely injured Coach's reputation in the marketplace. FIRST CAUSE OF ACTION (Defamation ­ Against Mr. Carlson) 27. Coach incorporates and realleges the preceding paragraphs as if set forth fully

28.

Mr. Carlson's statement to the news media on or about February 9, 2011 was

29. 30.

Mr. Carlson's statement was an unprivileged communication. Mr. Carlson's statement was published to the news media with knowledge of its

31. 32.

Mr. Carlson's statement has harmed and continues to harm Coach's reputation. On information and belief, Mr. Carlson's statement to the news media has been

viewed/heard by persons around the country and the world. 33. As a proximate result of publication of Mr. Carlson's statement, Coach has

suffered significant damages in an amount to be demonstrated at trial.
ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 15 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 proper. falsity. false. herein.

34.

The above-described publication was made by Mr. Carlson with actual malice

and reckless disregard for the truth, in that Mr. Carlson specifically intended to misrepresent the contents of a statement attributed to Coach in an effort to injure Coach. SECOND CAUSE OF ACTION (Defamation ­ Against Mr. Carney) 35. Coach incorporates and realleges the preceding paragraphs as if set forth fully

36.

Mr. Carney's statement to the news media on or about February 9, 2011 was

37. 38.

Mr. Carney's statement was an unprivileged communication. Mr. Carney's statement was published to the news media with knowledge of its

39. 40.

Mr. Carney's statement has harmed and continues to harm Coach's reputation. On information and belief, Mr. Carney's statement to the news media has been

viewed/heard by persons around the country and the world. 41. As a proximate result of publication of Mr. Carney's statement, Coach has

suffered significant damages in an amount to be demonstrated at trial. 42. The above-described publication was made by Mr. Carney with actual malice

and reckless disregard for the truth. REQUEST FOR RELIEF Coach requests the following relief: 1. 2. 3. 4. Dismissal of the Amended Complaint with prejudice; An award of general and special damages, according to proof at trial; An award of costs and reasonable attorneys' fees incurred in this lawsuit; and An award of any such other and further relief as the Court may deem just and

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 16 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Dated this 3rd day of March, 2011. DLA Piper LLP (US) By: s/ Stellman Keehnel Stellman Keehnel, WSBA No. 9309 R. Omar Riojas, WSBA No. 35400 Patrick Eagan, WSBA No. 42679 DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104 Tel: [phone] Fax: [phone] E-mail: [e-mail] E-mail: [e-mail] E-mail: [e-mail] Attorneys for defendant and counterclaim plaintiff Coach, Inc.

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 17 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

CERTIFICATE OF SERVICE I hereby certify that on March 3, 2011, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all counsel of record. Dated this 3rd day of March, 2011. /s/ Stellman Keehnel Stellman Keehnel, WSBA No. 9309

ANSWER, DEFENSES, AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT, AND COUNTERCLAIMS - 18 NO. 2:11-cv-00214-RSM
WEST\223262591.5

DLA Piper LLP (US) 701 Fifth Avenue, Suite 7000 Seattle, WA 98104-7044 Tel: [phone]

EXHIBIT A