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Luxottica Group, S.p.A. v. Enuff

United States District Court, D. New Jersey

August 27, 2019

Luxottica Group, S.p.A., Plaintiff,
v.
Shore Enuff, and Bags and Accessories, Defendants.

          OPINION

          ROBERT B. KUGLER UNITED STATES DISTRICT COURT JUDGE

         Before the Court in this trademark infringement and unfair competition action is plaintiff's motion for default judgment, pre-judgment interest, attorneys' fees and costs, and injunctive relief against defendants [“this motion”] (ECF Doc. 100] under Federal Rule of Civil Procedure [“Fed. R. Civ. P.” or “Rule”] 55(b) (2). Defendants have neither challenged nor filed an opposition to the motion. For the reasons below, the Court GRANTS the motion for default judgment and injunctive relief and DENIES the requests for pre-judgment interest and attorneys' fees and costs, except as to the filing fee of this action.

         An appropriate Order accompanies this Opinion.

         1.0 Factual and Procedural Background

         On 23 September 2016, plaintiff Luxottica filed a complaint against the following 15 named defendants and 10 unnamed ones: Shore Enuff; One Stop Souvenirs LLC d/b/a/ Deck2sea; Beach Apparel; Fashion Paradise LLC; Stop & Save d/b/a Moon Traders; Dolma & Girls LLC; Sunshine Fashion; Shore Styles; City of Souvenirs LLC; AC Gift Shop; Hot Stop LLC; Bags and Accessories; Shore Gifts; Sea Star Souvenir; One Stop; and Does 1-10.

         Plaintiff's complaint alleges:

on 10 August 2016, its investigators saw that defendants, at their stores on the boardwalk in Atlantic City, New Jersey, were selling certain products that bore the mark “Ray Ban”. ECF Doc. 1: ¶32.

         -its investigators purchased such products from each of the 15 named defendants. Id. -Luxottica representatives reviewed samples of all such purchased products and determined them to be counterfeit [“the counterfeit products”]. Id. at ¶33.

         -the marks on the counterfeit products appear confusingly similar to plaintiff's registered marks. Id. at ¶34.

         -Defendants were never authorized to manufacture, sell, and/or offer for sale products bearing its trademarks. Id. at ¶35.

         The complaint also alleges, on information and belief, that all defendants had gotten the counterfeit products from the same source as the same counterfeit products from each defendant appeared substantially similar in style and price; and, defendants' stores were geographically close to one another on the boardwalk. Id. at ¶34.

         Since defendants' confusingly similar products bear plaintiff's registered Ray Ban® marks, the complaint asserted: trademark infringement under the Lanham Act at 15 U.S.C. 1117 (a), (b) and/or (c); false designation of origin and unfair competition; common law trademark infringement; and unfair competition under New Jersey statutory and common law at N.J. Stat. Ann. 56:4-1 and 4-2. Id. at ¶

         Much of the procedural background here relates to plaintiff's obtaining orders of default for 13 of the defendants for their failure to answer.[1] On 13 June 2018, plaintiff voluntarily dismissed without prejudice the 13 defendants for whom it had obtained default: One Stop Souvenirs LLC d/b/a Deck2sea, Beach Apparel, Fashion Paradise LLC, Stop & Save d/b/a Moon Traders, Dolma & Girls LLC, Sunshine Fashion, Shore Styles, City of Souvenirs LLC, AC Gift Shop, Hot Stop LLC, Shore Gifts, Sea Star Souvenir, and One Stop. ECF Doc. 87.

         The action continued as to Shore Enuff and Bags and Accessories, the named defendants here. As for these defendants, on 8 March 2018, plaintiff filed a motion to strike their answers and obtain entry of default. On 24 Sep 2018, Magistrate Judge Williams issued a report recommending a grant of the motion to strike and entry of default because of these defendants' repeated failure to attend court conferences or otherwise defend the case, in the face of plaintiff's evidence of its repeated notices to them. ECF Doc. 89.

         On 24 October 2018, this Court in ECF Doc. 90 adopted Magistrate Judge Williams's report and recommendation; and, on 12 March 2019 entered default against Shore Enuff, and Bags and Accessories. On 18 March 2019, plaintiff filed this motion for default judgment under Rule 55(b) against Shore Enuff and Bags and Accessories, each of whom did not respond.

         In its request for default judgment, plaintiff seeks the following relief:

1. $750, 000.00 in statutory damages under the Lanham Act 15 U.S.C. 1117 (c), the calculation of which is based on plaintiff's assertion of defendants' willful infringement (ECF Doc. 100: 12-13);
2. Pre-judgment interest on the requested $750, 000 in statutory damages at the rate of 6% from the date of service of the complaint, 29 October 2016, to the date of filing this motion, 18 March 2019, which equals $106, 645.85 (Id. at 14);
3. Adding 1. and 2. amounts to a currently ascertainable, total damages request of $856, 645.85;
4. as yet un-totaled attorneys' fees and costs because this case is “exceptional” and involving culpable conduct on the part of the defendants (Id. at 13);
5. post-judgment interest computed daily from the date of entry of the default judgment to the date of payment, according to the weekly average 1-year constant maturity Treasury yield rate (Id. at 15); and
6. a permanent injunction (Id. at 15-16) to enjoin defendants from engaging in further infringement of the Ray Ban® marks and in unfair competition against plaintiff.

         2.0 Legal Standard of Review

         Fed. R. Civ. Proc. 55(b)(2) authorizes courts, upon plaintiff's motion, to enter a default judgment against a properly served defendant who fails to plead or otherwise timely defend against a claim for affirmative relief. If a defendant is in default of prosecuting the case, the Court accepts as true all of plaintiff's well-pleaded factual allegations in the complaint. Comdyne I, Inc. v Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990). The Court, however, does not accept plaintiff's legal conclusions as it's the Court that determines whether the pleaded facts set forth an actionable claim (Doe v. Simone, No. 12-5825, 2013 WL 3772532, at *2 (D.N.J. 17 July 2013)). Nor does the Court accept plaintiff's allegations concerning damages. Id. [citing 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure §2688, at 58-59 (3d ed. 1998 and Supp. 2013).

         The “decision to enter default judgment rests within the sound ‘discretion of the district court' (Chanel, Inc. v. Matos, 133 F.Supp.3d 678, 683 (D.N.J. 2015) [citing Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984). The Third Circuit's repeatedly stated preference is that “cases be disposed of on the merits whenever practicable”. Hritz, 732 F.2d at 1181.

         3.0 Default Judgment Discussion

         3.1 Jurisdiction

         This matter being an action for trademark infringement and unfair competition under the Lanham Act, 15 USC §1051 et seq., the Court has subject matter jurisdiction under 15 U.S.C. §1121 and 28 U.S.C. §§1331 and 1338 (b) as well as supplemental jurisdiction over plaintiff's New Jersey state law claims for trademark infringement under N.J. Stat. Ann. 56:4-1 and 4-2 under 28 U.S.C. §1367(a).

         As it is unclear where defendants are currently located, this Court reviews both its general and specific personal jurisdiction over defendants. ECF filings show that personal service of the complaint upon Shore Enuff and Bags and Accessories was executed on 29 October 2016 at addresses on the boardwalk in Atlantic City, New Jersey.[2] Defendants timely served their answers, also stating their boardwalk addresses.[3]

         Under Rule 4, a defendant is subject to the general personal jurisdiction of a United States district court if the defendant is “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located”. Fed. R. Civ. Proc. 4(k)(1)(A). Thus, a New Jersey federal district court exercises general personal jurisdiction over parties who are domiciled in New Jersey to the extent provided under New Jersey state law. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) [citations omitted]. Since the complaint was personally served on defendants at a New Jersey business address and defendants in their answers identified themselves as domiciled in New Jersey, this Court may exercise general personal jurisdiction over them. See, e.g., Erwin v. Waller Capital Partners, LLC, No. 10-3283, 2010 WL 4053553, at *3 (D.N.J. 14 October 2010).

         However, years have passed since defendants filed their answers. As subsequent documents notifying defendants of court meetings were mailed to defendants' last known boardwalk addresses, and as boardwalk addresses are typically not year-round domiciles but transient summer business locations, it occurs to the Court that these defendants no longer conduct business or are even domiciled in New Jersey. As an example, in November 2017, a process server executed proof of service by mail to each defendant to the addresses in their answers in order to notify them of a court-scheduled telephone conference. ECF Docs. 76 and 77. Neither defendant participated in that conference or in any subsequent proceeding, notices of which were typically sent by first-class mail.

         Even if defendants are no longer domiciled in New Jersey, the Court still exercises specific personal jurisdiction over them. The New Jersey long-arm statute “permits the exercise of personal jurisdiction to the fullest limits of due process” (IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998) [citing DeJames v. Magnificence Carrier, Inc., 654 F.2d 280, 284 (3d Cir. 1981)]) when the cause of action is related to or arises out of defendants' activities that took place in New Jersey. Powerhouse Equipment & Engineering Co., Inc. v. Power Mechanical, Inc. et al., No. 18-10744, 2019 WL 3334758, at *2 (D.N.J. 25 Jul 2019) [citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8 (1984).

         Since trademark infringement is considered an intentional tort, whenever that occurs in New Jersey, the Supreme Court's “effects” test (Calder v. Jones, 465 U.S. 783 (1984) is applied (AT&T v. Winback & Conserve Program, Inc.,42 F.3d ...


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