United States District Court, D. Connecticut
RULING RE: MOTION FOR ADDITIONAL RELIEF [Doc.
SARAH A. L. MERRIAM UNITED STATES MAGISTRATE JUDGE
Vineyard Vines, LLC (“plaintiff”) has filed a
motion seeking additional relief. Plaintiff asserts
that defendants MacBeth Collection, L.L.C., MacBeth
Collection By Margaret Josephs, LLC, MacBeth Designs LLC, and
Margaret Josephs (collectively, “defendants”),
violated the Permanent Injunction and Final Judgment on
Consent (Doc. #70) entered in this case. See Doc.
#113. For the reasons set forth herein, the Court
GRANTS, in part, and DENIES, in part,
plaintiff's Motion for Additional Relief [Doc.
30, 2014, plaintiff commenced this action against defendants
alleging that defendants were creating and distributing
products that infringed plaintiff's intellectual property
rights. See Docs. #1; #11. The parties eventually
reached an agreement to resolve the action, the full terms
and conditions of which were set forth in a settlement
agreement dated June 15, 2015. See Doc. #95.
Pursuant to the settlement agreement, the parties executed
and filed with the Court a proposed permanent injunction and
final judgment on consent. See Doc. #67.
17, 2015, the Court entered a Permanent Injunction and Final
Judgment on Consent (“Final Judgment”).
See Doc. #70. The Final Judgment required defendants
to pay plaintiff $300, 000 (“Judgment Amount”),
as damages stemming from defendants' infringement of
plaintiff's intellectual property rights. See
Doc. #70 at 4. The Judgment Amount was to be paid in five
installments according to a schedule set forth in the Final
Judgment (“Payment Schedule”). See Id.
at 5. Specifically, defendants were required to pay $75, 000
by August 15, 2015, $75, 000 by November 15, 2015, $50, 000
by February 15, 2016, $50, 000 by May 15, 2016, and $50, 000
by August 15, 2016. See id.
Final Judgment imposed a permanent injunction (the
“Permanent Injunction”). See Id. at 2-4.
The Final Judgment also provided
that in the event Defendants violate this Injunction, breach
the Settlement Agreement, or fail to timely pay an
installment payment, [plaintiff] shall be entitled to: (a)
liquidated damages in the amount of Five Hundred Thousand
Dollars ($500, 000); and (b) recovery of its actual expenses,
including reasonable attorneys' fees, associated with the
enforcement of the Settlement Agreement and this
Id. at 6.
paid the first installment of $75, 000, as required by the
Final Judgment, on August 15, 2015. See Docs. #113-3
at 2; #120-1 at 6. However, defendants failed to pay the
second installment due on November 15, 2015. See Id.
On November 15, 2015, defendants filed a motion to seal,
indicating that they expected to file a Motion to Modify
Consent Judgment, and asking the Court to seal any such
motion. See Doc. #72. The motion to seal asserted
that the motion and exhibits were “being filed
contemporaneously” with the motion to seal, but they
were not in fact filed. Id. at 1. The Court
conducted a telephonic conference with the parties regarding
the motion, and then entered an order directing “the
parties to meet and confer in good faith to resolve their
disputes before filing any motions to enforce or modify the
settlement agreement.” Doc. #74.
parties never filed a motion to modify the settlement
agreement, but they apparently agreed to modify the Payment
Schedule on their own. See Docs. #113-3 at 2; #120-1
at 6. Plaintiff “informally agreed” to modify the
payment schedule in exchange for an additional payment of
$20, 000 from defendants (the “Additional Debt”).
Doc. #113-3 at 2. Defendants paid an additional $115, 000
pursuant to the voluntarily modified payment
terms. See Id. On November 1, 2016,
defendant MacBeth Designs LLC filed a petition for Chapter 11
relief under the United States Bankruptcy Code. See
Doc. #120-1 at 7. Defendants missed the next payment due
under the modified schedule on November 15, 2016.
See Docs. #113-3 at 2; #120-1 at 6-8. $110, 000 of
the Judgment Amount and the $20, 000 in “Additional
Debt” remained unpaid. See id.
December 30, 2016, plaintiff filed a motion seeking
an order enforcing the Final Judgment, based on
defendants' alleged failure to abide by the payment
schedule in the Final Judgment. See Doc. #77. On
February 3, 2017, defendants filed a response to
plaintiff's motion, asserting that it was impossible for
defendants to comply with the payment schedule. See
Doc. #85 at 2. Plaintiff filed a reply on February 14, 2017.
See Doc. #87.
Court held an in-person status conference regarding
plaintiff's motion for an order enforcing the Final
Judgment on February 16, 2017. See Doc. #91. During
the conference, the Court noted that an award of some
attorneys' fees would be appropriate upon resolution of
the dispute and “reminded defendant Margaret Josephs
that she remains personally liable for the outstanding
judgment, notwithstanding any bankruptcy proceedings for
corporate defendants.” Id. at 2. The Court
also ordered Ms. Josephs to “make a diligent and
concerted effort to stop third party vendors from importing,
exporting, shipping, delivering, holding for sale, offering
for sale, selling, distributing, returning, transferring
and/or otherwise moving or disposing of in any manner any
infringing products.” Id. The Court held a
follow-up telephonic status conference on March 22, 2017.
See Doc. #106. The Court then issued an order
instructing plaintiff to file a formal motion if it
“seeks additional relief from the
Court[.]” Doc. #105 at 2.
30, 2017, plaintiff filed the motion for additional relief
currently before the Court. See Doc. #113. In light
of plaintiff's filing of the motion for additional
relief, the Court denied as moot plaintiff's motion
seeking an order enforcing the Final Judgment (Doc.
#77). See Doc. #114.Plaintiff asserts that it is
entitled to additional relief based on defendants'
alleged violation of both the Payment Schedule and the
Permanent Injunction in the Final Judgment. See
Docs. #113; #113-2. Plaintiff asks the Court to enter a
judgment against defendants MacBeth Collection, L.L.C.,
MacBeth Collection By Margaret Josephs, LLC, and Margaret
Josephs, jointly and severally,  awarding plaintiff the
unpaid $110, 000 of the Judgment Amount, $20, 000 in
Additional Debt, $500, 000 in liquidated damages, $8, 600,
000 in statutory damages, and $201, 657.21 in expenses and
attorneys' fees it asserts were incurred enforcing the
Final Judgment. See Doc. #113 at 1. Plaintiff also
moves the Court for:
an Order directing Defendants to immediately cease and desist
from any and all further violations of the Permanent
Injunction and Final Judgment on Consent (DKT. 70), to
immediately recall, remove and ready for destruction any and
all of Defendants' illegal and illicit Infringing
Products from the marketplace, in transit or in inventory, as
well as any and all related marketing and advertising
materials or references present in any media, electronic
media or otherwise.
Id. at 2. Finally, plaintiff moves the Court for
“an Order imposing coercive sanctions on Defendants[,
]” see Doc. #113 at 2, and asks the Court to
hold defendants in civil contempt, see Doc. #113-2
filed a response on August 9, 2017, arguing that
plaintiff's claims pertaining to alleged violations of
the Permanent Injunction are barred by the doctrine of
laches; that defendants have complied with the Permanent
Injunction; and that the liquidated damages provision
included in the Final Judgment is punitive and, as a result,
unenforceable. See Doc. #120. Plaintiff filed a
reply on September 6, 2017. See Doc. #123.
Defendants filed a supplemental response on September 28,
2017, see Doc. #129, and plaintiff filed a sur-reply
on October 19, 2017, see Doc. #132.
Defendants' Laches Defense
Court turns first to defendants' affirmative defense of
laches. Defendants argue that “the entirety of the
plaintiff's trademark and related claims are barred by
the doctrine of laches.” Doc. #120 at 13. Defendants
assert that plaintiff knew or should have known about any
alleged violation of the Permanent Injunction long before
filing the motion at issue here, but that plaintiff did not
complain of an alleged violation at any point in 2016.
See Id. at 14. Defendants claim they were prejudiced
by plaintiff's delay, because they would have taken steps
to “have the third-party cease and desist.”
Id. at 15. Plaintiff contends that defendants are
barred from asserting laches because they intended to
infringe plaintiff's intellectual property rights.
See Doc. #123 at 6. Plaintiff further argues that
even if the defendants can assert laches, the defense fails.
See Id. at 6-7. Plaintiff claims it did not delay in
taking action, because it consistently put defendants on
notice that infringing products were in the marketplace, and
because the majority of the products at issue are new to the
marketplace. See Id. Plaintiff further contends that
defendants did not suffer prejudice, because defendants
“neither report suffering economic prejudice or provide
evidence of a change in economic position during the
purported period of delay.” Id. at 7.
to enforce consent judgments can be subject to a defense of
laches. See Brennan v. Nassau Cty., 352 F.3d 60, 63
(2d Cir. 2003). Laches
is an equitable defense that bars a plaintiff's equitable
claim where he is guilty of unreasonable and inexcusable
delay that has resulted in prejudice to the defendant. A
party asserting the defense of laches must establish that:
(1) the plaintiff knew of the defendant's misconduct; (2)
the plaintiff inexcusably delayed in taking action; and (3)
the defendant was prejudiced by the delay.
Ikelionwu v. United States, 150 F.3d 233, 237 (2d
Cir. 1998) (quotation marks and citations omitted).
plaintiff believed that defendants were in violation of the
Permanent Injunction before seeking court
intervention. Plaintiff did not, however, inexcusably delay
taking action. Plaintiff, through its counsel, sent three
emails to defendants informing them of alleged violations. On
November 20, 2015, Attorney Todd Sharinn, counsel for
plaintiff, emailed Attorney Tim Frawley, counsel for
defendants, demanding that defendants “cease and
desist from their continued material breach of the ...
Order” and attaching screen shots of allegedly
infringing products being sold on third-party websites. Doc.
#113-10 at 1-7. On December 4, 2015, Attorney Sharinn again
emailed Attorney Frawley, stating that “several of the
entities that originally offered for sale and sold the
subject counterfeit goods are again selling the same”
and that plaintiff “discovered new entities who are
also selling these illegal goods.” Doc. #113-9 at 26.
On November 10, 2016, Attorney Sharinn emailed Attorney David
Edelberg,  attaching “examples of infringing
goods still offered by the MacBeth entities.”
Id. at 32-35. These communications were sufficient
to put defendants on notice of plaintiff's objections to
the allegedly infringing activity. See VOX
Amplification Ltd. v. Meussdorffer, 50 F.Supp.3d 355,
364-65 (E.D.N.Y. 2014) (finding allegedly infringing
party's receipt of cease and desist letters defeated its
defense of laches) (collecting cases). Plaintiff's
counsel also raised concerns regarding potential violations
of the Permanent Injunction during a status conference with
the Court and counsel for defendants on November 19, 2015.
See Doc. #76 at 11. Plaintiff first filed a formal
motion seeking to enforce the Permanent Injunction
on December 30, 2016. See Doc. #77.
only seven weeks elapsed between the last email contact
regarding violations of the Permanent Injunction asserted by
plaintiff, and the filing of the formal motion to enforce.
Although there was a delay of approximately 11 months between
the December 4, 2015, email and the November 10, 2016, email,
defendants offer no argument as to why that particular delay
was unreasonable. “[L]aches is an equitable, hence
flexible, doctrine, and no length of time is considered per
se unreasonable.” Whitfield v. Anheuser-Busch,
Inc., 820 F.2d 243, 245 (8th Cir. 1987). Here, plaintiff
and defendants engaged in substantial discussions regarding
potential infringing conduct in late 2015, and defendants
undertook to address plaintiff's concerns. It was not
unreasonable for plaintiff to allow some months to pass, to
permit the measures taken by plaintiff to have an effect.
Indeed, defendants submit an affidavit indicating that as a
result of their actions in 2015, at one point, “there
was no indication that any” infringing products
remained available in the marketplace. Doc. #120-1 at 5.
defendants make only a conclusory assertion that the delay in
filing a formal motion has prejudiced them. “To prevail
on the affirmative defense of laches, a defendant must prove
that it has been prejudiced by the plaintiff's
unreasonable delay in bringing the action.”
Mashantucket Pequot Tribe v. Redican, 403 F.Supp.2d
184, 198 (D. Conn. 2005). Here, defendants have not shown
that they actually changed their position in any way as a
result of any purported delay. To the contrary, they contend
that they were actively attempting to prevent third parties
from distributing infringing products throughout the relevant
time period. See Docs. #120-1 at 4 (“On
December 21, 2015 MacBeth again contacted Albert Shammah of
SSS Design to cease and desist with any marketing concerning
the whale.”); #120 at 16 (“MacBeth continually
contacted any and all vendors that were using the whale image
when it became so aware.”).
defendants have failed to meet their burden of establishing a
defense of laches, and plaintiff's claims are not barred
by that doctrine. The Court will thus proceed to consider the
merits of plaintiff's motion.
Failure to Pay Judgment/Settlement Amount
Plaintiff asks the Court to award it $110, 000, which it
asserts is the outstanding portion of the Judgment Amount
owed by defendants. Defendants do not dispute that they have
failed to pay the full $300, 000 Judgment Amount, and the
parties agree that $110, 000 of the Judgment Amount remains
unpaid. See Docs. #129 at 6; #120 at 7; #113-3 at 2.
Accordingly, plaintiff's request for an award of $110,
000, representing the unpaid portion of the Judgment Amount
asks the Court to award it $20, 000 in “Additional
Debt” it asserts is owed by defendants. See
Doc. #113 at 1. The parties do not dispute that plaintiff
agreed to modify the Payment Schedule in exchange for an
additional payment by defendants, and that $20, 000 of
Additional Debt remains unpaid. See Docs. #113-3 at
2; #120-1 at 6. However, neither party offers any discussion
of whether it is appropriate for the Court to enforce this
alleged informal agreement to modify the Final Judgment.
November 19, 2015, the Court issued an Order indicating that
any motion to modify the terms of the Final Judgment should
be filed on the public docket, see Doc. #74, but the
parties never filed such a motion. Thus, any informal
agreement between the parties to modify the terms of the
judgment is beyond the scope of the jurisdiction retained by
this Court to enforce the Final Judgment.
Second Circuit has addressed the proper manner in which a
trial court may interpret and enforce a judgment entered on
In interpreting a consent decree, we have recognized that
courts must abide by the express terms of a consent decree
and may not impose supplementary obligations on the parties
even to fulfill the purposes of the decree more effectively.
A court may not replace the terms of a consent decree with
its own, no matter how much of an improvement it would make
in effectuating the decree's goals. Consistent with this
narrow construction, we have held that a district court may
not impose obligations on a party that are not unambiguously
mandated by the decree itself.
Barcia, 367 F.3d at 106 (internal citations and
quotation marks omitted). The Court cannot, here, add to the
Final Judgment a requirement that defendants pay an
additional $20, 000 not contemplated by that Judgment.
the Settlement Agreement entered into by the parties includes
an explicit merger clause, stating that the Agreement
“may not be altered, amended or modified, except in a
writing signed by all Parties.” Doc. #95 at 18. No.
such writing has been produced. And, again, even if the
parties voluntarily agreed to alter the Settlement Agreement,
they did not seek any modification to the Judgment.
Accordingly, plaintiff's request that the Court award it
$20, 000 in Additional Debt is DENIED.
Violation of the Permanent Injunction
Plaintiff contends that defendants have violated the
Permanent Injunction. While plaintiff's argument as to
exactly how defendants have violated the Permanent Injunction
is less than clear, the Court identifies two theories under
which such violation could be found, based on the record
before the Court.
plaintiff points to numerous instances in which products
bearing marks that would violate the Permanent Injunction
have been found for sale in the marketplace, after the entry
of judgment in this matter. Plaintiff has offered no evidence
that defendants themselves have licensed or sold infringing
products after the entry of the Permanent Injunction. The
Court therefore construes this argument as relying on one or
more of the following provisions of the Permanent Injunction:
a. The provision barring defendants and “confederates
and any other persons or entities acting in concert or
participation with them” from offering for sale any
infringing products. Doc. #70 at 2.
b. The provision barring defendants from “enabling
others to sell or pass off” infringing items as genuine
products. Id. at 3.
c. The provision barring defendants from “assisting,
aiding, or abetting any other person or business
entity” in violating any term of the Permanent
Injunction. Id. at 4.
Court will refer to conduct prohibited by these provisions of
the Permanent Injunction as “Enabling Violations”
for purposes of this ruling.
plaintiff affirmatively asserts that defendants violated the
Permanent Injunction by telling a licensee, Access
Bags, which was in possession of infringing product, that
Access Bags could sell the infringing products, after the
Permanent Injunction entered, barring any such sale. Such an
action by defendants would violate any of the above
Court will evaluate plaintiff's claim under each of these
alternate theories. As a threshold matter, however, the Court
must determine the standard of proof applicable to this
claim. Neither party articulates the standard of proof that
must be met by plaintiff in establishing that the Permanent
Injunction has been violated for purposes of awarding
consent judgment, such as the one entered in this case, has
“a dual character, a ‘hybrid nature' that
reflects attributes of both a contract and a judicial
decree.” Kozlowski v. Coughlin, 871 F.2d 241,
245 (2d Cir. 1989) (quoting Local Number 93, Int'l
Assoc. of Firefighters v. Cleveland, 478 U.S. 501, 519
(1986)). Although the Permanent Injunction at issue here has
been ordered by the Court, it was agreed upon by the parties.
As such, it “is a contract between the parties, and
should be interpreted accordingly.” Tourangeau v.
Uniroyal, Inc., 101 F.3d 300, 307 (2d Cir. 1996);
see also United States v. ITT Cont'l Baking Co.,
420 U.S. 223, 238 (“[A] consent decree or order is to
be construed for enforcement purposes basically as a
contract[.]”); Whitmire v. Corbel & Co.,
977 F.Supp. 290, 293 (S.D.N.Y. 1997) (“Consent
judgments are agreements between parties to litigation and,
therefore, should be construed as contracts.”).
Connecticut law, a party asserting a breach of contract has
the burden of proving that breach by a preponderance of the
evidence.See, e.g., Franco v. Yale
Univ.,238 F.Supp.2d 449, 453 (D. Conn. 2002),
aff'd, 80 Fed.Appx. 707 (2d Cir. 2003); see also
Madigan v. Hous. Auth. of Town of E. Hartford, 113 A.3d
1018, 1029 n.2 (Conn.App. 2015) (affirming jury instruction
stating that “the burden of proof is on the plaintiff
to prove by a preponderance of the evidence that the
defendant breached his contract of employment”);
Chieffalo v. Norden Sys., Inc.,714 A.2d 1261, 1264
(Conn.App. 1998). Cf. E.E.O.C. v. New York Times Co.,
No. 92CV6548(RPP), 1998 WL 474201, at ...