The Fashion Exchange LLC v. Hybrid Promotions, LLC
- Sidney Stein
- 1:14-cv-01254
- U.S. District Court · Southern District of New York
- 7
In The Fashion Exchange v. Hybrid Promotions, Judge Stein granted defendants’ fee motion under the Lanham Act for exceptionally unreasonable litigation.
Hybrid Promotions, LLC and the other defendants were found entitled to reasonable attorney’s fees and costs, with the amount to be determined later. The Fashion Exchange LLC and its counsel were affected by the fee award, but the order did not set a dollar amount.
What happened
In The Fashion Exchange LLC v. Hybrid Promotions, LLC, defendants sought attorney’s fees and costs after prevailing on summary judgment in the long-running trademark and unfair-competition case. The plaintiff did not respond to the fee motion.
The court found that defendants were the prevailing parties and that the case was exceptional because of the unreasonable way the plaintiff and its counsel litigated it. The court cited discovery misconduct, repeated reconsideration motions, improper subpoenas, and the plaintiff’s lack of evidence supporting essential claims.
Judge Sidney H. Stein granted defendants’ motion under the Lanham Act and directed them to submit records supporting the amount of their reasonable fees and costs by December 2, 2024. The opinion did not award fees under the separate attorney-sanctions statute because the court was unwilling to find that counsel acted in bad faith.
The detailed version
- The Fashion Exchange LLC v. Hybrid Promotions, LLC · No. 1:14-cv-01254
- Sidney Stein
- Sept. 20, 2024
Background
The Fashion Exchange LLC brought trademark-infringement and unfair-competition claims against Hybrid Promotions, LLC, its owners Jarrod and Gavin Dogan, and more than forty retailers. The litigation lasted about a decade and involved amended pleadings, extensive discovery, sanctions proceedings, and multiple summary-judgment motions.
The court previously granted defendants’ summary-judgment motions, dismissing the plaintiff’s damages and unfair-competition claims and then dismissing the remaining claims concerning likelihood of confusion and liability. Judgment was entered for defendants, leaving no claims for the plaintiff. Defendants then moved under Federal Rule of Civil Procedure 54 for their attorney’s fees and costs. The plaintiff did not respond.
Lanham Act Fee Request
The Lanham Act allows a court to award reasonable attorney’s fees to the prevailing party in an “exceptional” case. The court held that defendants were prevailing parties because they had obtained summary judgment on essential elements of the plaintiff’s claims, including likelihood of confusion.
The court also held that the case was exceptional because of the unreasonable manner in which the plaintiff and its counsel litigated it. The court relied on two prior sanctions orders involving discovery conduct, including improper deposition objections and instructions not to answer, and failures to preserve and produce royalty-related financial records. The court also cited at least eight motions seeking reconsideration or otherwise objecting to court orders, subpoenas directed to retailers beyond the permitted discovery scope, and the plaintiff’s failure to present credible evidence of acquired distinctiveness, actual confusion, or intent to deceive.
The court concluded that awarding fees would also serve deterrence by discouraging similar conduct by the plaintiff and other litigants.
Attorney-Sanctions Statute
Defendants also invoked 28 U.S.C. § 1927, which can require an attorney to pay fees and costs caused by unreasonably and vexatiously multiplying proceedings. The court explained that such an award requires a finding of bad faith. Although the court described counsel Scott Zarin’s conduct as unreasonable, negligent, incompetent, and “lackadaisical,” it was unwilling to find that the conduct was undertaken in bad faith. The court therefore granted the fee motion under the Lanham Act, not on the stated § 1927 ground.
Ruling and Next Step
Judge Sidney H. Stein granted defendants’ motion for attorney’s fees and costs pursuant to 15 U.S.C. § 1117(a). The court did not set the amount of the award. Instead, it directed defendants to submit an application supported by contemporaneous time records by December 2, 2024, and required service of the order on the plaintiff by certified mail by September 27, 2024.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.