Nordic Naturals, Inc. v. Premium Sellers LLC

Background

Nordic Naturals, Inc. sued Premium Sellers LLC, described in the opinion as an unauthorized reseller of products bearing Nordic’s trademarks. Nordic alleged that Premium sold substantial quantities of Nordic products through an Amazon storefront without permission and did not comply with Nordic’s quality-control requirements. Nordic’s rules for authorized resellers included inspecting products, reporting defects, avoiding sales of damaged or defective products, cooperating in recalls, using approved images and current descriptions, and following restrictions on online sales and third-party fulfillment.

Nordic alleged that customers who bought Nordic products from unauthorized resellers posted complaints about defective, old, damaged, improperly packaged, unsealed, or unauthentic products. Nordic contended that Amazon associated those reviews with Nordic’s products, harming Nordic’s reputation and customer goodwill. Nordic also alleged that its sixty-day satisfaction guarantee did not apply to products sold by unauthorized resellers.

Premium did not appear or defend the case. The clerk entered Premium’s default after the court record supported service of process at a private mailbox in Florida. Nordic moved for default judgment on all of its claims, seeking disgorgement of profits totaling $1,060,362.09, a permanent injunction, an order requiring Amazon to freeze Premium’s funds, and orders requiring Premium to disclose its suppliers and return or destroy products bearing Nordic’s marks.

Jurisdiction and service

The court concluded that it had subject-matter jurisdiction over Nordic’s claims under the federal trademark statute and supplemental jurisdiction over related state-law claims. It also concluded that Premium’s alleged sales of Nordic products to consumers in California supported specific personal jurisdiction. The court further agreed that service at Premium’s private mailbox complied with Florida law and Federal Rule of Civil Procedure 4.

Trademark claim

The court analyzed Nordic’s claim under the Lanham Act, the federal trademark statute. It explained that the first-sale doctrine generally allows the resale of genuine trademarked products. An exception may apply when the reseller fails to comply with the trademark owner’s quality-control standards, because distributing products that do not meet those standards may damage the trademark’s reputation.

Taking Nordic’s allegations as true for purposes of default judgment, the court found that Premium’s alleged failure to follow Nordic’s quality-control rules, together with customer complaints about damaged packaging, missing safety seals, capsules sticking together or breaking open, and unpleasant smells, was sufficient to support Nordic’s infringement claim. The court therefore stated that Premium’s unauthorized resale of products bearing Nordic’s trademarks violated the Lanham Act.

The court did not decide whether the lack of Nordic’s satisfaction guarantee independently made the products non-genuine for trademark purposes. Nordic could address that theory in its response if it believed the court should resolve it.

Requested relief

The court was inclined to recommend default judgment only on the Lanham Act trademark-infringement claim and to limit relief to an injunction against further unauthorized sales. It was not inclined to recommend default judgment on Nordic’s other claims because the motion justified relief primarily through the trademark claim and did not explain why additional, potentially redundant claims would serve a practical purpose.

The court required Nordic to explain why its request for disgorgement of profits should not be denied. Nordic had shown Amazon sales totaling $1,060,362.09, but the court noted that federal law requires notice of trademark registration before profits may be recovered. Nordic had not alleged or shown that the products displayed a registration notice or that Premium otherwise had actual notice of the registrations. The court also found it unclear whether Premium received Nordic’s cease-and-desist letters and noted that those letters did not appear to state that the trademarks were registered.

The court was inclined to recommend an injunction against further unauthorized sales. It also was inclined to recommend an order requiring Amazon to freeze Premium’s funds, but only if Nordic cured the defect concerning disgorgement, because otherwise there would be no profits to collect. The court was inclined not to include proposed terms requiring Premium to disclose its suppliers or return or destroy products because Nordic’s motion did not explain why those terms were appropriate.

Order

Rather than immediately issuing a report and recommendation to the district judge, the magistrate judge ordered Nordic to show cause why its default-judgment motion should not be denied as to: (1) all claims other than Lanham Act trademark infringement; (2) the request for disgorgement of revenue; and (3) the proposed injunction requiring Premium to disclose its suppliers and return or destroy products bearing Nordic’s marks.

Nordic was required to respond by May 21, 2025 if it wished to pursue those claims or forms of relief. Alternatively, Nordic could notify the court that it wished to pursue only the Lanham Act infringement claim and an injunction against further infringement. The order did not itself enter final default judgment. The opinion identifies the signing magistrate judge as A. J. Cisneros; the initials in the reproduced signature make the first and middle names less certain.