City of New York v. Lopez

Background

The City of New York brought this trademark infringement and counterfeiting case against Robert G. Lopez. The case concerns Lopez’s alleged sale of cannabis-themed retail goods bearing similarities to the City’s trademarked logos. On December 21, 2021, the court granted the City’s motion for a preliminary injunction, which is a temporary court order intended to preserve the situation until a decision on the merits.

Lopez moved to “dissolve” the injunction. The court treated that request as a motion to vacate the preliminary injunction under its inherent equitable power to change or end its orders.

Rule 65(c) Bond

Lopez argued that the preliminary injunction should be vacated because the court had not required the City to post security under Federal Rule of Civil Procedure 65(c). That rule generally permits a preliminary injunction only if the party seeking it provides security to cover costs and damages that could result if the other party was wrongfully restrained. The court explained, however, that district courts have broad discretion to dispense with that requirement.

The court had previously found that no bond was needed. It concluded that Lopez had not shown a changed circumstance or a clear legal error requiring reconsideration. The court also noted that Lopez had not shown harm when the injunction was issued, including at a hearing when he was asked whether he had a reason the injunction should not issue. The court found that the City had shown a clear likelihood of irreparable harm from ongoing infringement and that Lopez had not raised concerns about recovering damages from the City if he ultimately prevailed. The court therefore found no basis to vacate the injunction on bond grounds.

Notice and Opportunity to Respond

Lopez stated that he had never received the City’s preliminary-injunction motion and therefore had no formal opportunity to oppose it. The court found that claim contradicted by the record and by Lopez’s own statements. At the preliminary-injunction hearing, Lopez acknowledged that he had access to the federal court’s electronic filing system and could obtain documents electronically. He also said that his arguments were the same as those in his motion to dismiss, which the court had considered when deciding the preliminary-injunction motion.

The City’s lawyer also represented that Lopez had been served with the preliminary-injunction papers in person and at several email addresses. The record included a photograph relating to service, an affidavit of service, and a mailing receipt. The court concluded that Lopez had notice and an opportunity to oppose the injunction.

Changed Circumstances and Fairness

Lopez argued that continuing the injunction had become unfair because it had lasted for years, caused serious business losses, and restricted his ability to use and promote his mark. He also argued that the City had delayed the litigation while continuing to benefit from the injunction.

The court found an apparent contradiction in Lopez’s arguments. Lopez said both that the injunction had caused major business losses and that the injunction was no longer needed because he no longer sold the clothing and accessories that were the focus of the injunction. Lopez estimated his lost revenue at at least $100 million, but the court found that he supplied no proof of that figure and considered it implausible in light of his statement that the entire New York cannabis industry generated $137 million in retail sales in fiscal year 2023. The court concluded that Lopez had not shown business losses or other prejudice making continued enforcement unfair.

The court acknowledged that the case had moved slowly, particularly during the year between October 2023 and October 2024. But it found that the City had attempted settlement, sought Lopez’s attendance at a deposition, and defended dozens of related actions, including one against the City’s counsel personally. The court also identified delays attributable to Lopez, including failing to respond to motions, requesting a conference delay, pursuing an appeal that was dismissed after he failed to file a required form, and failing to provide documents during discovery. The court concluded that the City had not delayed the case so significantly that continued enforcement of the injunction became inequitable.

Disposition

Judge Oetken denied Lopez’s motion to dissolve the preliminary injunction. The order directed the clerk to close the motion at ECF No. 101. The opinion describes the injunction’s subject matter but does not reproduce all of its operative terms.