Off-White LLC. v. Adagio

Background

Off-White LLC brought the action against 132 defendants, alleging, among other claims, trademark infringement and counterfeiting under the Lanham Act, the federal trademark statute. With its complaint, Off-White sought temporary and preliminary restraints, an asset restraining order, permission for electronic service, and expedited discovery. The court granted that application and later entered a preliminary injunction after the defendants did not appear at the scheduled hearing.

Off-White later sought permission to request a default judgment and permanent injunction. A default judgment is a judgment entered when a defendant fails to participate in the case. After additional dismissals, the court entered a default judgment on Off-White’s trademark infringement and counterfeiting claims against the remaining defendants and issued a permanent injunction against each of them. The case was then referred to Magistrate Judge Cott to determine damages and other relief.

Damages Recommendation

Off-White initially sought $12 million in statutory damages—$100,000 for each of 120 defaulting defendants—along with post-judgment interest and an order freezing and transferring the defendants’ assets until the awards were paid. After Off-White submitted its proposed findings, it voluntarily dismissed two more defendants, leaving 118 defaulting defendants. Judge Cott recommended statutory damages of $100,000 against each of those 118 defendants, for a total of $11.8 million, plus post-judgment interest and asset-freezing and transfer relief.

Judge Cott noted that Off-White later filed a notice voluntarily dismissing five additional defendants: Air98, coolshoesbiz, mansneaker, rungshoes001, and sneakertrade. He stated that his recommendation would not apply to those defendants if the dismissals were approved. No party filed objections to the Report and Recommendation. The opinion also states that eight defendants were not successfully served with the Report, but that they had previously received the summons, complaint, temporary restraining order, supporting documents, and preliminary injunction order, and had not appeared.

District Court’s Review and Ruling

Under the governing procedure, when no specific objection is filed to a magistrate judge’s recommendation, the district court reviews the record for clear error—an obvious mistake—and may then adopt the recommendation. Judge Abrams conducted that review and found no clear error.

Judge Abrams adopted Judge Cott’s Report and Recommendation in its entirety except for the required deduction for the five defendants later dismissed. She deducted $500,000, or $100,000 for each of those five defendants, from the recommended award. The court awarded Off-White statutory damages totaling $11.3 million, plus post-judgment interest. It also ordered the assets of the defendants frozen, except for the five dismissed defendants, and authorized the release and transfer of those assets to Off-White until the monetary judgments were satisfied. The Clerk was directed to terminate pending motions and close the case.