Spin Master Ltd. v. 158
- Lewis Liman
- 1:18-cv-01774
- U.S. District Court · Southern District of New York
- 7
In Spin Master v. 158, Judge Liman granted in part and denied in part reconsideration, awarding $1.7 million against twelve defaulting defendants.
Spin Master Ltd. and Spin Master, Inc.; twelve defaulting defendants became subject to liability findings and a combined $1.7 million statutory-damages award, while the court held that it lacked personal jurisdiction over the remaining defaulting defendants.
What happened
Spin Master Ltd. v. 158 involved the plaintiffs’ request to reconsider an earlier order that granted default judgment against six defendants but denied it against others. The earlier order also denied the plaintiffs’ proposed permanent injunction in its current form and requested a revised version.
The plaintiffs presented new evidence that twelve additional defendants had sold counterfeit products to New York customers. The court found that this evidence established its authority over those defendants and supported liability for trademark and copyright infringement. The plaintiffs also argued that the remaining defendants’ online storefronts and offers to ship to New York were enough, but the court disagreed because there was no evidence of a New York sale or transaction by those defendants.
Judge Lewis J. Liman granted in part and denied in part the reconsideration motion. He awarded the plaintiffs a total of $1.7 million in statutory damages against the twelve defendants and ruled that the court lacked authority over the remaining defendants. The plaintiffs were directed to submit revised default-judgment and injunction orders within twenty-one days.
The detailed version
- Spin Master Ltd. v. 158 · No. 1:18-cv-01774
- Lewis Liman
- Sept. 4, 2020
Background
The court had previously granted Spin Master Ltd. and Spin Master, Inc.’s motion for default judgment against six defaulting defendants, while denying the motion as to other defaulting defendants. It also denied the plaintiffs’ proposed permanent injunction in its current form and directed them to submit a revised injunction.
The plaintiffs moved for reconsideration under Southern District of New York Local Civil Rule 6.3. Reconsideration is an extraordinary remedy generally limited to an intervening change in controlling law, new evidence, or the need to correct clear error or prevent manifest injustice. The motion was unopposed.
Twelve Defendants Supported by New Evidence
The plaintiffs submitted supplemental discovery from ContextLogic showing that twelve defaulting defendants had sold counterfeit products into New York before the action was filed. The court held that this evidence established personal jurisdiction—meaning the court’s legal authority over those defendants—under New York Civil Practice Law and Rules § 302(a)(1), for the reasons stated in the earlier opinion.
The court also found liability on the plaintiffs’ trademark counterfeiting and infringement claims and copyright infringement claims against those twelve defendants, relying on the analysis in the earlier opinion. The court found that the twelve defendants had engaged in willful and widespread counterfeiting and infringement involving the Bunchems Mark.
The court rejected the plaintiffs’ proposed damages methodology but awarded statutory damages based on three times the lost revenues calculated using the most expensive counterfeit products. The total award was $1.7 million, with individual amounts ranging from $12,000 to $600,000. The opinion states that the calculation used $29.99, the highest-priced counterfeit product, multiplied by the number of counterfeit products sold by each defendant, then multiplied by three, with adjustments.
Remaining Defendants
The plaintiffs did not identify new evidence or a change in controlling law concerning the remaining defaulting defendants. Instead, they argued that maintaining interactive storefronts on the Wish marketplace, offering products for sale in New York, or offering shipping to New York was enough to establish personal jurisdiction, even without proof of an actual New York sale.
The court rejected that argument. It explained that New York’s statute requires purposeful activity in New York and a substantial relationship between that activity and the claim. The court noted that the decisions cited by the plaintiffs involved evidence of at least one sale or other transaction with New York, unlike the remaining defendants. Because the plaintiffs had not shown a single New York act or transaction by those defendants, the court held that it lacked personal jurisdiction over them.
Disposition
The court granted in part and denied in part the motion for reconsideration. It directed the plaintiffs to submit a revised final default judgment and permanent-injunction order within twenty-one days and directed the Clerk of Court to close the motion docket entry.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.