OFF-WHITE LLC v. ALI JR

Background

Off-White LLC sued defendants alleging trademark infringement, counterfeiting, false designation of origin, passing off, unfair competition, and related state and common-law claims. The court previously entered default judgment against 39 defendants who had not appeared or responded and permanently enjoined them from infringing or counterfeiting Off-White’s marks.

Off-White then sought statutory trademark damages under 15 U.S.C. § 1117(c), totaling $5,100,000, and requested a post-judgment asset restraining order and authorization to release and transfer frozen assets. The defendants collectively operated accounts or storefronts on Redbubble, an online marketplace, and Off-White alleged that they sold counterfeit products there. Off-White stated that 48 counterfeit products had been sold and shipped to a New York address, but it did not identify which defendants made those sales. Its other sales reports showed collective sales of 2,824 counterfeit products but did not identify where the products were sold or shipped.

Personal Jurisdiction Analysis

Personal jurisdiction is a court’s legal authority over a particular defendant. The court explained that it could examine this issue before awarding damages or other relief, even though the defendants had defaulted. Because the Lanham Act does not provide nationwide service of process, the court applied New York’s personal-jurisdiction rules and then considered constitutional due-process requirements.

Off-White relied on New York Civil Practice Law and Rules § 302(a)(1), which can apply when a defendant transacts business in New York and the claim arises from that business. The court recognized that an actual sale of counterfeit goods into New York can satisfy this provision. But it found that Off-White had not shown that each defaulting defendant actually made a sale or shipment to New York. The general ability to ship products to New York, general allegations of sales to customers worldwide, and collective sales data were insufficient. The 48 sales to the New York address did not establish jurisdiction over every defendant because Off-White did not identify the defendants responsible for those sales.

The court also considered § 302(a)(3), which requires, among other things, an out-of-state tort, a claim arising from that act, injury to a person or property in New York, reasonable expectation that the act would have consequences in New York, and substantial revenue from interstate or international commerce. The court found that Off-White adequately alleged the first two elements but did not adequately allege the required New York injury and foreseeability elements for the defaulting defendants.

Disposition

The court concluded that Off-White had not sufficiently established personal jurisdiction over the defaulting defendants for the damages inquiry or for deciding whether post-judgment asset relief was warranted. It did not award the requested damages or grant the requested asset relief in this order. Instead, Judge Sarah Netburn granted Off-White leave to supplement its papers within 21 days with the factual and legal basis for exercising personal jurisdiction over each defaulting defendant.

Classification and Scope

This is a procedural order because it addressed the threshold issue of personal jurisdiction rather than deciding the amount of damages or the requested post-judgment asset relief. The order also noted that the court had previously found personal jurisdiction at an earlier stage and had already entered a permanent injunction.