JLM Couture, Inc. v. Gutman

Background

JLM Couture, Inc. moved to hold Hayley Paige Gutman in civil contempt, meaning to find that she violated a court order, and requested monetary and nonmonetary sanctions. The challenged order was a preliminary injunction issued on March 4, 2021, and modified on June 2, 2021. Among other things, paragraph 3(b) barred Gutman until August 1, 2022, or an earlier date set by the court, from directly or indirectly engaging in or associating with businesses involved in designing, manufacturing, marketing, or selling bridal apparel, bridal accessories, evening wear, or other categories of goods designed, manufactured, marketed, licensed, or sold by JLM. Gutman opposed the motion and filed a cross-motion seeking attorney’s fees and costs.

Alleged Violations

The court considered Gutman’s social-media posts and related conduct. On June 7, 2021, she posted a video announcing that she planned to return to the bridal industry and launch a new brand in August 2022. She encouraged followers to “SAVE THE DATE.” She later gave Business Insider comments about returning to bridal and shared the resulting article on her Instagram account. On June 25, she posted that the injunction would expire on August 1, 2022, and that she hoped to reenter bridal with a new brand. She also posted videos of herself sketching dresses on May 7, June 21, July 1, and July 15, 2021.

JLM argued that the announcements marketed a future competing bridal brand and that the sketches were both designs and marketing materials for goods covered by paragraph 3(b). Gutman argued, among other things, that she had only prepared for a future brand, that no competing goods had yet been designed or manufactured, that her drawings were not for sale, and that the injunction violated her speech rights. The court rejected those arguments. It explained that paragraph 3(b) also prohibited marketing covered goods, even if the goods had not yet been manufactured, and found that the public announcements and sketches went beyond permissible preparation because they affected JLM’s economic interests.

Civil Contempt Finding

For civil contempt, JLM had to prove by clear and convincing evidence that the order was clear and unambiguous, that Gutman failed to comply, and that she did not diligently attempt to comply in a reasonable manner. The court found paragraph 3(b) clear and unambiguous. It determined that Gutman’s announcements and dress-sketch posts violated the provision and that she continued posting after receiving notice that JLM viewed her conduct as violating the order. The court found that her violations were willful, although willfulness was not required to establish civil contempt. Because the court found sufficient violations of paragraph 3(b), it did not decide whether the same conduct also violated paragraphs 3(a), 3(c), or 4.

Remedies and Disposition

The court granted in part and denied in part JLM’s motion to hold Gutman in civil contempt. It directed Gutman to remove the May 7 video from her @agirlyoumightknowgrant account and posts from June 7, June 21, June 25, and July 15 from her ATG Account within five days. If content had already disappeared, Gutman was barred from reposting it or similar content while the preliminary injunction remained in effect.

The court also immediately enjoined Gutman from announcing a new brand name in connection with a present or future commercial venture involving any category of goods listed in paragraph 3(b) while the injunction remained effective. If she failed to remove the specified content within five days, reposted the same or similar content, or made a prohibited brand announcement, she was ordered to pay $5,000 to the court clerk for each day of noncompliance.

The court awarded JLM its reasonable attorney’s fees and costs incurred in prosecuting the contempt motion and directed JLM to file a fee motion with supporting billing materials within 14 days. It denied JLM’s request for compensation based on claimed business and reputational losses, including an asserted $66,000 loss, because that amount was too speculative. It also denied as premature JLM’s request for an additional sanction for each later violation, while stating that JLM could seek additional relief for later noncompliant conduct. The court denied in its entirety Gutman’s cross-motion for attorney’s fees and costs.