Enchante Accessories, Inc. v. Turko Textile, LLC

Background

Enchante Accessories, Inc. manufactures home accessories, including bath towels, and has operated under its current name since 1997. Turko Textiles, LLC was founded in 2014 and markets products, including bath towels, under the brand name “Enchante Home.” In 2017, Turko attempted to register the stylized Enchante Home mark. Enchante opposed that application, and the resulting dispute led to this case.

Enchante’s complaint asserted trademark-infringement claims under the Lanham Act and New York common law, along with New York common-law unfair competition, use of a name with intent to deceive, injury to business reputation, and unjust enrichment. Enchante later withdrew its unjust-enrichment claim. In an earlier ruling, the court granted Turko summary judgment on Enchante’s claims for unfair competition and use of a name with intent to deceive. The opinion addressed Turko’s later motion to strike Enchante’s demand for a jury trial.

The Parties’ Arguments

Enchante sought injunctive relief, attorney fees, an accounting of Turko’s profits, and damages. Turko argued that the first three categories were equitable remedies and that Enchante had neither produced evidence nor pleaded a theory supporting legal damages. Enchante argued that it had properly made and maintained its jury demand and could seek damages at trial. It did not dispute that its nondamages remedies were equitable.

Enchante also asked the court to use an advisory jury under Federal Rule of Civil Procedure 39(c). The court did not decide that request because the decision whether to use an advisory jury belonged to the district judge. The opinion stated that Enchante could renew the request before Judge Woods no later than April 12, 2023.

Reasons for the Ruling

Under Federal Rule of Civil Procedure 39(a)(2), a court may strike a jury demand when there is no federal right to a jury trial on the issues demanded. The Seventh Amendment protects jury trials for legal rights, but not when only equitable rights and remedies are involved. The court applied the two-part test described in the opinion: whether the claim was legal or equitable in historical practice and whether the remedy sought is legal or equitable, with greater weight given to the remedy.

The court determined that only a claim for damages could give Enchante a right to a jury trial. Enchante’s complaint requested damages “in the full amount Plaintiff has sustained,” but its initial disclosures contained no computation. Its responses to Turko’s interrogatories likewise did not provide a damages calculation. Enchante’s supplemental disclosures also lacked a calculation and stated that the information depended on matters in Turko’s possession. During a discovery conference, Enchante’s counsel said the calculation would be based on the number of towels Turko had sold, rather than on Enchante’s own sales. Enchante’s expert report did not provide a basis for calculating Enchante’s damages.

The court held that these failures violated the damages-disclosure requirements of Rule 26. Under Rule 37, information not properly disclosed generally cannot be used as evidence at trial unless the failure was substantially justified or harmless. The court found that Enchante repeatedly failed to provide a damages calculation or even a theory explaining how it would prove the harm it suffered. It therefore ruled that Enchante was precluded from introducing evidence of its damages at trial.

Because the damages evidence was precluded, the court concluded that Enchante’s remaining remedies were equitable and did not entitle it to a jury trial. The court also rejected Enchante’s argument that a possible award of nominal damages would create a jury-trial right, relying on the practice described in the opinion for nominal-damages claims below twenty dollars.

Disposition

The court granted Turko’s motion to strike Enchante’s jury demand. The Clerk of Court was asked to terminate the motion at ECF No. 165. The court did not rule on Enchante’s request for an advisory jury under Rule 39(c).