Amplify Car Wash Advisors LLC v. Car Wash Advisory LLC & Harry Caruso

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK AMPLIFY CAR WASH ADVISORS LLC, Plaintiff, 22-cv-5612 (JGK) - against - MEMORANDUM OPINION AND ORDER CAR WASH ADVISORY LLC & HARRY CA- RUSO, Defendants. JOHN G. KOELTL, District Judge: The plaintiff, Amplify Car Wash Advisor LLC (“Amplify”), brought this action against the defendants, Car Wash Advisory LLC (“CWA”) and Harry Caruso (“Caruso”), asserting claims for cybersquatting, 15 U.S.C. § 1125(d); common-law trademark in- fringement, 15 U.S.C. 1125(a); unfair competition under N.Y. Gen. Bus. Law § 349(a); and tortious interference with prospec- tive economic advantage, all arising out of the defendants’ purchase of the domain name “amplifycarwash.com.” After trial, the jury awarded Amplify nominal damages of $1 on the trademark-infringement claim and maximum statutory dam- ages of $100,000 on the cybersquatting claim, and found that the defendants had acted willfully in infringing Amplify’s trade- marks. See ECF No. 141. Following the trial, the Court granted in part Amplify’s request for permanent injunctive relief and enjoined the defendants from using Amplify’s trademarks and re- quired the defendants to surrender and deliver up possession of

the “amplifycarwash.com” domain to the plaintiff. See ECF No. 140. Amplify moves for attorney’s fees of $224,382.60 under the Lanham Act, 15 U.S.C. § 1117(a), costs of $10,591.01, and post- judgment interest. See ECF Nos. 144-45. For the reasons ex-

plained below, the motion for attorney’s fees is denied with prejudice; the motion for costs is denied without prejudice; and the motion for post-judgment interest is granted. I. The background of this litigation is set out in the Court’s Memorandum Opinion and Order dated March 10, 2025, see Amplify Car Wash Advisors LLC v. Car Wash Advisory LLC (“Amplify II”), 770 F. Supp. 3d 625, 632-34 (S.D.N.Y. 2025), with which the Court assumes familiarity. The following facts are relevant to the present motion. On May 25, 2022, Amplify sent Caruso a letter asserting un-

authorized use of the domain name “amplifycarwash.com,” demanding that CWA cease use of the “Amplify” mark and transfer the domain.1 See ECF No. 145, Ex. A. On May 31, 2022, the defend- 0F ants responded that the request “appear[ed] to be a thinly veiled attempt to intimidate our client into surrendering his

1 Unless otherwise noted, this Memorandum Opinion and Order omits all alterations, omissions, emphasis, quotation marks, and cita- tions in quoted text. property,” and proposed that CWA would stop using the domain if Amplify ceased using “Car Wash Advisors” in its title, website, and marketing materials. See id., Ex. B. Amplify did not accept that proposal, and in the following month, the defendants deac- tivated the domain. Hadden Decl. ¶ 8, ECF No. 155.

On June 21, 2022, Amplify offered to split the filing fees and pay $200 for the domain transfer. See ECF No. 145, Ex. D. The defendants did not accept this proposal. On July 5, 2022, Amplify filed the present case. See ECF No. 3. While the defend- ants did not answer within sixty days, during that period, the parties were engaging in settlement discussions that were unsuc- cessful. Hadden Decl. ¶¶ 9–12. The defendants contend that Amplify did not respond to their last pre-answer proposal and instead obtained a certificate of default against the defendants and moved for a default judgment. Id. ¶ 12; see also ECF No. 35 at 3. The Court denied Amplify’s motion and vacated the certifi- cate of default. See Amplify Car Wash Advisors LLC v. Car Wash

Advisory LLC (“Amplify I”), No. 22-cv-5612, 2022 WL 16838336 (S.D.N.Y. Nov. 9, 2022). The expense caused by the plaintiff’s refusal to vacate the certificate of default and moving for a default judgment against the defendants, was wholly unnecessary. As the court noted: “[T]he parties could have agreed to set aside the certificate of default. Such an agreement would have avoided all of the subsequent procedural skirmishing over the propriety of a default judgment.” Id. at *1. The defendants then answered within the extended time set by the Court. See ECF No. 41. As discovery progressed, the parties continued to discuss settlement. On October 2, 2022, the defendants inquired about

settlement; on October 5, 2022, Amplify demanded $275,000. Had- den Decl. ¶ 15. On October 11, 2023, the defendants offered $20,000; on October 19, 2023, Amplify countered at $70,000. See ECF No. 145 at 1, Ex. G. Magistrate Judge Ona T. Wang presided over several settlement conferences and extended a mediator’s proposal, see ECF No. 88, which, according to the Declaration of the defendants’ then counsel, the defendants accepted but Am- plify did not. Hadden Decl. ¶¶ 16–17. On Amplify’s motion for partial summary judgment, the Court found the defendants jointly and severally liable for violating § 1125(a) by infringing Amplify’s “Amplify” and “Amplify Car Wash Advisors” marks, and for violating § 1125(d) with respect

to the “amplifycarwash.com” domain. See Amplify II, 770 F. Supp. 3d 625. On August 13, 2025, the jury awarded Amplify $1 in nominal damages on the trademark-infringement claim and $100,000 in statutory damages on the cybersquatting claim. See ECF No. 141. After the trial, the defendants offered $50,000 to resolve the case; Amplify rejected that offer and proposed $200,000. Hadden Decl. ¶ 17. The defendants satisfied the judgment on October 15, 2025. See ECF No. 158. II. Amplify moves for attorney’s fees pursuant to the Lanham Act, which provides that, “[t]he court in exceptional cases may

award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). Amplify is the prevailing party in this case. The Court of Appeals for the Second Circuit has held that the Supreme Court’s standard in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), governing fee awards under the Patent Act, also applies to requests for attor- ney’s fees under the Lanham Act. See Sleepy’s LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 530–31 (2d Cir. 2018). Under Octane Fitness, an “exceptional” case is one that “stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which

the case was litigated.” 572 U.S. at 554. Courts consider factors including “frivolousness, motiva- tion, objective unreasonableness (both in the factual and legal components of the case), and the need in particular circum- stances to advance considerations of compensation and deterrence.” Id. at 554 n.6. “[W]here a party has set forth some good-faith argument in favor of its position, it will generally not be found to have advanced exceptionally meritless claims.” Hockeyline, Inc. v. STATS LLC, No. 13-cv-1446, 2017 WL 1743022, at *5 (S.D.N.Y. Apr. 27, 2017). Although Octane Fitness does not require “independently sanctionable misconduct,” most post-Oc- tane fee awards have involved substantial litigation misconduct.

Id.; see also Hello I Am Elliot, Inc. v. Sine, No. 19-cv-6905, 2021 WL 1191971, at *7 (S.D.N.Y. Mar. 30, 2021) (considering whether the claimant acted with improper motives). Ultimately, whether a case is “exceptional” is committed to the Court’s dis- cretion, based on the totality of the circumstances. Octane Fitness, 572 U.S. at 554. Amplify contends that, considering the totality of the cir- cumstances, an award of attorney’s fees is warranted based on the defendants’ alleged misconduct and improper purpose during the settlement process and at the pleading stage. Pl.’s Mem. of L. in Supp. of Mot. for Attorney’s Fees, Costs, and Post-Judg-

ment Interest (“Pl.’s Mot.”) 7–9, ECF No. 145. In particular, Amplify cites the defendants’ refusal to resolve the dispute be- fore suit, their initial failure to meet the answer deadline, and the assertion that the defendants never “simply offered to give the domain back.” Id. These circumstances, however, do not show that the defendants’ conduct was motivated by an improper purpose or constituted misconduct. As Judge Sand observed in OPA (Overseas Pub. Ass’n) Amsterdam BV v. Am. Inst. of Physics, when “each side blames the other for not pursuing settlement more affirmatively . . . the failure to achieve a settlement was not entirely the responsi- bility of either party.” 986 F. Supp. 242, 244 (S.D.N.Y. 1997),

aff’d sub nom., Gordon & Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 166 F.3d 438 (2d Cir. 1999). The same is true here. Each side faults the other for the breakdown in negotia- tions, but on this record, the responsibility cannot be laid solely at the defendants’ feet. The defendants’ settlement con- duct appears routine, if not proactive: from the pleadings stage, they repeatedly engaged Amplify about settlement, deac- tivated the infringing domain, made multiple offers to return the domain (including offers well above the $1,000 statutory minimum under 15 U.S.C. § 1117(d)), accepted a mediator’s pro- posal extended by Magistrate Judge Wang, and continued negotiations through and after trial. See Hadden Decl. ¶¶ 9–17;

ECF No. 145, Exs. B, D, G. Mere back-and-forth over numbers and conditions to transfer the domain, without more, does not estab- lish bad faith or misconduct. Therefore, the defendants’ conduct during settlement was not improperly motivated and did not amount to misconduct. Additionally, the defendants’ delay in answering was nei- ther motivated by an improper purpose nor objectively unreasonable. As the Court explained in Amplify I, the delay stemmed from efforts to resolve the case through settlement, and “the defendants’ failure to answer was not willful . . . [a]nd there is no credible argument that the plaintiff has been preju- diced by a delay of less than two months in receiving an answer

or response from the defendants, particularly when that delay would have been shortened had the plaintiff simply agreed to let the defendants file a late answer in the first place.” 2022 WL 16838336, at *1. Accordingly, the brief delay was excusable and does not suggest bad faith or misconduct. To the extent Amplify also contends that the defendants’ positions throughout this case were frivolous or objectively un- reasonable, the contention is unpersuasive. An argument is objectively unreasonable only if it is “clearly without merit or otherwise patently devoid of a legal or factual basis.” Hello I Am Elliot, 2021 WL 1191971, at *8. An argument is frivolous if it amounts to a mere “shakedown.” Penshurst Trading Inc. v. Zo-

dax L.P., 652 F. App’x 10, 12 (2d Cir. 2016). But the failure of an argument at summary judgment or at trial does not, standing alone, render it objectively unreasonable or frivolous. See, e.g., id.; Sleepy’s LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 531 n.7 (2d Cir. 2018); Stephen T. Greenberg, M.D., P.C. v. Perfect Body Image, LLC, No. 20-3912-cv, 2022 WL 275378, at *2 (2d Cir. Jan. 31, 2022). In this case, the defendants’ positions were neither objec- tively unreasonable nor frivolous. In resolving Amplify’s motion for partial summary judgment, the Court concluded that, although the balance of the Polaroid factors favored Amplify, several factors weighed in the defendants’ favor. See Amplify II, 770 F.

Supp. 3d at 637–39. At trial, the defendants persuaded the jury that Amplify suffered no consequential damages from the trade- mark infringement, resulting in an award of only nominal damages. See ECF No. 141. Even though the defendants did not prevail at either of these stages, these outcomes underscore that the defendants’ positions were not “clearly without merit,” “patently devoid of a legal or factual basis,” or “a mere shake- down.” On balance, this was a straightforward infringement dis- pute. It does not “stand out” as exceptional within the meaning of § 1117(a) and does not warrant an award of attorney’s fees – particularly not in the amount sought by Amplify.

III. Under Local Civil Rule 54.1(a), costs are taxed by the Clerk in the first instance, and any disputes may then be pre- sented to the Court. Amplify should submit any bill of costs to the Clerk in accordance with the Local Rules. Accordingly, the motion is denied without prejudice to renewal, if necessary, af- ter a decision by the Clerk. IV. Under 28 U.S.C. § 1961, Amplify is entitled to post-judg- ment interest on the $100,001 judgment from the date the judgment was entered, August 13, 2025, until the judgment was satisfied, October 15, 2025. The rate of post-judgment interest

is “equal to the weekly average 1-year constant maturity Treas- ury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.” 28 U.S.C. § 1961(a). For a judgment entered on August 13, 2025, the applicable rate is 3.90% (the week ending August 8, 2025). Post-judgment interest is computed daily and com- pounded annually. 28 U.S.C. § 1961(b). Accordingly, Amplify is entitled to post-judgment interest of $673.16, calculated as follows: $100,001 × 0.0390 ÷ 365 × 63 = $673.16. CONCLUSION The Court has considered all of the parties’ arguments. To the extent not specifically addressed, those arguments are ei-

ther moot or without merit. For the reasons explained above, Amplify’s motion for attorney’s fees is denied with prejudice; the motion for costs is denied without prejudice; and the motion for post-judgment interest is granted. The Clerk is directed to close all pending motions in this case.

SO ORDERED. Dated: New York, New York January 8, 2026 LE 8 John G. Koeltl United States District Judge