International Design Concepts, LLC v. Saks Inc.

486 F. Supp. 2d 229, 68 Fed. R. Serv. 3d 17, 2007 U.S. Dist. LEXIS 25134, 2007 WL 945099
CourtDistrict Court, S.D. New York
DecidedMarch 27, 2007
Docket05 Civ. 4754(PKC)
StatusPublished
Cited by23 cases

This text of 486 F. Supp. 2d 229 (International Design Concepts, LLC v. Saks Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Design Concepts, LLC v. Saks Inc., 486 F. Supp. 2d 229, 68 Fed. R. Serv. 3d 17, 2007 U.S. Dist. LEXIS 25134, 2007 WL 945099 (S.D.N.Y. 2007).

Opinion

MEMORANDUM AND ORDER

CASTEL, District Judge.

Under a licensing agreement between Apparel Group International (“AGI”) and Oscar de la Renta, Ltd. (“Oscar”), AGI was permitted to sell products bearing the Oscar trademark to defendants Saks Incorporated and Saks Fifth Avenue, Inc. (collectively, “Saks”). Saks is alleged to have improperly imposed various charge-backs and improperly taken vendor markdown allowances causing damage to AGI. AGI defaulted on the royalty provisions of its licensing agreements with Oscar and Oscar cancelled AGI’s license. AGI subsequently closed its business and, on May 18, 2004, transferred “all assets of the undersigned .to HSBC Bank, (“HSBC”), in repayment for a $754,023.77 debt. That same day, plaintiff International Design Concepts, L.L.C. (“IDC”), allegedly acquired from HSBC all assets of AGI in exchange for payment of $751,896.14 to HSBC.

IDC now brings suit against Saks, alleging that the defendants breached their contract with AGI by improperly assessing the various chargebacks and taking illegitimate vendor markdown allowances on goods defendants purchased from AGI. The Second Amended Complaint, (“SAC”), filed by IDC in June 2005, also asserts eight other claims under New York law: common law fraud, tortious interference with prospective business advantage, violation of General Business Law (“G.B.L.”) § 349, three claims under sections 2-709(l)(a) and (l)(b) and 2-718 of the New York Uniform Commercial Code (“N.Y.U.C.C.”), unjust enrichment and quantum meruit. Plaintiff now seeks leave to withdraw the third count, the claim for tortious interference, and the sixth count to the extent that it relies on N.Y.U.C.C. 2-709(l)(b). The third claim and the referenced portion of the sixth claim are deemed withdrawn.

Discovery was set to close on February 28, 2007. In March 2006, defendants moved to dismiss all claims in the SAC, *234 pursuant to Rule 19(a), Fed.R.Civ.P., on the ground that plaintiff failed to join Oscar, an entity defendants view as indispensable and non-diverse. Defendants also moved for judgment on the pleadings under Rule 12(c) or, alternatively, summary judgment under Rule 56, Fed. R.Civ.P. Defendants contend that all tort claims against it should be dismissed because those claims were not validly assigned from AGI to IDC. Defendants also assert that the fraud and G.B.L. § 349 claims fail to state a valid claim for relief. They contend that the N.Y.U.C.C. claims, the fifth, sixth and seventh counts of the SAC, are time-barred. They also assert that plaintiff may not properly pursue a claim based on unjust enrichment or quantum meruit while simultaneously pursuing a claim of breach of contract.

On January 1, 2006, non-party Oscar moved to intervene as a party-plaintiff, pursuant to Rule 24(a) and, alternatively, Rule 24(b), Fed.R.Civ.P. (Docket 73) Oscar is a New York corporation. IDC, an LLC, has two members, both natural persons who are citizens of New York. Defendants are corporations organized under the laws of Tennessee and Massachusetts and have their principal places of business in Alabama. Because Oscar has sought to intervene as a plaintiff, this court’s jurisdiction, premised upon diversity of citizenship, would remain intact if the motion is granted.

I will first address Oscar’s motion to intervene. I will then consider defendants’ motion.

For the reasons explained below, Oscar’s motion to intervene is granted. Further, defendants’ motion for judgment on the pleadings as to the fourth count is granted. All other relief sought by defendants is denied.

I. Oscar’s Motion to Intervene

Non-party Oscar moves to intervene in this action as of right under Rule 24(a) or permissively under Rule 24(b). Plaintiff IDC has opposed Oscar’s Rule 24(a) motion for intervention as of right, asserting that Oscar is not a necessary party under Rule 19, Fed.R.Civ.P., that Oscar’s motion is untimely and that entry of Oscar into this action will prejudice IDC and compel the court to reopen fact discovery. Further, IDC asserts that permissive intervention under Rule 24(b) is inappropriate as Oscar’s motion is untimely and there are no common questions of fact and law. Defendants do not oppose Oscar’s motion to intervene.

Under Rule 24(a), intervention as of right is mandated when all of the following conditions are met: (1) the motion is timely; (2) the applicant asserts an interest relating to the property or transaction that is the subject of the action; (3) the applicant is so situated that without intervention, disposition of the action may, as a practical matter, impair or impede the applicant’s ability to protect its interest; and (4) the applicant’s interest is not adequately represented by the other parties. See United States v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir.1994). “If a party is not ‘necessary’ under Rule 19(a), then it cannot satisfy the test for intervention as of right under Rule 24(a)(2).” MasterCard Int’l. Inc. v. Visa Int’l Service. Ass’n Inc., 471 F.3d 377, 389-90 (2d Cir.2006).

I conclude that even if Oscar were not a necessary party under Rule 19, permissive intervention is appropriate under Rule 24(b). Accordingly, I need not determine whether intervention as of right under Rule 24(a) is warranted. See Gulf Underwriters Ins. Co. v. The Hurd Ins. Agency, 2004 WL 2935794, *2 n. 3 (D.Conn. Dec. 16, 2004)(concluding that permissive intervention is appropriate and that the “more *235 difficult question” of intervention under Rule 24(a) need not be reached); State of New York v. Reilly, 143 F.R.D. 487, 489 (N.D.N.Y.1992) (“Having granted the [in-tervenors] motions for permissive intervention, there is no need for the court to decide whether or not these applicants are entitled to intervention of right pursuant to Rule24(a)(2)”).

Permissive intervention under Rule 24(b) is discretionary. See In re Bank of N.Y. Derivative Litig., 320 F.3d 291, 300 (2d Cir.2003). In considering whether permissive intervention is warranted, I have considered a range of factors, including “the nature and extent of the interve-nors’ interests,” and to what, if any, degree those interests are “adequately represented by other parties,” as well as “whether parties seeking intervention will significantly contribute to [the] full development of the underlying factual issues in the suit and to the just and equitable adjudication of the legal questions presented.” H.L. Hayden Co. of New York, Inc. v. Siemens Med. Sys., Inc., 797 F.2d 85, 89 (2d Cir.1986). While there are some overlapping interests between Oscar and plaintiff, Oscar has an interest sufficiently distinct as licensor that its interests are not adequately represented by IDC alone.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

BH 336 Partners LLC v. Sentinel Real Estate Corp.
2026 NY Slip Op 00305 (Appellate Division of the Supreme Court of New York, 2026)
Streets v. Mangena
S.D. New York, 2025
McCrobie v. Palisades Acquisition Xvi, LLC
359 F. Supp. 3d 239 (W.D. New York, 2019)
Pike Co. v. Universal Concrete Prods., Inc.
284 F. Supp. 3d 376 (W.D. New York, 2018)
The People v. William Henderson
New York Court of Appeals, 2015
George Nelson Foundation v. Modernica, Inc.
12 F. Supp. 3d 635 (S.D. New York, 2014)
Bristol Village, Inc. v. Louisiana-Pacific Corp.
916 F. Supp. 2d 357 (W.D. New York, 2013)
Abu Dhabi Commercial Bank v. Morgan Stanley & Co.
888 F. Supp. 2d 478 (S.D. New York, 2012)
Macomb Interceptor Drain Drainage District v. Kilpatrick
896 F. Supp. 2d 650 (E.D. Michigan, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
486 F. Supp. 2d 229, 68 Fed. R. Serv. 3d 17, 2007 U.S. Dist. LEXIS 25134, 2007 WL 945099, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-design-concepts-llc-v-saks-inc-nysd-2007.