Home/S.D. New York/Kelly Toys Holdings, LLC. v. Alialialill Store

Kelly Toys Holdings, LLC. v. Alialialill Store

District Court, S.D. New York·Decided June 9, 2022·No. 1:21-cv-08434·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

---------------------------------------------------------- X KELLY TOYS HOLDINGS, LLC, : ORDER AND OPINION : A D O P T I N G M A G I S T RATE’S Plaintiff, : REPORT AND -against- : RECOMMENDATION AND : GRANTING MOTION FOR ALIALIALILL STORE, et al., : DEFAULT JUDGMENT : Defendants. : 21 Civ. 8434 (AKH) (RWL) ---------------------------------------------------------- X

ALVIN K. HELLERSTEIN, U.S.D.J.: On October 6, 2021, Plaintiff Kelly Toys Holdings, LLC (“Plaintiff”) commenced this action seeking damages and injunctive relief against 48 Defendants,1 allegedly engaged in marketing and selling counterfeit versions of Plaintiff’s Squishmallows line of collectible dolls. (ECF No. 8). Plaintiff asserted various claims under the federal trademark and copyright laws,2 as well as related state law and common-law claims. Plaintiff also moved ex parte for a temporary restraining order (“TRO”), expedited discovery, and other relief. (ECF No. 14–16). On October 25, 2021, the Court granted the TRO, which included an asset restraining order on each Defendant’s financial and online service accounts. (ECF No. 17). On November 12, 2021, the Court entered a preliminary injunction

1 The initial complaint named 62 Defendants; however, prior to the Magistrate issuing its Report and Recommendation (“R&R”) (ECF No. 33), Plaintiff voluntarily dismissed its claims against six, pursuant to Fed. R. Civ. P. 41(a). See ECF Nos. 28, 33. After the Magistrate issued its R&R, Plaintiff moved to dismiss its claims against eight additional defendants (ECF No. 39). The R&R included an attachment listing the Defaulting Defendants and their respective allegedly wrongful uses of Plaintiff’s Squishmallow marks. See Attachment A, Report and Recommendation, ECF No. 37. I approve dismissal, and therefore attach, an edited version of the R&R’s Attachment A, striking the newly dismissed defendants. 2 Plaintiff asserted federal claims for trademark infringement of its federally registered trademarks in violation of the Federal Trademark Act (the “Lanham Act”), 15 U.S.C. §§ 051 et seq.; counterfeiting of its federally registered trademarks in violation of 15 U.S.C. §§ 1114(1)(a)-(b), 1116(d), and 1117(b)-(c); false designation of origin, passing off, and unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and, copyright infringement of federally registered copyrights in violation of the Copyright Act of 1976, 17 U.S.C. §§ 101 et seq. 1 order, mirroring the terms of the TRO and extending through the pendency of this action (ECF Nos. 10, 21). The Defaulting Defendants, identified in the attached chart, have not appeared in this action and failed to answer or otherwise respond to the Complaint. On March 9, 2022, the Clerk of Court entered default against each Defaulting Defendant. (ECF Nos. 27). On March 11, 2022, Plaintiff moved pursuant to Federal Rule of Civil Procedure 55 for default judgment against the Defaulting Defendants, (ECF No. 29), seeking (1) entry of a final judgment and permanent injunction; (2) statutory damages pursuant to 15 U.S.C. § 1117(c) in the

amount of $50,000 against each Defaulting Defendant along with postjudgment interest; and (3) leave to serve restraining order notices on the Defaulting Defendants and third-parties holding assets of the Defaulting Defendants pursuant to Fed. R. Civ. P. 69(a)(1) and N.Y. C.P.L.R. § 5222. On March 17, 2022, Plaintiff’s motion was referred to United States Magistrate Judge Robert W. Lehrburger for a Report and Recommendation (“R&R”).3 (ECF No. 34). Judge Lehrburger entered an order requiring Defendants to file any response to Plaintiff’s motion no later than April 16, 2022 (ECF No. 35); Defendants failed to respond. On May 19, 2022, Judge Lehrburger issued an R&R (ECF No. 37) recommending that I enter a judgment in favor of Plaintiff against each Defaulting Defendant that (1) makes permanent the injunctive relief previously imposed by the PI Order (except for asset-freeze provisions); (2) awards Plaintiff statutory damages pursuant

to 15 U.S.C. § 1117(c) in the amount of $50,000 against each Defaulting Defendant along with post- judgment interest; and, (3) grants permission to serve asset restraining order notices pursuant to N.Y.

3 This case was originally assigned to Judge Alison Nathan but was reassigned to me on April 6, 2022, after Judge Nathan was elevated to the Court of Appeals for the Second Circuit. 2 C.P.L.R. § 5222 and dissolves the 30-day stay that would otherwise delay Plaintiff’s ability to serve the notices. See R&R at 27. No party has objected to the R&R, and the time to do so has passed. See Fed. R. Civ. P. 72(b)(2) (requiring specific written objections to an R&R to be served and filed within 14 days after being served with a copy of the recommended disposition); see also ECF No. 37 (requiring written objections to the R&R be filed by June 2, 2022). Accordingly, I review the R&R for clear error. See Urena v. New York, 160 F. Supp. 2d 606, 609–10 (S.D.N.Y. 2001) (“To accept the report

and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record.”); Porter v. Potter, 219 Fed. App’x 112, 113 (2d Cir. 2007) (summary order) (“Failure to object timely to a magistrate’s report operates as a waiver of any further review of the magistrate’s decision.”); see also Thomas v. Arn, 474 U.S. 140, 150 (1985) (noting that Congress provided for a “clearly erroneous or contrary to law” standard where parties fail to object). I have reviewed both the record and the R&R, and finding no clear error, adopt the R&R (ECF No. 37). The Clerk shall enter judgment in favor of Plaintiff against each Defaulting Defendant that (1) makes permanent the injunctive relief previously imposed by the preliminary injunction order (ECF No. 10) (except for asset-freeze provisions); (2) awards statutory damages

pursuant to 15 U.S.C. § 1117(c) in the amount of $50,000 against each Defaulting Defendant along with postjudgment interest; and (3) provides for immediate execution and grants costs to Plaintiff as taxed by the Clerk. Plaintiff shall provide forms of judgment to the Clerk.

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Related

Thomas v. Arn
474 U.S. 140 (Supreme Court, 1986)
Urena v. People of State of New York
160 F. Supp. 2d 606 (S.D. New York, 2001)