NY MACHINERY INC. v. THE KOREAN CLEANERS MONTHLY

CourtDistrict Court, D. New Jersey
DecidedMay 17, 2023
Docket2:17-cv-12269
StatusUnknown

This text of NY MACHINERY INC. v. THE KOREAN CLEANERS MONTHLY (NY MACHINERY INC. v. THE KOREAN CLEANERS MONTHLY) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NY MACHINERY INC. v. THE KOREAN CLEANERS MONTHLY, (D.N.J. 2023).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

NY MACHINERY INC., et al., Case No. 17–cv–12269–ESK Plaintiffs,

v. OPINION AND ORDER THE KOREAN CLEANERS MONTHLY, et al., Defendants. KIEL, U.S.M.J. THIS MATTER is before the Court on the motion (Motion) of plaintiffs NY Machinery Inc. (NY Machinery) and Kleaners LLC (Kleaners) for summary judgment pursuant to Federal Rule of Civil Procedure (Rule) 56 in their favor on all claims in the amended complaint. (ECF No. 182 through ECF No. 182-8; ECF No. 183 through ECF No. 183-5.) Defendants The Korean Cleaners Monthly (Cleaners Monthly) and John Chung, also known as Seung Chae Chung, filed papers in opposition to the Motion (ECF Nos. 190, 190-1), and plaintiffs filed papers in reply (ECF No. 191 through ECF No. 191-4). The parties have consented to my authority as a Magistrate Judge to conduct all proceedings in this case. (ECF No. 105). The Motion was held in abeyance to allow for the parties to engage in settlement discussions, which were not ultimately successful. (ECF Nos. 193, 194, 195, 197.) For the following reasons, the Motion is DENIED. I. FACTS AND PROCEDURAL HISTORY The facts and claims at issue in this case have been addressed previously. (See ECF Nos. 15, 30, 40 (opinions entered by District Judge Wigenton in May 2018, November 2018, and January 2019); ECF No. 67 (opinion entered by Magistrate Judge Wettre in August 2019).) The aspects of the case that are necessary to resolve the Motion will be restated here. NY Machinery: (a) is based in Irvington, New Jersey; (b) sells dry cleaning machines, laundry machines, and other related products; and (c) is owned by Robert Lee. (ECF No. 17 pp. 1, 4.) Lee was assigned a patent for and sells a product called “EM Soap,” which plaintiffs describe as “a petroleum-based dry cleaning detergent that contains [effective microorganisms] and works to, among other things, dissociate contaminants, eradicate harmful bacteria, suppress static formation and promote antioxidant formation, which are beneficial in the dry cleaning process.” (Id. p. 4; see ECF No. 182-4 p. 2 (United States Patent No. 8,110,009).) Kleaners: (a) was founded in 2017; (b) was owned and operated by Lee; (c) was based at the same address as NY Machinery; and (d) published a magazine geared toward “the Korean dry-cleaning industry.” (ECF No. 17 pp. 1, 3.) Chung publishes, controls, and writes most of the articles in Cleaners Monthly, which: (a) is based in Englewood, New Jersey; (b) was founded in 1993; (c) is “a [monthly] Korean-language trade publication that focuses on Korean dry cleaners and laundromats”; and (d) is circulated in South Korea, the United States, and Canada. (Id. pp. 1, 4; ECF No. 182-2 pp. 3, 4; ECF No. 183-1 pp. 153, 160, 163; ECF No. 190 p. 5.) NY Machinery had previously advertised its products and services in Cleaners Monthly, but NY Machinery stopped doing so in October 2016 for reasons that are disputed by the parties. (ECF No. 17 p. 1; compare ECF No. 182-2 p. 5 (plaintiffs asserting that NY Machinery was concerned “with how Chung was using his authority as the primary Korean dry-cleaning trade publication to manipulate Korean Americans in the industry”), with ECF No. 190- 1 p. 4 (defendants asserting they stopped accepting NY Machinery’s advertising after Lee demanded a discount to advertise in Cleaners Monthly).) Soon thereafter, NY Machinery’s Lee created Kleaners to market NY Machinery’s products and services and to compete with Cleaners Monthly. (ECF No. 182-2 p. 5.) According to plaintiffs, defendants commenced what plaintiffs characterize as a defamatory campaign against them in either December 2016 or January 2017 in retaliation, ultimately causing NY Machinery to lose customers and causing Kleaners to dissolve in 2018. (Id. pp. 6, 62.) A. Plaintiffs’ Allegations Plaintiffs allege that defendants: (a) published articles falsely deriding the quality of NY Machinery’s products and services; (b) disseminated false and defamatory statements to NY Machinery’s existing and prospective customers; (c) harassed NY Machinery’s customers; (d) disseminated false statements that Kleaners fraudulently boosted its circulation numbers; and (e) harassed the subscribers and advertisers of Kleaners. (ECF No. 17 pp. 2, 3.) Plaintiffs also allege that Chung disseminated falsehoods about NY Machinery’s products and services verbally and through electronic communications. (Id. p. 10.) Among the allegedly false or defamatory statements were: (a) NY Machinery is an “outright crook,” “a fraud,” a “liar,” and “deceptive,” and that NY Machinery’s detergents, filters, and other products are “bogus,” a “scam,” “fake,” and “phony”; (b) EM Soap does not actually contain effective microorganisms as an ingredient; (c) NY Machinery’s specialized EM filter is the same as any other filter, and thus is a “ghost product”; (d) NY Machinery’s dry cleaning machines are of inferior quality because they are manufactured in China, and that the products of NY Machinery’s competitors were superior; and (e) NY Machinery was deceiving its dry cleaning customers in a criminal manner. (Id. pp. 12, 13; ECF No. 182-1 p. 28; ECF No. 182-2 pp. 6, 7, 20, 21, 22, 26, 33, 40, 51.) Plaintiffs allege that prospective customers who were in the process of purchasing NY Machinery’s machines, EM Soap, and filters cancelled their orders after seeing the negative articles published in Cleaners Monthly, and that many existing NY Machinery customers stopped purchasing EM Soap and filters from NY Machinery. (ECF No. 17 p. 11.) Plaintiffs further allege that due to the damage to NY Machinery’s reputation caused by defendants, many dealers and distributors ended their existing business relationships with NY Machinery, resulting in decreased access and decreased sales to the customers of those dealers and distributors in their respective local markets. (ECF No. 182-2 pp. 59, 60.) Plaintiffs also assert that Chung contacted industry organizations to further besmirch their good names. (Id. p. 41 (Chung stating in an email to a dry cleaning industry organization that NY Machinery’s products were not effective, and that the organization should consider not publishing NY Machinery’s advertisements in its newsletter).) Plaintiffs allege that this situation inevitably resulted in a decrease in NY Machinery’s annual revenue. (ECF No. 182-3 pp. 8, 9.) Lee asserts in a declaration several instances wherein he was called in 2017 and 2018 by certain customers who expressed concern over NY Machinery’s products as a result of articles in Cleaners Monthly. (See generally ECF No. 182-3.) B. Causes of Action Plaintiffs now assert eight causes of action against defendants to recover damages for: (a) unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a); (b) false advertising in violation of the Lanham Act; (c) unfair competition in violation of N.J.S.A. 56:4-1; (d) common law unfair competition; (e) defamation per se; (f) tortious interference with prospective economic advantage; (g) false light; and (h) trade libel. (ECF No. 17 pp. 12–27.) II. DISCUSSION It is not necessary to restate the standard for resolving a motion for summary judgment made pursuant to Rule 56, because that standard has been enunciated previously. See Fed.R.Civ.P. 56(a) (providing for an award of summary judgment if there are no genuine disputes of material fact and the movant is entitled to judgment as matter of law); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986) (setting forth the standard); United States ex rel. Kosenke v.

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NY MACHINERY INC. v. THE KOREAN CLEANERS MONTHLY, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ny-machinery-inc-v-the-korean-cleaners-monthly-njd-2023.