Opinion
02 Civ. 7020 (DLC)
December 27, 2002
Louis S. Ederer and Joseph Lessem, Gursky Ederer, LLP New York, NY, for Plaintiffs.
Michael A. Cornman, Jay A. Bondell, Fritz L. Schweitzer, Jr., Schwietzer Cornman Gross Bondell LLP New York, NY, for Defendants.
OPINION AND ORDER
On September 4, 2002, plaintiffs GTFM, Inc. and GTFM, LLC (collectively, "GTFM") filed this action against defendants Sang P. Park ("Park") and Wha Jung Kim ("Kim"), alleging wilful trademark and trade dress infringement, counterfeiting and dilution, and false designation of origin under the Trademark Act of 1946 ("Lanham Act" or the "Act"), 15 U.S.C. § 1051 et seq., common law trademark infringement and unfair competition, and the violation of New York General Business Law Sections 360-1 and 349. GTFM now moves for summary judgment. Defendants move to transfer this action pursuant to 28 U.S.C. § 1404(a), or in the alternative, to stay the action pending the resolution of all appeals in the related case GTFM, Inc. and GTFM, LLC v. Solid Clothing, Inc., 01 Civ. 2629 (DLC) ("GTFM I"). For the reasons stated, plaintiffs' motion is granted in part and defendants' motions are denied.
Background
After a bench trial on July 1 and 2, 2002, this Court held by Opinion dated July 11, 2002 (the "July 11 Opinion"), GTFM, Inc. and GTFM, LLC v. Solid Clothing Inc., 215 F. Supp.2d 273 (S.D.N.Y. 2002), familiarity with which is assumed, that Solid Clothing Inc. ("Solid") engaged in intentional trademark infringement in violation of Section 32 of the Lanham Act (the "Act"), 15 U.S.C. § 1114, false designation of origin in violation of Section 43(a) of the Act, 15 U.S.C. § 1125(a), common law trademark infringement and unfair competition, and the violation of New York General Business Law Sections 360-1 and 349. Final judgment in GTFM I was entered on August 14, 2002. Solid subsequently submitted,inter alia, a motion for a new trial or in the alternative for a new trial limited to the issue of damages pursuant to Rule 59(a), Fed.R.Civ.P., and a motion to vacate, alter or amend the judgment pursuant to Rule 59(e), Fed.R.Civ.P. These motions were denied by Opinion dated December 27, 2002. GTFM, Inc. and GTFM, LLC v. Solid Clothing Inc., 01 Civ. 2629 (DLC) (S.D.N.Y. Dec. 27, 2002) (the "December 27 Opinion").
As set forth in the July 11 Opinion, 215 F. Supp.2d at 278, Park is Solid's President and Kim is its Secretary. Park and Kim both testified at trial that they were the sole owners of Solid and are jointly responsible for exercising control over the company and making final decisions in its business operations. Park testified that he was primarily responsible for the financial side of Solid's business, including marketing and sales, and communicating with Solid's accountants and attorneys. Kim testified that he was primarily responsible for purchasing from Solid's suppliers and for operating Solid's wholesale storefront. Kim further testified that he participated in the development of the designs for Solids' "05" and "PLAYERS 05" apparel. Both Park and Kim were responsible for deciding what styles were included in Solid's catalogues.
Discussion
I. Motion to Transfer
Section 1404(a) allows for a transfer of venue "for the convenience of parties and witnesses, [and] in the interest of justice." Such motions are in the court's discretion to grant or deny and are "`determined upon notions of convenience and fairness on a case-by-case basis.'" Hall v. South Orange, 89 F. Supp.2d 488, 493 (S.D.N.Y. 2000) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992)). Plaintiff's choice of forum is entitled to great weight and should not be disturbed except when the balance of public and private interest factors clearly weighs in favor of trial in an alternative forum. Piper Aircraft v. Reyno, 454 U.S. 235, 256-57 (1981).
Defendants have not shown that they are or would be seriously inconvenienced by litigating this case in New York. Defendants' testimony in GTFM I shows that they routinely come to New York to conduct business, particularly at semiannual trade shows. Moreover, both defendants testified at trial in New York and Park came to New York on two separate occasions for depositions. In any event, given that summary judgment is being granted against them, their presence in New York for any further proceedings will only be necessary if the judgment entered against them is reversed and there is a need for a new trial.
II. Motion to Stay
Courts in this Circuit generally consider five factors when deciding whether to grant a stay pending the outcome of a related action:
(1) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.Kappel v. Comfort, 914 F. Supp. 1056, 1058 (S.D.N.Y. 1996). See also Volmar Distributors v. New York Post Co., 152 F.R.D. 36, 39 (S.D.N.Y. 1993). Each of these factors weighs in favor of denying a stay. Plaintiffs have a substantial interest in proceeding expeditiously with this litigation. Solid has not posted a bond pending the appeal in GTFM I and there is no assurance that GTFM will be able to recover any of the judgment in GTFM I from Solid. Proceeding with this litigation constitutes a minimal burden on defendants, particularly since a trial has already been held on all of the issues raised in the instant action. The Court has a substantial interest in proceeding with this action while its knowledge of the underlying facts is still fresh. Finally, the interests of persons not parties to the instant action and the public interest in general weighs in favor of denying a stay. Prompt enforcement of the trademark laws benefits all who seek protection under them.
Defendants argue that the instant case should be stayed pending the determination of the appeal in GTFM I. In support of this argument, defendants cite two cases, neither of which is relevant. In Regions Bank v. Weider, 170 F. Supp.2d 436 (S.D.N.Y. 2000), the court stayed the action under the first-filed rule pending the outcome of a related action in another district. GTFM I, however, is no longer pending. Final judgment has been entered and defendants' Rule 59 motions have been decided. In In re Literary Works in Electronic Databases Copyright Litigation, 58 U.S.P.Q.2d 1317 (S.D.N.Y. 2001), the action was stayed because the Supreme Court was considering at the time an issue of law that went to the heart of the action. Defendants have not shown any such situation here.
III. Summary Judgment Motion
Plaintiffs argue that Park and Kim are barred by the principles of res judicata and collateral estoppel from relitigating any claims or issues determined in GTFM I. Plaintiffs further argue that there is no genuine issue of fact as to defendants' involvement in the wrongful conduct at issue in GTFM I. Because Park and Kim are collaterally estopped from relitigating any issues determined in GTFM I, it is unnecessary to determine whether they are barred by the principle of res judicata from relitigating the claims determined in GTFM I.
"Collateral estoppel, or issue preclusion, prevents parties or their privies from relitigating in a subsequent action an issue of fact or law that was fully and fairly litigated in a prior proceeding." Marvel Characters, Inc. v. Simon, 310 F.3d 280, 288 (2d Cir. 2002). Collateral estoppel applies when:
(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits.Id. at 288-89. Defendants argue only that they were not given a "full and fair opportunity" to litigate the issues presented in GTFM I. Defendants make the same arguments here that they made in their Rule 59 motions, specifically, that plaintiffs in GTFM I engaged in various tactics constituting trial by ambush. These arguments were addressed in detail in the December 27 Opinion.
IV. Park's and Kim's Individual Liability
Defendants do not dispute that they are individually liable for Solid's conduct. Plaintiffs have shown that Park and Kim each constituted a "moving, active conscious force" behind Solid's conduct, and may thus be held individually liable for it. Monsanto v. Haskel Trading, Inc., 13 F. Supp.2d 349, 354 (E.D.N.Y. 1998) (citation omitted).
Conclusion
For the reasons stated, defendants' motion to transfer or to stay is denied. Plaintiffs' motion for summary judgment is granted in part. Specifically, it is granted as against Park and Kim to the same extent that final judgment was granted as against Solid in GTFM I in the Order of Judgment of August 14, 2002. Plaintiffs shall submit by January 10, 2003 an appropriate Order of Judgment.
SO ORDERED.