Summary
finding a "large" statutory damage award warranted where defendants "use[d] the counterfeit labels to push expired mayonnaise onto an unsuspecting public," thereby "subjecting consumers who eventually [ate] this product to a completely unknown danger"
Summary of this case from JUUL Labs. v. ChouOpinion
10-CV-1077 (RJD) (RER)
02-17-2011
UNILEVER SUPPLY CHAIN, INC. and CONOPCO, INC. D/B/A UNILEVER, Plaintiffs, v. I & I WHOLESALE FOOD INC., I & I DISTRIBUTORS, and IGOR MAGIDOV, Defendants.
REPORT & RECOMMENDATION RAMON E. REYES, JR., U.S.M.J. :
Plaintiffs Unilever Supply Chain, Inc. and Conopco, Inc. (collectively, "Plaintiffs") brought this action against defendants I & I Wholesale Food, Inc., I & I Distributors, and Igor Magidov ("Magidov") (collectively, "Defendants"), alleging violations of the Trademark Act of 1946 (the "Lanham Act"), 15 U.S.C. §§ 1114(1) and 1125(a), and state law for trademark infringement, dilution, unfair competition, deceptive trade practices, injury to business, and unjust enrichment. Specifically, Plaintiffs allege that Defendants unlawfully counterfeited and used two federal trademarks owned by Plaintiffs: the HELLMANN'S trademark and logo and the BRING OUT THE BEST trademark.
Upon Plaintiffs' motion and in light of Defendants' failure to appear in or otherwise defend this action, the Clerk of the Court noted the default of Defendants pursuant to Federal Rule of Civil Procedure 55(a) on June 4, 2010. (Docket No. 10.) The Honorable Raymond J. Dearie then referred this case to me for a report and recommendation on jurisdiction, damages, injunctive relief, and attorney's fees. (Docket No. 13.)
For the reasons stated herein, I recommend that the Court award Plaintiffs $500,000 in statutory damages and $19,144 in attorney's fees and costs. I further recommend that Defendants be enjoined from further infringing upon Plaintiffs' trademarks.
FACTS
Plaintiffs are the owners of a number of U.S. trademark registrations—including those of HELLMANN'S and BRING OUT THE BEST. (Compl. ¶ 4.) HELLMANN'S is a brand name associated with various types of mayonnaise and other food products. BRING OUT THE BEST is a slogan of HELLMANN'S products. According to Plaintiffs, they and their predecessors and licensees have used the HELLMANN'S trademark in the United States for more than 80 years and have "invested significant amounts of time, effort and hundreds of millions of dollars to market and to maintain the highly regarded image of HELLMANN'S® products." (Compl. ¶ 19.) Likewise, Plaintiffs state that they and their predecessors have used the phrase BRING OUT THE BEST as a registered trademark for more than 20 years, and have invested significant amounts of money, effort, and time in maintaining its reputation. (Compl. ¶ 20.)
According to Plaintiffs, Defendants "have been and/or are currently manufacturing, distributing, offering for sale and/or selling [30-lb] mayonnaise products" bearing counterfeit HELLMANN'S labels. (Compl. ¶ 22.) These counterfeit labels differ from genuine HELLMANN'S labels in three respects. First, the counterfeit labels incorrectly read: "HELLMANN'S, BRING OUT THE BEST and THE CARTOUCHE of the Unilever Group of Companies;" whereas, the genuine labels read: "HELLMANN'S, BRING OUT THE BEST and the CARTOUCHE DEVICE are registered trademarks of the Unilever Group of Companies." (Compl. ¶ 24) (emphasis in complaint). Second, while the counterfeit labels display the mayonnaise products' weights as simply "30 LB," genuine 30-pound HELLMANN'S products bear labels that read "30 LBS (13.62 kg)." (Compl. ¶ 25.) And finally, the counterfeit labels do not contain the UNILEVER FOOD SOLUTIONS logo, contrary to what appears on a genuine HELLMANN'S 30-lb mayonnaise product label. (Compl. ¶ 26.) Plaintiffs further allege that Defendants use the counterfeit labels to sell mayonnaise products beyond their designated shelf lives. (Compl. ¶ 27.)
DISCUSSION
I. Jurisdiction
As a threshold issue, this Court has jurisdiction over this action pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1338, which provide jurisdiction to district courts for actions arising out of trademark disputes. See Phillip Morris USA Inc. v. Marlboro Express, No. 03-CV-1161, 2005 WL 2076921, *2 (E.D.N.Y. Aug. 26, 2005). Additionally, jurisdiction over the Plaintiffs' state law claims is provided to the Court by principles of pendent jurisdiction. Id.
II. Liability
Once a default judgment is entered, a defendant is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Montcalm Publ'g Corp. v. Ryan, 807 F. Supp. 975, 977 (S.D.N.Y. 1992).
The allegations of Plaintiffs' complaint establish the elements required to state a claim under §§ 1114(1) and 1125. Defendants concede by default that they have counterfeited and used counterfeits of Plaintiffs' federally registered trademarks "in connection with the sale . . . of [] goods . . . [in a way that] is likely to cause confusion." 15 U.S.C. § 1114(1)(a)-(b). Furthermore, Defendants use of the counterfeit mayonnaise labels is likely to confuse consumers and constitutes a "false designation of origin." 15 U.S.C. § 1125(a).
III. Damages
Plaintiffs seek to recover statutory damages of $2,000,000 under 15 U.S.C. § 1117(c). "The lack of information regarding [D]efendants' sales and profits make statutory damages particularly appropriate for these kinds of default cases." Century 21 Real Estate LLC v. Paramount Home Sales, Inc., No. 06-CV-2861, 2007 WL 2403397, *4 (E.D.N.Y. Aug. 20, 2007). In cases involving the use of a counterfeit mark, the Lanham Act sets statutory damages at:
Plaintiffs consistently request $2,000,000 in statutory damages; however, they alternatively requested $2,000,000 in total and $2,000,000 per infringing mark. (Compare Memorandum of Law in Further Support of Plaintiffs' Application ("Memorandum"), dated Jan. 14, 2011, at 16 (requesting "the maximum amount of statutory damages of $2,000,000 per mark.") (emphasis added), and Compl. at 16 (requesting $2,000,000 per each type of goods sold . . . in connection with each of the counterfeit marks), with Plaintiffs' Application for Entry of Default Judgment by the Court, dated June 7, 2010, ¶ 4 (requesting only "statutory damages of two million dollars ($2,000,000.00) for Defendant's federal trademark counterfeiting"), and Plaintiffs' [Proposed] Default Judgment and Permanent Injunction, ¶ 6 (requesting "statutory damages of two million dollars ($2,000,000) for Defendant's federal trademark counterfeiting").) Since I ultimately recommend awarding less than this figure, the discrepancy is irrelevant here.
(1) not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed as the court considers just; or (2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.15 U.S.C. §1117(c). Plaintiffs allege that Defendants willfully used two counterfeit marks and are thus seeking $1,000,000 per mark. In determining the amount of statutory damages available, therefore, the Court must first ascertain whether the Defendants use of the counterfeit marks was willful.
See supra note 1.
Apart from the factual allegations of this case, Defendants' default alone indicates that their infringement was willful. See Louis Vuitton Malletier v. WhenU.com, Inc., No. 05 Civ. 1325, 2007 WL 257717, *4 (S.D.N.Y. Jan. 26, 2007) ("When a defendant has defaulted, then by virtue of its default it is deemed to be a willful infringer."). Furthermore, in this matter, Defendants' unwillingness to mount a defense is merely an extension of their previous refusals to cooperate with Plaintiffs' requests to cease and desist the infringing activity. Despite repeated attempts at contact made by Plaintiffs—and Plaintiffs' filing of a complaint—Defendants have shown no intention of responding to Plaintiffs' demands.
On Feb. 9, 2010, Plaintiffs' counsel sent a letter to Defendants demanding that they cease using counterfeit HELLMANN'S labels. (Compl. ¶ 28.) Defendants took no action in response to Plaintiffs' demands. (Compl. ¶ 29.) Plaintiffs' counsel subsequently left a voicemail message for Defendant Magidov on Feb. 17, 2010, repeating Plaintiffs' demands that Defendants cease using the counterfeit marks. (Compl. ¶ 30.) Again, Defendants failed to respond to Plaintiffs' requests. (Id.)
It also bears mentioning that the counterfeit marks very closely resemble those of legitimate HELLMANN'S products. The alterations were minor and done in such a way as to indicate a willful intent to mislead consumers. Defendants did not include the phrase "registered trademarks" or the logo of UNILEVER FOOD SOLUTIONS anywhere on their counterfeit labels. (Compl. ¶¶ 24, 26.) These changes, while giving no indication to an average purchaser that the mayonnaise product was anything less than genuine HELLMANN'S mayonnaise, worked to conceal the true owner of the HELLMANN'S brand. This pattern of activity evinces a willful disregard for Plaintiffs' rights under federal trademark law.
Willfulness alone, however, does not entitle Plaintiffs to the maximum allowable amount of statutory damages. The Lanham Act "does not provide guidelines for courts to use in determining an appropriate award" within the statutory boundaries; awards are limited only by "what the court considers just." Gucci Am., Inc. v. Duty Free Apparel, Ltd., 315 F. Supp. 2d 511, 520 (S.D.N.Y. 2004) (quoting Louis Vuitton Malletier v. Veit, 211 F. Supp. 2d 567, 583 (E.D. Pa. 2002) and 15 U.S.C. § 1117(c)).
[C]ourts have found, [however,] some guidance in the caselaw of an analogous provision of the Copyright Act, 17 U.S.C. § 504(c), which also provides statutory damages for willful infringement. See, e.g., Louis Vuitton, 211 F. Supp. 2d at 583; Sara Lee Corp. v. Bags of N.Y., Inc., 36 F. Supp. 2d 161, 166 (S.D.N.Y. 1999). Under the Copyright Act, courts look to factors such as: (1) "the expenses saved and the profits reaped;" (2) "the revenues lost by the plaintiff;" (3) "the value of the copyright;" (4) "the deterrent effect on others besides the defendant;" (5) "whether the defendant's conduct was innocent or willful;" (6) "whether a defendant has cooperated in providing particular records from which to assess the value of the infringing material produced;" and (7) "the potential for discouraging the defendant." Fitzgerald Pub. Co., Inc. v. Baylor Pub. Co., 807 F.2d 1110, 1117 (2d Cir. 1986).Gucci Am., 315 F. Supp. 2d at 520.
A number of these factors suggest that Plaintiffs are entitled to a large award. The HELLMANN'S trademark is incredibly valuable and one that Plaintiffs have gone to great lengths to develop and protect. Further, by refusing to participate in this litigation, Defendants have made it "impossible to determine the true scope of their counterfeiting operation." (Memorandum at 16.) However, Plaintiffs have provided some evidence of Defendants' operation. In just one month (to just one customer), Defendants sold 973 units of counterfeit mayonnaise. (Supplemental Declaration of Gregory P. Gulia ("Gulia Decl."), dated Jan. 14, 2011, Exh. 1.) These transactions resulted in more than $25,000 worth of revenue for the Defendants and more than $11,000 worth of lost profits for the Plaintiffs. (Id.; Declaration of Christopher Huff, dated Jan. 14, 2011.) These lost profits and wrongfully acquired revenue streams could easily be multiplied by the simple addition of more purchasers.
Some of the figures provided by Plaintiffs do not add up. In calculating Defendants' total known revenue from counterfeit mayonnaise sales, for example, Plaintiff inexplicably includes revenue generated by sales of real lemon juice and Kraft BBQ sauce. (Gulia Decl., Exh. 1.) Similar errors appeared in the Declaration of Christopher Huff, regional sales manager for Plaintiffs' affiliate Unilever Foodsolutions. I have recalculated all of the relevant figures, using the basic numbers provided by Plaintiffs. This has resulted in some discrepancies between my figures and those existing in Plaintiffs' complaint and supplementary materials; however, it does not affect the recommendation for an appropriate statutory award.
Furthermore, Plaintiffs allege that Defendants use the counterfeit labels to push expired mayonnaise onto an unsuspecting public. Such actions pose a dual threat. First, Defendants are putting the Plaintiffs' goodwill in jeopardy by introducing inferior and misleadingly-labeled mayonnaise into the market. And second—apart from any brand-confusion concerns—Defendants are subjecting consumers who eventually eat this product to a completely unknown danger. In light of these factors, a strong deterrent component is necessary in calculating damages and plaintiffs are entitled to an amount of damages that is greater than the $200,000 maximum for non-willful infringement.
However, there are also significant reasons why Plaintiffs should not receive the $2,000,000 they have requested. Courts have not hesitated to award the statutory maximum of damages against Defendants who willfully infringe trademarks. See, e.g., Phillip Morris USA Inc., 2005 WL 2076921 at *8 (awarding the then-maximum $1,000,000 per mark for counterfeit cigarettes). However, courts have also considered the scale of the counterfeiting operation when calculating damages. See, e.g., Philip Morris USA Inc. v. C.H. Rhodes, Inc., No. 08-CV-0069, 2010 WL 1196124, *6 (E.D.N.Y. Mar. 26, 2010) (awarding only $500,000 par mark because, as compared with an earlier cases, "a significantly smaller amount of cartons was seized"), adopted by, 2010 WL 1633455 (E.D.N.Y. Apr. 21, 2010).
In previous Second Circuit cases, courts have found a range of statutory awards to be appropriate. At one end of the spectrum are cases in which the court has awarded the maximum amount of statutory damages. These cases tend to feature widespread and extremely expensive infringements. In Phillip Morris USA Inc. v. Marlboro Express, for example, "defendant's counterfeiting [operation] was large, involving at least 200,000 cartons and millions of cigarettes," with a total value of at least $4,773,790. Phillip Morris, 2005 WL 2076921 at *6 . The Court awarded maximum statutory damages to deter future misconduct by the defendant and "other similarly situated counterfeit cigarette traffickers." Id.
At the other end of the spectrum are cases in which the courts have awarded far less in statutory damages. In a case that bears some resemblance to the one before this Court, Plaintiff was awarded just $75,000 per mark against a defendant who used the plaintiff's kosher certification mark without authorization on three types of food products. Union of Orthodox Jewish Congregations of Am. v. Am. Food & Beverage, 704 F. Supp. 2d 288, 293 (S.D.N.Y. 2010). In that case, as here, the plaintiff was entitled to default judgment; however, the Court determined that an amount significantly less than the statutory maximum could adequately compensate the plaintiff.
In this case, an award as small as $75,000 is unlikely to have a sufficient deterrent effect. By selling to only one customer for only one month, Defendants were able to generate more than a third of that amount in revenues. (Gulia Decl., Exh. 1.) However, Plaintiffs have failed to provide evidence to suggest that Defendants were operating a trademark infringement system that would rival a $4.7 million cigarette counterfeiting operation. Therefore, the appropriate award must fall somewhere between these two poles. Also, it should reflect the willful nature of Defendant's infringing conduct.
Accordingly, I respectfully recommend that the Court award Plaintiff $250,000 per infringing mark, totaling $500,000 in statutory damages. IV. Injunctive Relief
The Second Circuit has stated that a plaintiff seeking a permanent injunction "in any type of case" must satisfy the Supreme Court's four-factor test. Salinger v. Colting, 607 F.3d 68, 78 n.7 (2d Cir. 2010). This means that the plaintiff must show—in addition to a likelihood of success—"(1) that it has suffered irreparable injury; (2) that remedies available at law . . . are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." Id. at 77 (quoting eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)).
A. Likelihood of Success on the Merits
Through their default, Defendants have admitted liability and the truth of all of Plaintiffs' well-pleaded allegations. Therefore, Plaintiffs have demonstrated more than a likelihood of success on merits; they have "achieved actual success on the merits." Eu Yan Sang Intern. Ltd. v. S&M Enters. (U.S.A.) Enterprise Corp., No. 09-CV-4235, 2010 WL 3824129, *3 (E.D.N.Y. Sept. 8, 2010), adopted by, 2010 WL 3806136 (E.D.N.Y. Sept. 23, 2010).
B. Likelihood of Irreparable Harm
In a trademark case, a plaintiff can establish a risk of irreparable harm by showing a "likelihood of confusion as to source or sponsorship." Am. Cyanamid Co. v. Campagna per la Farmacie in Italia S.P.A., 847 F.2d 53, 55 (2d Cir. 1988) (quoting Home Box Office, Inc. v. Showtime/The Movie Channel Inc., 832 F.2d 1311, 1314 (2d Cir. 1987)). The uncontested facts of Plaintiffs' complaint meet the standards for showing a likelihood of confusion as to source. See Prot. One Alarm Monitoring, Inc. v. Exec. Prot. One Sec. Serv. LLC, 553 F. Supp. 2d 201, 206 (E.D.N.Y. 2008) (a plaintiff need "only to raise a serious question of likelihood of confusion.") (quoting Am. Cyanamid, 847 F.2d at 55).
Defendants concede by default that they are manufacturing, distributing, and/or selling mayonnaise products bearing counterfeit HELLMANN'S labels. (Compl. ¶ 22.) In a case such as this, "the Court need not undertake a factor-by-factor analysis . . . because counterfeits, by their very nature, cause confusion." Gucci Am., Inc. v. Duty Free Apparel, Ltd., 286 F. Supp. 2d 284, 287 (S.D.N.Y. 2003). As Plaintiffs correctly point out, "[T]he dissimilarities between the counterfeit label and Plaintiffs' genuine brand labels are discernable only to the trained eye. . . . Consumers will easily miss such minor details and have difficulty distinguishing between the genuine products and the counterfeit products." (Memorandum at 12.)
C. Remedies Available at Law Inadequate to Compensate for Injury
The Defendants have expressed an unwillingness to cooperate with Plaintiffs or to cease their infringing conduct. (Compl. ¶¶ 28-30.) Furthermore, Plaintiffs' showing of irreparable harm indicates that there is no measure at law that can fully compensate Plaintiffs for their injury. See Northwestern Nat'l Ins. Co. of Milwaukee, Wisconsin v. Alberts, 937 F.2d 77, 80 (2d Cir. 1991) ("The irreparable injury requisite for the preliminary injunction overlaps with the absent lack of adequate remedy at law necessary to establish the equitable rights."). On this basis, Plaintiff has established the inadequacy of remedies available at law.
This conclusion is supported by the fact that Defendants' unlawful conduct is likely to cause reputational harm to Plaintiffs. "[M]onetary damages are difficult to establish and are unlikely to present an adequate remedy at law" where the defendant's conduct damages the plaintiff's reputation. Philip Morris U.S.A., Inc. v. U.S. Sun Star Trading, Inc., No. 08-CV-0068, 2010 WL 2133937, *17 (E.D.N.Y. Mar. 11, 2010), injunction granted by, 2010 WL 2160058 (E.D.N.Y. May 27, 2010). If the Defendants are able to distribute more expired mayonnaise products that are misleadingly labeled with Plaintiffs' marks, it seems entirely possible that their actions will "adversely affect the reputation and business of [Plaintiffs] in ways that may be difficult to quantify and that will not lend themselves easily to monetary compensation." Id. at *17.
D. Balance of Hardships Tips in Plaintiffs' Favor
The balance of hardships unquestionably tips in Plaintiffs' favor. As discussed above, the Defendants' continued use of infringing marks will likely cause irreparable injury to Plaintiffs' business and reputation. The Defendants' counterfeit labels are near identical to genuine HELLMANN'S labels and are likely to confuse even Plaintiffs' most loyal customers. Plaintiffs are at serious risk of having their reputation linked to expired mayonnaise. Through their default, Defendants have admitted all of the aforementioned findings.
E. Public Interest is Not Disserved by Injunction
An injunction would serve the public interest in at least two respects. First, the injunction would protect the public from deception. See Hermes Int'l v. Lederer De Paris Fifth Ave., Inc., 50 F. Supp. 2d 212, 225 (S.D.N.Y. 1999) ("The trademark laws are intended, in part, to protect the public from confusion.") rev'd in part on other grounds, 219 F.3d 104 (2d Cir. 2000). Given the likelihood of confusion in this case—caused by the nearly identical counterfeit HELLMANN'S marks—the Defendants should be enjoined from foisting more of these mayonnaise containers onto an unsuspecting public. Additionally, Defendants admit by default not only that they are selling misleadingly labeled mayonnaise containers, but that they are selling mayonnaise products beyond their designated shelf lives. (Compl. ¶ 27.) To grant a permanent injunction in this case, far from disserving the public interest, actually protects the public, by shielding it from both confusion and the health hazards associated with eating expired mayonnaise.
* * *
Considering that all of these factors favor the granting of a permanent injunction, I respectfully recommend that Plaintiffs request for a permanent injunction against Defendants be granted as laid out in Plaintiffs' [Proposed] Default Judgment and Permanent Injunction. (Docket No. 12-4.)
V. Attorney's Fees and Costs
A. Attorney's Fees
Plaintiffs requested $25,757.60 in attorney's fees. Under the Lanham Act, courts are empowered to award reasonable attorney's fees, however, only "in exceptional cases." 15 U.S.C. 1117(a). "The Second Circuit has explained that such awards are appropriate in instances of . . . 'willful infringement.'" AW Indus. v. Sleep Well Mattress, Inc., No. 07-CV-3969, 2009 WL 485186, *4 (E.D.N.Y. Feb. 26, 2009) (quoting Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 221 (2d Cir. 2003)). As discussed, I recommend finding Defendants' infringement willful. Therefore, I recommend Plaintiffs be awarded reasonable attorney's fees.
The standard for calculating an appropriate award is what a "reasonable, paying client, who wishes to pay the least amount necessary to litigate the case effectively," would be willing to pay. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 184 (2d Cir. 2008). This process entails looking at both the reasonableness of the hourly rates charged by the attorneys and the reasonableness of the total number of hours billed. See Eu Yan Sang, 2010 WL 3824129 at *7-8.
1. Reasonable Hourly Rate
Plaintiffs seek to recover attorney's fees at the following rates: $540 for Gregory P. Gulia, a partner at the Duane Morris firm; $540 for Eric W. McCormick, special counsel at Duane Morris LLP; $610 for Mitchell A. Frank, who is also special counsel; $395 for fifth-year associate Christopher J. Rooney; an initial rate of $325 and a later rate of $345 for third-year associate R. Terry Parker; an initial rate of $110 and a later rate of $125 for Edwin E. Grullon, a paralegal; and, $270 for managing paralegal Onika M. McLean. In support for their claim that these rates are reasonable, Plaintiffs cite to Louis Vuitton Malletier v. Dooney & Bourke, Inc., No. 04-CV-5316, 2007 WL 1284013, *4 (S.D.N.Y. Apr. 24, 2007), in which even larger hourly rates were upheld.
However, as Plaintiffs rightfully point out, "[t]o determine the appropriate hourly rates, the court should use the 'prevailing [hourly rate] in the community . . . the 'community' for purposes of this calculation [being] the district where the district court sits." (Memorandum at 17 (citing Arbor Hill Concerned Citizens Neighborhood Ass'n. v. County of Albany, 493 F.3d 110, 118 (2d Cir. 2007), amended and superseded by, 522 F.3d 182).) While hourly rates approved by the Southern District of New York are often used "as a basis for comparison," the general standard in the Eastern District remains attorney rates in the Eastern District. See Lyons P'ship, L.P. v. D & L Amusement & Entm't, Inc., 702 F. Supp. 2d 104, 120 (E.D.N.Y. 2010).
In the Eastern District, approved "hourly rates for attorneys . . . have [normally] ranged from $200 to $350 an hour for partners, $200 to $250 for senior associates, $100 to $150 an hour for junior associates, and $70 to $80 for legal assistants." Eu Yu Sang, 2010 WL 3824129 at *7 (citations omitted). In some cases, the reasonable range has included higher hourly rates. See, e.g., Lyons P'ship, L.P., 702 F. Supp. 2d at 121 (approving rates up to $440 for a partner "who has been litigating intellectual property cases for almost 2 decades," $270 for a senior associate, $160 for an associate, and $75 for a paralegal). Plaintiffs, however, request rates that are even higher.
Given the size and scope of Plaintiffs' business operations, it is reasonable in this case to import a somewhat higher range of rates than the routine average. Based on prevailing rates in other trademark cases and Plaintiffs' evidence regarding the rates of comparably sized firms in New York City, I therefore respectfully recommend setting reasonable rates at: $440 per hour for Gregory Gulia, Eric McCormick, and Mitchell Frank; $200 for Christopher Rooney; $160 for R. Terry Parker; $80 for Edwin Grullon; and $100 for Onika McLean.
2. Reasonable Hours
After reviewing the Plaintiffs' time records (Gulia Decl., Exh. 2) and taking into account Plaintiffs' apparent efforts to reach a settlement with Defendants, sixty-two hours was a reasonable amount of time to spend litigating this case.
Applying the judicially determined rates to the hours billed by the attorneys in this matter, I determine that Plaintiffs' attorneys and their agents billed the following amounts for legal services rendered in connection with this matter: Gregory Gulia, $8,844; Eric McCormick, $4,312; Mitchell Frank, $572; Christopher Rooney, $3,280; R. Terry Parker, $304; Edwin Grullon, $784; and, Onika McLean, $270; for a cumulative total of $18,366.
B. Costs
Plaintiffs have also requested $778 in costs. Under the Lanham Act, a successful Plaintiff is "entitled . . . to recover . . . the costs of the action." 15 U.S.C. 1117(a). A plaintiff who has proven a violation of section 1125(a) is entitled to recover those costs "necessary to cure the effects of the harm caused by the violation." Eu Yan Sang, 2010 WL 3824129 at *5 (quoting Forschner Group v. Arrow Trading Co., 124 F.3d 402, 406 (2d Cir. 1997). The amount requested by Plaintiffs is reasonable. Plaintiffs only seek reimbursement for filing fees, process service fees, court search service fees, and the cost of serving an entry of default judgment upon Defendants. Therefore, I recommend that the Court award Plaintiffs $19,144 in attorney's fees and costs.
Conclusion
Based on all of the foregoing, I respectfully recommend that Plaintiffs be awarded $500,000 in statutory damages and $19,144 in attorney's fees and costs. Additionally, I recommend that the Court enjoin Defendants from future unlawful use of Plaintiffs' registered trademarks as set forth in Plaintiffs' Proposed Default Judgment and Permanent Injunction. (Docket No. 12-4.)
Any objections to this Report and Recommendation must be filed with the Clerk of the Court and the Honorable Raymond J. Dearie within fourteen days of receipt hereof. Failure to file timely objections may waive the right to appeal the District Court's Order. See 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72; Small v. Sec'y of Health & Human Servs., 892 F.2d 15, 16 (2d Cir. 1989). Plaintiffs are directed to serve a copy of this Report and Recommendation on all Defendants by certified mail within three days, and promptly thereafter file proof of service with the Court. Dated: February 17, 2011
Brooklyn, New York
/s/ _________
Ramon E. Reyes, Jr.
United States Magistrate Judge