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January 5, 2001


The opinion of the court was delivered by: Rakoff, District Judge.


By Order dated October 10, 2000, the Court granted plaintiffs' motion to dismiss Count Eight of defendants' amended counterclaims; granted plaintiffs' motion to dismiss Count Nine of the counterclaims except to the extent that that Count is premised on the alleged occurrence of a "CKI Event"; held that liability under Counts One and Two of the counterclaims could not be premised on any alleged modification of the relevant contracts by conduct or oral agreement; and denied plaintiffs' motion to dismiss Counts Three through Seven of defendants' counterclaims, which allege defamation, trade libel, and tortious interference with business relations. Following the close of discovery, plaintiffs in effect renewed their motion for dismissal of Counts Three through Seven of the counterclaims in the form of a summary judgment motion, but this motion was also denied.*fn1 See Order dated December 19, 2000. The instant Memorandum briefly elucidates the reasons for these rulings.

The basic background facts in this case are set forth in Calvin Klein Trademark Trust v. Wachner, 123 F. Supp.2d 731, 732-33 (S.D.N.Y. 2000), familiarity with which is here presumed. In brief, in March 1994 plaintiff Calvin Klein, Inc. ("CKI") entered into various agreements with defendants The Warnaco Group, Inc. and Warnaco, Inc. ("Warnaco") whereby CKI and Warnaco became co-beneficial owners of the Calvin Klein Trademark Trust (the "CK Trust"), a Delaware business trust the corpus of which is comprised of the trademarks "Calvin Klein," "CK/Calvin Klein," "CK/Calvin Klein Jeans," and "CK" (collectively, the "Marks"). In return for conveying its trademark interests to the Trust, CKI received three classes of certificates representing ownership rights with respect to differing usages of the Marks. Two classes, representing such rights with respect to use of the Marks on and in connection with women's intimate apparel and men's underwear, were sold to Warnaco, while CKI retained ownership of the other class of certificates representing such rights with respect to the use of the Marks on or in connection with all other products. CKI also conveyed to Warnaco an exclusive license to use the Marks on and in connection with the manufacture, distribution, and marketing of men's belts and other accessories. Additionally, in 1997, Warnaco acquired an exclusive license to sell jeanswear bearing the Marks and to maintain and operate Calvin Klein Outlet Stores for the duration of the jeanswear license. Subsequently, however, disputes arose among the parties to these various agreements, giving rise to the instant litigation.

Counterclaim Eight. The "Trust Agreement" that established the CK Trust provided that while the trust would have no officers, employees or other management, the CK Trust would employ a "Servicer" to take action to protect the Marks and to fulfill the responsibilities of the CK Trust under both the Trust Agreement and a separate "Quality Assurance Agreement," also executed in March 1994. See Plaintiffs' Exhibits, Ex. 1 ("Trust Agreement"), § 4.01; Ex. 6 ("Quality Assurance Agreement"). CKI agreed to act as Servicer for the CK Trust under a "Servicing Agreement." See Plaintiffs' Exhibits, Ex. 4 ("Servicing Agreement"). Count Eight of the counterclaims alleges that the Servicing Agreement and the Trust Agreement impose "fiduciary duties" on CKI, which CKI violated by filing the instant lawsuit without prior notice to or consultation with Warnaco, by making claims against Warnaco, denigrating Warnaco, and disparaging the quality of Warnaco's products produced under the Marks, and by generally engaging in a public campaign to damage the Marks. See Amended Counterclaims, ¶ 118.

Counterclaim Eight must be dismissed, however, because (among other deficiencies) it premises a fiduciary relationship that does not exist. As the Court has previously held, the CK Trust is simply a means by which the sophisticated parties entered into arm's-length business arrangements that created ordinary contractual relations between them. See Calvin Klein Trademark Trust, 123 F. Supp.2d 731, 734-35. Indeed, defendants themselves have repeatedly urged the Court to construe the CK Trust in this fashion. See, e.g., transcript of oral argument on defendants' motion to dismiss, 8/3/00, at 35-37; Supplemental Memorandum in Support of Defendants' Motion to Dismiss, at 7.

Likewise, the Servicing Agreement, on its face, is an arm's-length contract between sophisticated parties that will not be held to entail fiduciary duties absent some express agreement to that effect. See id., at 733. Indeed, the Servicing Agreement suggests, if anything, the absence of any fiduciary relationship, for it explicitly disavows any joint venture or partnership relationship between CKI, as Servicer, and the CK Trust or the beneficial owners, see Servicing Agreement, § 5, and states that the Servicer is to be considered an "independent contractor" at least in regards to the manner in which the Servicer carries out its duties under the Servicing Agreement. Id. at § 4.

To be sure, the Servicing Agreement expressly states what the law would in any event imply, to wit, a duty of the Servicer to proceed in "good faith." See Servicing Agreement, ¶ 6(a). This is far removed, however, from the much higher duties created by a fiduciary relationship, and will at most support a claim for contractual breach, which is not what Count Eight alleges. Nor is the failure to so allege accidental, since, under the terms of the Servicing Agreement, CKI had no duty to give notice to Warnaco of the instant lawsuit prior to the filing and service of the Complaint, nor, for that matter, did the Servicing Agreement impose on CKI any of the other, rather nebulous duties that Court Eight alleges. In short, on any analysis, Count Eight of the counterclaims must be dismissed.

Counterclaims One and Two. Counts One and Two of defendants' counterclaims allege that CKI breached the Jeanswear License Agreement and Men's Accessories License Agreement, either by their terms or as these agreements were "modified by the course of conduct and oral agreement of the parties." See Amended Counterclaims, ¶¶ 63-77. However, express provisions in both agreements explicitly state that the agreements "may not be modified, discharged or terminated except by written agreement signed by both parties, and none of the provisions hereof may be waived orally." Plaintiffs' Exhibits, Ex. 7, § 18.3; see also Plaintiffs' Exhibits, Ex. 8, § 14.3. Consequently, Counts One and Two may only be premised on breaches of the express terms of the agreements themselves and not on any alleged modification by conduct or oral agreement.

Counterclaims Three Through Six. As presently pled, Counts Three through Six of defendants' counterclaims allege claims of defamation and trade libel against CKI and third-party defendant Calvin Klein. Counts Three and Four allege these violations in connection with a meeting of apparel industry executives on May 31, 2000 (the so-called "Fairchild Summit") at which Mr. Klein is alleged to have described Warnaco's conduct as being "equivalent" to "counterfeiting," and in connection with Mr. Klein's interview of June 5, 2000 on the Larry King Live television program, during which Mr. Klein allegedly disparaged the quality of Warnaco's jeanswear products and manufacturing. Counts Five and Six allege these violations in connection with a letter and accompanying press release that CKI and Mr. Klein allegedly circulated on May 30, 2000, the same day as the filing of this lawsuit, in which CKI and Mr. Klein allegedly falsely described the suit as relating to the quality of Warnaco's products, including underwear products nowhere referred to in the Complaint, and also likened Warnaco's practices to "counterfeiting."

In assessing the legal sufficiency of these claims, a threshold issue is whether the counterclaiming "victims" of the alleged defamation and libel are "public figures," who must prove "actual malice" on the part of the alleged defamers in order to prevail. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974); Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 255-56, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). While conceding that the counterclaiming defendants are not "general purpose" public figures, see transcript of oral argument, 12/14/00, at 68-69, plaintiffs contend that these defendants are public figures of the "limited purpose" kind, i.e. those who "have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved." 418 U.S. at 351, 94 S.Ct. 2997. Specifically, in the Second Circuit, a claimant is to be considered a "limited purpose" public figure if he (or she or it) has:

(1) successfully invited public attention to his views in an effort to influence others prior to the incident that is the subject of the litigation; (2) voluntarily injected himself into a public controversy related to the subject of the litigation; (3) assumed a position of prominence in the public controversy; and (4) maintained regular and continuing access to the media.

Lerman v. Flynt Distrib. Co., 745 F.2d 123, 136-37 (2d Cir. 1984)

Here, the statements alleged to be defamatory and libelous chiefly relate either to the quality of goods produced by Warnaco that bore the Marks or to the alleged passing-off of other Warnaco goods as Calvin Klein goods. See Second Amended Counterclaims, ¶¶ 80-81, 94-99.*fn2 Prior to plaintiffs' making these statements, however, there was no "public controversy" over the issues of the quality of Warnaco goods or non-Calvin-Klein goods being passed off as Calvin Klein goods. Rather, at most, there were disputes between the parties regarding design and distribution practices that occasionally surfaced publicly. As the Fifth Circuit Court of Appeals noted in Snead v. Redland, 998 F.2d 1325, 1330 (5th Cir. 1993), "[a]lthough an intellectual property dispute might rise to a matter of public concern if it concerns a product of extreme importance (e.g. a ...

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