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
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.
Counterclaim Nine. To the extent that Count Nine of
defendants' counterclaims seeks removal of CKI as Servicer of
the CK Trust on the ground that CKI failed in its alleged duty
to notify Warnaco of this
lawsuit, the Count must be dismissed for the reasons already
stated. Count Nine separately alleges, however, that such
removal is warranted because a "CKI Event" has occurred as
defined by the terms of a separate "Administration Agreement"
entered into by the parties as part of the March 1994
transactions. See Plaintiffs' Exhibits, Ex. 5 ("Administration
Agreement"). Under the Administration Agreement, a "CKI Event"
is said to occur when, inter alia, "Mr. Calvin Klein ceases to
exercise control over design, advertising or promotion of
products sold under or in connection with the Trademarks."
Administration Agreement, § 1.4(c). The Servicing Agreement, in
turn, provides, in effect, that when such a "CKI Event" happens,
Warnaco can replace CKI as Servicer with respect to the Marks
that Warnaco owns. Since Count Nine adequately alleges that Mr.
Klein has failed to fulfill obligations imposed by § 1.4(c) of
the Administration Agreement, this alternative basis for Count
Nine survives dismissal.
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
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.
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 ...