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AHAVA, INC. v. J.W.G.

United States District Court, Southern District of New York


August 18, 2003

AHAVA (USA), INC., PLAINTIFF, - AGAINST - J.W.G., LTD. DEFENDANT

The opinion of the court was delivered by: VICTOR Marrero, District Judge

DECISION AND ORDER

Plaintiff Ahava (USA), Inc. ("Ahava") filed a motion for a preliminary injunction on January 31, 2003 (the "Motion") seeking to bar defendant J.W.G., Ltd. ("JWG") from selling to consumers in the United States through JWG's website, www.judaicawebstore.com (the "Website") certain health and beauty care products (the "Products") that were manufactured by Dead Sea Laboratories, Ltd. in Israel under the trademarked brand name AHAVA and purchased by JWG in Israel. Following an evidentiary hearing held before the Court on February 28, 2003, the Court issued an Order dated February 28, 2003 granting the Motion, and a subsequent Decision and Order, dated March 17, 2003 (the "Decision"), outlining its findings, reasoning and conclusions.

On June 19, 2003, pursuant to a motion filed by Ahava on June 11, 2003, the Court entered default judgment (the "Judgment") against JWG. The Judgment decreed, inter alia, that JWG was permanently enjoined from selling the Products [ Page 2]

through the Website to consumers in the United States. In a letter dated July 8, 2003 (the "Letter"), JWG denied having submitted to the jurisdiction of this Court and indicated its intention to continue selling the Products to American consumers in violation of the Judgment. Because the Letter clearly raised the possibility that the permanent injunction ordered in the Judgment was being and would continue to be violated, the Court called for the parties to appear before the Court on Friday, August 1, 2003 for an evidentiary hearing (the "Hearing") to determine whether JWG was violating any of the terms of the Judgment. The Court also ordered JWG to show cause by August 1, 2003 why Ahava's motion to hold JWG in contempt of Court should not be granted.

JWG did not attend the Hearing, but Ahava did and presented further evidence that the terms of the Judgment were continuing to be violated by JWG. At the close of the Hearing, the Court agreed to consider a future motion by Ahava to find JWG in contempt of court. In a letter dated August 6, 2003, Ahava enclosed a proposed contempt order (the "Proposed Order") that required JWG to cease any activities barred by the Judgment within ten days of the Court entering the Proposed Order, and requiring JWG to remit to Ahava its gross profits earned from the sale of the Products to customers in the United States and plaintiff's attorneys' fees and costs [ Page 3]

incurred in connection with the motion for contempt. The Proposed Order further requested that a fine of $1,000 per day be imposed upon JWG if JWG did not cease conducting the barred activities.

The Court is persuaded that the Proposed Order imposes fair sanctions upon JWG, especially in light of JWG's continued refusal to abide by the Court's rulings. The Supreme Court has permitted courts to order sanctions if necessary to coerce compliance with the courts' orders. See United States V. United Mine Workers of Am., 330 U.S. 258, 303-04 (1947). Indeed, the Court has previously imposed nearly identical sanctions as those that Ahava requests for "indirect" civil contempt — that is, contempt resulting from actions occurring outside the courtroom — in an effort to compel future compliance with a court order. See, e.g., A. V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp.2d 281, 296-97 (S.D.N.Y. 2000); Playboy Enterprises, Inc. v. Chuckleberry Pub., Inc., 939 F. Supp. 1032, 1041 (S.D.N.Y. 1996). Such sanctions may be imposed "in an ordinary civil proceeding upon notice and an opportunity to be heard." International Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994). Neither a jury trial nor proof beyond a reasonable doubt is necessary. See /id.

JWG has had its opportunity to be heard several times [ Page 4]

over the past few months, most recently at the Hearing, and still does not need to be subject to sanctions if it simply complies with the Court's clearly stated orders in the Judgment within the next ten days. Accordingly, it is hereby

ORDERED that the attached Order, executed by the Court on August 18, 2003, shall impose the specified sanctions on J.W.G., Ltd., including a fine of $1,000 per day if J.W.G., Ltd. does not comply with the Order within ten days of the Order.

SO ORDERED. [ Page 1]

ORDER

Upon the declaration of Elizabeth Elfeld, executed on June 6, 2003, the declaration of Marc P. Misthal, Esq., executed on June 9, 2003, and the declaration of Marc P. Misthal, Esq., executed on August 6, 2003, as well as plaintiff's supporting papers and the hearing held by the Court on August 1, 2003, the Court finds that defendant J.W.G. Ltd. ("J.W.G.") is in contempt of the Preliminary Injunction entered by the Court on February 28, 2003 and the Permanent Injunction entered by the Court on June 19, 2003, as a result of its continued sale of AHAVA products to customers in the United States, its continued use of the term "Ahava" as a metatag, and its failure to submit a report detailing how it is complying with the injunctions entered by the Court. Therefore it is hereby

ORDERED that defendant, within ten days of the entry of this order:

1. Refrain from accepting any new orders for beauty and health care products bearing the AHAVA mark from customers residing in the United States; and

2. Cease its use of plaintiff's AHAVA mark as a metatag; and [ Page 2]

3. File with this Court and serve upon plaintiff a written report, under oath, setting forth the details of the manner and form in which defendant has complied with the Preliminary and Permanent Injunctions; and

4. Remit to Plaintff all gross profits earned from the sale of beauty and health care products bearing the AHAVA mark to customers in the United States; and it is further

ORDERED that if defendant does not, within ten days of the entry of this order, comply with the foregoing, the defendant shall pay to plaintiff a fine of $1,000 per day; and it is further

ORDERED that defendant remit to plaintiff its attorneys' fees and costs incurred in connection with its motion for contempt in the amount of Eight Thousand Three Hundred Twenty-Four Dollars and Eighty Five Cents ($8,324.85); and it is further

ORDERED that service on defendant or its counsel of a copy of this order by personal service, by sending it by Federal Express or other expedited service, or by any means of service permitted under New York law, be deemed sufficient service. [ Page 1]

20030818

© 1992-2003 VersusLaw Inc.



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