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Time Square Foods Imports LLC v. Philbin

United States District Court, S.D. New York

July 21, 2014

TIME SQUARE FOODS IMPORTS LLC, Plaintiff,
v.
URSA PHILBIN, NICKY KALLIONGIS, and COMNEXIS, INC., Defendants. URSA PHILBIN derivatively on behalf of MY SKINNY GROUP LTD. and on behalf of SEENA FOODS, LTD. doing business as MY SKINNY GROUP, Counterclaimant,
v.
TIME SQUARE FOODS IMPORTS LLC, EXIMP LTD., ASHOK KUMAR VERMA, TARUN VERMA a/k/a RIKKI VERMA, JATINDER S. DHALL a/k/a RICKY SINGH a/k/a RICKY DHALL, and PRESTON TURCO, Counterdefendants, and MY SKINNY GROUP LTD. and SEENA FOODS LTD. doing business as MY SKINNY GROUP, Nominal Counterdefendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge.

Before the Court is a motion by plaintiff Time Square Foods Imports LLC ("Time Square"), to hold defendants Ursa Philbin ("Philbin"), Nicky Kalliongis ("Kalliongis"), and Comnexis, Inc. ("Comnexis") in civil contempt of court, due to their alleged violations of the consent judgment and injunction entered by the Court on March 6, 2014. Time Square also seeks a temporary restraining order, monetary damages, and attorneys' fees. For the reasons that follow, Time Square's motion is denied in its entirety, save for one aspect of Time Square's contempt motion, on which the Court reserves judgment pending receipt of further evidence.

Separately, Philbin seeks leave to issue a subpoena for Time Square's banking records, to enable it to test whether Time Square defaulted on its obligation to pay Philbin $10, 000 on May 6, 2014. That application is granted.

I. Background[1]

On December 12, 2012, Time Square filed a Complaint, alleging that defendants were infringing on its trademarks MY SKINNY, MY SKINNY RICE, MY SKINNY PETS, and MY SKINNY PET TREATS. Dkt. 1. On March 25, 2013, defendant Philbin answered and filed a counterclaim, alleging that Time Square's trademarks were invalid. Dkt. 5. On April 19, 2014, an initial conference was held in the case; on April 22, 2013, the Court referred the case to Magistrate Judge Pitman to conduct a settlement conference. Dkt. 8.

On June 7, 2013, a successful settlement conference was held. The resulting settlement resolved all disputes between the parties pending in both state and federal court. Time Square agreed to pay Philbin $100, 000, spread over six installments, in exchange for Philbin and the other defendants' agreement to cede to Time Square all rights to the above trademarks. See Dkt. 18 (Transcript, June 7, 2013). Defendants also agreed to have a consent judgment and injunction entered that would prevent them "from using the disputed marks and anything confusingly similar. " Id. at 2-3 (emphasis added). Defendants agreed that they would thus be enjoined from using not only MY SKINNY, SKINNY PETS, and MY SKINNY PETS, but also all confusingly similar trademarks on food products for both humans and pets. Id. at 5-6. The terms of the settlement agreement were recorded in Philbin's presence and on the record.

After the settlement conference, the parties exchanged drafts of the proposed consent judgment and injunction, but could not reach an agreement. Specifically, Philbin disputed Time Square's proposed paragraph 7, which would enjoin defendants from infringing on the trademark MY SKINNY, and all other marks "confusingly similar thereto including without limitation SKINNY, MY SKINNY, SKINNY RICE, MY SKINNY RICE, SKINNY PETS, MY SKINNY PETS, SKINNY PET TREATS, and MY SKINNY PET TREATS." Dkt. 20 Ex. 1 at 4. Defendants objected to the inclusion in this list of the mark SKINNY.

On August 19, 2013 Time Square filed a motion to vacate the conditional order of dismissal entered on July 18, 2013, and to execute its proposed consent judgment and injunction. Dkt. 20. On September 13, 2013, Philbin opposed the motion. Dkt. 23. On September 30, 2013, Time Square Foods filed a reply brief. Dkt. 24.

On January 14, 2014, Judge Pitman issued a Report and Recommendation, which recommended that Time Square's motion be granted for two reasons: (1) there was a meeting of the minds on the existence of a settlement between the parties; and (2) the mark SKINNY, when used with respect to food for humans or pets, is within the terms of the settlement to which defendants agreed. See Dkt. 25 ("Report"). Accordingly, Judge Pitman recommended that the Court vacate the conditional order of dismissal entered on July 18, 2013 and enter the consent judgment and injunction proposed by Time Square. Id. at 12.

On February 10, 2014, the Court adopted Judge Pitman's Report in its entirety. Dkt. 29; Time Square Foods Imports LLC v. Philbin, No. 12 Civ. 9101 (PAE) (HBP), 2014 WL 521242 (S.D.N.Y. Feb. 10, 2014). Specifically, the Court agreed with the Report's conclusion that SKINNY was confusingly similar to the trademark MY SKINNY when used on the same or similar food products. Accordingly, the Court vacated the conditional order of dismissal entered on July 18, 2013, restored the case to the Court's docket, and directed the parties to submit a consent judgment and injunction consistent with the Court's ruling.

On March 6, 2014, the Court entered the consent judgment and injunction submitted by the parties. Dkt. 30 ("consent judgment"). In relevant part, the consent judgment gave Time Square the exclusive right to the trademarks at issue and enjoined all defendants from infringing, diluting, or using those trademarks. In return, Time Square agreed to pay Philbin a total of $100, 000, divided into the following installments: $50, 000 upon the entry of judgment, and five payments of $10, 000 every 30 days thereafter. Id. ΒΆ 20. In addition, counter-defendant Jatinder Dhall ("Dhall") personally guaranteed this $100, 000 payment. Id. Upon entry of the consent judgment, the Court closed the case.

Since then, the parties have not amicably implemented their settlement. Philbin has accused Time Square of failing to make timely payments; Time Square, in turn, has accused Philbin of various violations of the consent judgment.

In May 2014, Philbin moved for a judgment of default against Time Square due to its failure to pay the $10, 000 owed on May 6, 2014; in response, Time Square claimed-through the sworn declaration of Dhall-that it had sent check #111 (for $10, 000), but that the check must have been lost in the mail.

On June 18, 2014, after each side submitted several letters, the Court denied Philbin's application for a judgment of default because, on the then-existing record, the Court could not "conclusively determine that Dhall did not send check #111." Dkt. 46. The Court did, however, direct Time Square and/or Dhall to "hand-deliver another $10, 000 check to Philbin's attorney by June 20, 2014" in order to satisfy the payment due on May 6, 2014. Id. Because Time Square had, by then, already indicated an intention to move for a contempt order against Philbin, the Court also determined that the best course was first to resolve Time Square's motion for a contempt order, and in the meantime, stay Time Square's requirement to pay Philbin the remaining $30, 000.

On June 19, 2014, Time Square filed its contempt motion, Dkt. 48, along with an accompanying memorandum of law, Dkt. 51 ("Pl. Br."), and two supporting declarations, Dkt. 49-50. On June 27, 2014, Philbin filed her opposition brief, Dkt. 56 ("Def. Br."), and three supporting declarations, Dkt. 53-55. On July 1, 2014, Time Square submitted a reply brief. Dkt. 58 ("Pl. Reply Br.").

II. Legal Standards

A contempt order is "a potent weapon... to which courts should not resort where there is a fair ground of doubt as to the wrongfulness of the defendant's conduct[.]" King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995) (citation omitted). "A contempt order is warranted only where the moving party establishes by clear and convincing evidence that the alleged contemnor violated the district court's edict." Id. More specifically, a party may only be held in civil contempt for failure to comply with a court order if: "(1) the order is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted to comply in a reasonable manner.'" Liberty Propane L.P. v. Feheley, 522 F.Appx. 38, 38-39 (2d Cir. 2013) (quoting Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 655 (2d Cir. 2004)) (internal quotation marks omitted). "A clear and unambiguous order is one that leaves no uncertainty in the minds of those to whom it is addressed." Id. at 39.

In general, "[a] district court may not expand or contract the agreement of the parties as set forth in the consent decree, and the explicit language of the decree is given great weight.'" King, 65 F.3d at 1058 (quoting Berger v. Heckler, 771 F.2d 1556, 1568 (2d Cir. 1985)). Here, the consent judgment is the "sole source of the parties' rights" and, as such, the Court "may not impose obligations on a party that are not unambiguously mandated by the [consent judgment] itself." Id. (citations omitted). At the same time, however, because the consent judgment is a court-approved order, the Court "has broad equitable discretion" to enforce its obligations. Id.

III. Discussion

A. Time Square's Contempt Allegations

Time Square seeks a contempt order on the grounds that Philbin committed the following four violations of the consent judgment: (1) filing trademark applications for SKINNY GRAINS, SKINNY POTATO, and SKINNY MINTS; (2) placing allegedly infringing material on her personal Facebook page; (3) refusing to furnish logins and passwords to the three websites related to Time Square's ...


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