United States District Court, S.D. New York
OPINION AND ORDER
G. SCHOFIELD, District Judge.
Erik Boneta brings this action against Defendant Rolex Watch
U.S.A., Inc. ("Rolex USA"), alleging that Rolex USA
violated the Racketeer Influenced and Corrupt Organizations
Act ("RICO"), the Sherman Antitrust Act and the
Clayton Antitrust Act by deliberately and unlawfully
permitting United States Custom and Border Protection
("CBP") officials to detain genuine Rolex watches
imported into the United States from overseas.
Plaintiff's First Amended Complaint was dismissed in its
entirety for failure to state a claim. See Boneta v.
Rolex Watch USA, Inc., __ F.Supp.3d __, No. 16 Civ.
2369, 2017 WL 481450, at *1 (S.D.N.Y. Feb. 3, 2017).
Plaintiff moves for leave to file a Second Amended Complaint
(the "SAC") pursuant to Federal Rule of Civil
Procedure 15(a)(2). For the following reasons,
Plaintiff's motion is denied.
with the procedural history and the allegations contained in
the First Amended Complaint is assumed. See Boneta,
2017 WL 481450, at *l-2. The following is based on the SAC,
and all factual allegations are assumed to be true for
purposes of this motion. See Trs. of Upstate N.Y.
Eng'rs Pension Fund v. Ivy Asset Mgmt, 843 F.3d 561,
566 (2d Cir. 2016).
to the Tariff Act of 1930 and accompanying regulations, CBP
offers gray market protection to certain American-owned
trademarks and trade names. When a trademark is entitled to
gray market protection, CBP will prohibit the importation of
a foreign-made item bearing a genuine trademark that is
identical to or substantially indistinguishable from the
American-owned trademark. An American-owned trademark is
entitled to gray market protection where (1) the American and
foreign trademarks are not owned by the same person, (2) the
trademarks are not subject to common ownership or control and
(3) the owner of the American trademark records it with the
federal government. See 19 U.S.C. § 1526(a); 19
C.F.R. § 133.23.
letter dated February 8, 2005, Defendant Rolex USA renewed
the recordation of its trademark with CBP, indicating that it
was entitled to gray market protection. A CBP official
confirmed renewal of Rolex USA's trademark in a letter
dated June 30, 2005. The letter noted that "it is the
recordant's responsibility to promptly advise [CBP] of
any material changes made to recordations, including . . .
changes in ownership or control." The same CBP official
sent a letter dated January 11, 2006, confirming that the
contact information for Rolex USA had been changed to John
Flaherty and Angelo Mazza of Gibney, Anthony & Flaherty,
LLP ("Gibney"), who were legal counsel for Rolex
USA with regard to any CBP matters from 2004 through at least
result of this recordation, Rolex USA effectively received
the exclusive right to import Rolex watches into the United
States. CBP published notice of that gray market protection
on an agency website, http://iprs.cbp.gov, from no
later than 2009 until 2015. Among other things, the agency
website displayed a screen with information stating
"Gray Market Restricted YES" as to Rolex products.
However, by 2006, Rolex USA had merged with other Rolex
entities, such that Rolex USA was under common ownership with
Rolex Holdings, S.A., a foreign entity. At that point, Rolex
USA knew that the U.S. trademark was no longer entitled to
gray market protection.
USA never informed CBP about the merger. Instead, Rolex USA
deliberately allowed CBP to enforce its gray market
protection in order to decrease its competition in the United
States. Rolex USA did so by requiring importers to obtain its
authorization to import Rolex watches, and communicating
these authorizations "through email and postal
services." Relying on its gray market protection, Rolex
USA consistently prohibited Plaintiff and numerous other
watch importers from bringing shipments of Rolex watches into
the United States.
20, 2009, CBP officials detained two shipments containing a
total of 90 Rolex watches that Plaintiff sought to import
from Hong Kong. The customs broker of record for the detained
shipments was Karen Ferry. The same day, CBP officials
contacted Rolex USA "via wire and/or mail." Counsel
from Gibney confirmed that the watches were genuine, but
advised that the shipments were not accompanied by
authorization from Rolex USA, the trademark holder.
Consequently, CBP seized the watches and sent Plaintiff
written notice of its actions. Gibney also sent Plaintiff a
letter advising him of the seizure and seeking additional
21, 2009, Brian Ferrante, a Special Agent with Immigration
and Customs Enforcement, contacted either Flaherty or Mazza
at Gibney, who confirmed that Plaintiff was not authorized to
import Rolex watches and did not disclose that authorization
was unnecessary. Also on May 21, Ferrante contacted Ferry,
who provided "customs declarations, invoices and other
documentation" showing that Plaintiff had imported at
least six other shipments of watches since April 2009. As a
result of these communications, a search warrant was sought
for the purpose of finding and seizing more Rolex watches
2015, Rolex USA changed its recordation with CBP to indicate
that it is not entitled to gray market protection. Rolex USA
also notified FedEx at some point during 2015 that it no
longer wished to abide by the import restriction. Rolex
USA's decision not to seek further gray market protection
confirmed Plaintiff's suspicions that Rolex USA had not
been entitled to gray market protection since the merger in
or around 2006, despite Rolex USA's representations to
alleges that Rolex USA is a subsidiary of Rolex Industries,
Inc., which in turn is a subsidiary of Rolex Holdings, SA.
Montres Rolex, SA. is the sole worldwide distributor of Rolex
watches. Rolex Holdings, SA. and Montres Rolex, SA. are Swiss
to amend should be 'freely give[n] . . . when justice so
requires, ' Fed.R.Civ.P. 15(a)(2), but should generally
be denied in instances of futility . . . ." United
States ex rel. Ladas v. Exelis, Inc.,824 F.3d 16, 28
(2d Cir. 2016) (some internal quotation marks omitted).
"A proposed amendment to a complaint is futile when it
could not withstand a motion to dismiss." F5 Capital
v. Pappas,856 F.3d 61, 89 (2d Cir. 2017). In reviewing
such a motion, a court accepts as true all factual
allegations and draws all reasonable inferences in the
plaintiff's favor. See Trs. of Upstate N.Y.
Eng'rs Pension Fund, 843 F.3d at 566. To withstand
dismissal, a pleading "must contain sufficient factual
matter, accepted as true, to state a claim to relief that is