United States District Court, W.D. New York
DEFAULT JUDGMENT AND PERMANENT INJUNCTION
FRANK P. GERACI, JR. CHIEF JUDGE UNITED STATES DISTRICT COURT
Crazy Dog T-Shirts, Inc. (“Plaintiff”) initiated
this action on December 11, 2015 to remedy alleged trademark
infringement and unfair competition by Defendants Design
Factory Tees, Inc. and Tony Rallis. Plaintiff seeks relief
under Section 43(a) of the Lanham Act, 15 U.S.C. §
1125(a), and New York General Business Law §§
360-k, 360-l, and 360-m.
record demonstrates that Defendants were properly served,
that Defendants failed to respond to Plaintiff's
complaint, and that the Clerk of Court entered default
against Defendants pursuant to Rule 55(a) of the Federal
Rules of Civil Procedure. After a hearing in which Defendants
did not appear, the Court granted Plaintiff's motion for
a preliminary injunction. See ECF No. 15.
now moves for a default judgment against Defendants pursuant
to Rule 55(b). ECF No. 16. For the reasons stated below,
Plaintiff's motion is granted as to Defendant Design
Factory Tees but denied as to Defendant Tony Rallis.
default has been entered, the Court's role is to
determine whether the facts alleged in the complaint are
sufficient to state a claim for relief as to each cause of
action for which the plaintiff seeks default judgment.
See, e.g., Haley v. Hughes Network Sys.,
LLC, No. 12-CV-1079, 2013 WL 5937007, at *1 (W.D.N.Y.
Nov. 1, 2013). In making that determination, the Court
accepts the allegations in the complaint as
true. Id. (citing Greyhound
Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d
155, 158 (2d Cir. 1992)).
same time, the Court does not simply accept at face value
that a defendant is liable. Rather, “judgment against a
defaulting party should be granted only after careful
examination of the moving party's claim by the district
court . . . Indeed, a defendant's default does not in
itself warrant a court in entering a default judgment because
there must be a sufficient basis in the pleadings for the
judgment entered.” Bianco v. Seaway Industrial
Services, Inc., No. 03-CV-0084, 2004 WL 912916, at *1
(W.D.N.Y. Apr. 1, 2004) (internal citations and quotations
omitted); see also Enron Oil Corp. v. Masonori
Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993). The Second
Circuit has cautioned district courts that “defaults
are generally disfavored and are reserved for rare occasions,
” and when there is doubt as to the propriety of
granting judgment by default, “the doubt should be
resolved in favor of the defaulting party.” Enron
Oil Corp., 10 F.3d at 96.
Plaintiff seeks a default judgment against Defendants with
respect to its first cause of action, false designation of
origin under 15 U.S.C. § 1125(a).
Design Factory Tees
considered the record in this case and the applicable legal
authorities, the Court is satisfied that Plaintiff is
entitled to a default judgment against Defendant Design
Factory Tees. See ECF No. 16-2, at 5-10.
Plaintiff's allegations, accepted as true, demonstrate
that the unregistered mark CRAZY DOG TSHIRTS
(“Plaintiff's Mark”) is entitled to
protection under section 1125(a) and that Design Factory
Tees's actions-namely, hijacking Plaintiff's listings
on amazon.com and falsely implying to customers that shirts
sold by Design Factory Tees originate from or are authorized
by Plaintiff-constitute false designation of origin and are
likely to cause confusion with Plaintiff's Mark. The
Sports Auth., Inc. v. Prime Hosp. Corp., 89 F.3d 955,
960 (2d Cir. 1996); Coach Leatherware Co. v. AnnTaylor,
Inc., 933 F.2d 162, 168 (2d Cir. 1991); Polaroid
Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d
with respect to Defendant Tony Rallis, Plaintiff's
allegations are insufficient. Courts in the Second Circuit
have consistently held that a corporate officer may only be
held personally liable for trademark infringement and unfair
competition if that officer is “a moving, active,
conscious force behind the corporation's
infringement.” See, e.g., Innovation
Ventures, LLC v. Ultimate One Distrib. Corp., 176
F.Supp.3d 137, 155 (E.D.N.Y. 2016). For example, a person who
is the sole shareholder and employee of an infringing company
would be personally liable for that company's
infringement because he or she must have approved of the
infringing act. Chloe v. Queen Bee of Beverly Hills,
LLC, No. 06-cv-3140, 2011 WL 3678802, at *4 (S.D.N.Y.
Aug. 19, 2011) (collecting cases).
only mention of Tony Rallis in Plaintiff's complaint is
that he is, and at all relevant times was, a Maryland
resident. ECF No. 1 ¶ 6. In its motion for default
judgment, Plaintiff argues that Tony Rallis should be held
personally liable for Design Factory Tee's infringement
because (1) he is the sole listed agent of Design Factory
Tees according to the Maryland Department of Assessments and
Taxation Business Services; (2) he accepted service on behalf
of Design Factory Tees; and (3) Plaintiff's counsel sent
him a cease and desist letter on November 20, 2015. ECF No.
16-2, at 10-11. Plaintiff does not cite to anything in the
record to support its first assertion. Id. But even
if the Court were to accept that fact as true, Plaintiff has
not shown that Tony Rallis was “a moving, active,
conscious force” behind Design Factory Tees's
infringement. See Carell v. Shubert Org., Inc., 104
F.Supp.2d 236, 271 (S.D.N.Y. 2000) (finding allegations
insufficient to support personal liability where the
individual was chairman of the infringing organization,
credited on the allegedly infringing video, and copied on a
letter threatening legal action); Flat Rate Movers, Ltd.
v. FlatRate Moving & Storage, Inc., 104 F.Supp.3d
371, 383 (S.D.N.Y. 2015); Eu Yan Sang Int'l Ltd. v. S
& M Enterprises (U.S.A.) Enter. Corp., No.
09-CV-4235, 2010 WL 3824129, at *2 (E.D.N.Y. Sept. 8, 2010)
(“This Court has also found that a defendant is not