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Mitchell Group USA, LLC v. Udeh

United States District Court, E.D. New York

July 28, 2017

MITCHELL GROUP USA, LLC and GAPADIS HEALTH AND BEAUTY INC., Plaintiffs,
v.
NKEM UDEH, individually and d/b/a/ "BEAUTY RESOURCE, " TIMITE & SON BEAUTY SUPPLIES, INC., AFRICAN & CARIBBEAN MARKET, INC., and JOHN DOES 1-10 and UNKNOWN ENTITIES 1-10. Defendants.

          ORDER ADOPTING REPORT AND RECOMMENDATION

          THE HONORABLE ANN M. DONNELLY UNITED STATES DISTRICT JUDGE

         Before the Court are the parties' objections to the Report and Recommendation ("R & R") that Magistrate Judge James Orenstein issued on March 8, 2017, recommending that the Court award the plaintiffs $203, 227.70 in damages and enter a permanent injunction against the defendants. For the reasons set forth below, I adopt Judge Orenstein's thorough and well-reasoned R & R.

         BACKGROUND

         The plaintiffs, Mitchell Group USA LLC ("Mitchell") and Gapadis Health and Beauty, Inc. ("Gapardis"), initiated this action against the defendants, Timite & Son Beauty Supplies, Inc. ("Timite") and World Beauty Distributor, Inc. ("World"), [1] asserting trademark infringement, counterfeiting, unfair competition, and false advertising under the federal Lanham Act and New York common law. (Second Amended Complaint, ECF 55.) After the defendants willfully failed to comply with multiple court orders, the court held them in contempt and ordered their answer stricken from the record. (ECF 80, affd, Order dated June 16, 2015; ECF 100, adopted, ECF 117; ECF 121.)

         On April 26, 2016, the plaintiffs filed a motion for default judgment, (ECF 141) which I referred to Judge Orenstein, pursuant to 28 U.S.C. § 636(b). Judge Orenstein recommended that the Court enter judgment against the defendants "jointly and severally in the amount of $203, 227.70 (consisting of $100, 000 in statutory damages; $95, 627.20 in attorney's fees; and $7, 600.50 in costs), and issue a permanent injunction." (R & R, ECF 168, at 1.) Both parties filed timely objections to the R & R on April 19, 2017. (ECF 171, 172.)

         DISCUSSION

         I. Standard of Review

         A party may object to a magistrate judge's R & R within 14 days. Fed.R.Civ.P. 72(b)(1). The objections must be specific; where a party "makes only conclusory or general objections, or simply reiterates [the] original arguments, the Court reviews the [R & R] only for clear error." Pall Corp. v. Entegris, Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008) (quoting Barratt v. Joie, No. 96 Civ. 324, 2002 WL 335014, at *1 (S.D.N.Y.Mar. 4, 2002)). The district judge must evaluate proper objections de novo and "may accept, reject, or modify the recommended disposition." Fed.R.Civ.P. 72(b)(3). "[E]ven in a de novo review of a party's specific objections, [however, ] the court will not consider 'arguments, case law and/or evidentiary material which could have been, but were not, presented to the magistrate judge in the first instance.'" Brown v. Smith, No. 09 Civ. 4522, 2012 WL 511581, at *1 (E.D.N.Y. Feb. 15, 2012) (quoting Kennedy v. Adamo, No. 02 Civ. 1776, 2006 WL 3704784, at *1 (E.D.N.Y. Sept. 1, 2006)) (alterations omitted). Moreover, "the district court is 'permitted to adopt those sections of a magistrate judge's report to which no specific objection is made, so long as those sections are not facially erroneous.'" Sasmor v. Powell, No. 11 Civ. 4645, 2015 WL 5458020, at *2 (E.D.N.Y. Sept. 17, 2015) (quoting Batista v. Walker, No. 94 Civ. 2826, 1995 WL 453299, at *1 (S.D.N.Y. July 31, 1995)).

         II. Defendants' Objections

         The defendants make the same arguments they made in their memorandum opposing the plaintiffs' motion for default judgment, which Judge Orenstein already considered and rejected. Accordingly, the Court reviews that part of the R & R for clear error. See, e.g., Official Comm. of Unsecured Creditors of Exeter Holdings Ltd. v. Haltman, No. 13 Civ. 5475, 2016 WL 128154, at *5 (E.D.N.Y. Jan. 12, 2016) (objections to an R & R that are identical to those put forth in motion papers are reviewed for clear error). Having reviewed Judge Orenstein's cogent analysis, the available record, and relevant case law, I find no clear error in his recommendation that default judgment be entered against the defendants.

         III. Plaintiffs' Objections

         The plaintiffs object to Judge Orenstein's recommendation that this Court enter a judgment against the defendants for $100, 000 in statutory damages; they argue this amount is insufficient because it does not include damages for (1) the defendants' use of the "Fair & White" and "Paris Fair & White" marks or (2) false advertising of products bearing the plaintiffs' "Maxi Skin, " "Pure Skin, " or "Immediate Claire Maxi-Beauty" marks. These objections are sufficiently specific to warrant de novo review. See 28 U.S.C. § 636(b)(1) ("A [district] court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.").

         Under 15 U.S.C. § 1117(c), a plaintiff may recover statutory damages for trademark infringement involving the use of counterfeit marks. In other cases of trademark infringement, plaintiffs are entitled to recover "(1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action." 15 U.S.C. § 1117 (a). "Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true[;] [t]he district court must instead conduct an inquiry in order to ascertain the amount of ...


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