158 F.3d 631 (2nd Cir. 1998), 98-7642, Gucci America, Inc. v. Gold Center Jewelry

Docket Nº:98-7642, 98-7644, 98-7726 and 98-7728.
Citation:158 F.3d 631
Party Name:48 U.S.P.Q.2d 1371 GUCCI AMERICA, INCORPORATED, GUESS?, INC., Plaintiffs-Appellants-Cross-Appellees, v. GOLD CENTER JEWELRY, Gold Fortune Jewelry, Empire Jewelry, Gold
Case Date:September 30, 1998
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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158 F.3d 631 (2nd Cir. 1998)

48 U.S.P.Q.2d 1371

GUCCI AMERICA, INCORPORATED, GUESS?, INC.,

Plaintiffs-Appellants-Cross-Appellees,

v.

GOLD CENTER JEWELRY, Gold Fortune Jewelry, Empire Jewelry,

Gold "N" Ice, Gold Spot Jewelry, Golden Touch Bronx Corp.,

Manny's Joyeria Jewelry, Oro-uno Jewelry, Inc., Senobar

Jewelry, John Does 1-8, Defendants,

Home Boy 2000, Defendant-Appellee,

Big Time Jewelry, Defendant-Appellee-Cross-Appellant.

Nos. 98-7642, 98-7644, 98-7726 and 98-7728.

United States Court of Appeals, Second Circuit

September 30, 1998

Argued July 15, 1998.[*]

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Milton Springut, Kalow, Springut & Bressler, New York City (Robert Tilewick, on the brief), for Appellants.

Bruce H. Lederman, Lederman Abrahams Lederman and Zarett, LLP, Massapequa, NY, for Appellee Home Boy 2000.

Noel W. Hauser, Noel Hauser and Associates, New York City, for Appellee Big Time Jewelry.

Before: CABRANES and REAVLEY, [**] Circuit Judges, and COVELLO, [***] District Judge.

COVELLO, District Judge.

This is an appeal from a decision of the United States District Court for the Southern District of New York, (Lewis A. Kaplan, Judge ), vacating and reducing the monetary portions of default judgments previously entered against the appellants, Gucci America, Inc. ("Gucci") and Guess?, Inc. ("Guess"). The appellants filed this appeal, arguing that the district court erred in reducing the amount of the original default judgments. The issue to be determined is whether the district court erred in setting aside default judgments based upon the notion that to have defaulted "willfully" for the purposes of our cases interpreting Federal Rule of Civil Procedure 60(b)(1), a defendant must have acted in bad faith. We reverse the decision of the district court and reinstate the original monetary award.

BACKGROUND

On February 26 and 27, 1997, Gucci and Guess sued the appellees, Home Boy 2000 ("Home Boy") and Big Time Jewelry ("Big Time"), for, inter alia, trademark infringement in violation of the Trademark Act of 1946, 15 U.S.C. § 1051, et seq., as amended by the Anticounterfeiting Protection Act of 1996, Pub.L. No. 104-153. The complaints, which sought both damages and injunctive relief, alleged that Home Boy and Big Time were selling counterfeits of Gucci and Guess name brand products. Home Boy and Big Time failed to answer the complaints and, on May 6, 1997, the district court entered default judgments against them. In those default judgments, the district court granted the injunctive relief sought in the appellants' complaints and retained jurisdiction over the cases for the purpose of calculating damages.

On September 17, 1997, Gucci and Guess filed their joint memorandum in support of an award of damages against the defaulting defendants. The memorandum indicated that Guess sought $25,000 in statutory damages from Home Boy and that each of the appellants sought $25,000 in statutory damages from Big Time. 1 Home Boy and Big Time received copies of the plaintiffs' memorandum, but failed to file a response.

On October 20, 1997, the court amended the default judgments, ordering Home Boy and Big Time individually to pay $25,000 in

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statutory damages to each of the appellants. 2 On December 30, 1997 and January 9, 1998, after Gucci and Guess had executed on the judgments, Home Boy and Big Time moved to vacate the default judgments against them pursuant to Federal Rule of Civil Procedure 60(b). 3

On January 16, 1998, the district court held a hearing on Home Boy's application to vacate the monetary portion of the judgment against it. At the hearing, Keyvan Amirianfar ("Amirianfar"), the owner of Home Boy, testified that he had, in fact, received a copy of the complaint and the plaintiffs' application for...

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