Estate of Ellington v. Harbrew Imports Ltd.

• Decision Date: 19 September 2011
• Docket Number: No. 09–CV–3359 (KAM)(ALC).,09–CV–3359 (KAM)(ALC).
• Citation: 812 F.Supp.2d 186
• Parties: The ESTATE OF Mercer K. ELLINGTON, by its Executor, Paul ELLINGTON, Plaintiff/Counter-claim Defendant, v. HARBREW IMPORTS LTD. and Iconic Brands, Inc., Defendants.Harbrew Imports Ltd. and Iconic Brands, Inc., Third–Party Plaintiffs, v. Steven D. Shaw, Jr.; SDS Enterprises LLC; Seth J. White; EGS Development, Inc.; CMG Worldwide, Inc.; and “John Does 1 through 10,” Third–Party Defendants.
• Court: U.S. District Court — Eastern District of New York

812 F.Supp.2d 186

The ESTATE OF Mercer K. ELLINGTON, by its Executor, Paul ELLINGTON, Plaintiff/Counter-claim Defendant,

v.HARBREW IMPORTS LTD. and Iconic Brands, Inc., Defendants.Harbrew Imports Ltd. and Iconic Brands, Inc., Third–Party Plaintiffs,

v.Steven D. Shaw, Jr.; SDS Enterprises LLC; Seth J. White; EGS Development, Inc.; CMG Worldwide, Inc.; and “John Does 1 through 10,” Third–Party Defendants.

No. 09–CV–3359 (KAM)(ALC).

United States District Court, E.D. New York.

Sept. 19, 2011.

Richard J.J. Scarola, Alexander Zubatov, Scarola Malone & Zubatov LLP, New York, NY, for Plaintiff/Counterclaim Defendant.

Alan S. Berkowitz, Alan S. Berkowitz, Esq., Bonnie Lynn Mohr, Law Offices of Bonnie L. Mohr, New York, NY, Theodore J. Minch, Sovich Minch, LLP, McCordsville, IN, for Third–Party Defendants.

ORDER ADOPTING REPORT AND RECOMMENDATION

MATSUMOTO, District Judge:

Plaintiff/counter-claim Defendant Mercer K. Ellington, by its Executor, Paul Ellington (“plaintiff” or “Ellington Estate”) commenced the instant action against defendants Harbrew Imports Ltd. and Iconic Brands, Inc. (“defendants”) alleging that defendants used the name Duke Ellington and other registered trademarks of the Ellington Estate without authorization in the marketing and promotion of defendants' product, “Duke Ellington XO Cognac,” in violation of Sections 43(a) and 43(c) of the Lanham Act, 15 U.S.C. §§ 1125(a) and 1125(c), and for related claims of unfair competition and dilution under New York state law. ( See ECF No. 1, Complaint (“Compl.”).) Defendants initially answered the complaint and alleged several counterclaims against plaintiff. (ECF No. 8, Answer and Counterclaims to Complaint, filed Sept. 24, 2009.) Defendants also brought a third-party complaint against Steven D. Shaw, Jr.; SDS Enterprises LLC; Seth J. White; CMG Worldwide, Inc. (“CMG”); and EGS Development, Inc. ( Id.) Following defendants' counsel's withdrawal from the case and defendants' subsequent default, plaintiff moved for a default judgment and injunctive relief. ( See ECF No. 52, Notice of Motion, filed Dec. 3, 2010; ECF No. 53, Memorandum in Support of Motion for Default and Failure to Prosecute, filed Dec. 3, 2010 (“Pl. Mem.”).) CMG also filed a motion to dismiss the third-party complaint for failure to prosecute. (ECF No. 49, Defendant's Motion to Dismiss the Third Party Complaint or Failure to Prosecute under Fed.R.Civ.P. 41(b).)

On March 4, 2011, the court referred the above motions to Magistrate Judge Andrew L. Carter, Jr. for a report and recommendation (“R & R”). ( See Order dated March 4, 2011.) On August 25, 2011, Judge Carter issued an R & R recommending that the court grant the plaintiff's motion for default judgment and award statutory damages of $325,000 under 15 U.S.C. § 1117(c), and grant the permanent injunction and other relief cited in paragraphs 2–4 of the “complaint's wherefore clause.” (ECF No. 62, R & R at 197–98.) In addition, Judge Carter recommended that defendants' counterclaims and third-party complaint as to all third-party defendants be dismissed with prejudice. ( Id.)

Notice of the Report and Recommendation was sent electronically to all parties via the court's electronic filing system on August 25, 2011. Plaintiffs also served a copy of the Report and Recommendation on the defendants and filed a declaration of service on August 26, 2010. (ECF No. 63.) As set forth in the Report and Recommendation, the parties had a right to file written objections to the Report and Recommendation within fourteen days of the date of the R & R. ( See R & R at 198.) The period for filing objections for all parties has now lapsed, and no objections to the Report and Recommendation have been filed.

A district court reviews those portions of a report and recommendation to which a party has timely objected under a de novo standard of review and “may accept, reject, or modify, in whole or in part, the findings or recommendations ...” 28 U.S.C. § 636(b)(1)(C). However, where no objections to the Report and Recommendation have been filed, the district court “need only satisfy itself that that there is no clear error on the face of the record.” Urena v. New York, 160 F.Supp.2d 606, 609–10 (S.D.N.Y.2001) (quoting Nelson v. Smith, 618 F.Supp. 1186, 1189 (S.D.N.Y.1985)).

Upon a careful review of the record and Judge Carter's thoroughly researched and well-reasoned Report and Recommendation, the court finds no clear error in Judge Carter's Report and Recommendation and hereby affirms and adopts the Report and Recommendation in its entirety as the opinion of the court pursuant to 28 U.S.C. § 636(b)(1). Accordingly, and for the reasons set forth above and based upon the findings of fact and conclusions of law set forth in the Report and Recommendation and adopted herein: (1) plaintiffs are awarded statutory damages of $325,000 under 15 U.S.C. § 1117(c); (2) defendants are permanently enjoined from using the Duke Ellington trademark, defendants must turn over to plaintiff all products, inter alia, bearing the Duke Ellington trademark and defendants must submit an affidavit within thirty days of the date of this order confirming that they have complied with the injunction; and (3) defendants' counterclaims and third-party complaint as to all counterclaim defendants and third-party defendants are dismissed with prejudice.

By September 26, 2011, plaintiff's counsel shall submit a proposed Judgment and Permanent Injunction consistent with the Report and Recommendation and this Order.

SO ORDERED.

REPORT & RECOMMENDATION

CARTER, United States Magistrate Judge:

Plaintiff/counter-claim Defendant Mercer K. Ellington, by its Executor, Paul Ellington (“Plaintiff” or “Ellington Estate”) brings this action against Defendants Harbrew Imports Ltd. and Iconic Brands, Inc. under Sections 43(a) and 43(c) of the Lanham Act, 15 U.S.C. §§ 1125(a) and 1125(c), and for related claims of unfair competition and dilution under New York state law, based upon Defendants' unauthorized use of the name DUKE ELLINGTON and other registered trademarks of the Ellington Estate in the marketing and promotion of Defendants' product, “Duke Ellington XO Cognac.” On December 3, 2010, the Ellington Estate moved for an entry of default. By order dated March 4, 2011, the Honorable Kiyo A. Matsumoto, United States District Judge, referred to me Plaintiff's motion for default and other related motions to dismiss for failure to prosecute, and requested a report and recommendation. For the reasons set forth below, I respectfully recommend that the Court grant Plaintiff's default motion and award $325,000 in damages and other relief as specified below. I further recommend that the Court grant Plaintiff's and third-party defendant, CMG Worldwide, Inc.'s motion to dismiss under Fed.R.Civ.P. 41(b).

I. Background

A. Factual Background

The following facts are drawn from the complaint, which was filed on August 5, 2009. This action arises under the Trademark Act of 1946, as amended, 15 U.S.C. §§ 1051, et seq. (“the Lanham Act”). (Compl. ¶ 1.) The Estate of Ellington is an estate existing under the laws of Florida. ( Id. ¶ 3.) Defendants Harbrew Imports Ltd. (“Harbrew”) and Iconic Brands, Inc. (“Iconic”) are corporations with a principal place of business in the Eastern District of New York. ( Id. ¶¶ 4–5.) On or around June 10, 2009, Harbrew was acquired by and became a wholly owned subsidiary of the company now named Iconic. ( Id. ¶ 6.) Defendants are purportedly in the business of “celebrity-branded liquor distribution.” ( Id.) Mercer Ellington was the son of the late Edward Kennedy Ellington, commonly known as Duke Ellington. ( Id. ¶ 9.) Duke Ellington was, among other things, a famous composer and musician in American pop culture. ( Id. ¶¶ 10–11.) Duke Ellington died in 1974 and since his death, Plaintiff and Mercer Ellington made substantial efforts to continue his reputation and his legacy. ( Id. ¶ 12.) For example, Duke Ellington's music appears in popular television programs such as American Idol and The Sopranos. ( Id.) The complaint describes the effect of Duke Ellington's legacy and his posthumous popularity. ( Id. ¶¶ 13–15.) Building on the success of Duke Ellington's legacy, the Estate of Ellington licensed the DUKE ELLINGTON name and its related indicia, including his image and his signature, to a broad category of goods and services, including, but not limited to luxury watches, luxury pens, books, stationary, greeting cards, designer apparel, limited edition prints, calendars, note cards, and posters. ( Id. ¶ 16.) The Estate of Ellington owns several federal trademark registrations for the name DUKE ELLINGTON. ( Id. ¶¶ 17–18.) Plaintiff has also filed additional applications based on the use of the name DUKE ELLINGTON in connection with jazz festivals. ( Id. ¶ 19.)

According to Harbrew's website, Harbrew is a federally licensed importer and distributor of beverages. ( Id. ¶ 20.) Harbrew specializes in celebrity-branded products, such as “Danny DeVito's Limoncello,” a liqueur named after the Italian–American actor and “Bench 5,” a scotch named after baseball Hall of Famer Johnny Bench. ( Id.) It appears that Defendant Iconic is now in the same business as Harbrew, based on Iconic's similar website and the products it promotes. ( Id. ¶ 21.) Plaintiff alleges that Harbrew once attempted to negotiate with Plaintiff a proposed licensing agreement where Harbrew would manufacture, distribute and promote a DUKE ELLINGTON branded liqueur, but no agreement was reached. ( Id. ¶ 22.) Subsequently, without Plaintiff's authorization, Harbrew used the trademarked name and signature DUKE ELLINGTON and actively promoted and marketed a liqueur entitled “Duke Ellington XO Cognac.” ( Id. ¶¶ 23–29.) These unauthorized activities appear to have begun in October 2006. ( Id.)

Plaintiff now brings this suit against Defendants for claims arising under the Lanham Act and New York state law. It seeks relief for...