Graduation Sols., LLC v. Acadima, LLC
| Decision Date | 26 March 2020 |
| Docket Number | No. 3:17-CV-1342 (VLB),3:17-CV-1342 (VLB) |
| Court | U.S. District Court — District of Connecticut |
| Parties | GRADUATION SOLUTIONS, LLC Plaintiff, v. ACADIMA, LLC and ALEXANDER LOUKAIDES, Defendants. |
On June 27, 2019, a jury found Defendants Alexander Loukaides ("Loukaides") and Acadima, LLC liable on Plaintiff Graduations Solutions, LLC's ("Graduation Solutions" or "Plaintiff") claims of copyright infringement, trade-dress infringement, violation of Connecticut's prohibition against unfair competition, and unjust enrichment. The jury awarded Graduation Solutions $6.254 million dollars in compensatory and punitive damages, including $3.23 million dollars from Loukaides. In the wake of that verdict, Loukaides moves for, in the alternative, (1) renewed judgment as a matter of law [Dkt. 147], or (2) a new trial [Dkt. 148]. Because of the overlap in relevant law and arguments, the Court considers the motions together. After considering each party's briefing, the Court DENIES both motions for the reasons that follow.
Graduation Solutions designs and sells graduation apparel and accessories, such as caps, gowns and tassels, through its website, graduationsource.com. [Dkt. 100 at 3]. Loukaides officially formed Acadima, LLC, also a graduation apparel company, in 2015, but operations began prior to that date. [Dkt. 126 (Jury Instructions) at 11].
In August 2017, Graduation Solutions filed a complaint against Acadima, LLC and Loukaides for copyright infringement under 17 U.S.C. § 101, et seq.; trade dress infringement under section 43(a) of the Lanham Act, 16 U.S.C. § 1125(a); false advertising under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); violation of the Connecticut Unfair Trade Practices Act ("CUTPA"); violation of Connecticut's common law prohibition against unfair competition; and unjust enrichment. [Dkt. 1 (Compl.)]. Graduation Solutions alleged that Acadima, LLC and Loukaides owned and controlled websites, including gradshop.com and acadima.com, which duplicated Graduations Solutions's website, graduationso urce.com ("Plaintiff's website"), and induced customer confusion. [Dkt. 31 (Second Amended Compl.)]. Graduation Solutions sought injunctive relief, compensatory damages, punitive damages, costs, and attorneys' fees. Id. Acadima, LLC defaulted, and so the only issue to be determined as to Acadima, LLC at trial was damages. [Dkts. 73 (Mot. for Default), 75 (Order on Default)]. Therefore, the trial focused on Graduation Solutions's claims against Loukaides.
Trial began on June 20, 2019 and lasted four days. Plaintiff argued and introduced evidence that Loukaides owned and controlled acadima.com and gradshop.com, that those websites duplicated features of Plaintiff's website, andthat, in doing so, those websites confused Plaintiff's customers into mistaking those websites for Plaintiff's website. [Dkt. 113 at 18-21, 78:2-79:20, 170:1-4, 173:4-14, 108:2-24, 119:4-14; 122: 20-123:24, and 137:1-139:8]. Plaintiff presented evidence that Acadima, LLC had gross annual revenues of $1.3 million dollars. [Dkt. 140 at 77:14-16, 110:10-18], and Plaintiff's financial expert testified that Plaintiff lost profits of $1,512,000.00 due to the conduct of Acadima, LLC and lost profits of $1,936,000.00 due to the conduct of Loukaides. [Dkt. 140 at 116:15-118:14]. Loukaides responded that Acadima, LLC, rather than Loukaides, owned the websites and that Frank Seviane, Loukaides's former business partner and current owner of Acadima, LLC, was responsible for any copying, [Dkt. 113 at 26-33]. Plaintiff offered 114 exhibits for trial, of which 113 were admitted. [Dkt. 127 (Marked Ex. List)]. Loukaides offered one, which the Court did not admit. Id. Plaintiff also offered the testimony of four fact witnesses and an expert witness. See [Dkts 113, (6/20/2019 Trial Tr.), 140 (6/24/2020 Trial Tr.), 141 (6/25/2020 Trial Tr.), 142 (6/27/2019 Trial Tr.)]. Loukaides put on two witnesses. [Dkts. 140, 141].
After Plaintiff presented its case in chief, Loukaides moved for a directed verdict. [Dkt. 115 (Mot. for Directed Verdict)]. After hearing oral argument, this Court denied the motion. [Dkt. 141 at 78:2-89:18]. The jury found that Acadima, LLC was liable for $1,512,000.00 in actual damages, and $1,512,000.00 in punitive damages. [Dkt. 124 (Jury Verdict) at 1-2]. The jury found that Loukaides was liable for copyright infringement, trade dress infringement under the Lanham Act, violation of the Connecticut Unfair Trade Practices Act, violation of Connecticut common law against unfair competition, and unjust enrichment, but that he wasnot liable for false advertising under the Lanham Act. Id. at 3-4. Based on these liability findings, the jury awarded Plaintiff actual damages of $1,615,00.00 and punitive damages of $1,615,000.00 against Loukaides. Id. at 2.
Loukaides moves for a new trial pursuant to Federal Rule of Civil Procedure 59, arguing that the Court made six critical and independent legal errors. [Dkt. 148 (Def. Mot. New Trial), Dkt. 149 (Def. Mem. Supp. Mot. New Trial)]. Graduation Solutions opposes the motion. [Dkt. 156]. Loukaides replies. [Dkt. 161]. The Court addresses each argument in turn.
Rule 59 permits a court, on motion, to "grant a new trial on all or some of the issues . . . after a jury trial, for any reason for which a new trial has heretofore been granted in an action in federal court." Fed. R. Civ. P. 59(a)(1)(A). To grant a new trial, the court must view the jury's verdict as against the weight of the evidence. Manley v. AmBase Corp., 337 F.3d 237, 245 (2d Cir. 2003). "[A] decision is against the weight of the evidence . . . if and only if the verdict is [(1)] seriously erroneous or [(2)] a miscarriage of justice." Farrior v. Waterford Bd. of Educ., 277 F.3d 633, 635 (2d Cir. 2002). "[R]elief is not to be granted unless the movant demonstrates that the error was not harmless." Leo v. Long Island R. Co., 307 F.R.D. 314, 321 (S.D.N.Y. 2015) ).
In reviewing motions for a new trial, the judge "may weigh the evidence and the credibility of witnesses and need not view the evidence in the light most favorable to the verdict winner." Raedle v. Credit Agricole Indosuez, 670 F.3d 411, 418 (2d Cir. 2012) (citing United States v. Landau, 155 F.3d 93, 104 (2d Cir. 1998)). But where "a verdict is predicated almost entirely on the jury's assessments of credibility, such a verdict generally should not be disturbed except in an egregious case, to correct a seriously erroneous result, or to prevent a miscarriage of justice." Raedle, 670 F.3d at 418-19.
Loukaides first argues that the Court erred in giving an instruction on the inadmissibility of Loukaides's Exhibit A ("Exhibit A"), a single piece of paper which appeared to be a portion of an email dated July 5, 2016 sent by non-party Frank Seviane ("Seviane") to non-party Elizabeth Barwick. [Dkt. 149 at 4-11]
Before trial and outside the presence of the jury, Loukaides attempted to submit Exhibit A into evidence. [Dkt. 140 at 12:11-14:20]. Graduation Solutions objected under Federal Rules of Evidence 901 and 801 that Exhibit A could not be authenticated and contained inadmissible hearsay. [Dkt. 100 at 24 ]; [Dkt. 140 at 14:22-15:3]. Loukaides argued that portions of the deposition transcript of Frank Seviane should be sufficient to deem Exhibit A self-authenticating and reliable. [Dkt. 140 at 13:12-14:20, 16:7-18:5]. But Seviane was not shown Loukaides's Exhibit A during his deposition, he did not admit to sending or knowing about it, and he did not in any way otherwise authenticate it. Id. at 19.Further, when asked about how Loukaides came into possession of Exhibit A, since he was not a sender or recipient, Loukaides represented that Seviane forwarded him the email. Id. at 16:7-11. But he failed to present the complete forwarded email as part of Exhibit A. Id. After considering these facts, the Court found that the email excerpt marked Exhibit A could not be admitted with just its present support. Id. at 18:5-19:16.
Later that day, Loukaides's counsel questioned him on Exhibit A in front of the jury, and again attempted to lay the foundation to offer Exhibit A into evidence. [Dkt. 140 at 183]. The Court repeatedly cautioned Loukaides and his counsel to not "not reference anything in the email," but only "categorically describe what the document is." Id. at 180:1-20. Nevertheless, before the document was admitted, Loukaides testified that Seviane had forwarded him an email showing that Seviane had a content writer for the websites. Id. at 183:14. Graduation Solutions's counsel objected and the Court excused the jury to "address this evidentiary issue." Id. at 183:17-20.
After the jury exited, Loukaides again told the Court that the email had been forwarded to him. Id. at 186:5. The Court asked Loukaides to produce the entire forwarded email, and Loukaides said he would have to look for it. Id. at 186:6-7. At this point in the exchange, out of the presence of the jury, the Court said "this is beginning to look like a fraud on the Court and the jury." Id. at 188:7-8. The Court recessed. Upon return from recess, and still out of the presence of the jury, the Court confirmed with Loukaides's counsel that counsel had explained toLoukaides his obligations as a witness and that "the testimony he has given casts... his credibility in doubt." Id. at 191.
Before bringing the jury back in, the Court informed counsel that the Court planned to instruct the jury that the email is "not admissible and that the jury should disregard all testimony concerning" it because it is "hearsay" and has "no indicia of reliability," even though "Mr. Loukaides testified under oath that the email was forwarded to...
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