Mary Kay Inc. v. Ayres

• Decision Date: 26 October 2011
• Docket Number: Civil Action No. 4:11–cv–972–TLW–SVH.
• Citation: 827 F.Supp.2d 584
• Court: U.S. District Court — District of South Carolina
• Parties: MARY KAY INC., Plaintiff, v. Leslie AYRES, individually and d/b/a Your Little Make Up Shoppe and d/b/a My Little Make Up Shoppe, Defendant.

827 F.Supp.2d 584

MARY KAY INC., Plaintiff,

v.Leslie AYRES, individually and d/b/a Your Little Make Up Shoppe and d/b/a My Little Make Up Shoppe, Defendant.

Civil Action No. 4:11–cv–972–TLW–SVH.

United States District Court,D. South Carolina,Florence Division.

Oct. 26, 2011.

OPINION TEXT STARTS HEREAngelica Marie Colwell, Cherie Wilson Blackburn, Nexsen Pruet Adams Kleemeier, Charleston, SC, for Plaintiff.

ORDER

TERRY L. WOOTEN, District Judge.

On April 25, 2011, the plaintiff, Mary Kay Inc. (“plaintiff”), filed this civil action. (Doc. # 1). On June 8, 2011, this Court signed an Order, which granted the plaintiff's motion for a preliminary injunction. (Doc. # 9). After the defendant, Leslie Ayres, individually and d/b/a Your Little Make Up Shoppe and d/b/a My Little Make Up Shoppe (“defendant”), failed to answer or otherwise file a responsive pleading, the plaintiff moved for a default judgment and an award of attorneys' fees and other costs. (Doc. # 12). Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B), the default judgment motion was referred to United States Magistrate Judge Shiva V. Hodges for a Report and Recommendation. (Doc. # 13).

This matter now comes before this Court for review of the Report and Recommendation (“the Report”) filed by the Magistrate Judge to whom this motion had previously been assigned. (Doc. # 16). On August 31, 2011, the Magistrate Judge issued the Report. In the Report, the Magistrate Judge recommends that the motion for default judgment and award of attorneys' fees and other costs be granted. (Doc. # 16). Neither party filed objections to the Report. Objections were due on September 19, 2011. Notably, the defendant has not objected to the relief recommended by the Magistrate Judge in the Report.

This Court is charged with conducting a de novo review of any portion of the Magistrate Judge's Report and Recommendation to which a specific objection is registered, and may accept, reject, or modify, in whole or in part, the recommendations contained in that report. 28 U.S.C. § 636. In the absence of objections to the Report and Recommendation of the Magistrate Judge, this Court is not required to give any explanation for adopting the recommendation. See Camby v. Davis, 718 F.2d 198, 199 (4th Cir.1983).

The Court has carefully reviewed the Magistrate Judge's Report and Recommendation. It is hereby ORDERED that the Magistrate Judge's Report is ACCEPTED. (Doc. # 16). For the reasons articulated by the Magistrate Judge, the plaintiff's motion for default judgment and award of attorneys' fees and other costs (Doc. # 12) is GRANTED. Default judgment is hereby entered against the defendant, making the defendant liable for willful trademark infringement pursuant to 15 U.S.C. § 1125(a). The plaintiff is awarded judgment against the defendant in the amount of $16,671.30, which represents $16,078 in attorneys' fees pursuant to 15 U.S.C. § 1117 and $593.30 in costs. The Court also hereby enters a permanent injunction against the defendant pursuant to 15 U.S.C. § 1116. The terms of the injunction are set forth in the Magistrate Judge's Report. (Doc. # 16). Additionally, the defendant is ordered to deliver to the plaintiff, within thirty (30) days after service of this Order, all labels, signs, prints, packages, wrappers, receptacles, and advertisements in the defendant's possession that include any of the plaintiff's registered marks. Finally, the defendant is directed to serve upon the plaintiff a report in writing and under oath setting forth in detail the manner and form in which the defendant has complied with the terms of the injunction ordered herein. Said report shall be served upon the plaintiff within thirty (30) days after the entry and service on the defendant of the injunction ordered herein.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION

SHIVA V. HODGES, United States Magistrate Judge.

Plaintiff Mary Kay Inc. (“Mary Kay” or “Plaintiff”), which manufactures and distributes cosmetics, toiletries, skin care, and related products, filed a Verified Complaint (“Complaint”) against Defendant Leslie Ayres, individually and d/b/a Your Little Makeup Shoppe, and d/b/a My Little Make Up Shoppe, (“Ayres”) for breach of contract; unfair competition and trademark infringement pursuant to 15 U.S.C. § 1125 and § 1117, respectively (“Lanham Act”); violation of the South Carolina Unfair Trade Practices Act, S.C.Code Ann. § 39–5–10 et seq. (“SCUTPA”), tortious interference with contract, tortious interference with prospective contractual relationships, and unjust enrichment. Complaint ¶¶ 7; 46–83. [Entry # 1]. Mary Kay alleges that Ayres has sold and continues to sell Mary Kay products at flea markets in violation of her Independent Beauty Consultant (“IBC”) agreement.

I. Factual and Procedural Background

On April 25, 2011, Mary Kay filed its Complaint, together with a motion for a preliminary injunction against Ayres. [Entry # 5]. Although Ayres was served with Mary Kay's Complaint, she has not filed an answer or other responsive pleading. Ayres also failed to respond to Mary Kay's motion, and the Honorable Terry L. Wooten granted the preliminary injunction in an order filed June 6, 2011 (“Preliminary Injunction Order”). [Entry # 9]. Pursuant to Mary Kay's request, the Clerk of Court entered default against Ayres on June 14, 2011. [Entry # 10, # 11]. Thereafter, Mary Kay moved for a default judgment and award of attorneys' fees and other costs. [Entry # 12]. Mary Kay subsequently filed a motion to amend/correct its motion for a default judgment, in which it withdrew its original request for actual damages. [Entry# 15]. Pursuant to 28 U.S.C. § 636(b)(1)(B), Judge Wooten referred the default judgment motion and motion to amend to the undersigned for a Report and Recommendation (“Report”). [Entry # 13]. The court grants the motion to amend [Entry # 15] and considers the default judgment motion, as amended.

Mary Kay's motion for default judgment, fees, and costs focuses on its federal claims brought pursuant to the Lanham Act, although it has also sued Ayres for breach of contract and several tort causes of action. The undersigned recommends finding for Mary Kay on the Lanham Act claims based on injury from Ayres's improper use of its trademarks and damage to its goodwill. Prior to entry of the requested judgment, Mary Kay should be required to elect remedies. Because a party cannot recover twice for the same wrong, in the event Mary Kay chooses the remedies as discussed in its motion for default judgment, it cannot also obtain remedies under its state law causes of action. See Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 335 (5th Cir.2008) (finding plaintiff could not simultaneously recover attorneys' fees under breach of contract claim and lost profits pursuant to Lanham Act claim). Because Mary Kay's motion does not seek damages pursuant to those state law causes of action, they are not examined here.

The court has subject matter jurisdiction over the Lanham Act claims pursuant to 28 U.S.C. §§ 1331, 1338; and 15 U.S.C. § 1051 et seq. See Complaint ¶¶ 5–6. This court has personal jurisdiction over Ayres, and venue in this district is proper pursuant to 28 U.S.C. §§ 1391(b), 1391(c), and 1400 because she is a South Carolina resident who conducts business in this district and because a substantial part of the alleged acts of infringement occurred here. Complaint ¶¶ 2–3, 6.

Mary Kay's counsel, Cherie W. Blackburn, stated that, prior to filing and serving the Complaint, she wrote Ayres on Mary Kay's behalf and demanded she cease and desist certain activities. See Blackburn Decl. ¶ 3 [Entry # 12–2]. Blackburn indicated that attorney Robert Maring contacted her on March 30, 2011, and informed her he was representing Ayres in connection with responding to the cease-and-desist letter. Id. Blackburn received no response to her letter from Maring, Ayres, or otherwise, and she filed the Complaint, Motion for Preliminary Injunction, and Responses to Local Rule 26.01 Interrogatories on April 25, 2011. Id.; see Entry # 1, 3–5. On April 26, 2011, Blackburn wrote Maring again and provided him with a courtesy copy of the filed Summons, Complaint, Motion for Preliminary Injunction, and interrogatory responses. Blackburn Decl. ¶ 4 & ex. A. Maring indicated to Blackburn that, although he offered to represent Ayres in this matter, he had not heard from her again and had not been able to get in touch with her. Id. On April 26, 2011, Mary Kay's private process server served the Summons and Complaint, Motion for Preliminary Injunction with exhibits, and Responses to Local Rule 26.01 Interrogatories on Ayres personally. See Aff. of Service [Entry # 8–1]. Ayres's answer was due May 17, 2011. See Entry # 8.

II. Analysis

The undersigned has reviewed Mary Kay's Complaint, Responses to Local Rule 26.01 Interrogatories, Request for Entry of Default, Motion for Default Judgment, and the Preliminary Injunction Order, as well as all supporting and supplemental information provided. Accepting Mary Kay's well-pleaded factual allegations as true, the undersigned makes the following factual findings. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n. 2 (4th Cir.2009) (accepting plaintiff's allegations against defaulting defendant as true, noting a defaulting “ ‘admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.’ ”) ( quoting Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir.2001)).

Mary Kay is a Delaware corporation licensed to do business in Texas. Complaint ¶ 1. Ayres resides in and conducts business in South Carolina. Id. ¶¶ 2–4. Mary Kay manufactures and distributes cosmetics, toiletries, skin care, and related products to IBCs, who then sell the products to their customers. Id. ¶¶ 7–8.

Having found the facts as set forth in Mary Kay's Complaint deemed admitted by default, the court must ensure...