E.A. Sween Company, Inc. v. A & M Deli Express Inc., 093019 FED2, 18-2998-cv

Docket Nº:18-2998-cv
Party Name:E.A. Sween Company, Inc., A Minnesota Corporation, DBA Deli Express, Plaintiff-Appellant, v. A & M Deli Express Inc., Defendant-Appellee.
Attorney:FOR PLAINTIFF-APPELLANT: Thomas H. Boyd, Tucker A. Chambers, Winthrop & Weinstine, P.A., Minneapolis, MN; Sanford H. Greenberg, Greenberg Freeman LLP, New York, NY. FOR DEFENDANT-APPELLEE: No appearance.
Judge Panel:PRESENT: José A. Cabranes, Gerard E. Lynch, Christopher F. Droney, Circuit Judges.
Case Date:September 30, 2019
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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E.A. Sween Company, Inc., A Minnesota Corporation, DBA Deli Express, Plaintiff-Appellant,

v.

A & M Deli Express Inc., Defendant-Appellee.

No. 18-2998-cv

United States Court of Appeals, Second Circuit

September 30, 2019

UNPUBLISHED OPINION

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 30th day of September, two thousand nineteen.

Appeal from a judgment of the United States District Court for the Eastern District of New York (Raymond J. Dearie, Judge; Robert M. Levy, Mag. Judge).

FOR PLAINTIFF-APPELLANT: Thomas H. Boyd, Tucker A. Chambers, Winthrop & Weinstine, P.A., Minneapolis, MN; Sanford H. Greenberg, Greenberg Freeman LLP, New York, NY.

FOR DEFENDANT-APPELLEE: No appearance.

PRESENT: José A. Cabranes, Gerard E. Lynch, Christopher F. Droney, Circuit Judges.

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court is AFFIRMED.

Appellant E.A. Sween Company ("Sween") sued A & M Deli Express Inc. ("A&M") for trademark infringement, dilution, and unfair competition under federal and state law, alleging that A&M's use of "Deli Express" in its name and advertising infringed on Sween's trademark for a brand of convenience foods called "Deli Express." After A&M failed to appear, Sween moved for a default judgment. A magistrate judge recommended denying the motion and dismissing the complaint, reasoning that Sween failed to state any claims. The District Court adopted the recommendation and dismissed the complaint with prejudice. We assume the parties' familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.

Because the District Court simultaneously denied the motion for a default judgment and dismissed the complaint for failure to state a claim, we review the dismissal de novo.

See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002)

I. Procedural Issues

Sween challenges the District Court's judgment on a number of procedural grounds. It argues that the District Court erred by dismissing its complaint sua sponte, without notice or the opportunity to be heard, thereby denying it due process. Although it is true that the magistrate judge recommended dismissal sua sponte in the sense that no party had moved to dismiss for failure to state a claim, the record does not support the notion that Sween was denied notice and an opportunity to be heard before the complaint was dismissed. The magistrate judge, in his Report & Recommendation, clearly informed Sween that it had an opportunity to object. This gave Sween explicit notice that the District Court would be considering dismissal and provided Sween an opportunity to be heard on the issue.

Sween also contends that the District Court erred by dismissing the complaint because a defaulting party admits liability and the magistrate judge should not have conducted a merits analysis. That argument is meritless. A defaulting party admits only well-pleaded factual allegations; it does not admit conclusory allegations or legal conclusions. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). Therefore, it was proper for the magistrate judge to consider whether the complaint's allegations established liability. Id. In considering both plaintiff's motion for default judgment and the propriety of dismissal for failure to state a claim, the District Court was required to determine whether the facts, as alleged in well-pleaded, non-conclusory fashion, were sufficient to establish the defendant's liability as a matter of law. See id.; J.S. v. T'Kach, 714 F.3d 99, 103 (2d Cir. 2013); see also Steginsky v. Xcelera Inc., 741 F.3d 365, 368 (2d Cir. 2014). Even assuming, without deciding, the correctness of the view, frequently stated in district court opinions in this Circuit, that "[l]ikelihood of confusion is a fact-intensive analysis that ordinarily does not lend itself to a motion to dismiss, " Van Praagh v. Gratton, 993 F.Supp.2d 293, 303 (E.D.N.Y. 2014) (internal quotation marks omitted) (alteration in original), district courts...

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