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River Light V, L.P. v. Zhangyali

United States District Court, N.D. Illinois, Eastern Division.

August 22, 2016

River Light V, L.P. and Tory Burch LLC, Plaintiffs,
Zhangyali, et al., Defendants.


          MANISH S. SHAH United States District Judge.

         Defendant I Love You To The Moom And Back operates an online store and sold earrings bearing a counterfeit Tory Burch trademark. The owners of that trademark, plaintiffs River Light V, L.P. and Tory Burch LLC, brought claims under the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act. Plaintiffs now move for summary judgment and seek statutory damages of $150, 000. For the following reasons, summary judgment is granted in favor of plaintiffs, and statutory damages in the amount of $100, 000 will be awarded.

         I. Legal Standards

         Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014); Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A court must “construe all facts and reasonable inferences in the light most favorable to the non-moving party.” Apex Digital, Inc. v. Sears, Roebuck, & Co., 735 F.3d 962, 965 (7th Cir. 2013).

         II. Facts

         Plaintiffs River Light V, L.P. and Tory Burch LLC hold a valid and incontestable trademark in the shape of two capital T’s, registered with the United States Patent and Trademark Office under the number 3, 029, 795. [52] ¶ 1.[1]Defendant I Love U To The Moom And Back advertised, offered for sale, and sold earrings featuring a counterfeit Tory Burch trademark, without plaintiffs’ authorization, through an online store. [52] ¶¶ 2-4. It listed the earrings for $1.80, and described them as “Hot fashion follow out big classic double T stud earrings the branded styled fashion rose gold button earrings for women.” [52] ¶ 2. Defendant advertised and offered to ship the earrings to potential customers in Illinois and elsewhere in the United States. [52] ¶ 4.

         III. Analysis

         A. Expert Reports

         In its response to this motion, defendant refers to and attaches the declarations of Wenquing Li and Michal Malkiewicz-two expert reports that opine on plaintiffs’ actual damages and defendant’s willfulness in infringing upon plaintiffs’ trademarks. See [62-1], [62-3]. Plaintiffs request that the expert reports be stricken, because defendant never disclosed the identities of, or its intent to use, any expert witnesses. Under Rule 37(c), “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed.R.Civ.P. 37(c). Exclusion is “automatic and mandatory, ” unless the sanctioned party can show that nondisclosure was either justified or harmless. David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003) (quoting Salgado v. Gen. Motors Corp., 150 F.3d 735, 742 (7th Cir.1998)).

         Defendant concedes that it failed to make any initial disclosures or disclosures of expert testimony, and that the Li and Malkiewicz declarations constitute expert opinions. Its only excuse is that it did not have an opportunity to provide the necessary disclosures. Defendant claims that it did not decide to commission expert reports until after December 16, 2015, when the briefing schedule for this motion was set and discovery was stayed, and that the expert reports were not ready until six days before its response brief was due. This excuse is not sufficient justification. Defendant both requested and received the reports before the filing deadline for its response brief, and it could have moved to lift the stay or amend the briefing schedule under Federal Rule of Civil Procedure 56(d). What it should not have done was use a stay of discovery as an opportunity to attach an expert report to its response brief without warning.

         Defendant also claims that its nondisclosure was harmless. The following factors should be considered in determining whether nondisclosure was harmless:

(1) the prejudice or surprise to the party against whom the evidence is offered; (2) the ability of the party to cure the prejudice; (3) the likelihood of disruption to the trial; and (4) the bad faith or willfulness involved in not disclosing the evidence at an earlier date.

Tribble v. Evangelides, 670 F.3d 753, 760 (7th Cir. 2012). Defendant concedes that plaintiffs may have been surprised by its experts’ existence, but argues that they should not be surprised by the content of the expert reports, because they are consistent with and support “what the defendant [has] been claiming throughout this case.” [74] at 4. Defendant makes no mention at all of the prejudice arising from plaintiffs’ inability to adequately respond to the expert declarations. “Without proper disclosures, a party may miss its opportunity to disqualify the expert, retain rebuttal experts, or hold depositions for an expert not required to provide a report.” Tribble, 670 F.3d at 759-60. Plaintiffs had no such opportunity, and defendant has not offered one. Allowing defendant to rely on expert reports that were disclosed for the first time in a response to plaintiffs’ summary judgment motion would be prejudicial. Despite defendant’s arguments to the contrary, it had the opportunity to make expert disclosures (or seek permission in advance) but did not, and this indicates a willful decision to not comply with the rules. The declarations of Li and Malkiewicz are therefore excluded.[2]

         B. ...

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