RVC Floor Decor, Ltd. v. Floor & Decor Holdings, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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RVC FLOOR DECOR, LTD.,

Plaintiff, MEMORANDUM & ORDER

18-CV-6449 (JS)(ARL)

-against-

FLOOR AND DECOR OUTLETS OF

AMERICA, INC.,

Defendant.

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APPEARANCES

For Plaintiff: Craig B. Sanders, Esq.

Jonathan Mark Cader, Esq.

James H. Freeman, Esq.

Sanders Law Group

333 Earle Ovington Boulevard, Suite 402

Uniondale, New York 11530

Erica Carvajal, Esq.

Sanders Law LLC

100 Garden City Plaza, Suite 500

Garden City, New York 11530

For Defendant: Bryan J. Wolin, Esq.

H. Forrest Flemming, III, Esq.

Robert Nathan Potter, Esq.

Kilpatrick Townsend & Stockton LLP

1114 Avenue of the Americas, 21st Floor

New York, New York 10036

Richard Charles Henn, Jr., Esq.

Kilpatrick Townsend & Stockton LLP

1100 Peachtree Street, Suite 2800

Atlanta, Georgia 30309

SEYBERT, District Judge:

RVC Floor Decor, Ltd., (the “Plaintiff”) initiated this

trademark infringement case against Floor & Decor Outlets of

America, Inc., (the “Defendant”) pursuant to Section 43(a) of the

Lanham Act, New York common law, and New York General Business Law

Section 360-l.1 Presently before the Court is Defendant’s Motion

for Reconsideration of the Court’s previous denial of its Motion

for Judgment as a Matter of Law (the “Reconsideration Motion”)

(ECF No. 250). Plaintiff filed opposition to the Motion on April

17, 2023 (ECF No. 252), to which Defendant filed a Reply (ECF No.

253). At the April 18, 2023 hearing on the reconsideration motion,

the Court granted reconsideration and upon reconsideration GRANTED

Defendant’s Motion for Judgment as a Matter of Law on Plaintiff’s

common law unfair competition claim, and Plaintiff’s entitlement

to punitive damages under the same. Since Plaintiff’s remaining

remedies were equitable in nature, and not legal, Defendant’s

request that the jury be struck was also GRANTED. The Court’s

reasoning for its rulings follows.

BACKGROUND

I. Facts

For a thorough recitation of the factual and procedural

background of this case, the Court refers the parties to Judge

1 Plaintiff also brought claims pursuant to New York General

Business Law Section 349, which were dismissed during the summary

judgment stage of this case. See RVC Floor Decor, Ltd. v. Floor

and Decor Outlets of Am., Inc., 527 F. Supp. 3d 305, 321-22

(E.D.N.Y. 2021). This Memorandum & Order, issued by then presiding

Honorable Denis R. Hurley, is also available on the docket at ECF

No. 147. Going forward, the Court will refer to this case by its

Reporter citation.

Hurley’s March 18, 2021 Memorandum & Order denying Plaintiff’s

motion for summary judgment and denying in part and granting in

part Defendant’s cross-motion for summary judgment. See RVC Floor

Decor, Ltd., 527 F. Supp. at 312-15.

II. Defendant’s Initial Motion for Judgment as a Matter of Law

On April 14, 2023, Defendant orally moved for Judgment

as a matter of law on all of Plaintiff’s claims and arguments were

presented on the record. Regarding all claims, Defendant argued

Plaintiff was required to, but could not establish, that its “FLOOR

DECOR” mark had achieved secondary meaning before July 2015.

Additionally, Defendant contended that Plaintiff had failed to

adduce evidence in its case-in-chief that established the bad faith

element of its New York common law unfair competition claim, and

that Plaintiff had failed to present any evidence of dilution

regarding its General Business Law (“GBL”) 360-l anti-dilution

claim. Moreover, Defendant argued that Plaintiff’s claims for

punitive damages should be dismissed because Plaintiff could not

establish that Defendant’s conduct met the requisite standard.

Finally, on the issue of disgorgement of profits under the Lanham

Act, Defendant highlighted that it was an equitable remedy to which

Plaintiff had not established an equitable right.

Ruling from the bench, the Court denied Defendant’s

Motion for Judgment as a Matter of Law noting that Plaintiff had

presented evidence for its claims. (See Order, ECF No. 249, in

toto.) Specifically, the Court determined that while Plaintiff

had failed to present certain categories of relevant evidence

regarding secondary meaning, no single factor was determinative.

(Id. at 4.) Consequently, since Plaintiff had presented evidence

regarding its long-term exclusive use of the “FLOOR DECOR” mark,

as well as, inter alia, evidence regarding sales success, the Court

could not, as a matter of law, determine that there was no legally

sufficient evidentiary basis for a reasonable jury to find that

Plaintiff had established secondary meaning. (Id.) The Court

also determined that Plaintiff had successfully introduced

relevant evidence at trial through its store manager regarding

potential blurring for its anti-dilution claims. (Id. at 6.)

Additionally, the Court noted that “[r]esolution of [an unfair

competition claim] requires a complex factual analysis of a variety

of factors” and that given the Court could not rule “as a matter

of law that there [was] no legally sufficient evidentiary basis

for a reasonable jury to find bad faith intent on Defendant’s

part,” this matter was better left to the jury. For similar

reasons, the Court determined that the issue of punitive damages

was also best left to the determination of the jury. (Id. at 6-

7.) The Court noted that Plaintiff had presented evidence that

included, among other things, Defendant’s actual knowledge of

Plaintiff’s mark prior to its entry into the relevant geographical

area. (Id.)

III. The Reconsideration Motion

In the instant motion, Defendant argues that partial

reconsideration of the Court’s Order is warranted as to Plaintiff’s

(1) common law unfair competition claim, and (2) punitive damages

claim. (Support Memo., ECF No. 250-1 at 1, attached to Motion.)

Additionally, Defendant argues that should its Reconsideration

Motion be granted then the Court should strike the jury since

Plaintiff’s disgorgement of profits remedy is equitable, and not

legal, in nature. (Reply at 7.) Plaintiff opposed the Motion.

DISCUSSION

I. Legal Standard

I. Motion for Reconsideration

The decision to grant or deny a motion for

reconsideration is “committed to the sound discretion of the

district court.” Wilder v. News Corp., No. 11-CV-4947, 2016 WL

5231819, at *3 (S.D.N.Y. Sept. 21, 2016) (internal quotation marks

omitted) (quoting Liberty Media Corp. Vivendi Universal, S.A., 861

F. Supp. 2d 262, 265 (S.D.N.Y. 2012)). “A motion for

reconsideration should be granted only when the [movant]

identifies ‘an intervening change of controlling law, the

availability of new evidence, or the need to correct a clear error

or prevent manifest injustice.’” Kolel Beth Yechiel Mechil of

Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir.

2013) (quoting Virgin Atl. Airways, Ltd. v. Nat’l Mediation Bd.,

956 F.2d 1245, 1255 (2d Cir. 1992)); see also Hernandez v. Caliber

Home Loans, No. 16-CV-3755, 2016 WL 6561415, at *1 (S.D.N.Y. Oct.

24, 2016) (“A motion for reconsideration may be granted where the

moving party can point to controlling decisions or data that the

court overlooked -- matters, in other words[,] that might

reasonably be expected to alter the conclusion reached by the

Court.” (alteration in original) (citation omitted)). A motion

for reconsideration is “not a vehicle for relitigating old issues,

presenting the case under new theories, securing a rehearing on

the merits, or otherwise taking a second bite at the apple.”

Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52

(2d Cir. 2012) (internal quotation marks omitted) (quoting Sequa

Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)).

II. Motion for Judgment as a Matter of Law

A court may grant judgment as a matter of law pursuant

to Federal Rule of Civil Procedure (“Rule”) 50(a) “if it concludes

that the evidence, viewed in the light most favorable to the

opposing party, is insufficient to permit a reasonable juror to

make a particular finding.” Okraynets v. Metro. Transp. Auth.,

555 F. Supp. 2d 420, 444 (S.D.N.Y. 2008) (citing Galdieri-Ambrosini

v. Nat’l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998)).

“Under Rule 50, judgment as a matter of law is appropriate where

‘there is no legally sufficient evidentiary basis for a reasonable

jury to find for’ a party.” Merrill Lynch Interfunding, Inc. v.

Argenti, 155 F.3d 113, 120 (2d Cir. 1998) (quoting FED. R. CIV. P.

50(a)(1)). As such, judgement as a matter of law may be granted

only where “viewed in the light most favorable to the nonmoving

party, the evidence is such that, without weighing the credibility

of the witnesses or otherwise considering the weight of the

evidence, there can be but one conclusion as to the verdict that

reasonable men could have reached.” Id. (quoting Samuels v. Air

Transp. Local 504, 992 F.2d 12, 14 (2d Cir. 1993)) (further

citation omitted).

III. Motions to Strike Jury Demand

Pursuant to Rule 39(a)(2), a court may strike a jury

demand “on motion or on its own [if it] finds that on some or

all of those issues there is no federal right to a jury trial.”

FED. R. CIV. P. 39(a)(2).

II. Analysis

I. Motion for Reconsideration

Regarding Plaintiff’s unfair competition claim,

Defendant argues: (1) that Second Circuit law has held that

“[p]rior knowledge of a plaintiff’s mark . . . is insufficient, as

a matter of law, to show an intent to capitalize on the plaintiff’s

goodwill and reputation;” (2) that “Plaintiff cannot carry its

burden of proving Defendant intended to capitalize on Plaintiff’s

reputation and goodwill by calling out things that Defendant

hypothetically could have done to avoid a dispute with Plaintiff;”

and (3) that “controlling authority . . . provides that a

defendant’s decision to continue -- or even expand -- its purported

infringement after a lawsuit is filed cannot support a finding of

bad faith as long as the merits of the plaintiff’s claims are open

to honest doubt.” (Support Memo at 4, 7, 8.) As to punitive

damages, Defendant avers that the Court did not clearly articulate

the relevant legal standard. (Id. at 12.)

Here, the Court finds that Defendant’s reconsideration

motion is warranted due to controlling decisions that were

initially overlooked by the Court and to avoid manifest injustice.

Having granted the motion for reconsideration, the Court considers

de novo whether Defendant is entitled to judgment as a matter of

law on Plaintiff’s New York common law unfair competition claim

and/or Plaintiff’s punitive damages request for Defendant’s

alleged violation of the same.

II. Plaintiff’s “Bad Faith” Evidence

Plaintiff articulates ten categories of “bad faith”

evidence which it contends are both legally sufficient: (1) “to

support the element of bad faith under common law unfair

competition”; and (2) “to qualify for an award of punitive

damages.” (Opp’n at 8, 24.) The “legally sufficient facts”

include: (1) that “Defendant’s junior mark Floor & Decor is

virtually identical to Plaintiff’s senior mark Floor Decor” (“Fact

One”); (2) the parties’ market proximity (“Fact Two”);

(3) Defendant’s “actual notice of Plaintiff’s senior mark” which

it learned of “in 2012” (“Fact Three”); (4) Defendant’s failure

“to contact Plaintiff in order to negotiate a co-existence

agreement or other arrangement” (“Fact Four”); (5) the parties’

relative geographic proximity and Defendant’s decision to open its

“flagship New York retail store” in Long Island as opposed to

somewhere else within New York state (“Fact Five”);

(6) Defendant’s “aggressive[] move[] into Nassau County with

limited notice” to Plaintiff which comprised of “a massive

advertising campaign” (“Fact Six”); (7) Defendant’s failure to

provide, either in its advertisements, promotion, or signage, “a

written disclaimer to consumers” to combat potential confusion

between the parties (“Fact Seven”); (8) Defendant’s relative size

and financial resources compared to Plaintiff (“Fact Eight”);

(9) Defendant’s continued use of its trademark “in the relevant

geographic region” after the Court’s summary judgment decision in

which Judge Hurley found “that Plaintiff’s claim for secondary

meaning was colorable and its allegations of bad faith were triable

to a jury” (“Fact Nine”); and (10) Defendant’s expansion of its

operations within the relevant geographic area after the Court’s

summary judgment decision (“Fact Ten”). (Id. at 8-9.)

From the factual record, Plaintiff posits that “a

reasonable juror could infer bad faith at the end of Plaintiff’s

case-in-chief because”: (1) “Defendant’s failure to contact

Plaintiff and work out a co-existence agreement in advance of

extreme geographic competition . . . shows Defendant’s intent to

promote, rather than avoid, public confusion as between the two

marks;” (2) “Defendant’s failure to include disclaimers in its

advertisements . . . demonstrates Defendant’s willful disregard

for the public interest in avoiding mass instances of actual

confusion;” (3) “Defendant’s rapid, barely announced surge into

Nassau County as its first flagship store in New York state, rather

than in some other county outside of Long Island, creates a

reasonable inference that it was attempting to capitalize on the

good will and reputation” of Plaintiff; (4) Defendant had yet to

put on a case in which it demonstrated that “it harbored an honest

belief in its legal position” that Plaintiff’s tradename “never

acquired any secondary meaning;” and (5) “Defendant’s post-

notification actions, viewed in their totality, create a

reasonable inference that Defendant intended to leverage the

public confusion caused by its extreme geographic competition with

Plaintiff in order to run Plaintiff out of business rather than

compete on the merits.” (Id. at 9.) Plaintiff also argues that

it has “adduced competent evidence showing that in 2003, Defendant

copied Plaintiff’s ‘Floor Decor’ Logo from Plaintiff’s 2002 New

York Times advertisements, which were widely distributed.” (Id.

at 7 n.2.)

Defendant counters that Plaintiff’s bad faith evidence

consists of two, legally insufficient facts: (1) Defendant’s prior

knowledge of Plaintiff; and (2) Defendant’s decision to open new

stores after this litigation began. (Reply at 4-6.) Defendant

expounds that only Facts Three, Eight, and Nine are facts which

Second Circuit courts regularly discuss in conjunction with bad

faith and all have been found to be legally insufficient as a

matter of law to support such a finding. (Id. at 4.) Moreover,

Defendant avers that Plaintiff “conflates its likelihood-of-

confusion evidence with evidence of bad faith” in asserting Facts

One, Two and Five, “with Fact [Five] essentially being the

‘geographic proximity’ Polaroid factor.” (Id. (emphasis in

original)). As to Facts Four and Seven, Defendant notes that they

are in fact “hypothetical and irrelevant actions Defendant could

have taken to avoid a dispute” and that Plaintiff has failed to

“find a single case in which a court found a failure to notify or

failure to use a disclaimer as evidence of bad faith.” (Id. at

5.) Furthermore, Defendant refutes Fact Six in that it “is partly

false, as Plaintiff adduced no evidence that there was ‘limited

notice.’” (Id.) Again, Defendant highlights that Plaintiff “fails

to cite a single case finding that even ‘aggressive’ marketing is

evidence of bad faith intent to capitalize on Plaintiff’s goodwill

and reputation or to deceive.” (Id.)

“Prior knowledge of a senior user’s mark does not,

without more, create an inference of bad faith.” Playtex Prods.,

Inc. v. Georgia-Pacific Corp., 390 F.3d 158, 166 (2d Cir. 2004)

(emphasis added); see also Lang v. Ret. Living Publ’g Co., 949

F.2d 576, 583-84 (2d Cir. 1991) (holding that Defendant’s “prior

knowledge of [plaintiff’s] trade name does not give rise to a

necessary inference of bad faith, because adoption of a trademark

with actual knowledge of another’s prior registration of a very

similar mark may be consistent with good faith”); W.W.W. Pharm.

Co. v. Gillette Co., 984 F.2d 567, 575 (2d Cir. 1993) (finding

that prior knowledge of another’s prior registration of a similar

mark “does not necessarily give rise to an inference of bad faith”

and noting that plaintiff had not shown bad faith on defendant’s

part because it had failed to “put forth any evidence that

[defendant] intended to promote confusion between the products or

appropriate [plaintiff’s] good will”).

Savin Corporation v. Savin Group further illustrates

this point; in that case, the plaintiff asserted that the

defendants acted in bad faith because: (1) defendants’ founder

“had knowledge of [plaintiff’s] products and services for

approximately ten years;” (2) defendants “never performed a search

or investigation prior to adopting and launching their trade names

incorporating” plaintiff’s mark; and (3) defendants’ “[e]ngineers

were aware of [p]laintiff’s ‘savin.com domain name prior to

registering their thesavingroup.com and savinengineers.com

domains.’” 391 F.3d 439, 460 (2d Cir. 2004). The district court

found that defendants did not act in bad faith, specifically noting

that the defendants

had no reason to believe that they might be

infringing another’s marks[,] because they

were not copying the mark from another entity.

In fact, [defendants’] founder was not even

aware of [plaintiff’s] existence at the time

he adopted his mark, and arrived at the name

‘Savin’ independently by reversing the

spelling of his nickname ‘Nivas.’

Id. Additionally, the district court “observed, [that] even if

[d]efendants had conducted a trademark search, they would have

discovered only that [plaintiff’s] mark was registered for

photocopiers and related goods and services and, hence, would have

had no reason to believe that using the name for professional

engineering services would infringe [plaintiff’s] marks.” Id. In

affirming the district court, the Second Circuit, viewing the

totality of plaintiff’s evidence, held that defendants’ failure

“to perform an official trademark search” did not “standing alone

prove that [d]efendants acted in bad faith.” Id. Moreover, the

Second Circuit noted that prior knowledge of a senior user’s

trademark was not “inconsistent with good faith.” Id.

Further, “a defendant’s refusal to abandon a mark in the

face of a cease and desist letter cannot demonstrate bad faith

standing alone” because “[i]f a defendant reasonably believes its

mark does not infringe plaintiff’s, [it] does not act with the

[requisite] intention of capitalizing on plaintiff’s reputation

and goodwill.” E.A. Sween Co. v. Big City Deli Express Corp., No.

14-CV-6031, 2016 WL 5874998, at *6 (E.D.N.Y. Oct. 8, 2016) (quoting

O’Keefe v. Ogilvy & Mather Worldwide, Inc., 590 F. Supp. 2d 500,

525 (S.D.N.Y. 2008)). As noted by the Supreme Court in Straus v.

Notaseme Hosiery Company:

[T]he defendants' persistence in their use of

the design after notice proves little or

nothing against them. They had been

advertising their goods by name and using the

design in connection with the name. The

natural interpretation is not that they wanted

to steal the plaintiff's good will, of which

they then learned for the first time, but that

they wished to preserve their own. . . . If

the defendants' conduct was a wrong, . . . it

was a wrong knowingly committed, but no

further inference against the defendants can

be drawn from the fact.

240 U.S. 179, 181-82 (1916); see also Hi-Tech Pharmacal Co. v. Hi-

Tech Pharms., Inc., No. 05-CV-2674, 2007 WL 1988737, at *11

(E.D.N.Y. July 5, 2007) (finding that “defendant’s continued use

of its mark after [receipt of] cease and desist letters cannot by

itself constitute evidence of bad faith” and that

“plaintiff . . . presented no evidence that defendant’s

persistence in the use of its mark during the course of [the]

litigation represent[ed] anything but a good faith belief that it

[was] entitled to do so because plaintiff’s mark is not

protectible”); Hypnotic Hats, Ltd. v. Wintermantel Enters., LLC,

335 F. Supp. 3d 566 (S.D.N.Y. 2018) (finding that plaintiff’s main

argument as to bad faith “appear[ed] to be that defendants

continued to use the contested marks after receiving a cease and

desert letter” and that “[t]his argument misse[d] the mark” since

it “has long been held that ‘defendant’s persistence in their use

of the design after notice proves little or nothing against them’”

(quoting Strauss, 240 U.S. at 181-82)); Real News Project, Inc. v.

Indep. World Television, Inc., No. 06-CV-4322, 2008 WL 2229830, at

*21 (S.D.N.Y. May 27, 2008) (finding that the defendant’s “stubborn

insistence that it could not be legally prevented from using the”

alleged infringing mark was not evidence of defendant’s bad faith).

Here, in view of the foregoing the Court finds that

Plaintiff has not, as a matter of law, met its burden in

establishing that the Defendant acted with bad faith. Moreover,

since Plaintiff’s common law unfair competition claim requires

Plaintiff to demonstrate some showing of bad faith on the part of

the Defendant, this failure is fatal to Plaintiff’s unfair

competition claim. Sly Magazine, LLC v. Weider Publ’ns L.L.C.,

346 F. App’x 721, 723 (2d Cir. 2009) (“To prevail on a New York

unfair competition claim . . . there must be some showing of bad

faith on the part of the defendants”) see also WM Int’l, Inc. v.

99 Ranch Mkt. #601, 329 F.R.D. 491, 499 (E.D.N.Y. Jan 8, 2019)

(“[W]hile there is no complete list of activities which constitute

unfair competition under New York law, the essence of an unfair

competition claim is that one may not act in bad faith to

misappropriate the skill, expenditures, and labor of another”

(quoting CA, Inc. v. Simple.com, Inc., 621 F. Supp. 2d 45, 53

(E.D.N.Y. 2009))). Regardless, as detailed below, Plaintiff’s bad

faith evidence is also insufficient, as a matter of law, to

establish a right to punitive damages pursuant to its state law

claim.2

III. Punitive Damages

“[T]he standard for imposing punitive damages is a

strict one and punitive damages will be awarded only in exceptional

cases . . . .” Marinaccio v. Town of Clarence, 20 N.Y.3d 506, 511

(2014). “[A] plaintiff is entitled to punitive damages where the

wrongdoer’s actions amount to willful or wanton negligence, or

recklessness, or where there is ‘a conscious disregard of the

rights of others or conduct so reckless as to amount to such

disregard.’” Chauca v. Abraham, 30 N.Y.3d 325, 329 (2017) (quoting

Home Ins. Co. v. Am. Home Prods. Corp., 75 N.Y.2d 196, 203-04

(1990)); see also Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478,

489 (2007) (“Punitive damages are permitted when the defendant’s

2 Although Plaintiff requests disgorgement of Defendant’s profits

under both Federal and state law, the inability to establish an

entitlement to punitive damages is also, effectively, fatal to

Plaintiff’s unfair competition claim given that Plaintiff “cannot

obtain double recovery of profits in the event profits are awarded

under the Lanham Act.” (Pl’s. Statement of Damages, ECF No. 225

at 2.)

wrongdoing is not simply intentional but ‘evince[s] a high degree

of moral turpitude and demonstrate[s] such wanton dishonesty as to

imply a criminal indifference to civil obligations. . . . The

misconduct must be exceptional, ‘as when the wrongdoer has acted

maliciously, wantonly, or with a recklessness that betokens an

improper motive or vindictiveness . . . or has engaged in

outrageous or oppressive intentional misconduct or with reckless

or wanton disregard of safety or rights.”); Prozeralik v. Capital

Cities Commc’ns, 82 N.Y.2d 466, 479 (1993) (clarifying “for future

cases” that “[p]unitive damages are awarded in tort actions

‘[w]here the defendant’s wrongdoing has been intentional and

deliberate, and has the character of outrage frequently associated

with crime’” and that “‘[t]here must be circumstances of

aggravation or outrage, such as spite or ‘malice,’ or a fraudulent

or evil motive on the part of the defendant, or such a conscious

and deliberate disregard of the interests of others that the

conduct may be called wilful or wanton’” (quoting Prosser and

Keeton, Torts § 2, at 9-10 (5th ed. 1984))).

The Second Circuit has observed that New York’s

Appellate Divisions “are divided over whether punitive damages

must be shown by clear and convincing evidence or a preponderance

of the evidence.” In re Methyl Tertiary Butyl Ether (MTBE) Prods.

Liab. Litig., 725 F.3d 65, 127 n.49 (2d Cir. 2013). However, more

recent case law has applied the clear and convincing standard.

Compare Randi A.J. v. Long Island Surgi-Ctr., 46 A.D.3d 74, 86 (2d

Dep’t 2007) (requiring clear and convincing evidence); Munoz v.

Puretz, 301 A.D.2d 382, 384 (1st Dep’t 2003) (requiring clear and

convincing evidence), with Matter of Seventh Jud. Dist. Asbestos

Litig., 190 A.D.2d 1068, 1069 (4th Dep’t 1993) (requiring

preponderance of the evidence). See also Lexington Furniture

Indus., Inc., v. The Lexington Co., AB, No. 19-CV-6239 (S.D.N.Y.

Oct. 24, 2022), Hr’g Tr. (ECF No. 221), at 626:23-627:2 (charging

the jury that it “may . . . award punitive damages for plaintiff’s

New York common law unfair competition claim if [it] conclude[s]

by clear and convincing evidence that defendant’s conduct has

constituted gross, wanton, or willful fraud or other extremely

unethical conduct”); Pure Power Boot Camp, Inc. v. Warrior Fitness

Boot Camp, LLC, 813 F. Supp. 2d 489, 526 (S.D.N.Y. 2011) (“[T]he

burden of proof for punitive damages” under New York law “is ‘clear

and convincing evidence.’” (quoting Randi A.J., 46 A.D.3d at 86))).

Here, even if Plaintiff had adduced sufficient evidence

of bad faith to allege a prima facie case of unfair competition,

which the Court has already found it has not, the Court finds that

Plaintiff has not met its evidentiary burden in establishing, as

a matter of law, its entitlement to punitive damages.3 None of

3 The Court’s finding in this regard remains the same whether it

applies the “clear and convincing” standard of proof or

“preponderance of the evidence.”

Plaintiff’s case-in-chief evidence demonstrates that Defendant

acted in a manner that amounts to willful or wanton negligence, or

recklessness, or conscious disregard of the rights of others.

Plaintiff highlights its previously articulated ten categories of

bad faith evidence and contends that these facts, taken in their

totality, demonstrate “[a] level of callous disregard[]

[that] . . . marks the quintessential example of reckless

disregard that can only be remedied by punitive damages.” As

previously noted, Plaintiff’s case-in-chief evidence on this issue

primarily relies upon: (1) Defendant’s prior knowledge of

Plaintiff’s mark; and (2) Defendant’s continued use of its mark,

including Defendant’s expansion of its business on Long Island,

during this litigation. The Second Circuit has already determined,

however, that these facts, without more, cannot demonstrate bad

faith; consequently, additional facts are needed.

Regarding Defendant’s prior knowledge of Plaintiff, the

parties stipulated that such knowledge existed as of 2012, six

years after Defendant had already “obtained its first federal

trademark registration for FLOOR & DECOR.” (Stipulation of Facts,

ECF No. 238.) It cannot be stated therefore that Defendant adopted

its mark with the intent to capitalize on Plaintiff’s reputation

and goodwill and any confusion between the parties’ products;

moreover, Plaintiff offered no evidence tending to establish

otherwise. Plaintiff’s contention it had “adduced competent

evidence showing that in 2003, Defendant copied Plaintiff’s ‘Floor

Decor’ Logo from Plaintiff’s 2002 New York Times’ advertisements,

which were widely distributed” is unsubstantiated conjecture.

Indeed, there was no evidence introduced by Plaintiff establishing

either that Defendant had seen the New York Times’ advertisements

in 2002 or that the advertisements were circulated outside the

tri-state metropolitan area. (April 11, 2023 Hr’g Tr. at 200:9-

21.)

Plaintiff’s contention that Defendant’s continued use of

its federally registered trademark during the course of this

litigation evinced “callous disregard” for Plaintiff’s rights is

hyperbole. Plaintiff avers that Defendant’s subsequent actions

after Judge Hurley’s summary judgment decision, placing Defendant

on notice that “Plaintiff’s claim for secondary meaning was

colorable and its allegations of bad faith were triable to a jury,”

evidence a level of bad faith that entitles Plaintiff to punitive

damages because Defendant “continued to aggressively exploit

Plaintiff’s senior mark in the relevant geographic region.”

However, Judge Hurley ultimately denied Plaintiff’s summary

judgment motion. See RVC Floor Decor, Ltd., 527 F. Supp. 3d at

312-13. Specifically, Judge Hurley found that “there [were]

genuine issues of material fact as to whether Plaintiff’s mark

obtained a secondary meaning by 2015” and that “[a] rational trier

of fact could . . . find in Defendant’s favor on this issue.” Id.

Similarly, on the issue of bad faith and on a different record

than what Plaintiff produced in its case-in-chief,4 Judge Hurley

stated that “Defendant may have the better of the” bad faith

argument. Id. at 328. Consequently, Defendant’s subsequent

decisions to continue using its FLOOR & DECOR mark and to expand

its operations on Long Island cannot be said to evince callous

disregard for Plaintiff’s rights. On the contrary, the record

evidence establishes that Defendant owns a federally registered

trademark in its FLOOR & DECOR mark whereas Plaintiff’s mark was,

and remains, unregistered. It was, and remains, Plaintiff’s burden

to establish that its mark is even entitled to protection. In its

case-in-chief, Plaintiff adduced no evidence that Defendant’s

persistent use of its mark, or its opening of new stores in the

relevant geographic area, was attributable to callous or reckless

disregard for Plaintiff’s rights, as opposed to Defendant’s honest

belief that it was entitled to continue using its mark in the face

4 On summary judgment, Plaintiff produced five categories of bad

faith evidence: (1) “Defendant’s discovery of Plaintiff’s mark in

2012;” (2) Defendant’s “Google AdWords purchase of the ‘floor

decor’ term (among others) . . . in 2018;” (3) the “failure to use

‘negative keywording’ in those AdWords;” (4) “the decision to open

a ‘Floor & Decor’ store on Long Island in 2018;” and (5) “the

failure to advertise this location until ten days before its

opening.” Conversely, during its case-in-chief, Plaintiff offered

no evidence regarding Defendant’s Google AdWords practices.

Further, the extent to which Plaintiff successfully adduced

evidence that Defendant deliberately delayed advertising its

Farmingdale Store opening in 2018 until ten days beforehand is

debatable.

of Plaintiff’s legal challenge. Indeed, Judge Hurley’s summary

judgment order contained language that may have bolstered

Defendant’s belief that it would ultimately prevail. Plaintiff’s

case-in-chief evidence contains nothing to support Plaintiff’s

contention that Defendant’s decision to open new stores on Long

Island was “an attempt to thumb its nose at” Judge Hurley’s summary

judgment decision or that this decision was driven by “callous

disregard for [either] Plaintiff’s rights [or] the Court’s

ruling.” (Opp’n at 9.)

IV. Plaintiff is No Longer Entitled to A Jury Trial Because

its Remaining Remedies are Equitable, and Not Legal, in

Nature

The Seventh Amendment to the United States Constitution

preserves the right to a jury trial in civil actions. U.S. CONST.

amend. VII. “This provision means in part that ‘the right to trial

by jury of legal claims must be preserved.’” Car Freshner Corp.

v. Am. Covers, LLC, No. 05:17-CV-0171, 2021 WL 4502281, at *6

(N.D.N.Y. Sept. 30, 2021) (quoting Dairy Queen, Inc. v. Wood, 369

U.S. 469, 471-72 (1962)). Where a “complaint requests a money

judgment it presents a claim which is unquestionably legal.” Dairy

Queen, 369 U.S. at 476. “The Supreme Court . . . has explained

that a trademark ‘infringer is required in equity to account for

and yield up his gains to the true owner,’ and ‘profits are then

allowed as an equitable measure of compensation.’” Gucci Am.,

Inc. v. Weixing Li, 768 F.3d 122, 131 (2d Cir. 2014) (quoting

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 259

(1916)). The Second Circuit “has expressly attested to the ancient

roots of this remedy, explaining that ‘the ancient remedies of

accounting, constructive trust, and restitution have compelled

wrongdoers to ‘disgorge’ -- i.e., account for and surrender --

their ill-gotten gains for centuries.” Id. (quoting S.E.C. v.

Cavanagh, 445 F.3d 105, 119 (2d Cir. 2006)). Based upon the

distinction that an accounting of profits is an equitable remedy

and not a legal one, courts in this circuit have found “that a

demand for profits in a trademark case is an equitable remedy that

does not create a jury-trial right.” Car Freshner, 2021 WL

4502281, at *7; see also Speedfit LLC v. Woodway USA, Inc., No.

13-CV-1276, 2020 WL 3051511, at *4 (E.D.N.Y. June 8, 2020) (noting

that “[p]laintiffs unambiguously seek disgorgement of

[defendant’s] profits” and that “[d]isgorgement has repeatedly

been characterized as an equitable remedy by courts in the Second

Circuit;” collecting cases); Emmpresa Cubana Del Tabaco v. Culbro

Corp., 123 F. Supp. 2d 203, 208-09 (S.D.N.Y. 2000). The principles

outlined by the Second Circuit in Gucci are also in line with

opinions issued by other circuit courts. See, e.g., Hard Candy,

LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343, 1358 (11th

Cir. 2019) (“[A] claim for an accounting and disgorgement of

profits under the Lanham Act is equitable in nature and, therefore,

the Seventh Amendment’s guarantee of a jury trial does not

apply.”); Fifty-Six Hope Rd. Music, Ltd. V. A.V.E.L.A., Inc., 778

F.3d 1059, 1065, 1075 (9th Cir. 2015) (finding that “[a] claim for

disgorgement of profits under § 1117(a) is equitable, not legal”

and so “[t]he Seventh Amendment does not require that a jury

calculate these profits”); Ferrari S.P.A. v. Roberts, 944 F.2d

1235, 1248 (6th Cir. 1991) (holding that the defendant was not

entitled to a jury trial where the “complaint requested only

equitable relief; an injunction and disgorgement of profits”).

Here, since the Court has determined that Plaintiff, as

a matter of law, has not adduced sufficient evidence of bad faith

to state a prima facie claim for unfair competition under New York

law, and that, regardless, Plaintiff’s bad faith evidence is

legally insufficient to establish, as a matter of law, Plaintiff’s

right to punitive damages, Defendant’s request that the jury be

struck is granted because Plaintiff’s remaining remedies are all

equitable in nature. Specifically, Plaintiff’s remaining claims

consist of disgorgement of profits under Federal and state law,

and an injunction pursuant to GBL § 360-l.

CONCLUSION

For the stated reasons, IT IS HEREBY ORDERED that the

Defendant’s Reconsideration Motion (ECF No. 250) is GRANTED.

Accordingly:

I. Upon reconsideration, Plaintiff’s Motion for Judgment as

a Matter of Law on Plaintiff’s common law unfair

competition claim and its claim for punitive damages

under the same is GRANTED;

II. Defendant’s Motion to strike the jury is also GRANTED as

Plaintiff’s remaining remedies are equitable, and not

legal, in nature.

SO ORDERED.

/s/ JOANNA SEYBERT______

Joanna Seybert, U.S.D.J.

Dated: April 26, 2023

Central Islip, New York