SANDRA J. FEUERSTEIN, District Judge.
On March 26, 2019, plaintiff Carson Optical, Inc. ("plaintiff" or "Carson") commenced this action against defendants Alista Corporation ("Alista"), Nasr Amr ("Amr"), RQ Innovasion Inc. ("RQ") and Brendan Zheng ("Zheng") (collectively, "defendants"), alleging, inter alia, false advertising in violation of Section 43(a)(1)(B) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). Presently before the Court are plaintiff's applications, inter alia, (i) for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure enjoining and restraining defendants from falsely advertising the magnifying power of certain cosmetic mirror products; (ii) for leave to file an amended complaint pursuant to Rules 15 and 21 of the Federal Rules of Civil Procedure; and (iii) for leave to conduct expedited discovery. For the reasons set forth herein, plaintiff's application for leave to file an amended complaint is granted and its applications for a preliminary injunction and for leave to conduct expedited discovery are denied.
Carson was founded in 1990 and markets and sells "optical products" nationwide, (Complaint ["Compl."], ¶¶ 2, 17; Declaration of Richard Cameron ["Cameron Decl."], ¶¶ 1-2), including three (3) products that have a magnifying mirror which it sells on
RQ, doing business as Fancii®, is a Canadian corporation which, inter alia, markets and sells beauty products online, including the following ten (10) magnifying mirrors: the Fancii® LED 7X Lighted Magnifying Makeup Mirror, the Fancii® 10X Magnifying Lighted Makeup Mirror, the Fancii® LED Lighted Travel Makeup Mirror, the Fancii® Daylight LED 10X Magnifying Makeup Mirror, the Fancii® LED Lighted Large Vanity Makeup Mirror, the Fancii® Lumi S LED Compact Mirror, the Fancii® Lumi S LED Compact Mirror, the Fancii® Lumi-Lighted Compact Mirror, the Fancii® Maya Lighted Magnifying Mirror and the Fancii® Tria Trifold Vanity Mirror. (Compl., ¶¶ 5, 13-14, 23-24; Cameron Decl., ¶¶ 7, 9; Zheng Decl., ¶¶ 5, 7, 15). Zheng "owns, directs and/or controls" RQ.
Plaintiff alleges that RQ and Zheng (collectively, the "RQ Defendants"), "[u]tilizing the
Alista is also a Canadian company which, inter alia, markets and sells magnifying mirrors on
On March 26, 2019, plaintiff commenced this action against defendants alleging, inter alia, false advertising in violation of Section 43(a)(1)(B) of the Lanham Act
Plaintiff now moves, inter alia, (i) for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure enjoining and restraining defendants from falsely advertising the magnifying power of the ten (10) Fancii®-branded magnified mirror products at issue herein; (ii) for leave to file an amended complaint pursuant to Rules 15 and 21 of the Federal Rules of Civil Procedure to add "Creatorstudio" as an additional defendant, (see Proposed "First Supplemental Complaint" ["Am. Compl.,"], ¶ 7), and the following additional allegations: (a) that "[a]fter the initiation of this lawsuit, . . . the seller of the falsely advertised Fancii magnifying mirrors in the Amazon marketplace was caused to be changed from Alista to Creatorstudio[,]" (id., ¶ 17), (b) that, "[u]pon information and belief, this change in the seller of the falsely advertised `Fancii' magnifying mirrors in the Amazon marketplace was made to frustrate and avoid an impending order from the Court preliminarily enjoining the continued false advertising of the Fancii magnifying mirrors in the Amazon marketplace[,]" (id., ¶ 18), and (c) that Creatorstudio, like the Alista Defendants and RQ Defendants, "advertise[s] and sell[s] a line of Fancii® magnifying mirrors[,]" (id., ¶ 26), and "consistently and systematically overstate[s] the magnifying power of the Fancii® products[,]" (id., ¶ 27); and (iii) for leave to conduct expedited discovery and, specifically, to serve up to two (2) interrogatories and up to five (5) requests for production "for the purpose of identifying the person or entity known as Creatorstudio . . . and learning the relationship between Creatorstudio and the Defendants."
"A party seeking preliminary injunctive relief must establish: (1) either (a) a likelihood of success on the merits of its case or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in its favor, and (2) a likelihood of irreparable harm if the requested relief is denied." Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 152-53 (2d Cir. 2007); accord North American Soccer League, LLC v. United States Soccer Fed'n, Inc. ("NASL"), 883 F.3d 32, 37 (2d Cir. 2018). In addition, the movant must show that "a preliminary injunction is in the public interest[,]" NASL, 883 F.3d at 37; accord Friends of the E. Hampton Airport, Inc. v. Town of East Hampton, 841 F.3d 133, 143 (2d Cir. 2016); and "that the balance of equities tips in his favor." Benisek v. Lamone, ___ U.S. ___, 138 S.Ct. 1942, 1944, 201 L. Ed. 2d 398 (2018); see also American Civil Liberties Union v. Clapper, 804 F.3d 617, 622 (2d Cir. 2015) ("A preliminary injunction is an equitable remedy and an act of discretion by the court. A party seeking a preliminary injunction must generally show a likelihood of success on the merits, a likelihood of irreparable harm in the absence of preliminary relief, that the balance of equities tips in the party's favor, and that an injunction is in the public interest.") "[A] preliminary injunction is `an extraordinary remedy never awarded as of right[,]'" Benisek, ___ U.S. ___, 138 S. Ct. at 1943 (quoting Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L. Ed. 2d 249 (2008)), and "should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Sussman v. Crawford, 488 F.3d 136, 139-40 (2d Cir. 2007) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L. Ed. 2d 162 (1997) (emphasis in original)).
Since "[i]rreparable harm is the single most important prerequisite for the issuance of a preliminary injunction[,] . . . the moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered." Rodriguez ex rel. Rodriguez v. DeBuono, 175 F.3d 227, 234 (2d Cir. 1999) (quotations and citations omitted); see also JBR, Inc. v. Keurig Green Mountain, Inc., 618 F. App'x 31, 33 (2d Cir. Oct. 26, 2015) (summary order) (holding that since irreparable harm "is the sine qua non for preliminary injunctive relief[,] . . . the moving party must first demonstrate that irreparable harm would be `likely' in the absence of a preliminary injunction before the other requirements for the issuance of a preliminary injunction will be considered." (quotations and citations omitted)). "Irreparable harm is defined as certain and imminent harm for which a monetary award does not adequately compensate[,] . . . [and] exists where, but for the grant of equitable relief, there is a substantial chance that upon final resolution of the action the parties cannot be returned to the positions they previously occupied." Allstate Ins. Co. v. Harvey Family Chiropractic, 677 F. App'x 716, 718 (2d Cir. Jan. 27, 2017) (summary order) (quotations and citations omitted); see also WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 285 (2d Cir. 2012) (holding that irreparable harm is "harm to the plaintiff's legal interests that could not be remedied after a final adjudication.") "Harm may be irreparable where the loss is difficult to replace or measure, or where plaintiffs should not be expected to suffer the loss." WPIX, 691 F.3d at 285. Thus, unless the movant demonstrates "an injury that is neither remote nor speculative, but actual and imminent and that cannot be remedied by an award of monetary damages[,] . . . a motion for a preliminary injunction should be denied." Rodriguez, 175 F.3d at 234 (quotations and citation omitted); see also eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L. Ed. 2d 641 (2006) (holding that before a court may grant injunctive relief, the plaintiff must demonstrate, inter alia, "that remedies available at law, such as monetary damages, are inadequate to compensate for [its] injury."); Faiveley Transport Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d Cir. 2009) ("[T]o satisfy the irreparable harm requirement, plaintiffs must demonstrate that absent a preliminary injunction they will suffer an injury that is neither remote nor speculative, but actual and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve the harm. . . . Where there is an adequate remedy at law, such as an award of money damages, injunctions are unavailable except in extraordinary circumstances." (quotations, alterations and citations omitted)). "[I]f a party fails to show irreparable harm, a court need not even address the remaining elements of the [preliminary injunction standard]." Coscarelli v. ESquared Hosp. LLC, 364 F.Supp.3d 207, 221 (S.D.N.Y. 2019).
Plaintiff has not sufficiently demonstrated a likelihood of irreparable harm absent a preliminary injunction. Plaintiff's argument that it will be irreparably harmed absent a preliminary injunction is primarily based upon the presumption of injury set forth in the Merck case. (See Plf. Mem. at 7). However, in that case, the Second Court affirmed the district court's use of legal presumptions to impose Lanham Act liability upon the defendant following a bench trial, holding that when "the parties operate in the context of a two-player market and literal falsity and deliberate deception have been proved, it is appropriate to utilize legal presumptions of consumer confusion and injury for the purposes of finding liability in a false advertising case brought under the Lanham Act."
However, following the Supreme Court's decision in eBay, the Second Circuit has held that in considering whether the plaintiff sufficiently demonstrated a likelihood of irreparable harm, "the court must not adopt a `categorical' or `general' rule or presume that the plaintiff will suffer irreparable harm (unless such a `departure from the long tradition of equity practice' was intended by Congress)."
Plaintiff has not demonstrated that it would likely suffer irreparable harm in the absence of a preliminary injunction. Although generally, "the most difficult element to demonstrate when seeking an injunction against false advertising is the likelihood that one will suffer irreparable harm if the injunction does not issue[,]" because "[i]t is virtually impossible to prove that so much of one's sales will be lost or that one's goodwill will be damaged as a direct result of a competitor's advertisement[,]" Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 316-17 (2d Cir. 1982), abrogated on other grounds by Fed. R. Civ. P. 52(a), that is not true in this case. The specific harm alleged by plaintiff is that by positioning defendants' challenged advertisements allegedly overstating the magnifying power of their Fancii®-branded magnifying mirror products upon the web pages of Carson's competing magnifying mirror products on
Plaintiff's conclusory assertions, inter alia, that the challenged advertisements will irreparably harm its goodwill and the value of its products in the minds of the consumer, without more, are insufficient to satisfy its burden of showing that irreparable harm would be likely in the absence of a preliminary injunction. See, e.g. Rush v. Hillside Buffalo, LLC, 314 F.Supp.3d 477, 486 (W.D.N.Y. 2018) ("In failing to supply evidence of the loss of reputation or good will beyond his own conclusory averments, Plaintiff has not made a sufficient showing that irreparable harm is likely. . . ."); CSI Entm't, Inc. v. Anthem Media Grp., Inc., No. 15-cv-3508, 2016 WL 11263667, at * 7-8 (E.D.N.Y. Dec. 30, 2016), report and recommendation adopted, 2017 WL 2778466 (E.D.N.Y. June 27, 2017) (finding that the plaintiff's conclusory statements of loss of reputation were insufficient to show irreparable harm); Alzheimer's Found. of Am., Inc. v. Alzheimer's Disease & Related Disorders Ass'n, Inc., No. 10-cv-3314, 2015 WL 4033019, at* 11 (S.D.N.Y. June 29, 2015) ("[C]onclusory statements of loss of reputation will not justify an irreparable harm finding."); Worldwide Diamond Trademarks, Ltd. v. Blue Nile, Inc., No. 14-cv-3521, 2014 WL 7933941, at * 4-5 (S.D.N.Y. Nov. 6, 2014) ("Where the loss of a product with a sales record will not affect other aspects of a business, a plaintiff can generally prove damages on a basis other than speculation. . . . In general, injury resulting from the loss of goodwill is irreparable only when the very viability of the plaintiff's business, or substantial losses of sales beyond those of the terminated product, have been threatened." (quotations and citations omitted)). "[I]ssuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with [the Supreme Court's] characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22, 129 S.Ct. 365.
Moreover, plaintiff's claim of irreparable injury is weakened by the lack of any apparent causal connection between the advertisements and its own sales position, since Cameron contends that plaintiff only hired its purported expert in the field of optics, Eugene Hecht ("Hecht"), to investigate the accuracy of the magnifying powers represented in the challenged advertisements of its magnified mirror products because, approximately three (3) years ago, it discovered that Fancii®-branded magnifying glass products "were being sold with advertising that materially overstated the magnifying power of the products[,]" (Cameron Decl., ¶ 11), and it wanted to know "whether the Fancii® products, which have magnifying mirrors, follow the same practice of overstating magnifying power."
Since, inter alia, defendants do not object to plaintiff's proposed amended complaint, and plaintiff may amend its complaint once as a matter of course pursuant to Rule 15(a)(1)(B) of the Federal Rules of Civil Procedure, plaintiff's motion for leave to file an amended complaint is granted, provided that plaintiff serves and files the proposed amended complaint
For the reasons set forth above, plaintiff's motion for leave to file an amended complaint pursuant to Rules 15 and 21 of the Federal Rules of Civil Procedure is granted, provided that plaintiff serves and files the proposed amended complaint
SO ORDERED.