Lucky Brand decision: Dale Cendali makes her own luck

Yet another Supreme Court trademark decision yesterday, May 14, 2020: Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., No. 18-1086 (S. Ct. May 14, 2020).

I blogged about the case here in 2019, and predicted the outcome… incorrectly, unlike IP Watchdog.

Held:

Because Marcel’s 2011 Action challenged different conduct—and raised different claims—from the 2005 Action, Marcel cannot preclude Lucky Brand from raising new defenses.

Ok, we can at least include the official synopsis too:

Ever Winning Dale Cendali

This case asks whether so-called “defense preclusion” is a valid application of res judicata: a term comprising the doctrine of issue preclusion, which precludes a party from relitigating an issue actually decided in a prior action and necessary to the judgment, and the doctrine of claim preclusion, which prevents parties from raising issues that could have been raised and decided in a prior action. Any preclusion of defenses must, at a minimum, satisfy the strictures of issue Preclusion or claim preclusion. Here, issue preclusion does not apply, so the causes of action must share a Common nucleus of operative facts for claim preclusion to Apply.

Because the two suits here involved different marks and different conduct occurring at different times, they did not share a common nucleus of operative facts. The 2005 claims depended on Lucky Brand’s alleged use of “Get Lucky.” But in the 2011 Action, Marcel alleged that the infringement was Lucky Brand’s use of its other marks containing the word “Lucky,” not any use of “Get Lucky” itself. The conduct in the 2011 Action also occurred after the conclusion of the 2005 Action. But claim preclusion generally does not bar claims that are predicated on events that postdate the filing of the initial complaint, because events occurring after a plaintiff files suit often give rise to new operative facts creating a new claim to relief.

Marcel claims that treatises and this Court’s cases support a version of defense preclusion that extends to the facts of this case. But none of those authorities describe scenarios applicable here, and they are unlikely to stand for anything more than that traditional claim or issue preclusion principles may bar defenses raised in a subsequent suit—principles that do not bar Lucky Brand’s release defense here.

There’s a good treatment of the decision here. Congratulations to the ever-winning Dale Cendali!