Forum Shopping Leads to Award of Attorneys’ Fees

Wednesday, May 30, 2018

In response to a cease-and-desist (C&D) letter from Coach, Inc. threatening to bring a trademark infringement action on a specific date in the Central District of California, Citi Trends, Inc. attempted to preempt Coach by filing a declaratory judgment action in the U.S. District Court for the District of Maryland that handbags they had sold were not counterfeit and did not infringe on Coach’s trademarks.  The next day, Coach filed suit in the California court and also filed a motion to dismiss the Citi Trends’ Maryland DJ complaint on the ground that Citi Trends had engaged in forum shopping.  After granting the motion to dismiss, U.S. District Court Judge Richard D. Bennett took up Coach’s motion for attorneys’ fees, which may be awarded to the prevailing party in “exceptional cases” under Section 35 of the Lanham Act.  Judge Bennett, citing to Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014), found Coach had established that the case was exceptional because:  (i) the events giving rise to the action occurred in California, not Maryland; (ii) Citi Trends filed their DJ action in Maryland one day before the date on which Coach’s C&D letter stated the California action would be filed; and (iii) Citi Trends did not assert any counterclaims in the California action.  The Court awarded Coach over $150,000 in attorneys’ fees.  Citi Trends, Inc. v. Coach Inc., Civil Action No. RDB-17-1763, 2018 WL 2276151 (D. Md. May 17, 2018).