2024-cv-11860

COMPLAINT filed by Merch Traffic, LLC; Filing fee $ 405, receipt number AILNDC-22742428.

Exhibit 1

Exhibit 2

Exhibit 3

Exhibit 4

SEALED EXHIBIT by Plaintiff Merch Traffic, LLC Schedule A regarding complaint[1]

MOTION by Plaintiff Merch Traffic, LLC for leave to file under Seal

CIVIL Cover Sheet

NOTIFICATION of Affiliates pursuant to Local Rule 3.2 by Merch Traffic, LLC

Notice of Claims Involving Trademarks by Merch Traffic, LLC

ATTORNEY Appearance for Plaintiff Merch Traffic, LLC by Justin R. Gaudio

ATTORNEY Appearance for Plaintiff Merch Traffic, LLC by Amy Crout Ziegler

ATTORNEY Appearance for Plaintiff Merch Traffic, LLC by Kahlia Roe Halpern

ATTORNEY Appearance for Plaintiff Merch Traffic, LLC by Luana Faria De Souza (Faria De Souza, Luana)

CASE ASSIGNED to the Honorable Martha M. Pacold. Designated as Magistrate Judge the Honorable M. David Weisman. Case assignment: Random assignment. (Civil Category 2).

CLERK'S NOTICE: Pursuant to Local Rule 73.1(b), a United States Magistrate Judge of this court is available to conduct all proceedings in this civil action. If all parties consent to have the currently assigned United States Magistrate Judge conduct all proceedings in this case, including trial, the entry of final judgment, and all post-trial proceedings, all parties must sign their names on the attached Consent To form. This consent form is eligible for filing only if executed by all parties. The parties can also express their consent to jurisdiction by a magistrate judge in any joint filing, including the Joint Initial Status Report or proposed Case Management Order.

MAILED Trademark report to Patent Trademark Office, Alexandria VA.

MAILED to plaintiff(s) counsel Lanham Mediation Program materials.

MOTION by Plaintiff Merch Traffic, LLC for temporary restraining order including a Temporary Injunction, a Temporary Asset Restraint, and Expedited Discovery

MEMORANDUM by Merch Traffic, LLC in support of motion for temporary restraining order 13

DECLARATION of Justin R. Gaudio regarding memorandum in support of motion 14

Exhibit 1

Exhibit 2

Exhibit 3

(Exhibit 4)

DECLARATION of Emily Holt regarding memorandum in support of motion 14

(Exhibit 1)

SEALED EXHIBIT by Plaintiff Merch Traffic, LLC Exhibit 2 regarding declaration 16

(Exhibit 2-1)

MOTION by Plaintiff Merch Traffic, LLC for Electronic Service of Process Pursuant to Fed. R. Civ. P. 4(f)(3)

MEMORANDUM by Merch Traffic, LLC in support of motion for miscellaneous relief 18

DECLARATION of Justin R. Gaudio regarding memorandum in support of motion 19

Exhibit 1

(Exhibit 2)

ANNUAL REMINDER: Pursuant to Local Rule 3.2 (Notification of Affiliates), any nongovernmental party, other than an individual or sole proprietorship, must file a statement identifying all its affiliates known to the party after diligent review or, if the party has identified no affiliates, then a statement reflecting that fact must be filed. An affiliate is defined as follows: any entity or individual owning, directly or indirectly (through ownership of one or more other entities), 5% or more of a party. The statement is to be electronically filed as a PDF in conjunction with entering the affiliates in CM/ECF as prompted. As a reminder to counsel, parties must supplement their statements of affiliates within thirty (30) days of any change in the information previously reported. This minute order is being issued to all counsel of record to remind counsel of their obligation to provide updated information as to additional affiliates if such updating is necessary. If counsel has any questions regarding this process, this LINK will provide additional information. Signed by the Honorable Virginia M. Kendall on 12/20/2024: Mailed notice.

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motions for leave to file under seal, 3, and for a temporary restraining order, temporary asset restraint, and expedited discovery, 13, are denied. Plaintiff seeks leave to file under seal so that plaintiff may obtain a temporary restraining order freezing the defendants' assets before revealing the defendants' identities. See 3. "The Supreme Court has made clear that courts lack the power to issue an asset freeze at the beginning of a case, unless that party is seeking equitable monetary relief." Zorro Productions, Inc. v. Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on Schedule A Hereto, No. 23-cv-5761, 2023 WL 8807254, at *4 (N.D. Ill., Dec. 20, 2023) (citing Grupo Mexicano de Desarrollo S.A. v. All. Bond Fund, Inc., 527 U.S. 308 (1999)); see also Shenzhen Yihong Lighting Co., Ltd. v. The Partnerships and Unincorporated Associations Identified on Schedule A, No. 23-cv-1560, at Dkt. 15 (N.D. Ill. Nov. 22, 2023). Indeed, "[a]s a general matter [ ] prejudgment asset restraints are not proper simply to establish a fund from which a later award of money damages can be satisfied." Id. (second alteration in original) (quoting Banister v. Firestone, No. 17-cv-8940, 2018 WL 4224444, at *9 (N.D. Ill. Sept. 5, 2018)). In Schedule A cases, plaintiffs often initially demand equitable relief in the form of an accounting of profits, but after obtaining a temporary asset freeze, plaintiffs uniformly shift their focus to demanding statutory damages. Id. at *3-4. In substance, then, if not in form, Schedule A plaintiffs seek prejudgment asset restraints to establish a fund from which money damages may be awarded. So, despite the demand in plaintiff's complaint that it be awarded defendants' profits, the court is not persuaded that plaintiff will actually seek or obtain such equitable relief-as opposed to statutory damages-in this case. See Zorro, 2023 WL 8807254, at *3-4. Thus, even if plaintiff's initial demand for an accounting of profits could provide this court with the power to issue a prejudgment asset freeze, see Grupo Mexicano, 527 U.S. at 333; Banister, 2018 WL 4224444, at *9, the court is not persuaded that such a freeze is warranted. Because the court denies the motion for a temporary restraining order, there is no reason to seal plaintiff's filings pending such relief. Plaintiff's motions for leave to file under seal, 3, and for a temporary restraining order, 13, are therefore denied. Plaintiff's sealed exhibits, 2, 17, are stricken. If plaintiff wishes to proceed with this case, plaintiff must file its exhibits publicly on the docket by 1/31/2025.

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion for electronic service of process, 18, is granted. The court finds that electronic service of process is proper under Fed. R. Civ. P. 4(f)(3). Electronic service of process does not violate any treaty and is consistent with due process because it effectively communicates the pendency of this action to defendants. To the extent that the motion requests service of process of any temporary restraining order in this case, service is not necessary because this court has already denied the motion for a TRO. 22.

MOTION by Plaintiff Merch Traffic, LLC for reconsideration regarding order on motion for leave to file, order on motion for temporary restraining order, text entry, 22

MOTION by Plaintiff Merch Traffic, LLC for extension of time to Comply with Order 22

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion for reconsideration, 24, is denied. "While motions to reconsider are permitted. they are disfavored." Patrick v. City of Chicago, 103 F. Supp. 3d 907, 911 (N.D. Ill. 2015). "This is a heavy burden for the moving party and makes a motion for reconsideration an inappropriate medium to 'rehash' past arguments[.]" Alice F. v. Health Care Serv. Corp., No. 17-cv-3710, 2019 WL 11626480, at *1 (N.D. Ill. June 17, 2019) (citation omitted). "Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence." Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996) (citation omitted). Plaintiff has not submitted any newly discovered evidence. Thus, plaintiff can prevail only if it demonstrates that the court made a manifest error of law or fact. "A manifest error of law or fact under this standard occurs when a district court 'has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but of apprehension.'" Patrick, 103 F. Supp. 3d at 912 (quoting Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990)). Plaintiff has not shown that the court made a manifest error of law or fact. Plaintiff points out that the court has the power to issue an asset restraint when a plaintiff seeks an accounting and profits in the alternative to statutory damages in its complaint. See CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 996 (7th Cir. 2002) (asset freeze was "appropriate" when plaintiff sought statutory damages or equitable relief in the alternative). But simply because a court has the authority to issue an asset freeze in such circumstances does not mean that the plaintiff here is entitled to one. As explained in the prior minute entry, 22, the court is not persuaded that plaintiff intends to actually seek or obtain equitable relief-as opposed to statutory damages-in this case. Plaintiff's motion for reconsideration, 24, is denied.

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion for extension of time to comply with order, 25, is granted. If plaintiff wishes to proceed with this case, plaintiff must file its exhibits publicly on the docket by 2/7/2025.

MOTION by Plaintiff Merch Traffic, LLC for discovery Expedited

MOTION by Plaintiff Merch Traffic, LLC to unseal document exhibit[17], exhibit[2]

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion to unseal certain documents, [29], is granted. The Clerk of Court is directed to unseal Schedule A to the Complaint [2] and Exhibit 2 to the Declaration of Emily Holt [17].

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion for expedited discovery, [28], is granted in part and denied in part. Enter Order.

ORDER Signed by the Honorable Martha M. Pacold on 2/7/2025:

SUMMONS Submitted (Court Participant) for defendant(s) The Partnerships and Unincorporated Associations Identified on Schedule A by Plaintiff Merch Traffic, LLC

SUMMONS Issued (Court Participant) as to Defendant The Partnerships and Unincorporated Associations Identified on Schedule A

SUMMONS Returned Executed by Merch Traffic, LLC as to The Partnerships and Unincorporated Associations Identified on Schedule A on 2/25/2025, answer due 3/18/2025.

Declaration of Luana Faria de Souza

(Exhibit A)(Faria De Souza, Luana)

MOTION by Plaintiff Merch Traffic, LLC for Leave to Amend Schedule A to the Complaint Instanter

AMENDED exhibit[2] Amended Schedule A

MOTION by Plaintiff Merch Traffic, LLC for entry of default, MOTION by Plaintiff Merch Traffic, LLC for default judgment as to all Defendants

Exhibit A

MEMORANDUM by Merch Traffic, LLC in support of motion for entry of default, motion for default judgment[38]

Exhibit 1

DECLARATION of Justin R. Gaudio regarding memorandum in support of motion[39]

Exhibit 1

MINUTE entry before the Honorable Martha M. Pacold: Plaintiff's motion for leave to amend Schedule A to the complaint instanter 36 is granted. Defendant No. 29 WenY is terminated. Plaintiff has already filed an amended Schedule A on the docket. 37.

MINUTE entry before the Honorable Martha M. Pacold: Any defendant objecting to plaintiff's motion for entry of default and default judgment, 38, must enter an appearance and file a written objection by 3/31/2025. If no objections are filed, the court will consider the motion unopposed. Plaintiff shall serve defendants with this notice.

CERTIFICATE of Service by Plaintiff Merch Traffic, LLC regarding set motion and R&R deadlines/hearings, 42

ORDER : No defendant has responded to plaintiff's motion for entry of default and default judgment, 38. The motion, 38, is granted. Based on the evidence submitted in support of the temporary restraining order and the motion for entry of default and default judgment, and the admission of liability by virtue of the default, plaintiff has established that the infringement was willful, that damages should be awarded in the amount of $100,000 per defendant, and that a permanent injunction should be entered. Plaintiff has shown that the infringement of its marks causes it irreparable harm in the form of diminished goodwill and brand confidence, damage to plaintiff's reputation, loss of exclusivity, and loss of future sales; that monetary damages are inadequate to address these harms; and that the public interest would not be disserved by a permanent injunction. No defendant has appeared to argue otherwise, thus, the court also finds that the balance of the hardships favors an injunction. All pending motions are denied as moot. Enter Final Judgment Order. Civil case terminated. Signed by the Honorable Martha M. Pacold on 4/2/2025. Mailed notice

DEFAULT JUDGMENT ORDER. Signed by the Honorable Martha M. Pacold on 4/2/2025. Mailed notice