After a series of lawsuits between the two companies going back almost two decades, the Supreme Court of the United States in Lucky Brand Dungarees, Inc. et. al. v. Marcel Fashions Group, Inc. unanimously decided in favor of Lucky Brand, reversing an appeals court decision to revive Marcel’s lawsuit that was previously dismissed by the District Court. The appeals court reasoned that Lucky Brand was precluded from raising its settlement agreement defense in the latest lawsuit. This was because it could have raised it in earlier litigation, but failed to do so.
The Supreme Court’s Decision
However, the Supreme Court thought differently and in a unanimous decision reversed the appeals court decision. In particular, Justice Sotomayor, who authored the opinion of the Court, stated that the action in question “involved different marks, different legal theories, and different conduct—occurring at different times” than those previously litigated. The “two suits here were grounded on different conduct, involving different marks, occurring at different times…” Therefore “claim preclusion did not and could not bar Lucky Brand from asserting its settlement agreement defense in the 2011 Action.” This is because the actions “did not share a ‘common nucleus of operative fact.”
While the unanimous Supreme Court decision is a win for Lucky Brand, the battle is likely far from over. The nearly two-decade game of chess is bound to continue. It will be interesting to see who makes the next move.