Gandbold Partners LLC v. Hershey Chocolate & Confectionery LLC
2:24-cv-07942
E.D.N.YAug 5, 2025Background
- Ganbold Partners LLC resells branded candies online; certain Amazon listings for Hershey products were removed after Gray Falkon (GF), acting as Hershey’s agent, sent infringement notices to Amazon.
- Ganbold sued Hershey and GF for declaratory relief (no infringement), and for state-law defamation and tortious interference after the takedowns.
- GF moved to dismiss for lack of subject-matter and personal jurisdiction, submitting evidence it is a Utah company with limited New York contacts and that Ganbold is principally a Wyoming entity.
- Ganbold voluntarily dismissed GF without prejudice instead of opposing jurisdictional arguments; Ganbold later settled with Hershey and the case closed.
- GF then moved for attorney’s fees under the Lanham Act (15 U.S.C. § 1117(a)) or the court’s inherent sanctioning power, arguing the case was exceptional and brought in bad faith.
- The magistrate judge recommended denying GF’s fee motion, concluding GF was not a "prevailing party" under the Lanham Act and Ganbold did not act in bad faith such that inherent-power sanctions were warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GF is a "prevailing party" under the Lanham Act | Ganbold: dismissal of GF does not show GF prevailed; no judgment or consent decree | GF: voluntary dismissal in response to its motion signaled weakness; thus GF prevailed | Held: GF is not prevailing—dismissal was without prejudice so legal relationship unchanged; fees under Lanham Act unavailable |
| Whether this is an "exceptional case" warranting Lanham Act fees | Ganbold: suit against GF was reasonable because GF sent the notice causing delisting | GF: claims were frivolous, jurisdictional and substantive defects made the case exceptional | Held: not exceptional; objective weaknesses do not make the case stand out or justify fees |
| Whether Ganbold acted in bad faith to justify inherent-power sanctions | Ganbold: acted reasonably and dismissed GF promptly after settlement; no improper motive | GF: naming GF was vexatious and jurisdictionally baseless, showing bad faith | Held: no clear-and-convincing evidence of bad faith; cannot impose inherent-power fees |
| Whether personal and subject-matter jurisdiction justified naming GF | Ganbold: GF’s notice was targeted and foreseeably affected Ganbold’s New York operations; GF’s website reaches NY | GF: GF sent notices to Amazon (WA) on Hershey’s behalf, has minimal NY contacts; Ganbold appears to be a WY company | Held: jurisdictional allegations were weak but not so meritless or ‘‘entirely without color’’ to infer bad faith; court did not reach a fee-awarding conclusion based on jurisdiction alone |
Key Cases Cited
- Carter v. Inc. Vill. of Ocean Beach, 759 F.3d 159 (2d Cir. 2014) (defining when a party is a prevailing party for fee-shifting purposes)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (standard for an "exceptional" case under fee-shifting statutes)
- Sleepy’s LLC v. Select Comfort Wholesale Corp., 909 F.3d 519 (2d Cir. 2018) (applying Octane standard to Lanham Act cases)
- Huebner v. Midland Credit Mgmt., Inc., 897 F.3d 42 (2d Cir. 2018) (inherent-power sanctions require clear-and-convincing proof of bad faith)
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Hum. Res., 532 U.S. 598 (2001) (prevailing-party doctrine and limits on fee awards after voluntary dismissals)