Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc.
140 S. Ct. 1589
| SCOTUS | 2020Background
- Marcel owns a federal trademark for the phrase "Get Lucky" (registered 1986); Lucky Brand sells apparel using the mark "Lucky Brand" and other marks containing the word "Lucky."
- 2003 settlement: Lucky Brand agreed to stop using the phrase "Get Lucky," and Marcel agreed to release claims concerning Lucky Brand’s use of its own "Lucky" marks.
- 2005 action: Marcel counterclaimed alleging Lucky Brand continued to use "Get Lucky" (and used it alongside Lucky Brand marks); Lucky Brand invoked the settlement release early but largely dropped the defense; the district court enjoined Lucky Brand from using the phrase "Get Lucky," and a jury found for Marcel on remaining counterclaims.
- 2011 action: Marcel sued again, alleging post-2010 infringement based on Lucky Brand’s continued use of its own "Lucky" marks (not the "Get Lucky" phrase). Lucky Brand asserted the settlement release defense in this suit.
- The Second Circuit reversed the district court, adopting a "defense preclusion" doctrine that would bar defenses not fully litigated earlier; the Supreme Court granted review and reversed the Second Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a defendant may be barred by "defense preclusion" from raising an unlitigated defense in a later suit | Marcel: a defendant should be precluded from raising a defense it could have asserted earlier; following Second Circuit test, preclusion fits where prior action involved same parties and the defense could have been raised | Lucky Brand: any preclusion must fit within traditional claim- or issue-preclusion rules; here the later suit raises different claims so defense preclusion should not apply | The Court held "defense preclusion" cannot bar a defense unless traditional claim- or issue-preclusion requirements are met; it did not recognize an independent broad doctrine of defense preclusion |
| Whether claim preclusion bars Lucky Brand’s settlement-release defense because the 2005 and 2011 suits arose from the same operative facts | Marcel: the 2011 claims are essentially the same theory of reverse-confusion and thus could have been litigated earlier | Lucky Brand: the 2011 suit alleges different conduct, different marks, and post-2005 events, so the suits do not share a common nucleus of operative facts | The Court held claim preclusion requires the same claim/common nucleus of operative facts; here the suits differed by mark, conduct, and time, so claim preclusion did not apply |
| Whether issue preclusion or other precedents independently bar Lucky Brand’s defense | Marcel: precedents and treatises recognize preclusion of defenses in enforcement or collateral-attack settings and support precluding defenses that would undermine prior judgments | Lucky Brand: the 2011 defense does not attack or nullify the 2005 judgment (which only enjoined use of "Get Lucky") and thus does not fall into enforcement/collateral-attack scenarios | The Court found issue preclusion inapplicable and rejected Marcel’s reliance on enforcement/collateral-attack analogies; Lucky Brand’s defense did not threaten the 2005 judgment |
Key Cases Cited
- Davis v. Brown, 94 U.S. 423 (1877) (preclusion applies only to matters actually at issue and determined when claims differ)
- Brown v. Felsen, 442 U.S. 127 (1979) (claim preclusion bars all grounds for recovery that were previously available)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (issue preclusion may be applied offensively or defensively in certain circumstances)
- Allen v. McCurry, 449 U.S. 90 (1980) (issue preclusion bars relitigation of issues actually decided and necessary to judgment)
- Kremer v. Chemical Constr. Corp., 456 U.S. 461 (1982) (same-claim identity and transactional test)
- Lawlor v. National Screen Service Corp., 349 U.S. 322 (1955) (claims based on post-judgment conduct are not barred by an earlier suit)
- United States v. Tohono O'odham Nation, 563 U.S. 307 (2011) (same-claim analysis and transactional commonality)
- Taylor v. Sturgell, 553 U.S. 880 (2008) (limits on preclusion and identification of when claims are the same)
- Cromwell v. County of Sac, 94 U.S. 351 (1877) (practical considerations explain why defendants may raise defenses in subsequent suits)