Supreme Court Sides With Lucky Brand on Defense Preclusion

Written by: Karl Braun, Esq., Justin Kerenyi, Esq., Daniel Miller, Esq., and Rodney Miller, Esq.

The U.S. Supreme Court sided with apparel maker Lucky Brand on the applicability of “defense preclusion” about whether and under which circumstances a defense might be barred in subsequent litigation between two parties.

The unanimous decision held that any preclusion of defenses must satisfy the strictures of issue preclusion or claim preclusion, at a minimum. Specifically, the cause must share a “common nucleus of operative facts” for a defense to be precluded, the court wrote in an opinion authored by Justice Sonia Sotomayor.

Lucky and Marcel Fashions Group have been in litigation for almost 20 years over their various “Lucky” trademarks. The first lawsuit, in 2001, was brought by Marcel over Lucky’s use of the phrase “Get Lucky,” which Marcel alleged infringed on its trademark for “GET LUCKY.”

A series of claims and counterclaims followed.

The Supreme Court decision stems from a 2011 lawsuit between the companies in which Marcel alleged that Lucky’s use of certain trademarks infringed on its GET LUCKY mark, but it didn’t reiterate Marcel’s earlier claim that Lucky Brand continued to use “Get Lucky” in its advertising. Lucky sought a dismissal, saying Marcel had released its claim due to a settlement in the original 2001 case. Marcel argued that Lucky was precluded from invoking the release, because it could have done so in a later suit, but didn’t.

The Supreme Court concluded: “The two suits here were grounded on different conduct, involving different marks, occurring at different times. They thus did not share a ‘common nucleus of operative facts.’”