09-2858-cv
Erchonia Corp. v. Bissoon,
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 SUMMARY ORDER
5 RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
6 SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
7 BY THIS COURT’S LOCAL RULE 32.1.1 AND FEDERAL RULE OF APPELLATE PROCEDURE 32.1.
8 WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
9 MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
10 NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
11 OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
12
13
14 At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
15 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
16 on the 11th day of May, two thousand eleven,
17
18 Present: RALPH K. WINTER,
19 ROSEMARY S. POOLER,
20 PETER W. HALL,
21 Circuit Judges.
22 _____________________________________________________
23
24 ERCHONIA CORPORATION f/k/a THERAPY
25 PRODUCTS, INC.,
26
27 Plaintiff-Appellant,
28
29 -v- 09-2858-cv
30
31 M.D. LIONEL BISSOON d/b/a MESOTHERAPIE &
32 ESTETIK, MERIDIAN AMERICA MEDICALS, INC.,
33 MERIDIAN MEDICAL INC., MERIDIAN CO., LTD.,
34
35 Defendant-Appellees.
36
37
38 Attorneys for Appellant: Rory J. Radding, Craig B. Whitney, Morrison & Foerster LLP,
39 New York, NY.
40
41 Attorneys for Appellees: Anthony L. Fletcher, Kristen McCallion, Fish & Richardson P.C.,
42 New York, NY.
43
44 ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
45 AND DECREED that Appellees’ motion for sanctions is DENIED.
46
1 Appellees move this Court for sanctions pursuant to Federal Rule of Appellate Procedure
2 38 arguing principally that Appellant’s appeal was frivolous for the same reasons the underlying
3 lawsuit was frivolous—“Erchonia had . . . virtually no physical evidence of its purported use of
4 ‘lipolaser’ as a trademark.”
5
6 A court of appeals has significant discretion in determining whether an appeal was so
7 frivolous as to warrant sanctions. We have held that sanctions under Federal Rule of Appellate
8 Procedure 38 may be imposed when one party proceeds with an argument “‘totally lacking in
9 merit, framed with no relevant supporting law, conclusory in nature, and utterly unsupported by
10 the evidence.’” United States v. Potamkin Cadillac Corp., 689 F.2d 379, 381 (2d Cir. 1982).
11 We have also held that in cases where there is a “clear showing of bad faith,” Rule 38 sanctions
12 may issue. See In re 60 E. 80th St. Equities, Inc., 218 F.3d 109, 119 (2d Cir. 2000).
13
14 In the context of sanctions issued under Federal Rule of Civil Procedure 11, which
15 governs sanctions issued by the district court, we have held that “[t]he fact that a legal theory is a
16 long-shot does not necessarily mean it is sanctionable.” Fishoff v. Coty Inc., 634 F.3d 647, 654
17 (2d Cir. 2011). That principle is instructive here. Although we found Appellant’s claims to be
18 meritless, they were not entirely baseless. Among other things, Appellant directed us to
19 registered marks that were somewhat similar to the “lipolaser” mark it sought to protect. These
20 included, for example, “lipojection” for “medical services providing injections to dissolve fat.”
21 Appellant also pointed us to evidence that it had used the “lipolaser” mark over a period of 10
22 years, and although we concluded that the district court did not err in granting judgment to
23 Appellees on the ground that the evidence of use demonstrated, at most, sporadic and
24 inconsistent use over that period, Appellant’s arguments in support of its use were not so
25 outrageous as to warrant sanctions.
26
27 Further, we note that Appellees have effectively asked this Court to sanction Appellant
28 on the ground that the initial action filed was frivolous. That is, in large part, Appellees’ motion
29 for sanctions is based upon the fact that “[t]he District Court already found bad faith,” and “the
30 baselessness of Erchonia’s claims has been plain from the start.” However, that an action may
31 have been frivolous when initially filed, does not automatically mean that an appeal from a
32 dismissal of that action will be frivolous. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,
33 407 (1990) (Federal Rule of Civil Procedure 11 and Federal Rule of Appellate Procedure 38 “are
34 better read together as allowing expenses incurred on appeal to be shifted onto appellants only
35 when those expenses are caused by a frivolous appeal, and not merely because a Rule 11
36 sanction upheld on appeal can ultimately be traced to a baseless filing in district court.”).
37
38 Finally, Appellees ask us to infer bad faith on the part of Appellant’s filing based in part
39 on facts well-beyond the scope of this case and beyond the record before us. In particular,
40 Appellees reference a Texas lawsuit that Appelles’ allege Erchonia was “reckless” in pursuing.
41 Appellees also reference a separate appeal in this Circuit (No. 10-3245), which was taken from
42 the district court’s award of fees in the underlying case. Appellees argue that the fact that the
43 separate appeal was dismissed as time-barred indicates that the current appeal before us (No. 09-
44 2858) was undertaken in bad faith. However, we note that the fact that a party may have filed
45 one time-barred appeal is not necessarily probative of bad faith in a separate appeal, especially
46 where, as here, the case before us (09-2858) was filed before the time-barred appeal (10-3245),
2
1 the two appeals were never consolidated, and this Court issued no sanctions in connection with
2 the time-barred appeal.
3
4 We have considered Appellees’ remaining arguments in support of sanctions and find
5 them to be without merit. For the foregoing reasons, Appellees’ motion for sanctions under
6 Federal Rule of Appellate Procedure 38 is DENIED.
7
8
9 FOR THE COURT:
10 Catherine O’Hagan Wolfe, Clerk
3