Lucky Brand Dungarees, Inc., et al. v. Marcel Fashions Group, Inc. is a Supreme Court case centering on the idea of defense preclusion — or, more accurately, avoiding the issue of defense preclusion.
In this case, the appellant wanted to argue that Marcel Fashions Group (Marcel) could not raise a defense that it could have raised in one of two prior lawsuits. They claimed that because that particular defense could have been raised in the 2005 lawsuit, it could not be raised again in a subsequent lawsuit. In that lawsuit, Lucky and Marcel ended up entering into a settlement agreement that Lucky would not use the phrase “Get Lucky” in connection with its jeans. (Footnote: It’s a clever concept. One can see why they’re fighting over such a hot trademark.)
The idea of defense preclusion is a new one, but two types of preclusion have existed since the 1870s and have plagued law students and esoteric lawyers ever since.
Issue preclusion, sometimes called collateral estoppel, is the concept that you can’t litigate an issue that was actually decided in a prior case, and the issue was necessary to reach the judgment.
Claim preclusion, sometimes called res judicata, means that a later suit argues or brings up the same claim as an earlier suit. That earlier suit prevents a new lawsuit between the same parties.
The Supreme Court asserted that it did not have to decide on this concept of defense preclusion because the claims in the two cases are different. As such, there would be different defenses. Therefore there would be no application of the concept of preclusion.
According to the court, the two suits were grounded on different conduct involving different marks, occurring at different times, thus they did not share “a common nucleus of operative facts.” How could they be related? How could they be the same issue if what they’re complaining about took place chronologically later?
In the end, it came down to the fact that the 2011 lawsuit did not challenge the underlying 2005 decision. The Supreme Court did something very important in doing this. Had the Court said defense preclusion is a viable concept, then every defendant would be obligated to bring up every defense under the sun when they put in their answer.
If that were the case, there would be a lot of potentially frivolous defenses being named just for the sake of preserving them. In turn, there would likely be more litigation moving to strike those defenses. That kind of kitchen sink approach would be very wasteful — as well as prejudice every defendant who didn’t come up with every possible defense they could have made, even if they weren’t engaged in discovery yet.
The plaintiff wasn’t, in fact, lucky. The case was reversed and remanded, providing a good ruling for the defendants. It was interesting to read as the court reached all the way back to decisions that date from the 1860s and 1870s — and quote them as if they happened yesterday. You kind of have to marvel at that overall appreciation of history and how old these principles are.
