Lucky Brand Dungarees v. Marcel

Defense preclusion is not applicable in a second action when the same defenses from the first action are asserted but applied to different conduct, legal theories, and occurred at different times than those asserted in the first action and did not pose a risk of negatively affecting the first judgment.

Marcel filed action in 2011 against Lucky Brand Dungarees (Lucky), claiming that Lucky continued to violate Marcel’s “Get Lucky” trademark in opposition to a judgement issued in 2005. The district court granted summary judgement in favor of Lucky, deciding that Marcel’s claims current action were fundamentally the same counterclaims it raised in 2005. On appeal, the Second Circuit disagreed, concluding that the doctrine of “defense preclusion” disallows Lucky from using the release defense in the current action.  "Defense preclusion" has never been addressed by the United States Court. Using Wright, H. Miller, & E. Cooper, Federal Practice and Procedure § 4402 (3d ed. 2016) for guidance, the Court determined that if a second lawsuit arises involving “a new claim or cause of action, the parties may raise assertions or defenses that were omitted from the first lawsuit even though they were equally relevant to the first cause of action.”The Court reasoned that Lucky’s defenses in the current action concerned different conduct, legal theories, trademarks and occurred at a different time than those it asserted in the first action. While a court may apply claim or issue preclusion to prevent attacks on previously decided claims, given the existence of these factors, Lucky’s defense to new claims in 2011 did not pose a risk of negatively affecting the 2005 judgement. Therefore, defense preclusion is not applicable in this context. REVERSED AND REMANDED.