The Lawletter Vol 37 No 5
There are occasions when it pays to plead a state law cause of action, even though the main claim arises predominantly under federal law. In Belk, Inc. v. Meyer Corp., U.S., 679 F.3d 146 (4th Cir. 2012), Meyer claimed that Belk had infringed certain of its copyrights, trademarks, and trade dress in selling at retail a certain line of high-end cookware. After a nine-day trial, the court found, based on the jury's factual findings, that Belk had engaged in unfair and deceptive trade practices as a matter of law. The jury found that Belk had distributed, marketed, and sold a private‑label cookware line that was "deceptively similar" to Meyer's trademarked product line. Belk did so after receiving product, sales, and market information, as well as images and samples of Meyer's line. Finally, Belk purchased a cookware design from a third party that was "deceptively similar" to Meyer's product line, even after learning that proposed designs sold by the third party were being sold by Meyer.
After the jury rendered its verdict, the district court observed that the jury had made its findings regarding Meyer's claim for unfair and deceptive trade practices, and the court invited argument from the parties as to whether those findings were sufficient as a matter of law to establish that Belk had engaged in unfair and deceptive trade practices under North Carolina law. After argument, the district court determined that, based on the jury's findings, Belk had engaged in unfair and deceptive trade practices as a matter of law and that Meyer was entitled to treble damages. As a procedural matter, the Fourth Circuit concluded that Belk had forfeited its argument that the judgment was not supported by the evidence by failing to timely file a motion for a new trial under Federal Rule of Civil Procedure 50(b). As the court put it, "[a] lawyer has a duty to preserve issues on the record for his client." Id. at 160.
Under the Lanham Trademark Act, 15 U.S.C. § 1117(a), damages normally will not be trebled or attorney's fees awarded absent a finding that the case is exceptional or that the defendant's conduct warrants an enhanced award. Upon a finding of a violation of North Carolina General Statutes section 75-1.1, however, treble damages are assessed automatically pursuant to section 75-16. Once the jury found that Belk's conduct was unfair or deceptive, within the meaning of the statute, the award of treble damages was not discretionary.
Prudent counsel should always look to state law for additional or augmented remedies, even when the claim predominantly sounds in federal law. Particularly in the field of unfair competition, state remedies can enhance or augment the remedy awarded for conduct that violates both federal and state law.