United States v. Colabella

          ORDER RE MOTION FOR SUMMARY JUDGMENT

          SHARON L. GLEASON UNITED STATES DISTRICT JUDGE.

         Before the Court at Docket 55 is Plaintiff's Motion for Summary Judgment. The motion is fully briefed.^[1] Oral argument was not requested and was not necessary to the Court's decision.

         BACKGROUND

         This is a civil action by the United States to collect the fine authorized by 19 U.S.C. § 1526(f). The facts, viewed in the light most favorable to Defendants for purposes of this summary judgment motion, are as follows: On July 15, 2010, U.S. Customs and Border Patrol (CBP) intercepted two shipments that had arrived in Anchorage, Alaska from China.^[2] These packages, together, contained 1, 128 pairs of women's sunglasses.^[3] Each package was addressed to:

Colabella, Lou 1810 Veterans Hwy Central Islip, NY 11722^[4]

         The sunglasses in each package purported to be either Coach-brand or Oakley-brand sunglasses.^[5] CBP sent photographs of these sunglasses to representatives of each company to verify their authenticity. Each company responded that the sunglasses were not genuine products, and each company explained how the products differed from genuine products.^[6]

         Based on the companies' responses, CBP determined the sunglasses were counterfeit and that each infringed on the companies' protected marks. Pursuant to 19 U.S.C. § 1526(e), CBP seized the shipments, ^[7] which it assigned a Manufacturer's Suggested Retail Price (MSRP) value of $132, 625.00.^[8] CBP mailed a “Notice of Seizure and Intent to Forfeit” to the same address to which the packages were addressed.^[9] The return receipt for that notice was signed, ^[10] but there was no actual response to the notice.^[11] The sunglasses were administratively forfeited on October 29, 2010.^[12]

         In November 2010, CBP sent a Notice of Penalty and Demand for Payment to Louis Colabella in relation to the seized sunglasses, seeking payment of a fine equal to the MSRP of the seized goods pursuant to 19 U.S.C. § 1526(f).^[13] Mr. Colabella responded by letter denying any knowing involvement in the importation of counterfeit goods.^[14] CBP proposed a mitigated fine of 20% of the MSRP, conditioned on timely payment.^[15] Mr. Colabella did not make any payment^[16] and in June 2014 the United States instituted this action to recover the full amount of the fine.^[17]

         Mr. Colabella disclaims any knowledge of or involvement in the importation of the seized sunglasses.^[18] At the time of the seizure, Mr. Colabella did not maintain a business at the shipping address, 1810 Veterans Highway, having moved up the road to 1930 Veterans Highway prior to the seizure.^[19] Both the new business location and the old one were in Islandia, NY, not Central Islip as the packages were addressed.^[20]

         “Lou Colabella” was also the named recipient for several other shipments of counterfeit or illegal goods in incidents not directly at issue in this case.^[21]

         DISCUSSION

         I. Jurisdiction

         The Court has jurisdiction pursuant to 28 U.S.C. § 1331 because Plaintiff's claim arises under federal law.

         II. Standard for Summary Judgment

         Federal Rule of Civil Procedure 56(a) directs a court to “grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The burden of showing the absence of a genuine dispute of material fact lies with the moving party.^[22] If the moving party meets this burden, the non-moving party must present specific factual evidence demonstrating the existence of a genuine issue of fact.^[23] The non-moving party may not rely on mere allegations or denials.^[24] Rather, that party must demonstrate that enough evidence supports the alleged factual dispute to require a finder of fact to make a determination at trial between the parties' differing versions of the truth.^[25]

         When considering a motion for summary judgment, a court views the facts in the light most favorable to the non-moving party and draws “all justifiable inferences” in the non-moving party's favor.^[26] To reach the level of a genuine dispute, the evidence must be such “that a reasonable [factfinder] could return a verdict for the non-moving party.”^[27]If the evidence provided by the non-moving party is “merely colorable” or “not significantly probative, ” summary judgment is appropriate.^[28]

         III. Analysis

         Section 1526(f)(1) provides that “[a]ny person who directs, assists financially or otherwise, or aids and abets the importation of merchandise for sale or public distribution that is seized under [§ 1526(e)] of this section shall be subject to a civil fine.” Thus, to impose a fine, the government must show that (1) Mr. Colabella directed, assisted, or aided and abetted the importation of the sunglasses, and (2) these sunglasses were seized under the statute.

         As evidence that Mr. Colabella directed, assisted, or aided and abetted the importation of the sunglasses, the government first emphasizes that Mr. Colabella was the listed recipient on both of the seized packages, and second argues that Mr. Colabella's involvement in other illegal importation incidents belie Mr. Colabella's claim of mistake, accident, or lack of involvement in this incident.

         Mr. Colabella does not contest that the packages had his name on them. But he has repeatedly and consistently contested any assertion that he was involved in or knew of the sunglasses shipment. First, in his November 2010 letter; second, in his August 2011 letter; third, in his October 2011 Affidavit; fourth, at his August 2016 deposition; and fifth, in his March 2017 Affidavit.^[29] Drawing all reasonable inferences in favor of the nonmoving party, there are clearly disputed material facts at issue that preclude the entry of summary judgment.

         The government observes that “importation statutes” are “strict liability offenses.”^[30]But the cases the government cites for that proposition do not suggest that being an unwitting addressee conclusively establishes that the addressee assisted, directed, or aided and abetted the importation of the seized merchandise. In Phillip Morris USA Inc. v. Liu, the defendant “concede[d] that he ‘unloaded and transported some cargo which unfortunately turned out to be counterfeit cigarettes'” and had “signed the bill of lading for the counterfeit cigarettes.”^[31] Here, Mr. Colabella has repeatedly denied that he had any connection to the sunglasses. A second case, Hard Rock Cafe Licensing Corp. v. Concession Services, Inc., stands for the unremarkable proposition that a trademark infringer may be liable for infringement even if he does not know the products he is trading are infringing.^[32] The government characterizes a third case, Phillip Morris USA Inc. v. U.S. Sun Star, as one in which “the plaintiff proved defendants imported cigarettes by showing cigarettes were ‘designated for delivery' to defendants.”^[33] But in that case the court was assessing the sufficiency of the allegations to support a default judgment-a very different standard than that applied to a contested summary judgment motion.^[34]United States v. Marco Leather Goods Ltd. also arose in the context of an uncontested default judgment.^[35] And Phillip Morris USA, Inc. v. Sheng Chen Lin arose in the context of an uncontested summary judgment motion, where the police had “arrived at defendant's home and discovered . . . boxes of what turned out to be counterfeit Marlboro Lights brand cigarettes in defendant's garage and car trunk.”^[36]

         The government also points to other customs incidents allegedly involving Mr. Colabella. But these other incidents do not conclusively preclude a reasonable factfinder from returning a verdict for Mr. Colabella based on his repeated and ...