NOT RECOMMENDED FOR FULL-TEXT PUBLICATION File Name: 18a0140n.06
Case No. 17-1546
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

COACH SERVICES, INC.; COACH, INC., Plaintiffs-Appellees,

v. SOURCE II, INC.; CERHUE ANDRE WALKER, Individually, dba Source II, Inc. Defendants-Appellants. ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

BEFORE: MERRITT, CLAY, a nd SUTTON, Circuit Judges. SUTTON, Circuit Judge. The district cour t ruled that Cerhue Walker and Source II infringed Coach’s trademarks, awarded statutory damages to Coach, and permanently enjoined Walker and Source II from using Coach’s marks in the future. Because no reasonable jury could disagree with these conclusions, we affirm the di strict court’s summary j udgment ruling in favor of Coach. Walker operated a retail clot hing store in Detroit, Michig an through his company, Source II. After someone informed law enforcement that the store (Source Appa rel) sold counterfeit goods, Homeland Security agents together with a Coach investigator launched a probe into possible trademark infringement. On four different date s, investigators saw Source Apparel offer counterfeit products for sale.Case No. 17-1546, Coach Servs., Inc. v. Source II, Inc.

2 Detroit police and Homeland Security agents executed a search warrant at the store. During the search, one employee, Walker’s daughter , admitted to the officers that the store’s merchandise included counterfeit items. All tol d, officers seized thousa nds of knockoff bags, wallets, and accessories worth almost $1,700,000. Law enforcement inventory records listed “products” from Gucci, Prada, Hermès, Burberr y, and Coach. Coach’s investigator confirmed (and memorialized in a report) that some of th e offered items imitated Coach products, including four purses and one wallet. Michigan charged Walker w ith counterfeiting. Mich. Co mp. Laws § 750.263(3). Shortly before Walker entered a “no contest” plea to th e criminal charge, Coach filed this civil action against Walker and Source II, alle ging violations of the Lanham Act, 15 U.S.C. § 1114 et seq., the Michigan Consumer Protection Act, Mi ch. Comp. Laws § 445.903(1), and state common law, including trademark, unfair competition, and unj ust enrichment. Each of Plaintiffs’ claims (with the exception of the unjust enrichment claim) turned on whether Plaintiffs could satisfy the “likelihood of confusion” test. See Audi AG v. D’Amato , 469 F.3d 534, 542 (6th Cir. 2006). After discovery, each side moved for summar y judgment. The district court granted summary judgment for Coach on liability, holdi ng that it “is not genui nely disputed that Defendants offered counterfeit Coac h purses for sale and those purse s are presumed to have been likely to confuse consumers as to the origin of the products.” R. 37 at 8. The defendants asked the district court to reconsider its decision, insisting that a refere nce to Walker’s no-contest plea tainted the court’s opini on and that Coach failed to prod uce physical evidence that Source Apparel sold Coach-like goods. Th e district court refused, and it eventually awarded statutory damages of $300,000 and a permanent injunction to Coach.Case No. 17-1546, Coach Servs., Inc. v. Source II, Inc.

3 Walker and Source II challenge the district court’s decision on se veral grounds: (1) It should not have found Walker personally liable; (2) Coach failed to introduce physical evidence of counterfeit goods to show infringement; (3) Co ach committed spoliation by failing to preserve the counterfeit goods; (4) the court fa iled to give appropriate weight to Walker’s affidavit; (5) the court erred by relying on Walke r’s no-contest plea; and (6) th e court erred by relying on the Coach investigator’s report. Forfeited arguments. The defendants forfeited the first three arguments by failing to raise them below. Start with Walker’s liabil ity. When Coach moved for summary judgment, it argued in its opening and reply briefs that the dist rict court should find Walk er personally liable. Yet Walker and Source II never ad dressed the issue in response to Coach’s motion and in their own cross-motion for summary judgment. Even af ter the district court noted in its summary judgment ruling that the defendants “have not addr essed the issue of pers onal liability” and ruled against them on that basis, R. 37 at 9, Walker di d not contest personal liab ility when he asked the district court to reconsider its summary judg ment decision. Only now on appeal does he challenge the ruling. That is mu ch too little and much too late . The argument is forfeited. Am. Bank, FSB v. Cornerstone Cmty. Bank , 733 F.3d 609, 615 (6th Cir. 2013). A similar problem clouds the defendants’ phys ical-evidence ground for appeal. In their cross-motion for summary judgment, the defendants insisted that “no physical evidence exists” to support the claim. R. 23 at 10. In response to Coach’s motion, they complained that “the purported infringing goods (4 purse s) are nowhere to be found.” R. 28 at 2. But in each instance, the defendants never showed why, or explained why, Coach needed to produce the purses in order to prove infringe ment. The same silence encumber s their argument here. In their opening brief, they do not cite a single authorit y in support of the idea that physical evidenceCase No. 17-1546, Coach Servs., Inc. v. Source II, Inc.

4 (as opposed to eyewitness testim ony or photographs) must be produc ed in order to establish a cognizable claim of counterfeiti ng. It is not our job to make the argument for them. United States v. Brownlee , -- F. App’x ---, 2017 WL 5625721, at *4 (6th Cir. 2017). Even if we overlooked this forfeiture and ev en if the Lanham Act re quired a plaintiff to produce the imitated goods in all cases (a doubtful proposition), it wouldn’t make a difference. The company admitted liability when it failed to provide “timely answers” to the plaintiffs’ requests for admissions. R. 29 at 4; see Fed. R. Civ. P. 36(a)(3). Source II never asked the district court to withdraw its admissions, and it remains bound by them. See Kerry Steel, Inc. v. Paragon Indus. , 106 F.3d 147, 153 (6th Cir. 1997); Fed. R. Civ. P. 36(b). What about spoliation? The defendants firs t alluded to this argument in a reply brief below. This first mention came too late (a reply brief) and was too brief to count as a preserved argument (a single sentence). Scottsdale Ins. Co. v. Flowers , 513 F.3d 546, 553 (6th Cir. 2008). Even if that were not the case, defendants ad mit that Homeland Security and the Wayne County Prosecutor’s office, not Coach, controlled the ev idence seized from Source Apparel. Coach had no duty to preserve what it di d not “hav[e] control over.” Adkins v. Wolever , 692 F.3d 499, 503– 04 (6th Cir. 2012). Preserved arguments. That leaves three arguments, al l preserved and all properly before us. In one way or another, each of these arguments takes issue with the district court’s decisional process in granting summary judgment to Coach. As the defendants see it, the court in its summary judgment ruling failed to give proper c onsideration to Walker’s affidavit, improperly referenced his no-contest plea, and relied on hear say in the Coach inves tigator’s report. But these process objections, even if accurate, woul d not prejudice them, as we review the legalCase No. 17-1546, Coach Servs., Inc. v. Source II, Inc.

5 decision to grant summary judgment with fresh eyes. See Hardrick v. City of Detroit , 876 F.3d 238, 243 (6th Cir. 2017). A comparison to a sentencing or administrative law appeal illustrates the point. We might reverse a district court’s sentencing decision based on a proc edural error. But we usually remand to allow the district court to exercise its sentencing discretion anew because it has “an institutional advantage” in ma king sentencing determinations. Gall v. United States , 552 U.S. 38, 52 (2007). Likewise, if we fi nd an agency decision arbitrary and capricious, we vacate the agency decision, send it back where it came from, and ask the agency to try again. SEC v. Chenery Corp. , 318 U.S. 80, 93–94 (1943). When the law re quires a decisionmaker to exercise discretion, we usually police the decisionmaker’s decisional process. Not so here. We are capable of deciding whether Coach was legall y entitled to summary judgment on our own, regardless of any mistakes the distri ct court may (or may not) have made. We have no trouble concluding that Coach was entitled to summary judgment even if we accept each of these process-based objections. The reason: Source II admitted liability, Walker is the company’s sole owner and President, an d Walker forfeited any argument that he is not personally liable for Source II’s conduc t. It is as simple as that. In reality, it is even simpler than that. As it turns out, the district court’s alleged errors were not errors at all. The district court did consider Walker’s affidavit under Civil Rule 56(c)(4). And it concluded that his claim that Source Apparel did not “display” Coach purses did not create a material fact dispute a bout whether it “offer[ed] them for sale.” Lollard Tobacco Co. v. Amouri’s Grand Foods, Inc. , 453 F.3d 377, 381 (6th Cir. 2006) . The district court did not rely on Walker’s no-contest plea in violation of the rules of evidence. It referenced the plea in a single sentence in the “B ACKGROUND” section of its opinion. R. 37 at 2. And the districtCase No. 17-1546, Coach Servs., Inc. v. Source II, Inc.

6 court did not rely on inadmissible hearsay. The fact s contained in the Coach investigator’s report—that he observed four Coach purses for sale at Walker’s store—c ould “be presented in a form that would be admissible,” namely live testimony. Fed. R. Civ. P. 56(c)(2); see Bailey v. Floyd Cty. Bd. of Educ. , 106 F.3d 135, 145 (6th Cir. 1997). For these reasons we affirm.