The Supreme Court of the United States granted Lucky Brand’s request to address whether claim preclusion principles bar a defendant from asserting a new defense in a case when the defense could have been raised over previous years of litigation. Lucky Brand Dungarees, Inc. et al. v. Marcel Fashion Group, Inc., Case No. 18-1086 (S. Ct. June 28, 2019). The question presented is:

Whether, when a plaintiff asserts new claims, federal preclusion principles can bar a defendant from raising defenses that were not actually litigated and resolved in any prior case between the parties.

Lucky Brands and Marcel are competitors in the apparel industry. Lucky Brands owns the trademark LUCKY BRANDS. In 2001, Marcel sued Lucky Brands for trademark infringement and unfair competition for Lucky Brand’s use of the phrase GET LUCKY. The 2001 action resulted in a settlement, which the parties signed in 2003, where Lucky Brands agreed to desist using the GET LUCKY trademark and Marcel agreed to release any and all claims relating to Lucky Brand’s LUCKY BRAND trademark in exchange for $650,000.

After the 2003 settlement, the parties engaged in series of litigations involving substantially the same trademark disputes, including a case that went to trial where a jury found that Lucky Brand infringed on Marcel’s GET LUCKY trademark and enjoined Lucky Brand from using the GET LUCKY mark. In 2011, Marcel filed another lawsuit alleging that Lucky Brand continued use of LUCKY BRAND after the injunction. In response, Lucky Brand moved for summary judgment, arguing that Marcel’s claims were barred by res judicata in light of the final disposition. The district court agreed, but the US Court of Appeals for the Second Circuit reversed, finding that the allegedly barred claims could not have been sued upon in the previous case. On remand, Marcel filed an amended complaint, and Lucky Brand moved to dismiss on the basis that the 2001 agreement barred Marcel’s claims. The district court granted Lucky Brand’s motion, but the Second Circuit vacated the ruling, finding that claim preclusion barred Lucky Brand from invoking its release defense in this action. Lucky Brand appealed to the Supreme Court.