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Salty Fin Holdings, LLC v. Salty Fin International, LLC

United States District Court, D. South Carolina, Columbia Division

January 8, 2018

SALTY FIN HOLDINGS, LLC and MICHAEL A. LETTS, Plaintiffs,
v.
SALTY FIN INTERNATIONAL, LLC, THE SALTY FIN REAL ESTATE COMPANY, LLC, SALTY FIN REALTY, LLC, SALTY FIN, LLC, SALTY FIN HOLDINGS & REALTY, LLC, THE ESTATE OF THERESA HIGGINS, and STACY AGRAN, Defendants.

          MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTION FOR SANCTIONS

          MARY GEIGER LEWIS UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This was an action for trade dress infringement and false designation of origin under 15 U.S.C. § 1125(a) and related claims arising under state law. The Court has jurisdiction over this matter under 28 U.S.C. §§ 1331 and 1367.

         Pending before the Court is Defendants' motion for sanctions under Federal Civil Procedure Rule 11 and the South Carolina Frivolous Civil Proceedings Sanctions Act, SC Code § 15-36-10 (SCFCPSA or the Act). Having carefully considered the motion, the response, the reply, and the surreply, it is the judgment of the Court Defendants' motion for sanctions will be denied.

         II. FACTUAL AND PROCEDURAL HISTORY

         Plaintiffs filed their initial complaint on April 27, 2016, in the Court of Common Pleas for Richland County, South Carolina, ECF No. 1-1, and Defendants removed the case to this Court, ECF No. 1. Defendants filed a motion to dismiss the initial complaint, ECF No. 9, and, in response, Plaintiffs requested leave to amend the complaint, ECF No. 17. The Court granted Plaintiffs leave to amend and dismissed Defendants' motion without prejudice. ECF No. 24. Plaintiffs filed the final version of their complaint on December 7, 2016 (Complaint), ECF No. 28, which Defendants moved to dismiss. ECF No. 31. On March 2, 2017, the Court entered an Order granting in part and denying in part Defendants' motion to dismiss. ECF No. 36. The Court granted the portion of Defendants' motion requesting the Court dismiss the claims asserted by Plaintiff Michael A. Letts (Mr. Letts) and denied the remainder of the motion.

         On November 17, 2017, Plaintiff Salty Fin Holdings, LLC (SF Holdings), the only remaining plaintiff at the time, filed a stipulation with the consent of Defendants dismissing with prejudice all remaining claims. ECF No. 59. The Clerk of Court entered a corresponding Judgment on November 20, 2017, ECF No. 60, and this case was closed.

         Defendants filed their motion for sanctions on November 27, 2017. ECF No. 61. Plaintiffs responded in opposition, ECF No. 62, and Defendants replied, ECF No. 63. Plaintiffs then filed a surreply. ECF No. 64. Having been fully briefed on the relevant issues, the Court is now prepared to discuss the merits of Defendants' motion for sanctions.

         III. STANDARD OF REVIEW

         Federal Civil Procedure Rule 11 provides in relevant part:

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for ...

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