## Facts

- Vuitton et Fils S.A., owner of Louis Vuitton trademarks, sued a New York retailer (Carousel Handbags) for selling counterfeit Vuitton handbags.
- The parties entered a consent decree enjoining Carousel Handbags and persons “acting in concert or participation with it” from selling counterfeit Vuitton leather goods.
- After the decree, Vuitton obtained evidence that counterfeit Vuitton handbags were being sold at “Mirage,” a store owned by partners Solomon, Maurice, and Joseph Mizrahi.
- Vuitton moved to hold the Mizrahis in civil and criminal contempt, seeking contempt findings, damages based on violating sales, coercive sanctions, and attorneys’ fees.
- The district court declined to hold the Mizrahis in contempt and denied monetary relief and fees, treating remedial relief as discretionary.
- Vuitton appealed the denial of contempt sanctions and related relief.

## Issues

1. After a violation of an injunction is established and injury is shown, may a district court refuse to award compensatory relief for civil contempt?
2. May attorneys’ fees be awarded as part of civil contempt compensation, particularly when the violation is willful?
3. What discretion does a district court have to fashion civil contempt remedies, including the distinction between coercive and compensatory sanctions?

## Decision

- The Second Circuit held the district court erred by treating compensatory relief for civil contempt as discretionary once a violation and resulting injury are established.
- The court held that damages for civil contempt must be awarded to the extent proven.
- The court held that reasonable costs of prosecuting the contempt, including attorneys’ fees, may be awarded as part of compensatory relief when the violation is willful.
- The court reversed or vacated the denial of compensatory relief and remanded for determination of damages and potential fees consistent with these rules.

## Legal Principles

- Civil contempt serves two remedial functions: (1) coercing future compliance and (2) compensating for past noncompliance.
- Coercive civil contempt sanctions are committed to the district court’s equitable discretion.
- Compensatory civil contempt sanctions operate like tort damages and are intended to restore the injured party to the position it would have occupied had the injunction been obeyed.
- Once contempt, injury, and the fact of loss are established, a court may not deny compensatory damages altogether; it must award damages to the extent proven.
- Attorneys’ fees may be included in compensatory civil contempt awards when the decree’s violation is willful, to make the injured party whole.

## Conclusion

The Second Circuit required that civil contempt remedies include proven compensatory damages for injuries caused by violating an injunction and authorized fee awards for willful violations, while leaving coercive measures to the district court’s discretion on remand.


Vuitton et Fils S.A. v. Carousel Handbags, 592 F.2d 126 (2d Cir. 1979)