Even Eighties-vintage court orders are due for the occasional revival. A magistrate judge in U.S. District Court in Manhattan last week recommended Burlington Coat Factory Warehouse Corp. pay more than $3 million for breaching a 22-year-old injunction banning unauthorized Fendi merchandise from its racks. According to court documents, Fendi noticed handbags bearing its mark at Burlington-owned stores and sent the retailer a cease-and-desist letter in 2004. After the luxe brand accused Burlington of having sold Fendi counterfeits since 2002, the off-pricer said the goods were real and the two sides spent the next two years trading correspondence as to their authenticity. Fendi served Burlington with a trademark infringement suit in 2006, accusing it of violating a 1987 court order, which banned Burlington from selling Fendi goods without permission. In October 2007, a U.S. District Court judge granted Fendi’s motion to hold Burlington in civil contempt for breaking the order and sent the matter to a magistrate judge to assess relief. In his report, Magistrate Judge Michael Dolinger wrote neither side seemed to be aware of the 1987 injunction until late 2005, weeks before Fendi filed the suit. Dolinger nevertheless suggested the retailer pay $2.5 million in disgorgement of profits and $541,913.65 in attorney’s fees for selling the products. The report is only a recommendation and will be passed on to the U.S. District Court judge overseeing the case. Stacy Haigney, general attorney for Burlington Coat Factory, said the company voluntarily entered into the injunction as part of a settlement related to a one-time order in 1985. He said the company had one handbag buyer and its president could oversee every order at the time. He called the recent violation “totally innocent,” said Burlington’s vendor vouched for the products’ authenticity and promised it would be objecting to Dolinger’s report on several grounds. “With great respect, we totally disagree with what the magistrate judge recommended here,” said Haigney. Burlington Coat was sold to, and taken private by, Bain Capital for about $2.05 billion in 2006.

This story first appeared in the May 5, 2009 issue of WWD. Subscribe Today.

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