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This is an appeal from a judgment entered in the United States District Court for the Southern District of New York (Broderick, J.) that approved and adopted a report of a special master finding the Bayard Shirt Corporation ("Bayard") in civil contempt of that court's February 27, 1981 consent judgment and injunction ("consent judgment"). The finding of contempt was premised on Bayard's failure to use a source reference to distinguish a mark it had adopted in connection with the sale of certain products from the mark adopted by Sweater Bee by Banff, Ltd. ("Sweater Bee"). Despite this finding, the district court agreed with the special master that Bayard's conduct was not willful and that Sweater Bee had failed to prove any injury. As a result, the court declined to award an accounting, damages or attorney's fees against Bayard. Also adopted by the district court was the special master's recommendation that Sweater Bee pay one-third of his fees and expenses.

On appeal, Sweater Bee contends that Bayard's conduct was willful as a matter of law, that sanctions may be imposed for non-willful conduct in any event, and that the district court erred in refusing to order an accounting of Bayard's contempt revenues or profits. We hold that Sweater Bee is entitled to the benefit of sanctions for Bayard's continuous violations of the consent judgment notwithstanding the absence of a finding that the violations were willful and the absence of proof that Sweater Bee sustained any lost sales by reason of the violations, and we award an appropriate sanction.


885 F.2d 1 (1989)

MANHATTAN INDUSTRIES, INC., Bayard Shirt Corporation, and Don Sophisticates, Inc., Plaintiffs,


SWEATER BEE BY BANFF, LTD., and Robert Belsky, Defendants. SWEATER BEE BY BANFF, LTD., Contempt-Plaintiff-Appellant, v. MANHATTAN INDUSTRIES, INC., Bayard Shirt Corporation, Champpierre, Ltd., Laurence L. Leeds, Jr., Donald Kallman, Robert Hamel, and Fred Feldstein, Contempt-Defendants, Manhattan Industries, Inc., Bayard Shirt Corporation, Donald Kallman, and Robert Hamel, Contempt-Defendants-Appellees.

No. 893, Docket 88-7810. United States Court of Appeals, Second Circuit.

Argued April 4, 1989.

Decided September 15, 1989.

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