With regard to the damages issue, the Court noted that "by virtue of their default, the Defendants have admitted that they acted knowingly and intentionally, or at least with a reckless disregard for, or willful blindness to, Tiffany's rights," entitling Tiffany to an award of statutory damages. Tiffany sought $14.4 million, which is "$200,000 for each of the eight Tiffany Marks the Seller Defendants infringed, multiplied by the nine types of goods that they sold." In analyzing the request, Judge Maas explained that the defendants' default had left the Court with little information on which to base an award. From the available evidence, though, Judge Maas concluded that the defendants had engaged in large-scale counterfeiting, and ultimately decided that "the Court should award damages based on the sale of the nine types of goods on which the Tiffany Marks were improperly placed," and specifically "that Tiffany be awarded statutory damages in the amount of $1 million per type of goods sold, i.e., a total of $9 million" against all the defendants jointly.
Concerning the proposed turnover order against the Chinese banks, the banks opposed the order on three grounds: (1) that Tiffany had to begin a special proceeding under the CPLR to secure a turnover order; (2) that the proposed order would violate the "separate entity" rule under which each bank branch is considered a separate entity for attachment purposes (meaning that an attachment issued against the New York branch would not be binding on any other branch); and (3) that the order would require the banks to violate Chinese bank secrecy laws. The Court rejected the requirement for a special proceeding, ruling that "federal courts in New York . . . have deemed the CPLR special proceeding requirement satisfied when a plaintiff proceeds by complaint or motion against the third party holding a judgement debtor's assets." In response to the "separate entity" argument, the Court noted the split of authority of whether the rule was abrogated by the New York Court of Appeals' decision in Koehler v. Bank of Bermuda, Ltd., 12 N.Y.3d 533 (2009), and ordered the parties to submit further briefing to more fully address the split. With regard to the banks' third argument, that they could not be compelled to violate Chinese banking regulations, Judge Maas noted that the same issue is currently pending before the Second Circuit, and "recommend[ed] that no further enforcement action be taken until the Court of Appeals has issued its decision in" that case. The Court held, however, that in "the interim, of course, the asset freeze order should remain in effect."
