Top Tobacco’s $1.1 Million Counterfeit Win Likely Safe on Appeal

A company that sold counterfeit Top Tobacco LP cigarette rolling papers likely won’t escape a $1.1 million jury verdict, an Eleventh Circuit panel indicated during oral argument.

A jury awarded Top Tobacco an impermissible windfall after a trial proved just $7,000 in profits from accidental infringement, Star Importers and Wholesalers Inc. told the US Court of Appeals for the Eleventh Circuit. But the panel suggested overruling the properly instructed jury’s verdict, which fits within statutory damages boundaries in trademark law, would undercut Top Tobacco’s right to a jury trial.

Circuit Chief Judge William H. Pryor said the jury was free to consider factors including the value of the brand and deterrence. He noted statutory damages can be punitive so no actual losses or profits are required—nor is willfulness.

“It seems to me hard to accept an argument that there has to be this relation to actual damages, because the entire point of statutory damages is as an alternative to actual damages,” Pryor said.

Star was one of several entities sued by Top Tobacco in the US District Court for the Northern District of Georgia over counterfeit papers in 2019. Another, Gabsons Novelties, filed a failed petition to the Supreme Court arguing its principal couldn’t be personally liable as he didn’t know of the ongoing infringement that had started before his tenure.

A jury found Star sold counterfeit papers, though not willfully. Top Tobacco elected statutory damages, which for non-willful infringement range from $1,000 to $200,000 per mark, and the jury awarded $123,000 for each of nine infringed trademarks.

Star attorney Rachel F. Gage of Robbins Alloy Belinfante Littlefield LLC told the 11th Circuit there was no evidence except Top Tobacco executive testimony of the brand’s value and degree of harm. When Pryor pushed back noting substantial sums were invested into the infringed trademarks, Gage said that wasn’t in dispute.

“However, it is disputed that my client in selling $7,000 of profit worth of counterfeit materials, unintentionally, not recklessly, should be liable to the plaintiff for a million dollars,” Gage said. “For punitive and deterrent damages that’s disputed, that is an arbitrary award.”

Second-Guessing a Jury

Circuit Judge Britt C. Grant probed Top Tobacco attorney Maia T. Woodhouse of Adams & Reese about whether any award within statutory boundaries could be an excessive windfall.

“What kind of evidence could show a windfall? Is there any way for us to police that line?” she asked. “Do you think that’s kind of a substantive limitation that there’s really no way to review?”

Woodhouse said it’s akin to trying to prove a negative, but ultimately the question is whether the award is within the range permitted by law.

“That is exactly what the Seventh Amendment prohibits: us from questioning and second-guessing” the jury, Woodhouse said.

On rebuttal, Grant told Star’s attorney Gage that “you’re doing a good job with what you have, but it’s a real challenge when the statutory range for non-willful actions goes up to $200,000.” She said she didn’t “see anything that allows us to look behind the jury’s verdict.”

Gage said the range doesn’t mean it’s appropriate for every case, again pointing to the disconnect between the million-dollar award and the accidental nature of a violation causing limited harm. But Pryor told her “you seem to be completely overlooking the legitimate deterrence value.”

“We’re trying to deter negligence in the distribution of counterfeit products that pose a risk to public safety and that harm the reputation of a brand that a seller has spent millions of dollars every year in marketing,” Pryor said.

Circuit Judge Embry J. Kidd also sat on the panel.

Katten Muchin Rosenman LLP also represents Top Tobacco. Katten & Temple LLP also represents Star.

The case is Top Tobacco LP et al v. Star Importers & Wholesalers Inc., 11th Cir., No. 24-10765, Oral argument 4/22/25.