Las Vegas swap meet faces accusations of allowing sale of counterfeit goods

Grace Leong

Friday, July 30, 1999 | 11:36 a.m.

Broadacres Inc. of Las Vegas was sued by Levi Strauss and Co. and Nike Inc., alleging it infringed on their trademarked brands by allowing the sale of counterfeit merchandise at its swap meet.

The Broadacres Swap Meet, 2930 North Las Vegas Blvd., occupies 27 acres with 1,000 paved parking spaces, this week's lawsuit says.

The suit said Broadacres, the owner and operator of the flea market, is liable for trademark infringement for allowing the continued sale of counterfeit merchandise despite repeated warnings over the last two years from the plaintiffs and the Western Anti-Counterfeiting Coalition.

The plaintiffs accused Broadacres of deliberately flouting regulations that prohibit such sales despite being served information listing the vendors that allegedly sold counterfeit goods and information stating what trademarks were being infringed.

"This is more than just a trademark infringement case, it's also about rampant consumer fraud. What we are trying to do is get Broadacres owners to significantly change their practices, and to take affirmative steps to prevent customers from being defrauded," Jeffrey Hyman, the plaintiffs' attorney, said.

"It is offensive to think that people are spending their hard-earned money on low-quality counterfeit merchandise and that a group of people are profiting from it," he said.

The U.S. District Court suit cited evidence from a California investigator, Heather Holdridge of Brands Security Corp., who conducted three sweeps of the market and made purchases in May from 15 vendors allegedly selling merchandise bearing counterfeit trademarks including Levi Strauss, Nike, Tommy Hilfiger, Warner Bros., Disney and Adidas.

In the first sweep conducted in December 1997, Holdridge had identified 26 vendors selling allegedly counterfeit goods and found 8,000-10,000 units of counterfeit clothing and accessories, the suit says.

The suit said Robert Smith, Broadacres' director of security, had at that time allegedly denied her access to the Swap Meet's premises, and didn't allow her to speak to its vendors, even when she said she wanted to educate the vendors rather than have them arrested.

The suit said Smith had claimed to be "an investigator for the Las Vegas City Attorney and had participated in a sting operation with the FBI (Federal Bureau of Investigation) a few years earlier and had 'cleaned the place up.' "

The plaintiffs are seeking a court order to prohibit Broadacres from interfering with their efforts to monitor the activities of vendors, and have requested the vendors certify they aren't selling counterfeit goods.

"Our clients are seeking damages and injunction, including recovery based on lost profits. These are profits derived from the sale of counterfeit products. Alternatively, we may seek statutory damages, which could range from $100,000 to $1 million per trademark," Hyman said.

Nike, which sells more than $8 billion worth of merchandise a year, spends more than $1.8 billion a year in marketing, product research, development and production of apparel and footwear.

No other Las Vegas swap meets are being investigated for counterfeiting by Levi Strauss and Nike, Hyman said.

Broadacres officials could not be reached for comment on the allegations.