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Winery v. Proximo Spirits

October 18, 2010


The opinion of the court was delivered by: Jennifer L. Thurston United States Magistrate Judge


(Doc. 47)

I. Background

Plaintiff, E&J Gallo filed this Declaratory Judgment Act, 28 U.S.C. §§2201-2202, action seeking 2 a declaration that Gallo's "Familia Camarena" tequila bottle and packaging does not infringe on the trademark or trade dress of "1800 Tequila." The United States' rights are owned by defendant Agavera Camichines, S.A. de C.V. and the tequila is sold by defendant Proximo Spirits, Inc. in the United States.

Defendants Proximo and Agavera moved to dismiss Gallo's DJA action, arguing that Gallo cannot establish that there is an actual controversy because the defendants have not acted to threaten Gallo or Gallo's United States' intellectual property rights. Defendants have indicated that there is no connection between them and Ex Hacienda, the entity which sent a cease and desist letter to Gallo's Mexican supplier/bottler of tequila.

Gallo contends that the defendants and Ex Hacienda are "associated" due to their relationship with "Grupo Cuervo." Gallo believes that Ex Hacienda and Agavera are subsidiaries of Tequila Cuervo La Rojena, which they contend is owned, directly or indirectly, by Grupo Cuervo. Gallo contends that the cease and desist letter sent by Ex Hacienda is part of a coordinated strategy by Grupo Cuervo which threatens Gallo's operations in the United States. Gallo's has sought the right to conduct limited discovery, before the Court determines the merits of the motion to dismiss, to determine the relationships among the Grupo Cuervo entities, including defendants, Ex Hacienda and Tequila Cuervo La Rojena and to take depositions of key witnesses.

In its August 26, 2010, order the Court found good cause to grant Gallo's request for limited discovery. (Doc. 39) The Court stayed the defendants' motion to dismiss and granted Gallo's request to conduct "limited discovery to establish subject matter jurisdiction on the relationships between the named defendants and Hacienda, and the connection between defendants and the conduct Gallo alleges to establish an actual, justiciable controversy between the parties pursuant to the DJA and Article III."

(Doc. 39 at 7)

For the reasons discussed below, the Court GRANTS IN PART and DENIES IN PART

Plaintiff's request that Defendants be required to supplement their responses to the discovery requests.

I. Background

A. Scope of Discovery

Although, generally, parties are entitled to "obtain discoveryregarding anynonprivileged manner that is relevant to any party's claim or defense" (Fed.R.Civ.P. 26(b)), at this time, discovery is limited only to the issue of the Court's jurisdiction. In essence, if Gallo can show that the action of Ex Hacienda, in sending the cease and desist letter, is attributable to defendants based upon their legal relationship to Ex Hacienda through a common "parent-company," Gallo contends that this will convince the Court that DJA jurisdiction is shown because, in that event, an actual case or controversy exists between Gallo and defendants. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007).

II. Analysis

A. Gallo's Requests to Proximo

Request for Admission Nos. 1, & Interrogatory No. 6:

In response to these requests, Gallo seeks to have Proximo admit that it knew of and reviewed the cease and desist letter before it was presented to Gallo's tequila supplier/bottler and to identify everyone who knew of the letter before it was presented to Gallo's tequila supplier/bottler.

In response, Proximo denied that "any individual had knowledge in their capacity as an officer, director, or employee of Proximo" of the letter. Gallo contends that this response is not sufficient because Proximo was required to respond as to "information reasonably available to it, which includes information known to individuals within its relative control" whether the knowledge is held due to their employment relationship with Proximo.

"A corporation must necessarily act through agents, and the general rule is that knowledge of an agent acquired in the ordinary discharge of his duties for the corporation is ordinarily to be imputed to the principal." Ritchie Grocer Co. v. Aetna Casualty & Surety Co., 426 F.2d 499, 500 (8th Cir. Ark. 1970) "'Generally the knowledge of a corporate officer within the scope of his employment is the knowledge of the corporation . . .'" FDIC v. O'Melveny & Myers, 969 F.2d 744, 750 (9th Cir. Cal. ...

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