United States District Court, S.D. California
ORDER DENYING MOTION FOR SANCTIONS [ECF No. 157]
JILL L. BURKHARDT, Magistrate Judge.
Presently before the Court is Plaintiff's Motion for Sanctions. (ECF No. 157.) Plaintiff seeks both monetary and evidentiary sanctions. For the reasons discussed below, the Motion is DENIED.
Plaintiff commenced this action on March 28, 2011. (ECF No. 1.) The First Amended Complaint ("FAC") pleads three causes of action relating to alleged trademark infringement. (ECF No. 14.) Over the last three years, this Court has reviewed and ruled on a litany of discovery issues. Magistrate Judge William McCurine, Jr. held over eighteen discovery conferences and eventually referred issues regarding electronically stored information to an outside consultant. (ECF No. 147.) On January 31, 2014, the above entitled action was transferred from the Honorable William McCurine, Jr. to the Honorable Ruben B. Brooks. (ECF No. 148.) The action was subsequently transferred to the Honorable Jill L. Burkhardt on March 28, 2014. (ECF No. 154.) Plaintiff filed the instant Motion for Sanctions on April 1, 2014. (ECF No 157.) Plaintiff seeks sanctions for Defendants' alleged refusal to comply with two separate discovery orders issued by Magistrate Judge McCurine. (ECF No. 157-1 at 2.) The orders concern Plaintiff's efforts to obtain U.S.-only Profit and Loss statements from Defendant Norwood. The pertinent discovery orders are discussed below.
A. Judge McCurine's April 9, 2013 Order
On April 9, 2013, Judge McCurine held a telephonic status conference to discuss a number of outstanding discovery issues. (ECF No. 138.) One of the issues discussed was Defendants' production of Profit and Loss ("P&L") statements for Defendant Norwood. Plaintiff claimed that the P&L statements produced for 2010 purported to provide sales figures for the U.S. but that the P&L statements for 2009 and 2011 provided sales figures for North America, which included the U.S. and Canada. (ECF No. 139 at 3.) Defendants informed the Court that Defendant Norwood did not keep P&L statements solely for the U.S. and that the 2010 P&L statement had been inadvertently mislabeled. Defendants stated that sales figures were only kept for North America as a whole. ( Id. ) Judge McCurine responded by asking whether there was a declaration stating that there were no P&L statements for the United States only. ( Id. at 4.) Counsel for Defendants indicated that there was not but that "[they could] certainly provide that...." ( Id. ) Before turning to another issue, Judge McCurine responded with, "Okay. Please do that." ( Id. )
On May 20, 2013, Defendants' Chief Financial Officer, Eric Balay, provided a declaration that stated, "Norwood does not keep Profit & Loss statements and the figures contained therein for the United States only, but rather for North America as a whole." (ECF No. 157, Ex. B.)
B. Judge McCurine's June 27, 2013 Order
Judge McCurine held another telephonic status conference to discuss discovery issues on June 27, 2013. (ECF No. 142.) During this conference, Plaintiff addressed the alleged inadequacy of Mr. Balay's declaration. (ECF No. 141 at 27.) The following discussion took place:
MR. LANE: Your Honor, at the April 9th hearing, we went over some specific financials that had yet to been (sic) produced or that were produced but were produced with the wrong headers or what have you. And we went through that. At one point the Court ordered that there would be a declaration coming in from the defendants that called out a couple things, and the first thing was that there was a P&L that had been titled "Norwood Promotional Products USA-Domestic." It was produced for the numbers for 2010. But the 2009 and 2011 P&Ls that Norwood produced were for North America, and the defendants said they don't - they can - they cannot produce number - they cannot extract U.S. out of North America's numbers to provide those P&Ls. And a declaration was produced on the 30th of May by defendants, and that's in the tab 2 of the Court's binder, and it's the declaration of Eric Bullay (phonetic). It's after the declaration of Tammy Wiard and then after the declaration of Laurie Bauer. It's the declaration of Eric Bullay. And so the declaration that I believe was ordered by the Court was, one, state that you cannot extract those U.S. figures from North America; and two, state that the U.S. P&L that was produced in 2010 was errantly titled US' and should have been North America. The declaration that we got says -
THE COURT: Yes. You don't need to go on; I've read it -
MR. LANE: Okay.
THE COURT: - you know, yeah, and I do specifically recall that. So Mr. Bullay's declaration is inadequate. He has to be able to say in his declaration we cannot extract from the subject P&L the United States figures; and, secondly, the phrase U.S. Financials' is in error, it should have read North American Financials. Very simple. And I want that done by July 10. Submit the right declaration by July 10. All right.
( Id. at 26-27.)
Mr. Balay provided a second declaration, per Judge McCurine's order, on July 2, 2013. (ECF No. 157, Ex. D.) The declaration stated that, "Norwood does not keep Profit & Loss statements and the figures contained therein for the United States only, but rather for North America as a whole. Norwood cannot extract from the P&L statements U.S.-only figures. To the extent that past Norwood P&L statements were labeled U.S.', those were errantly labeled, and should have read N.A.' for North America instead." ( Id. at 2.)
C. The Court's April 15, 2014 Order
On April 1, 2014, Plaintiff filed the instant Motion for Sanctions. (ECF No. 157.) On April 4, 2014, the Court issued an order setting a telephonic status conference to discuss the specific discovery issue that formed the basis for Plaintiff's Motion for Sanctions - Defendant Nordwood's U.S. sales figures. (ECF No. 160.) At the conclusion of the conference call, the Defendants were ordered to provide a third declaration addressing the following:
(1) The method or methods by which U.S. sales and profit data can be isolated and identified for the relevant time period;
(2) A statement that there are no other methods - aside from the one(s) identified in the declaration - that could ...