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Crossfit, Inc. v. National Strength and Conditioning Association

United States District Court, S.D. California

May 26, 2017

CROSSFIT, INC., a Delaware corporation, Plaintiff,
v.
NATIONAL STRENGTH AND CONDITIONING ASSOCIATION, a Colorado corporation, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SANCTIONS (ECF NOS. 150, 162)

          Hon. Janis L. Sammartino, United States District Judge

         Presently before the Court is Plaintiff CrossFit, Inc.'s Motion for Terminating Sanctions, or in the Alternative Issue, Evidentiary, and Monetary Sanctions (“Sanctions Mot.”). (ECF Nos. 150, 162.) Also before the Court is Defendant National Strength and Conditioning Association's (“NSCA”) Opposition to (“Opp'n”), (ECF No. 156), and Plaintiff's Reply in Support of (“Reply”), (ECF No. 170), Plaintiff's Sanctions Motion. After considering the Parties' arguments and the law, as well as carefully examining all exhibits attached to the moving papers, the Court rules as follows.[1]

         BACKGROUND

         I. Factual Background

         CrossFit is a relatively recent entrant in the arena of fitness and personal training. (See Order Granting CrossFit Inc.'s Partial MSJ and Granting in Part and Den. in Part Nat'l Strength and Condit. Ass'n's MSJ (“MSJ Order”) 2, ECF No. 121.) By contrast, NSCA is a nonprofit corporation that has been around for nearly half a century and is “dedicated to the educational and professional exchange of ideas in the areas of strength development, athletic performance, and fitness.” (See id.) Both CrossFit and the NSCA generate revenue by credentialing and certifying trainers through their various programs. (Id.) NSCA also disseminates publications through its “flagship journal, ” the Journal of Strength and Conditioning Research (“JSCR”). (Id.)

         CrossFit contends that its popularity poses “an existential threat to the NSCA” because as “more and more people move from the NSCA's traditional fitness model to CrossFit training . . . there will be fewer and fewer trainers seeking NSCA certifications.” (Id.) In particular, CrossFit argues that in a specific study (the “Devor Study”) the NSCA published false data regarding CrossFit participants' injury rates. (Id. at 3.) This Court previously concluded that the data were, as a matter of law, false. (See generally id.) CrossFit further contends that the NSCA's use of such false data was no accident-instead, CrossFit alleges that the NSCA had a commercial motive to publish these false data, both to harm CrossFit's market share and continued growth, and to bolster the NSCA's case for heightened government regulation regarding the fitness industry that might preclude CrossFit from continuing its certification programs and fitness centers in their current forms. (See Id. at 2-8; Sanctions Mot. 1-4.)

         For the NSCA's part, it denies any commercial motive, or that it even competes with CrossFit. (See Answer to Compl. ¶ 27, ECF No. 27; see also Sanctions Mot. Ex. S. (NSCA counsel noting that NSCA's representative “testified that the NSCA has not had internal or external communication regarding CrossFit's training regimen . . ., has not made any efforts to limit the growth of CrossFit certification or the proliferation of CrossFit, and . . .

         does not compete with CrossFit”).) Additionally, the NSCA notes that “nine months after receiving the participant declarations” proving the Devor Study's injury data were false, the NSCA issued an Erratum addressing the false injury data. (Sanctions Mot. 5.) CrossFit, however, maintains that the NSCA had a commercial motive to disparage CrossFit, that the NSCA views CrossFit as a competitor, and further “contends the Erratum was misleading” because it “still falsely suggested that two participants were injured during the study.” (Id.) CrossFit has amended its complaint to add a cause of action to redress “the additional harm stemming from the misleading nature of the Erratum and the NSCA's failure to issue a full retraction.” (Id.) “The NSCA has indicated that it intends to attack CrossFit's damages theories by arguing that the Erratum mitigated any damages and that CrossFit was responsible for the widespread distribution of the false data.” (Id. at 3.)

         II. Procedural Background

         After several years of litigation in this federal action, the NSCA filed a separate suit in state court against CrossFit alleging trade libel, defamation, and unfair business practices. (Id. at 5-6.) The subject matter of this action and the state-court action largely “directly overlap” such that discovery in both actions encompasses many of the same issues; indeed, the parties agreed to a state-court “protective order mirroring the protective order in this case.” (Id.)

         After a contentious discovery period and only weeks prior to several pretrial deadlines in this action, CrossFit received discovery from the state-court action that appeared to either directly respond to discovery propounded in this action or contradict assertions NSCA deponents had made in this action. (Id. at 6.) CrossFit then deposed Nick Clayton-the NSCA's “Education Coordinator”-in the state-court case, (id.), at which time Mr. Clayton admitted that several of the statements in his federal-action declaration, submitted under penalty of perjury, were false. (Sanctions Mot. Ex. I, 80:7-83:4, ECF No. 163-3, at 18-21.) Given this new information, CrossFit then “ran several controlled searches in the state-court production” which “yielded hundreds of documents material to the issues in this action and that the NSCA should have produced in response to CrossFit's discovery requests in this case.” (Id. at 6.) Although the documents are too numerous to comprehensively catalog, examples of withheld discovery are:

• Documents that affirmatively demonstrate Mr. Clayton's perjury. Specifically, Mr. Clayton attended a CrossFit “Level 1” certification and testified in this action that he did so only for his own personal interest and that he did not share the documents regarding the certification with anyone at the NSCA. (Id. Ex. I.) However, the withheld state-produced documents reveal (1) that Mr. Clayton shared his certification-created documents-which he titled “Competitive Analysis”-with many members of NSCA leadership, (id. Ex. H; see also Ex. AV (Clayton email specifying: “Attached is my evaluation of the CrossFit Level 1 Course. I was not sure what format it needed to be in; consider this draft 1. I'll make revisions as needed” (emphasis added))); (2) that Mr. Clayton and NSCA leadership focused specifically on the CrossFit certificate and its wording as compared to the NSCA's certificates, (id. Ex. K; see also Ex. J); and (3) that the NSCA in fact paid for Mr. Clayton to attend the CrossFit certification after Mr. Clayton submitted a detailed “Project Proposal” noting that CrossFit “is quite possibly the hottest trend in training and conditioning, ” (id. Ex. L);
• A 2013 “Executive Summary” prepared for an NSCA Board of Director's “strategic planning retreat.” The Executive Summary notes that “the greatest challenge facing the NSCA” is “[c]ompeting organizations and third-party fitness programs, including CrossFit” and that “[t]he long overdue modernization of military training protocols will leave a vacuum of expertise that if the NSCA doesn't pro-actively get involved in, some idiotic organization like CrossFit will.” (Id. Ex. C);
• An email from the NSCA's Media Relations Manager to many high-ranking NSCA officers. The email was issued several days after the NSCA published the Erratum and notes that “the point of confusion on the erratum is mostly based on the two people mentioned who stated injury/medical condition for not completing.” (Id. Ex. M.) It continues: “Because we did not clarify that the injury and medical condition were not associated with their workouts at the club people are assuming that they were.” (Id.);
• Several emails and internal NSCA documents titled, for example, “More CrossFit Media, ” that tracked media coverage of the Devor Study or the Erratum and updated various NSCA team members on the same. (E.g., Id. Exs. D, N.);
• An email in which an NSCA director told a member of the United States Air Force, who was considering NSCA certifications in regards to “establishing a . . . standard for the training of fitness professional in the Air Force, ” that “CrossFit is not included in [NSCA's] competitor analysis as it is neither accredited nor was it designed to directly meet the needs of military personnel . . . .” (Reply Ex. CB.);
• Several NSCA emails discussing state legislative efforts to more tightly regulate the fitness profession and corresponding certifications, including an email summarizing a presentation for the NSCA's Board of Directors and noting that the Board “is fully on board . . . and is leaning toward taking a more proactive role in legislation (. . . by proxy [through an advocacy organization]).” (E.g., Sanctions Mot. Exs. AM, AN.);
• A document cataloging “Request” numbers and “File Title[s][, ]” in which the NSCA's certification director wrote that a document where “CrossFit” certifications were mentioned was “THE JOB ANALYSIS REPORT INFORMATION THAT THE NSCA CERTIFICATIONS ARE BUILT FROM (CORE BUSINESS) AND IS CONFIDENTIAL AND PROPRIATORY [sic] INFORMATION THAT IS CRITICAL TO THE SUCCESS OF OUR CERTIFICATION PROGRAM - THIS REPORT AND FULL INFORMATION SHOULD NOT BE SHARED WITH ANYONE.” (Id. Ex. A (capitalization in original).)

         Given that pretrial proceedings were only several weeks away at the time CrossFit discovered these documents, CrossFit simultaneously moved to continue the pretrial proceedings and for sanctions against the NSCA. (ECF Nos. 150, 153.) Given the gravity and uncertainty of the discovery misconduct, the Court continued the pretrial proceedings. (ECF No. 155.) The Court now addresses the pending Sanctions Motion.

         LEGAL ...


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