Stone Brewing Co., LLC v. MillerCoors LLC

          REPORT AND RECOMMENDATION FOR ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR DISCOVERY SANCTIONS [ECF No. 261] REDACTED

          HONORABLE LINDA LOPEZ, UNITED STATES MAGISTRATE JUDGE

         Currently before the Court is Plaintiff Stone Brewing's Motion for Further Discovery Sanctions [see ECF Nos. 261, 280 (“Mot.”)], Defendant's opposition to the motion [see ECF Nos. 265, 279 (“Oppo.”)], and Plaintiff's October 21, 2019 reply [see ECF Nos. 274, 282 (“Reply”)]. This Report and Recommendation is submitted to the Honorable Roger T. Benitez, United States District Judge, pursuant to the provisions of 28 U.S.C. § 636 because the order makes recommendations regarding evidentiary sanctions including but not limited to adverse inference instructions. For the reasons set forth below, the Court RECOMMENDS that United States District Judge Benitez issue an order: (1) approving and adopting this Report and Recommendation; (2) DENYING Plaintiff's request to strike MillerCoors's defenses and counterclaims to the extent they allege prior use of “STONE” or “STONES” and the alleged lack of competition between economy and craft beer; (3) DENYING Plaintiff's request to instruct the jury that MillerCoors withheld material evidence and that an adverse inference may be drawn from that fact; (4) DENYING Plaintiff's request to require MillerCoors to detail how, where, and when it searched for responsive documents and provide an appropriate certification regarding its efforts; (5) GRANTING Plaintiff's request to supplement its expert reports to take account of the newly produced materials; (6) DENYING Plaintiff's request for additional discovery on XXXXX; and (7) GRANTING IN PART and DENYING IN PART Plaintiff's request for monetary sanctions.

         RELEVANT DISCOVERY BACKGROUND

         On September 5, 2019, Plaintiff filed a Motion to Compel and for Sanctions for Discovery Violations. ECF No. 218. In the motion, Plaintiff argued that Defendant failed to make a “full production of historical Keystone Materials” [in response to RFP Nos. 41 and 42]. Id. Plaintiff requested an “on-site inspection of the historical items in their locations in the Coors archive” and an additional deposition of Ms. Heidi Harris. Id. at 14-15. Plaintiff also requested sanctions. See id. at 15-18. MillerCoors opposed the motion, and Stone filed a reply. ECF Nos. 221, 224. On September 17, 2019, the Court issued an order granting in part and denying in part Plaintiff's motion for the requested discovery and for sanctions. ECF No. 250. Specifically, the Court ordered MillerCoors to make a full production of the historical Keystone materials in response to RFP Nos. 41 and 42 on or before September 20, 2019, and also ordered Ms. Heidi Harris to appear for a follow-up video deposition on or before September 27, 2019. Id. at 13. The Court denied Stone's request for an inspection of the Coors archive and for evidentiary and/or monetary sanctions. Id.

         On October 8, 2019, counsel for the parties contacted the Court regarding Plaintiff's instant request for sanctions on the basis that Defendant has systemically failed to comply with its discovery obligations in this case. The Court issued a briefing schedule. ECF No. 258. The parties filed their pleadings in accordance with the briefing schedule. See Mot, Oppo., and Reply.

         LEGAL STANDARD

         Federal Rule of Civil Procedure 37 empowers the Court to issue sanctions where a party fails to obey a previous order to provide discovery. The Rule provides for various sanctions, including:

(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;

(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;

(iii) striking pleadings in whole or in part;

(iv) staying further proceedings until the order is obeyed;

(v) dismissing the action or proceeding in whole or in part;

(vi) rendering a default judgment against the disobedient party; or (vii) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.

Fed. R. Civ. P. 37(b)(2)(A)(i)-(vii). The Court has broad discretion regarding the type and degree of discovery sanctions it may impose pursuant to Rule 37 and can impose any sanction it sees as just. Von Brimer v. Whirlpool Corp., 536 F.2d 838, 844 (9th Cir. 1976). “When sanctions are warranted, the Court must determine the appropriate level or severity of sanctions based on the circumstances of the case.” Daniels v. Jenson, 2013 WL 1332248, at *2 (D. Nev. Mar. 11, 2013).

         SUMMARY OF PARTIES' POSITIONS

         Stone argues that the newly ordered discovery and Court-ordered deposition of Ms. Harris “has shown that MillerCoors's misconduct on this score was even more severe than previously understood.” Mot. at 6. First, XXXXX Id. Second, Stone argues that recent third-party productions, from Boston Consulting Group [hereinafter “BCG”] and Andrews Distributing, reveal further withholding of documents. Id. at 7. Finally, Stone argues that it learned for the first time at the settlement conference on October 2, 2019 XXXXX Id. at 8. Stone argues that these “recent revelations demonstrate MillerCoors's repeated and systematic failure to comply” with its discovery obligations in this case and thus warrant a variety of requested sanctions. Id. at 8.

         MillerCoors opposes Stone's Motion on the following grounds: (1) with respect to the historical Keystone materials, “MillerCoors has already produced all remaining Keystone marketing and packaging materials from the Coors Archive as ordered by the Court;” (2) with respect to the recent third-party productions from BCG and Andrews Distributing, MillerCoors conducted a “thorough and reasonable search for documents responsive to the requests Stone Brewing actually served based on the parties' agreed-upon [ESI] ...