Alcon Vision, LLC. v. Lens.com, Inc.

District Court, E.D. New York·Decided November 10, 2020·No. 1:18-cv-00407·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------------x ALCON VISION, LLC,

Plaintiff, MEMORANDUM AND ORDER

-against- 18-CV-407 (NG) LENS.COM, INC.,

Defendant. -------------------------------------------------------------x ROANNE L. MANN, UNITED STATES MAGISTRATE JUDGE: The wave of discovery disputes flooding the docket in recent months includes, among other things, an application filed by plaintiff Alcon Vision, LLC (“plaintiff” or “Alcon”) why defendant Lens.com, Inc. (“defendant” or “Lens.com”) should not be held in contempt, see Letter Motion for Order to Show Cause (Aug. 28, 2020) (“8/28/20 Pl. Motion”), Electronic Case Filing (“ECF”) Docket Entry (“DE”) #277, a motion that triggered Lens.com’s cross- motion titled “Motion for Clarification,” see Letter Motion for Discovery/Motion for Clarification (Aug. 31, 2020) (“8/31/20 Def. Clarif. Motion”), DE #282. For the reasons that follow, each of the two motions is granted in limited part only, to the extent described in this opinion. BACKGROUND During a more than five-hour discovery hearing held on July 6, 2020 to address a series of then-pending motions to compel filed by the parties, this Court resolved various discovery disputes and directed counsel to confer further on other issues for which the Court had been provided with insufficient information. See Minute Entry (July 6, 2020) (“7/6/20 Minute Entry”), DE #246. Specifically, regarding Alcon’s previously filed motions to compel, the Court ordered defendant Lens.com to produce all Alcon-related purchase orders, sales records, and supplier invoices, since 2014, as well as Lens.com’s communications with its suppliers of

Alcon lenses since 2012, and certain communications with its customers. See Transcript of Hearing held on July 6, 2020 (filed on July 9, 2020) (“Hearing Tr.”) at 42-50, 83-85, DE #248. Lens.com had argued at the hearing that it should not be required to produce a broad range of confidential supplier and customer information because it had narrowed the scope of its antitrust counterclaims. Compare [First] Amended Answer (May 17, 2019), DE #67, with [Second] Amended Answer (Mar. 3, 2020), DE #203.1 After extensive discussion, this Court found that notwithstanding the amendments to its counterclaims, Lens.com had not “materially

narrow[ed] the scope of discoverable information[,]” Hearing Tr. at 34; see id. at 35, 36, and that the spreadsheets that Lens.com had produced contained only limited data and were no substitute for Lens.com’s far more detailed purchase orders and sales records. See id. at 35- 37. The Court therefore ordered Lens.com to produce, on a rolling basis, by August 6, 2020, purchase orders, sales records and supplier invoices starting from January 2014, and a variety of communications going back to 2012. See id. at 42-43, 45-46, 83-85, 163-64; 7/6/20

Minute Entry at 2. On August 5, 2020, the day before the court-ordered deadline for Lens.com to complete its production, Lens.com filed a notice of voluntary dismissal of its antitrust counterclaims (DE #258), along with a motion to vacate the Court's discovery rulings. See Letter Motion to Vacate Order (Aug. 5, 2020) (“Motion to Vacate”), DE #259. In its motion

1 An unredacted version of the latter is publicly available at docket entry number 254. to vacate, Lens.com argued that the withdrawal of its antitrust counterclaims rendered irrelevant the discovery previously ordered to be produced. By Memorandum and Order dated August 18, 2020, this Court denied Lens.com’s motion for reconsideration, finding that even

after the dismissal of Lens.com’s antitrust counterclaims, Lens.com's affirmative defenses alleged anticompetitive conduct by Alcon in attempting to cut off Lens.com’s supply of Alcon lenses. See Memorandum and Order (Aug. 18, 2020) (“8/18/20 M&O”) at 2, DE #268 (citing affirmative defenses of unclean hands, trademark misuse and bad faith). The Court admonished Lens.com for failing to comply with the August 6, 2020 court-ordered deadline and directed Lens.com to complete its production, on pain of sanctions, by August 21, 2020. See id. at 3. The Court expressly warned Lens.com that it would “countenance no further

delays in this case.” Id. It is against this backdrop that Alcon now seeks an order to show cause why Lens.com should not be held in contempt for failing to comply with the Court’s July 6th rulings and August 18th Memorandum and Order. Alcon complains that Lens.com failed to produce, inter alia, purchase orders, sales records and invoices, see 8/28/20 Pl. Motion, and that Lens.com’s production of customer communications is “clearly incomplete,” id. at 3.

On August 31, 2020, Lens.com responded to the motion, protesting that, with “diligent efforts,” it had “produced the first set of documents on August 21, 2020 and completed this production by August 25, 2020.” Response to Motion (Aug. 31, 2020) (“8/31/20 Def. Response”) at 1-2, DE #280. And, while claiming that it now “had complied with the Court’s July 6 and August 18, 2020 Orders,” Lens.com protested that “Alcon has a much broader view of the Court’s Order.” Id. at 1-2. On the same day, Lens.com filed its own motion, this time requesting “clarification” of the Court’s orders that Alcon was seeking to enforce by way of contempt sanctions. See 8/31/20 Def. Clarif. Motion. On September 15, 2020, Lens.com supplemented its motion for clarification, citing its

recent production (on September 10, 2020) of “additional financial information,” including “two large spreadsheets detailing Lens.com’s total sales and quantity sold for each Alcon product from 2014-2019” and sales transaction data. See Notice by Lens.com (Sept. 15, 2020), DE #295. DISCUSSION I. Lens.com’s Inadequate Production of Sales Records, Purchase Orders, Supplier Invoices, and Related Communications

A. Transactional Records This Court’s rulings at the July 6th hearing clearly required Lens.com to produce, by August 6, 2020, all purchase orders and customer sales records of Alcon products, as well as supplier invoices relating to Alcon products, from 2014 to the present. In the August 18th M&O, the Court specifically rejected Lens.com’s request for reconsideration of that directive on account of Lens.com’s voluntary dismissal of its antitrust counterclaims, and reluctantly extended the deadline to August 21, 2020. The Court expressly found that the aforesaid records were “relevant to various affirmative defenses that remain in the case.” 8/18/20 M&O at 2. Nevertheless, instead of complying with the Court’s directive by producing all purchase

orders and customer sales records for any Alcon products from 2014 to present, Lens.com disclosed only a spreadsheet purporting to show orders, costs, and revenue for the four allegedly infringing products, and approximately 64 (purportedly randomly selected) exemplary invoices. See Declaration of Neal F. Burstyn (Aug. 28, 2020) (“8/28/20 Burstyn Decl.”) ¶¶ 8-9, 16-17, DE #278. Similarly, although this Court ordered Lens.com to produce all documents and communications regarding Lens.com’s purchase of and offers to purchase

Alcon contact lenses, concerning all of its suppliers of Alcon lenses, see Hearing Tr. at 42, 45- 46; see also RFP No. 4, DE #152-2, Lens.com concedes that it unilaterally limited its production of sales and purchase orders to “gray market” goods at issue in this case, and did not include “its suppliers in the U.S. who only source goods in the U.S.,” see Declaration of Mark Bettilyon (Aug. 31, 2020) (“Bettilyon Decl.”) ¶¶ 6, 7, 10, DE #280-1. In order to justify its deficient production, Lens.com has now sought to voluntarily dismiss or modify the affirmative defenses on which this Court relied in its August 18th M&O.

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Alcon Vision, LLC. v. Lens.com, Inc., (E.D.N.Y. 2020).

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