Nexxus Products Co. v. CVS New York, Inc.

188 F.R.D. 11, 1999 U.S. Dist. LEXIS 13526, 1999 WL 498051
District Court, D. Massachusetts·Decided July 8, 1999·No. No. CIV. A. 97-40197-PBS·Published·Cited by 5 cases

Opinion

ORDER ON DEFENDANTS’ MOTIONS TO COMPEL DISCOVERY, AND DEFENDANTS’ MOTION FOR SANCTIONS

ALEXANDER, United States Magistrate Judge.

Defendant Quality King Distributors, Inc. (“Quality King”) has moved to compel the following responses to discovery: (1) answer to interrogatory and production of documents from The Nexxus Products Company (“Nexxus”) in response to its first set of interrogatories and requests for production (Docket No. 37); (2) various answers to interrogatories and production of documents from each of the Plaintiffs in response to its second set of interrogatories and requests for production and third set of interrogatories (Docket No. 77); and (3) production of documents viewed by Quality King’s counsel at the Shakour facility in Westborough, Massachusetts, and designated for copying at that time (Docket No. 76). Quality King has also moved the Court to impose sanctions on the Plaintiffs pursuant to Fed.R.Civ.P. 37 & 26(g) for knowing failure to produce certain requested discovery. For the following reasons, Quality King’s Motion to Compel Discovery by the Nexxus Products Co. (Docket No. 37) is DENIED; its Second Motion to Compel Discovery Responses by the Plaintiffs (Docket No. 77) is ALLOWED in part and DENIED in part; its Motion to Compel Documents from Shakour (Docket No. 76) is DENIED; and its Motion for Sanctions (Docket No. 83) is DENIED.

I. Factual Background

Nexxus is a manufacturer and seller of hah care products. Nexxus alleges that it has a policy of selling its products exclusively to beauty salons, beauty schools, and hair care professionals. Nexxus avers that it does not permit its distributors to sell its products to retail stores, such as drug stores and department stores. Nexxus claims that Quality King has been obtaining Nexxus products and reselling the products to unauthorized retailers, such as CVS, who in turn market the products to its retail customers, a process known in the industry as “diversion.” 1 Nexxus also claims that Defendants have been defacing the coding labels on its hair care products. %

[14]*14Plaintiffs have raised five claims in their Second Amended Complaint (Docket No. 97)2: (1) trademark infringement under section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); (2) trademark dilution under the Federal Trademark Dilution Act, section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c); unfair trade practices under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); making false and misleading statements also in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and unfair and deceptive trade practices in violation of Mass. Gen. Laws ch. 93A. Defendants have raised the affirmative defenses of laches and estoppel, and have counterclaimed for abuse of process and for unfair trade practices under Mass. Gen. Laws ch. 93A.

Plaintiffs seek injunctive relief to enjoin the Defendants from engaging in their allegedly prohibited conduct. Plaintiffs also seek costs and attorneys fees for the violation of the Lanham Act, and costs and fees under 93A. Relevant to this Court’s evaluation of the pending discovery motions is the standard for obtaining a permanent injunction: (1) Plaintiffs must prevail on the merits; (2) Plaintiffs must show that in the absence of injunctive relief, they would suffer irreparable injury; (3) Plaintiffs must show that the harm to them would outweigh the harm the Defendants would suffer from the imposition of an injunction; and (4) Plaintiffs must show that the public interest would not be adversely affected by the issuance of an injunction. See A.W. Chesterton Co., Inc. v. Chesterton, 128 F.3d 1, 5 (1st Cir.1997) (citing Indian Motorcycle Assoc. III Ltd. Partnership v. Mass. Housing Fin. Agency, 66 F.3d 1246, 1249 (1st Cir.1995)).

A Brobdingnagian mass of discovery is involved in the instant disputes, and much of the tempest swirls around the issue of what constitutes the permissible scope of discovery in this litigation. Specifically, this Court must resolve the question of whether or not the Defendants may access materials relevant to determining if the Plaintiffs sustained any actual damages or suffered any demonstrable harm to reputation as a result of the Defendants’ alleged diversion of Nexxus products. As a general rule, a defendant is entitled to discover that which the plaintiff must prove to prevail on his or her claims. Similarly, parties are entitled to discover information relevant to a defendant’s defenses and counterclaims. Under Fed.R.Civ.P. 26(b), such information may be sought by parties regardless of its admissibility at trial if it appears reasonably calculated to lead to the discovery of admissible evidence. Accordingly, to accurately limn the scope of discovery, this Court must undertake a review of the elements of the parties’ claims and defenses.

II. The Scope of Discovery Does Not Include Discovery Related to Proving or Disproving the Existence of Actual Harm, to Plaintiffs

A. Trademark Infringement

To prevail on the trademark infringement claim, Plaintiffs must show that Nexxus has a valid, protectable mark, and that the Defendants’ use of the mark in commerce is likely to cause confusion among consumers. See 15 U.S.C. § 1114(l)(a).3 Trademark protection is a one trick pony-that is, trademark [15]*15rights are exhausted as to a given item on the first sale of that item. See J. McCarthy, McCarthy on Trademarks § 25.11[1] at 25-61 (3rd ed.1994). Therefore, as a general rule, trademark law does not apply to the resale of genuine goods bearing a true mark, even if the sale is without the mark owner’s consent. Matrix Essentials, Inc. v. Emporium Drug Mart, Inc., 988 F.2d 587, 590 (5th Cir.1993).

In the case of resale of damaged goods, however, “trademark infringement may occur if ‘there exists a material difference between the products sufficient to create a likelihood of consumer confusion.’” Matrix Essentials v. Cosmetic Gallery, 870 F.Supp. 1237, 1251 (D.N.J.1994) (citing John Paul Mitchell Sys. v. Pete-N-Larry’s Inc., 862 F.Supp. 1020, 1023 (W.D.N.Y.1994)); see also Societe Des Produits Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d 633

Free access — add to your briefcase to read the full text and ask questions with AI

Nexxus Products Co. v. CVS New York, Inc., 188 F.R.D. 11, 1999 U.S. Dist. LEXIS 13526, 1999 WL 498051 (D. Mass. 1999).

188 F.R.D. 11 (Nexxus Products Co. v. CVS New York, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Minarik Elec. Co. v. Electro Sales Co., Inc.
223 F. Supp. 2d 334 (D. Massachusetts, 2002)
Montblanc-Simplo GMBH v. Staples, Inc.
172 F. Supp. 2d 231 (D. Massachusetts, 2001)
Westchester Media Co. v. PRL USA Holdings, Inc.
103 F. Supp. 2d 935 (S.D. Texas, 1999)