Novelty, Inc. v. Mountain View Marketing, Inc.

265 F.R.D. 370, 2009 U.S. Dist. LEXIS 98592, 2009 WL 3444591
CourtDistrict Court, S.D. Indiana
DecidedOctober 21, 2009
DocketNo. 1:07-cv-01229-SEB-JMS
StatusPublished
Cited by29 cases

This text of 265 F.R.D. 370 (Novelty, Inc. v. Mountain View Marketing, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Novelty, Inc. v. Mountain View Marketing, Inc., 265 F.R.D. 370, 2009 U.S. Dist. LEXIS 98592, 2009 WL 3444591 (S.D. Ind. 2009).

Opinion

ORDER

SARAH EVANS BARKER, District Judge.

Presently before the Court is Defendants’ Emergency Motion for Sanctions Pursuant to Federal Rule of Civil Procedure 37 and This Court’s Inherent Authority (the “Motion for Sanctions”). [Dkt. 165.]1

Background

In November 2007, Novelty filed a Complaint against its competitor, Defendant Mountain View Marketing, Inc., and that company’s parent, McLane Company, Inc. (collectively referred to as “Mountain View” unless otherwise noted). [Dkt. 1.] Novelty alleged that Mountain View was selling knock offs of three Novelty product designs that infringed upon Novelty’s copyright and trade dress. [See id. ¶ 11.]

By the time that Novelty filed its First Amended Complaint in October 2008, the number of designs at issue had increased to twenty-one. [Dkt. 96-2.] Later, in April 2009, Novelty filed its Second Amended Complaint, which dropped from its claims ten of those designs, leaving eleven at issue. [Dkt. 128.]

Concurrently with the filing of that Second Amended Complaint, Mountain View was granted leave to assert counterclaims for abuse of process, unfair competition, and Sherman Act claims against Novelty. [Dkt. 125.] Mountain View alleged that this entire litigation is baseless and harassing, especially with respect to those designs that Novelty initially brought into this litigation in the First Amended Complaint but dropped as part of the Second Amended Complaint.

As the magistrate judge has correctly noted, this case—almost from the very beginning—has been “riddled with discovery disputes.” [Dkt. 125 at 2.] In the month of February 2008 alone, the parties filed three separate discovery motions. [Dkt. 38, 42, 51.]2

[374]*374The parties’ most recent dispute involves failures by Novelty to timely and completely satisfy its obligations in response to several discovery requests and two discovery orders. The first discovery order was issued July 1, 2009. [Dkt. 155.] The second, on July 23, 2009, summarized proceedings at a hearing held the previous day. [Dkt. 177.] Together, those orders established due dates for Novelty’s comprehensive responses to Mountain View’s First Request for Production of Documents, to Mountain View’s Second Request for Production of Documents, and to Mountain View’s Third Set of Interrogatories (respectively, the “First RFP,” the “Second RFP, ” and the “Interrogatories”).

Discussion

“Courts have the power, and the responsibility, to advance the orderly and expeditious disposition of a case. When a party flouts a Court’s authority to do so, the Court may take action, under either its inherent powers or by virtue of the Federal Rules of Civil Procedure.” Corporate Express, Inc. v. U.S. Office Products Co., 2000 WL 1644494, *6 (N.D.Ill.2000) (quotation and citations omitted). The same is true with respect to “conduct [that] abuses the judicial process.” Chambers v. NASCO, Inc., 501 U.S. 32, 42 n. 8, 44-45, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (referencing both inherent authority and collecting provisions of the Federal Rules of Civil Procedure authorizing sanctions).

Mountain View first seeks to have sanctions imposed pursuant to the Court’s inherent authority. “Because of their very potency,” courts generally must exercise “restraint and discretion” before exercising their inherent powers to sanction parties—or their counsel—for misconduct. Chambers, 501 U.S. at 44-45, 111 S.Ct. 2123. However, the more serious the misconduct to be sanctioned, the more extensive the range of options available to the Court. See United States v. Johnson, 327 F.3d 554, 563 (7th Cir.2003) (“Generally, the harshest of sanctions based on inherent powers have been upheld only in situations involving bad faith, contumacy, or egregious misconduct. Conversely, misconduct that is merely questionable warrants a less severe sanction .... ” (citations omitted)). Punitive sanctions, such as an assessment of attorney’s fees, require a finding of willfulness or bad faith, as do sanctions against counsel. Maynard v. Ny-gren, 332 F.3d 462, 470-71 (7th Cir.2003). Remedial sanctions, however, do not require such a showing. See Johnson, 327 F.3d at 563 (affirming disgorgement of fees under inherent authority without finding of bad faith).

Mountain View also bases its requests for sanctions on Federal Rule of Civil Procedure 37(b)(2)(A), which authorizes sanctions when “a party ... fails to obey an order to provide or permit discovery.” Fed. R. Civ. Pro. 37(b)(2)(A). A sanction under Rule 37 requires a showing of “willfulness, bad faith, or fault.” Am. Nat’l Bank & Trust Co. v. Equitable Life Assur. Soc’y of the U.S., 406 F.3d 867, 878 (7th Cir.2005) (quotation omitted). For purposes of that section, “fault” concerns itself with “the reasonableness of the conduct—or lack thereof—which eventually culminated in the violation.” Marrocco v. General Motors Corp., 966 F.2d 220, 224 (7th Cir.1992). As with sanctions imposed pursuant to the Court’s inherent authority, Rule 37(b)(2) (A) sanctions must be “proportionate to the circumstances surrounding the failure to comply with discovery,” Crown Life Ins. Co. v. Craig, 995 F.2d 1376, 1382 (7th Cir.1993).

I. The Court’s July 1, 2009, Order:

As relevant here, the magistrate judge’s Order of July 1, 2009, required Novelty to do [375]*375three things: First, with respect to Mountain View’s First RFP, Novelty was directed to “produce all documents, not specifically objected to or logged as privileged, no later than July 3, 2009.” [Dkt. 155 at 2.] Second, with respect to Mountain View’s Second RFP, Novelty was ordered to “produce (or log as privileged)” “all documents responsive to Requests 38-42 [whose scope the magistrate judge had narrowed] ... no later than July 10, 2009.” [Id.] Third, also by July 10, 2009, Novelty was ordered to “serve its privilege log (one that meets Seventh Circuit standards)” for Mountain View’s Second RFP (except for documents responsive to Requests 46-51, which would be the subject of further briefing). [Id. at 3.]3

A. Novelty’s Responses to Mountain View’s Document Requests

Before going further, it is instructive to review a party’s obligations to respond to document requests in the absence of a discovery order.

1. Obligations When Responding to a Request for Production of Documents

Absent agreement of the parties or a court order,

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265 F.R.D. 370, 2009 U.S. Dist. LEXIS 98592, 2009 WL 3444591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/novelty-inc-v-mountain-view-marketing-inc-insd-2009.