ADIDAS AMERICA INC AG v. FASHION NOVA INC (2021)

ORDER ON MOTION TO COMPEL

The purpose of discovery is to provide a mechanism for making relevant information available to the litigants ․ Thus the spirit of the rules is violated when advocates attempt to use discovery tools as tactical weapons rather than to expose the facts and illuminate the issues ․

Burlington Northern & Santa Fe Ry. Co. v. U.S. Dist. Court for the District of Montana, 408 F.3d 1142, 1148-49 (9th Cir. 2005) (internal citations omitted). Nineteen hundred pages of briefing and exhibits regarding a motion to compel – especially given it is the fourth such motion in this case – is not merely a tactical weapon but constitutes the discovery equivalent of a weapon of mass destruction calculated to undermine the discovery process's legitimate purpose.

Background

Plaintiffs adidas America, Inc. (“adidas America”) and adidas AG (“adidas AG”) (collectively “adidas”) have sued Defendant Fashion Nova, Inc. (“Fashion Nova”) for trademark infringement. The litigation has been contentious ¹ and has required the court's intervention in discovery disputes on three previous occasions (Orders on Mots. Compel, ECF Nos. 99, 112; Minutes of Proceedings, ECF No. 125), and one award of attorney fees as a discovery sanction. (Scheduling Order, ECF No. 113). All tallied, those three motions collectively amounted to 1,927 pages of briefing, declarations, and exhibits.

Now a fourth motion to compel is before the court, this one filed by Fashion Nova (ECF No. 130), its third such motion. In the current motion, Fashion Nova asks for attorney fees, a request that prompted adidas in its response (ECF No. 139) to ask that it be awarded attorney fees as sanctions for Fashion Nova's filing of the current motion. Not surprisingly, Fashion Nova then filed a motion (ECF No. 141) to allow it to respond to adidas's request for attorney fees. All tallied, the submissions related to the new motion to compel collectively amount to 1,911 pages.

The parties’ instant dispute centers around a market survey study conducted at some point in 2002, referred to as the “Knight Study.” (Def.’s Mot. Compel at 3, ECF No. 130.) The Knight Study was conducted by then-adidas executive John Knight and current adidas executive Lee Kromminga. In November 2002, Knight circulated to adidas executives a two-page summary of the study's findings. (Id.)

On November 12, 2019, in its First Set of Requests for Production (“RFP”), Fashion Nova requested “all surveys, investigations, studies, market research, or similar documents ․ relating to adidas's three-stripe mark as used on apparel ․ from 2000 to the present.” (Id. at i-ii.) In a December 20, 2019 response, adidas America indicated it would produce “non-privileged, non-confidential surveys from the past five years pertaining to the Three-Stripe Mark on apparel.” (Id. at iii.) After a failed mediation, the parties re-engaged in discovery. On September 25, 2020, adidas produced the two-page Knight Study summary. (Pl. Resp. Mot. Compel at 4.) The parties engaged in numerous discussions about discovery issues, and adidas agreed to produce deposition transcripts from other lawsuits involving adidas apparel as well as some from footwear cases. (Decl. Charles H. Hooker at ¶ 30, ECF No. 140; Decl. Amanda Bryan Exs. E-I, ECF No. 135.)

In an amended response to Fashion Nova's first set of RFPs served on December 4, 2020, adidas America stated it would provide “responsive surveys from the past twenty years pertaining to the Three-Stripe Mark on apparel.” (Bryan Decl. Ex. A at 4, ECF No. 135-1 at 4.)

On July 7, 2021, Fashion Nova served its Second Set of Requests for Production (RFP Nos. 24-27), which for the first time specifically requested information about the 2002 Knight Study. (Pls. Resp. Mot. Compel at 6.) The parties jointly moved to extend deadlines, and the court set the following deadlines: fact discovery was to be completed by October 1, 2021; expert reports for the party bearing the burden of proof were due October 29, 2021; expert reports from the party not bearing the burden of proof were due December 3, 2021; rebuttal expert reports on any new issues raised by the party not bearing the burden of proof are due by January 7, 2022; expert discovery is to be completed by February 4, 2022. (Order, ECF No. 115.) The court also set a deadline of November 12, 2021, for the parties to complete depositions that already had been noticed. (Minute Order, ECF No. 122.)

On September 6, 2021, Fashion Nova deposed Lee Kromminga and extensively questioned him about the 2002 Knight Study. Following Kromminga's deposition, Fashion Nova's counsel believed that adidas had not adequately searched for documents relating to 2002 Knight Study and it asserted Kromminga had been deficiently prepared for his deposition. (Bryan Decl. Ex. K-L, ECF No. 135-1 at 60.) adidas's counsel, Charles H. Hooker III, related that on November 1, 2021, during a telephone phone call with Fashion Nova attorney Ken Davis, Davis told Hooker that the documents underlying the 2002 Knight Study existed in deposition files from the adidas v. Payless litigation. (Hooker Decl. ¶ 55.) Hooker further stated that Davis stated, based on his memory and his participation in the Payless litigation, that the documents could be found there. (Id.) Hooker represents that immediately after learning this information, he directed an electronic search and off-site physical search of the Payless files. (Id.)

On November 3, 2021, Fashion Nova deposed adidas executive Sara Vanderhoff and inquired about the 2002 Knight Study. Vanderhoff testified that other than the 2002 Knight Study, adidas conducted surveys only in connection with specific litigation. (Hooker Decl. Ex. 25, Vanderhoff Dep. at 23:2-21, ECF no. 140-25 at 6.) Vanderhoff further testified that Knight had been deposed in connection with the Payless litigation, but they did not have that transcript. (Id. at 41:16-23.) Vanderhoff testified that she was unsure whether adidas asked outside counsel to look for Knight's deposition transcript or other documents pertaining to the 2002 Knight Study. (Id. 54:14-19.)

On November 9, 2021, Davis asked adidas to expand its search to other footwear cases for documents relating the 2002 Knight Study, including Madden, Walmart, Nike, and Kmart, all cases in which Davis participated. (Hooker Decl. Ex. 2 (identifying Fashion Nova attorney Ken Davis as an attorney representing Payless, Steve Madden Ltd., TRB Acquisitions, and Kmart against actions by adidas).) On November 11 and 12, 2021, adidas produced 167 deposition transcripts and documents from those cases totaling nearly 4,000 pages, and seventeen VHS video tapes from the 2002 Knight Study.

On November 12, 2021, Fashion Nova filed this Motion to Compel. On November 16, 2021, Hooker offered to permit Fashion Nova to depose Kromminga for an additional two hours of 30(b)(6) testimony, which he believed would result in the Motion to Compel begin withdrawn because the parties were close to reaching an agreement. (Hooker Decl. Ex. 26, ECF No. 140-26.) The court asked the parties to confer regarding the matter. (Order, ECF NO. 137.) Hooker agreed to make Kromminga available for three hours and permit Fashion Nova to supplement its initial expert report to address the 2002 Knight Study, in exchange for withdrawing the instant motion to compel. (Hooker Decl. ¶ 73 & Ex. 28, ECF No. 140-28.)

In response, Fashion Nova asked that adidas search additional litigation files for documents, search files of two additional persons (Erich Stamminger and Paul Seline) and asked that the seventeen VHS video tapes be digitized, and declined Hooker's offer to depose Kromminga for three hours and to supplement its initial expert report. (Hooker Decl. ¶ 74.)

Legal Standards

Federal Rule of Civil Procedure 26(b)(1) provides that parties “may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” Fed. R. Civ. P. 26(b)(1). Courts construe Rule 26(b)(1) “broadly.” Roberts v. Legacy Meridian Park Hosp., Inc., 299 F.R.D. 669, 671 (D. Or. 2014). When a party fails to provide requested discovery that falls within the scope of Rule 26(b)(1), Rule 37(a)(1) allows the requesting party to “move for an order compelling disclosure or discovery.” Id. (quoting Fed. R. Civ. P. 37(a)(1)). The court also has discretion to limit the scope of discovery if “the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.” Fed. R. Civ. P. 26(b)(2)(C)(iii).

Federal Rule of Civil Procedure 37(b) “empowers the court to take remedial actions if a party ‘fails to obey an order to provide or permit discovery[.]’ ” Sali v. Corona Reg'l Med. Ctr., 884 F.3d 1218, 1222 (9th Cir. 2018) (quoting Fed. R. Civ. P. 37(b)(2)(A)). In the Ninth Circuit, discovery sanctions are appropriate only in “extreme circumstances” and where the discovery violation is “due to willfulness, bad faith, or fault of the party.” Fair Hous. of Marin v. Combs, 285 F.3d 899, 905 (9th Cir. 2002) (quoting United States v. Kahaluu Constr. Co., 857 F.2d 600, 603 (9th Cir. 1988)); see also Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (holding that a district court may assess attorney's fees as a discovery sanction when a party has “acted in bad faith, vexatiously, wantonly, or for oppressive reasons”) (citations and internal quotations marks omitted).

Discussion

In the instant motion, Fashion Nova asks the court to compel adidas to produce:

1. Documents responsive to Request for Production Nos. 4-7, 20, and 25-27 relating to a market survey conducted in 2002, and a follow up survey in 2005;

2. Permit Fashion Nova to depose adidas witness Lee Kromminga as a 30(b)(6) and fact witness for an additional eight (8) hours; and

3. Grant Fashion Nova leave to amend its expert report to account for any withheld evidence.

(Def.’s Mot. Compel at i, ECF No. 130 at 3.) Fashion Nova also asks the court to impose sanctions on adidas in the form of attorney fees for failing to produce the information sooner and for failing to adequately prepare Kromminga and Vanderhoff for their respective depositions. adidas responds that Fashion Nova's motion to compel should be denied as moot because they already have produced the documents, have agreed to a limited deposition of Mr. Kromminga, and have agreed to allow Fashion Nova to amend its initial expert report. In support of their respective motions and responses, the parties submitted over 1,900 pages of documents, including lengthy deposition transcripts and entire discovery requests.

Having carefully reviewed the parties’ lengthy submissions, the court concludes that Fashion Nova's motion concerning compelling production of documents is moot. adidas produced the requested documents on November 11 and 12, 2021. The parties’ collective briefing and voluminous documents reveal no evidence that adidas intentionally withheld information about the 2002 Knight Study. The parties do not dispute that adidas produced a two-page summary of the Study in September 2020 and that Fashion Nova waited until July 2021 – nearly ten months later – to serve its second set of RFPs in which it specifically identified the 2002 Knight Study. Clear too is that after Davis disclosed that he believed the information concerning 2002 Knight Study could be found in the Payless litigation, Hooker swiftly uncovered the documents Fashion Nova was seeking and produced them.

Hooker explains that he was not intimately involved in earlier adidas litigation in which the 2002 Knight Study was at issue. Fashion Nova offers no explanation for waiting ten months to target the 2002 Knight Study with its second set of RFPs. Further, Fashion Nova does not explain why Davis failed to recall that the 2002 Knight Study was at issue in Payless, Madden, Walmart, or Kmart litigation until November of 2021, fully two and one-half years after this lawsuit commenced.

The court sees little relevance to the resolution of the instant trademark infringement case of a nearly twenty-year-old study of consumers’ then-perspectives that significantly predates the infringing activity allegedly committed through Internet marketing and social media platforms. Indeed, the Supreme Court acknowledged last year the effect of the passage of time on trademark rights, consumer perceptions, and infringement, stating “liability for trademark infringement turns on marketplace realities that can change dramatically from year to year.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., ––– U.S. ––––, 140 S. Ct. 1589, 1596, 206 L.Ed.2d 893 (2020). Given this tenuous relevancy – which, the court notes, Fashion Nova's motion largely ignores in its drive to prove that adidas did not produce a document allegedly within the scope of one of its request – the resources the parties have devoted to the instant Motion to Compel and which they propose to devote should the motion be granted, are not “proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). Accordingly, Fashion Nova's Motion to Compel is denied.

Further, Fashion Nova has not demonstrated that additional producible documents are outstanding or that adidas acted willfully in failing to obtain documents earlier; thus, an award of fees against adidas is unwarranted. For adidas's part, the court concludes that it drew an unnecessarily narrow distinction between apparel and footwear litigation cases, thereby making an award of fees against Fashion Nova unwarranted as well. Accordingly, the parties’ respective requests for fees and costs relating to filing the instant motion to compel are denied. (See Defs.’ Mot. Compel at 10; Pl.’s Resp. Mot. Compel. at 11-12.)

Finally, the court denies Fashion Nova's request to depose Kromminga. Fashion Nova sought an additional eight hours for his deposition and adidas responded by offering Mr. Kromminga for an additional two or three hours, which would have been more than sufficient time to cover the limited area of the 2002 Knight Study. In light of the court's review of the lengthy submissions of the parties, however, the court concludes that no additional deposition of Kromminga is warranted and that request is denied. Likewise, Fashion Nova's request to amend its expert report also is denied. The expert discovery deadlines set forth previously remain in place and no amendments to the expert reports will be allowed.

Conclusion

Based on the foregoing, Defendant's Motion to Compel (ECF No. 130) is DENIED and Defendant's Notice of Request to Respond to Plaintiff's Request for Attorney Fees (ECF No. 141) is DENIED. Fact discovery is closed; no additional deposition of Kromminga is permitted; the previously set expert discovery deadlines remain in place; and no amendments of the expert reports will be permitted.

IT IS SO ORDERED.

FOOTNOTES

1.   The parties and their lawyers have impugned each other's integrity and ethics, and have freely fired adjectives and adverbs back-and-forth to accuse each other of making “numerous false representations,” “concealing important documents,” engaging in a “relentless” campaign of disparagement, committing “misconduct,” taking “unreasonable” positions, making “self-serving” arguments, offering “patently false” suggestions, and engaging in a “scorched-earth campaign” for documents, among the numerous other aspersions that litter the parties’ respective briefs.

ACOSTA, Magistrate Judge: