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Peerless Industries, Inc. v. Crimson Av

June 27, 2012

PEERLESS INDUSTRIES, INC. PLAINTIFF,
v.
CRIMSON AV, LLC; AND E. COX VLADIMIR GLEYZER DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Susan

Judge Joan H. Lefkow

MEMORANDUM OPINION AND ORDER

Susan E. Cox, Magistrate Judge

Plaintiff Peerless Industries, Inc. ("plaintiff") sued defendants Crimson AV, LLC and its Managing Director Vladimir Gleyzer ("defendants") in part for patent infringement and design patent infringement arising out of defendants' manufacture and sale of certain TV mounts. Plaintiff has filed a renewed motion for sanctions because of defendants' failure to comply with three of the Court's previous orders on the production of discovery. Plaintiff now asks that the Court issue an order requiring defendants to: produce all documents within fourteen days; bear plaintiff's cost of attorneys' fees for this motion, a prior motion for sanctions, and a prior motion to compel, and; provide a witness pursuant to Federal Rule of Civil Procedure 30(b)(6) to testify about defendants' document production and to bear the reasonable costs of that deposition. Plaintiff also requests that the Court enter a finding of fact that defendants copied plaintiff's drawings and to find defendants in contempt, warranting a per diem fine until production is complete.

For the reasons stated, we grant the motion in that defendants must product all documents by July 11, 2012 and must bear the costs of the three motions. The motion is denied, however, as to plaintiff's requests relating to the 30(b)(6) witness, the drawings, and the per diem fine.

I. FACTUAL BACKGROUND

Unless otherwise stated, the following facts are from plaintiff's Third Amended Complaint.*fn1 Plaintiff and defendants are competitors in the television mount industry. Plaintiff sells certain television mounts with distinctive arm and tilt bracket designs that are protected by patent. As part of the manufacture of these mounts, plaintiff signed a contract to purchase equipment manufactured by Sycamore Manufacturing Co., Ltd. ("Sycamore"), a company based in China.

To assist Sycamore in the manufacture of the mounts, plaintiff supplied Sycamore with proprietary information and equipment. On March 29, 2010, plaintiff terminated its contract with Sycamore. Plaintiff now alleges that after termination Sycamore failed to return the proprietary information. Two months after termination, defendant Crimson AV was formed and hired defendant Gleyzer, a former executive for plaintiff. Two months after that, Sycamore began shipping mounting equipment to defendants, who in turn began producing television mounts.

Plaintiff now alleges that Crimson AV, with help from Mr. Gleyzer and Sycamore, based its TV mount designs on plaintiff's confidential designs and drawings. Plaintiff asserts that it cannot provide any direct evidence of its own to prove these allegations but, rather, must rely on documents controlled by defendants, such as the defendants' detail and assembly drawings. Plaintiff alleges that an analysis of these drawings' sources, along with a comparison of the drawings to plaintiff's own designs and drawings, is the only way for it to provide direct evidence of this facet of its allegations.

II. PROCEDURAL HISTORY

On August 9, 2011, the district court referred this case for discovery supervision and a settlement conference.*fn2 On September 15, 2011, the Court held a discovery conference and ordered that all electronic discovery be produced in Tagged Image Format or Portable Document Format with an accompanying load file containing the metadata and searchable text.*fn3 The Court also ordered defendants to image and preserve defendant Gleyzer's computer.*fn4 At the conference, the Court asked the parties to brief the issue of whether or not Sycamore's documents were within defendants' control.*fn5 After considering both positions, the Court concluded that Sycamore's documents were within defendants' control.*fn6

On January 23, 2012, plaintiff filed a motion to compel as a result of defendants' failure to respond to plaintiff's third set of requests for document production.*fn7 On January 26, 2012, the parties agreed before the Court that defendants would produce the documents in question by February 15, 2012.*fn8 On February 15, defendants produced 5,000 pages worth of documents.*fn9 But several aspects of plaintiff's document request were missing from this production, such as email attachments and the sender and recipient information of the emails.*fn10

Consequently, on March 5, 2012, plaintiff filed a motion for sanctions. On March 13, 2012, the Court granted the motion in part and denied it in part.*fn11 The Court ordered defendants to produce a complete set of documents by March 27, 2012, but denied the motion for sanctions without prejudice so that a subsequent sanctions motion, should it be necessary, could include attorneys' fees for that motion as well.*fn12 By March 27, defendants had provided more than a thousand pages of documents. Plaintiff, however, alleges that production was still incomplete.*fn13

On April 30, 2012, plaintiff filed a renewed motion for sanctions.*fn14 According to plaintiff, defendants had produced documents that did not contain any of Sycamore's files, any of defendant Gleyzer's personal files, complete detail and assembly drawings, complete metadata, or any files pertaining to ...


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