United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Jeffrey T. Gilbert United States Magistrate Judge
matter is now before the Court on Plaintiffs Motion to Compel
Defendants' Production of Documents ("Plaintiffs
Motion"), [ECF No. 35], For the reasons stated below,
Plaintiffs Motion [ECF No. 35] is granted in part and denied
Maui Jim, Inc. ("Plaintiff) is a designer, manufacturer,
and provider of prescription and non-prescription sunglasses.
Plaintiffs Memorandum in Support of Its Motion to Compel
Defendants' Production of Documents ("Plaintiffs
Brief), [ECF No. 36], at 2. Plaintiff only distributes its
sunglasses to authorized retailers. Id., Each
authorized retailer must enter into a written agreement with
Plaintiff. See Complaint, [ECF No. 1], ¶ 27.
Among other things, the written agreement includes a
provision that prohibits an authorized retailer from selling
sunglasses purchased from Plaintiff to another entity that
intends to resell them. See id.¶ 32. Plaintiff
attempts to exercise tight control over its distribution
network so as to maintain the quality of its sunglasses,
selection, and customer service. See Id. ¶27.
SmartBuy Guru Enterprises, Motion Global Ltd.,
Smartbuyglasses Societa a Responsabilita Limitata, and
SmartBuyGlasses Optical Limited (collectively,
"Defendants") are online retailers of designer
eyewear. Defendants' Response to Plaintiffs' Motion
to Compel ("Defendants' Response"), [ECF No.
46], at 2. Defendants sell over 80, 000 products, including
prescription and non-prescription Maui Jim-branded
sunglasses. Id. at 3; Declaration of Doron
Kalinko ("Kalinko's Declaration"), [ECF No.
46-1], ¶¶ 4, 6. Defendants do not purchase products
directly from Plaintiff. Defendants' Response, [ECF No.
46], at 3; Kalinko's Declaration, [ECF No. 46-1], ¶
7; see also Plaintiffs Brief, [ECF No. 36], at 2;
Complaint, [ECF No. 1], ¶34. Instead, Defendants procure
Maui Jim-branded sunglasses from distributors and affiliates
that, according to Defendants, purchase the sunglasses from
Plaintiff. Defendants' Response, [ECF No. 46], at 3;
Kalinko's Declaration, [ECF No. 46-1], ¶ 7.
lawsuit, Plaintiff asserts claims arising out of
Defendants' marketing and selling of Maui Jim-branded
sunglasses. Complaint, [ECF No. 1], A detailed recitation of
Plaintiffs factual allegations is unnecessary at this point.
For now, it suffices to note that Plaintiff alleges the
following counts: Trademark Counterfeiting and Infringement
(Count I), Unfair Competition and False Advertising (Count
II), Trademark Dilution of Blurring and Tarnishment (Count
III), Copyright Infringement (Count IV), and Unfair
Competition (Count V). Id. ¶¶ 1, 71-107.
In their answer, Defendants assert 13 affirmative defenses,
including Waiver (Fourth Affirmative Defense), Exhaustion
(Fifth Affirmative Defense), and License (Tenth Affirmative
Defense). Defendants' Answer, Affirmative Defenses and
Counterclaim to Plaintiffs Complaint ("Defendants'
Answer"), [ECF No. 20], at 36-37. Defendants also allege
counterclaims for unfair competition, trade disparagement,
trademark misuse, unjust enrichment, and various forms of
declaratory relief. Id. ¶ 36 at p. 47-¶ 81
at p. 53.
March 24, 2017, Plaintiff served Defendants with Plaintiffs
First Set of Document Requests. Plaintiffs Brief, [ECF No.
36], at 2. Six requests matter for the Motion now before the
Court. Request Nos. 5 through 8 demand the production of
documents sufficient to show any person or entity that
supplies any Defendant with Maui Jim-branded sunglasses.
Defendants' Response to Plaintiffs First Set of Document
Requests, [ECF No. 36-1], at 3-4. Request Nos. 9 and 10
demand the production of documents relating or referring to
any Defendant's procurement of, or attempt to procure,
Maui Jim-branded sunglasses. Id. at 4-5. Defendants
have objected to these six requests and refused to produce
the requested documents. Id. at 3-5. Having reached
an impasse, Plaintiff filed the Motion to Compel that is now
before the Court. Plaintiffs Motion, [ECF No. 35]. In the
Motion, Plaintiff asks the Court to order Defendants to
produce the documents sought in Request Nos. 5 through 10 and
to pay Plaintiffs reasonable expenses incurred in filing the
Motion. Id. at 2.
Federal Rule of Civil Procedure 37(a), when a party does not
respond properly to a discovery request, the party that
issued the request may file a motion to compel a proper
response. Fed.R.Civ.P. 37(a); Vukadinovich v. Hanover
Cmty. Sch. Corp., 2014 WL 667830, at *4 (N.D. Ind. Feb.
20, 2014). The court then must independently determine the
proper course of discovery. John Wiley & Sons, Ltd.
v. McDonnell Boehnen Hulbert & Berghoff LLP, 2013 WL
505252, at *2 (N.D. Ill. Feb. 12, 2013). When doing so, the
court has significant discretion. Gile v. United
Airlines, Inc., 95 F.3d 492, 496 (7th Cir. 1996).
Ultimately, the party objecting to discovery bears the burden
to show the requested discovery is improper. Deere v. Am.
Water Works Co., 306 F.R.D. 208, 215 (S.D. Ind. 2015);
Dauska v. Green Bay Packaging Inc., 291 F.R.D. 251,
258 (E.D. Wis. 2013); JAB Distributors, LLC v. London
Luxury, LLC, 2010 WL 4008193, at *1 (N.D. Ill. Oct. 13,
argue they should not be required to produce any of the
documents Plaintiff is seeking. Defendants say the documents
are irrelevant to any claim or defense in this case. Even if
the documents are relevant, Defendants contend they should
not be required to produce them because they contain
confidential commercial information within the meaning of
Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure and
Plaintiff does not need the documents to prosecute its
claims. Defendants also say if the Court concludes some
discovery related to its supply chain is appropriate, then
the Court should prescribe a different discovery method
(i.e., not full document
production). Defendants propose two alternatives: warehouse
inspections of Defendants' inventory or in
camera review by the Court of "proof of
authenticity." In response, Plaintiff argues the
requested documents are relevant to Plaintiffs claims and to
three of Defendants' affirmative defenses. Plaintiff
maintains Defendants have not shown the requested documents
actually contain confidential commercial information.
Finally, Plaintiff asserts it needs the requested documents
to prosecute its claims and Defendants' proposed
alternatives to document production are inadequate because
they will not result in production of all the information
that is responsive to Plaintiffs discovery requests.
Rule 26(b)(1) of the Federal Rules of Civil Procedure,
parties "may obtain discovery of any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case." Fed.R.Civ.P.
26(b)(1). Defendants do not dispute that information about
their supply chain for Maui Jim-branded sunglasses is
relevant to the issue of whether those sunglasses are genuine
and authentic. Instead, Defendants contend Plaintiff has
not adequately alleged that Defendants are selling
non-genuine, counterfeit sunglasses. The Court disagrees.
According to Plaintiffs Complaint, Defendants obtain Maui-Jim
branded sunglasses from "unknown sources."
Complaint, [ECF No. 1], at ¶ 34. Plaintiff alleges the
nonprescription Maui Jim-branded sunglasses Defendants
acquire from these unknown sources are
"non-genuine" and the prescription Maui Jim-branded
sunglasses are "counterfeit" and "not
manufactured or otherwise authorized by Plaintiff."
See, e.g., Complaint, [ECF No. 1], at ¶¶
2, 42, 56. Plaintiff also alleges Defendants'
advertisements stating that their Maui Jim-branded sunglasses
are "approved and manufactured by Plaintiff, "
"genuine, " and "authentic" are false or
misleading. See, e.g., Id.¶¶ 3, 56.
Although Defendants argue discovery related to these
allegations should not be permitted because they are too
general and vague, Defendants have not moved to dismiss
Plaintiffs claims. Instead, Defendants answered the Complaint
and filed a counterclaim. As of now, these claims are a part
of this case and Plaintiff is entitled to discovery relevant
also have put the identity of their suppliers at issue
through their own pleadings. Three of Defendants'
affirmative defenses do as much. Defendants explicitly plead
that their license affirmative defense is "based on
agreements between Maui Jim and its past and present
customers and/or distributors." Defendants' Answer,
[ECF No. 20], at 37. Defendants assert an exhaustion (or
first sale doctrine) affirmative defense, which courts often
find opens the door to discovery about a defendant's
supply chain. Defendants' Answer, [ECF No. 20], at
36; Pendleton Woolen Mills, Inc. v. Kraff's Men's
Wear Co., 2014 WL 7777762, at *8 (D. Or. Nov. 21, 2014),
aff'd, 2015 WL 500846 (D. Or. Feb. 2, 2015)
("[T]hose district courts of this Circuit that have
considered the issue have found that, in consequence,
assertion of the first sale doctrine places supplier
information within the scope of discovery under Rule
26(b)(1)."); Adobe Sys. v. Kornrumpf, 2011 U.S.
Dist. LEXIS 80613, at *5 (N.D. Cal. July 25, 2011)
("Defendants have put their supplier information at
issue by invoking the first sale doctrine .,, .");
Bare Escentuals Beauty, Inc. v. Costco Wholesale
Corp., 2007 WL 4357672, at *3 (S.D. Cal. Dec. 11, 2007).
The same door is opened by Defendants assertion of a waiver
affirmative defense. Defendants' Answer, [ECF No. 20], at
36; Coach, Inc. v. Asia Pac. Trading Co., Inc., 2009
WL 10675238, at *1 (CD. Cal. Aug. 25, 2009); Bare
Escentuals Beauty, 2007 WL 4357672, at *3 ("I
don't know how [the defendant's waiver affirmative
defense] can be decided without understanding who the
supplier is to defendant.") (quoting a magistrate