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Guantanamera Cigar Co. v. Corporacion Habanos

August 18, 2009


The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge,


Before the Court at this time are defendant's Motion to Preclude, to Compel, and for Sanctions [19], plaintiff's Motion for Leave to Amend the Complaint and to Modify the Scheduling Order [25], defendant's Motion for Protective Order and to Quash [30,31], and defendant's Motion to Enlarge the Time for Completing Expert Disclosures [44]. Since all of these motions deal with the unnecessarily adversarial and litigious discovery process in this case, the Court will treat them together in one opinion. Upon consideration of the above motions and responsive filings, the applicable law and the record herein, for the reasons set forth below, all of the motions will be GRANTED.

I. Background

This case comes before the Court following a denial by the Trademark Trial and Appeal Board ("TTAB") of plaintiff Guantanamera Cigar Company's application for a U. S. trademark on February 29, 2008. Defendant Corporacion Habanos, S.A. had opposed the application, and the TTAB found plaintiff's Guantanamera mark geographically deceptively misdescriptive. 86 U.S.P.Q.2d 1473, 1479 (T.T.A.B. 2008). Plaintiff brought a civil action and appeal of the TTAB decision in this Court shortly thereafter, and the ensuing year of litigation has been marred by a significant lack of cooperation between the parties in the discovery process.

Plaintiff's initial disclosures, the first subject of contention, contained categories of potential witnesses, with no names or addresses, that could contain thousands of possible persons or companies. (Def.'s Mot. to Preclude Ex. B at 2-3.) In its production of documents, plaintiff purported to narrow these categories by providing industry lists of thousands of cigar retailers and distributors. (Pl.'s Resp. Ex. D-E.) Plaintiff further identified, in Responses to Interrogatories on December 4, 2008, fifty-six potential witnesses that represented some, but not all, of the persons in the previously disclosed categories.*fn1 (Def.'s Mot. Ex. E at 2-8.) Defendant moves to preclude plaintiff from using any witnesses from those large categories because of plaintiff's failure to adhere to the reasonable inquiry and specificity requirements of the Federal Rules. Defendant also moves to compel responses to various interrogatories and document requests which plaintiff failed to respond to even after the entry of a Protective Order it requested. (Def.'s Mot. 5.)

Concurrent with its response to defendant's Motion to Preclude-wherein plaintiff consented to respond to most interrogatories and urged against preclusion since discovery had not yet closed at that time-plaintiff filed a Motion for Leave to Amend the Complaint and to Modify the Scheduling Order. Back in February of this year, upon learning that defendant Habanos had begun advertising its brand of Guantanamera cigars in the U.S., plaintiff filed a separate suit in the Southern District of Florida for trademark infringement and unfair competition.*fn2 (Pl.'s Mot. 5.) Plaintiff now seeks to amend its complaint to consolidate these two actions, to flesh out its appeal of the TTAB decision with new law, and to modify the scheduling order to account for discovery on these new issues. Defendant consents to the amendment, but urges the court to stay discovery on the new claims until after dispositive motions have been filed and decided as to the TTAB appeal. (Def.'s Mem. in Resp. 6.) The discovery process has started in the Southern District of Florida case, with motions pending. (Notice re Status of Action [41].)

Finally, the most recent motion before the Court is defendant's Motion for Protective Order and to Quash Deposition Subpoena of Opposing Counsel Debra Evenson. Ms. Evenson is an attorney in defense counsel's law firm and has worked closely on defendant's case in the TTAB proceeding and this action. (Def.'s Mot. 3.) Plaintiff seeks to depose her about her relationship with defendant's expert Flora Gonzales and about her expertise on the Cuban legal system. (Pl.'s Opp'n passim.)

II. Amending the Complaint and Modifying the Scheduling Order

This Court "should freely give leave [to amend a complaint] when justice so requires." Fed. R. Civ. P. 15(a)(2). Though the Court remains puzzled as to why plaintiff did not seek leave to amend in this Court back in February, instead of filing a separate action, this peculiar error in judgment does not negate the consent of defendant and the obvious efficiency of having all related claims litigated in one forum. And though the Court agrees with defendant that "there is plainly no need for Plaintiff to amend its complaint to make legal arguments addressing [the In re Spirits Int'l, N.V.] decision" (Def.'s Mem. in Resp. n.2), there is just as plainly no reason to forbid plaintiff from fleshing out its claims in light of the Court's decision to allow amendment. Thus, the Court will allow plaintiff to file its Second Amended Complaint.

The Court will also amend the Scheduling Order as requested by plaintiff, utilizing the dates contained in plaintiff's motion at page 9, pursuant to Fed. R. Civ. P. 16(b). In light of the Court's decision regarding defendant's Motion to Preclude, detailed below, discovery will have to be extended anyway*fn3 , making the proposed dates appropriate. As to the scope of additional discovery, the Court agrees with defendant that it would make more sense to stay discovery on the trademark infringement issues until after dispositive motions have been filed as to whether plaintiff has a valid trademark. "To prevail on a claim of trademark infringement in the D.C. Circuit, 'the plaintiff must show (1) that it owns a valid trademark . . ." Globalaw Ltd. v. Carmon & Carmon Law Office, 452 F. Supp. 2d 1, 26-27 (D.D.C. 2006) (emphasis added). However, because additional discovery on the matters in the Original Complaint will likely follow the issuance of this opinion due to the Court's rulings on the Motion to Preclude, efficiency requires that the matters in the Second Amended Complaint be addressed at the same time. The 15 deponents from plaintiff's Initial Disclosures would have to be re-noticed later in the proceedings if plaintiff's claims survive dispositive motions, so fairness requires that all possible questions be asked of those 15 deponents at one time, for their sake. Thus, the Court will allow discovery on the claims of trademark infringement and unfair competition contained in the Second Amended Complaint. All additional discovery, however, with the exception of the discovery compelled or contemplated in the Court's ruling on the Motion to Preclude, shall be limited to the issues of infringement, unfair competition and dilution. Plaintiff will not be allowed to continue belated discovery on the issue of geographic misdescriptiveness.*fn4 The parties will also file, within 15 days of the issuance of this opinion, motions regarding the dispute in the Southern District of Florida over the depositions of Augusto Lopez, Eva Maria Lopez, and Oliver Spirits & Liqueurs, Inc. so that this Court may determine whether those depositions shall be permitted in this case.

III. Motion to Preclude, Compel and for Sanctions

a. Initial Disclosures

Rule 26(a)(1) requires parties to provide initial disclosures which include "the name and, if known, the address and telephone number of each individual likely to have discoverable information - along with the subjects of that information - that the disclosing party may use to support its claims or defenses . . ." Fed. R. Civ. P. 26(a)(1)(A)(i). Rule 26(g) requires that all signed disclosures be based on "belief formed after a reasonable inquiry." Fed. R. Civ. P. 26(g)(1). Likewise, "a party is not excused from making its disclosures because it has not fully investigated the case . . ." Fed. R. Civ. P. 26(a)(1)(E). The 1993 Advisory Committee Notes make it clear that the purpose of these disclosures is to "assist other parties in deciding which depositions will actually be needed." When a party provides evasive or incomplete disclosures- treated as a failure to disclose under Rule 37(a)(4)-a party may move to compel further disclosures and for sanctions under Rule 37(a)(3)(A), and a court may preclude the use of any witnesses not identified in initial disclosures, under Rule 37(c)(1).

Clearly, plaintiff's initial disclosures of persons it may use to support its claims were evasive and entirely out of touch with the spirit of the Federal Rules. By no stretch of the imagination can it be said that plaintiff made those disclosures after a reasonable inquiry, nor did defendant at any time in the discovery process have enough information to know which depositions would actually be needed. Plaintiff argues that in its Responses to Interrogatories it narrowed its list of potential witnesses to 56, and that with five months of discovery remaining defendant could have deposed all of them. (Pl.'s Resp. 12-13.) However, those responses clearly indicated that the 56 names provided constituted some, but not all of the potential witnesses plaintiff might use. See fn. 1, supra. Without assurances from plaintiff that it would limit itself to those 56 witnesses, and unable to predict this Court's ruling on these matters, defendant would have been foolish to proceed with ...

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