Magistrate Judge Recommends Default Judgment Against Defendants For Wide-Scale Discovery Misconduct
In Abbott Laboratories, et al. v. Adelphia Supply USA, et al., No. 15-CV-5826(CBA)(LB) (E.D.N.Y May 2, 2019), a New York Magistrate Judge recommended that Plaintiff’s motion for case ending sanctions be granted on the grounds that Defendants’ course of conduct presented “a cautionary tale about how not to conduct discovery in federal court.”
The underlying case centered around trademark and trade dress infringement, unfair competition, trademark dilution and other claims associated with the sales of Plaintiff’s products in the US.
In recommending that a default judgment be entered against Defendants, the Magistrate Judge highlighted the following discovery abuses:
- The documents originally produced by Defendants were printed “in hard copy, scanning them all together, and producing them as a single, 1941-page PDF file”;
- Defendants used search terms it knew wouldn’t turn up results (“such as ‘International’ and ‘FreeStyle,’ despite Defendant’s own internal system using item numbers and abbreviations such as ‘INT’ and ‘INTE’ for International and ‘FRL’ and ‘FSL’ for Freestyle”) and specifically removed other damaging documents while providing numerous false excuses for such omissions.
- The testimony from Defendants’ general manager regarding the discovery shortcomings was “clearly inconsistent if not perjured from his deposition” and the testimony from Defendants’ corporate representative was “clearly perjured.”
- “[Defendants] would have gotten away” with its fraud if not for Plaintiff being allowed to seize Defendants computers as part of a related counterfeiting case, which allowed Plaintiffs to discovery numerous documents that Defendants had tried to conceal.
In discussing its reasoning, the Court stated that Defendants “only complied with the court’s orders and their discovery obligations when their backs were against the wall” and that “there was no longer an escape from responsibility for their bad faith conduct…but for being caught in a web of irrefutable evidence, [Defendants] would have profited from their misconduct.”
Further, the Magistrate Judge added that Defendants’ dishonest conduct was part of a “calculated pattern of pervasive misconduct that started early on and continued even after Defendants were caught red-handed.”
As such, the Court recommended that Plaintiff’s motion for sanctions be granted and a default judgment be issued against Defendants, adding that the Defendants “committed a fraud upon this court, and that the highest sanction is warranted.”