Mon Ros Int’l. for General Trading & Contracting, W.L.L. v. Anesthesia USA, Inc., No. 17 C 7365, Slip Op. (N.D. Ill. Jan. 8, 2019) (Castillo, C.J.). Chief Judge Castillo granted in part plaintiff Mon Ros’ contempt motion in this Lanham Act trademark case involving Mon Ros’ ANESTHESIA marks for use with contact lenses. The Court … Continue Reading
Kroto Inc. v. Chapa, No. 17 C 1218, Slip Op. (N.D. Ill. Jun. 22, 2017) (Der-Yeghiayan, J.). Judge Der-Yeghiayan granted defendants’ motion to dismiss for lack of personal jurisdiction, but denied defendants’ motion for sanctions in this declaratory judgment copyright case. The only link plaintiff Kroto established between defendants and Illinois was the sending of … Continue Reading
Peerless Indus., Inc. v. Crimson AV, LLC, No. 11 C 1768, Slip Op. (N.D. Ill. May 8, 2013) (Cox, Mag. J.). Judge Cox granted defendants’ (collectively “Crimson”) motion to compel answers to Fed. R. Civ. P. 30(b)(6) deposition questions and for sanctions in this trade secret dispute. Crimson’s Rule 30(b)(6) deposition notice included a topic … Continue Reading
Digital Design Corp. v. Kostan, No. 11 C 6243, Slip Op. (N.D. Ill. Dec. 7, 2012) (Holderman, C.J.). Judge Holderman denied without prejudice plaintiff’s motion for sanctions based upon alleged spoliation of evidence in this copyright case involving InVision software. Defendant acknowledged deletion of a copy of the InVision software from his harddrive which allegedly … Continue Reading
Brown-Younger v. Lulu.com, No. 12 C 1979, Slip Op. (N.D. Ill. June 12, 2012) (Shadur, Sen. J.). Judge Shadur ordered that pro se plaintiff’s counsel be terminated and that counsel respond to plaintiff’s motion for sanctions to the extent it related to him. The Court reasoned that the plaintiff’s sanctions motion evidenced a desire to … Continue Reading
Sloan Valve Co. v. Zurn Indus., Inc., No. 10 C 204, Slip Op. (N.D. Ill. Apr. 12, 2012) (St. Eve, J.). Judge St. Eve granted in part plaintiff Sloan’s motion to strike defendant Zurn’s “late asserted” invalidity defense, to compel discovery and for sanctions in this patent case involving dual mode flush valves. Worn Zurn … Continue Reading
Woltmann v. Chicago Gridiron, LLC, No. 11 C 5994, Min. Order. (N.D. Ill. May 3, 2012) (Norgle, J.). Judge Norgle denied plaintiff’s sanctions motion in this copyright case. The motion was based upon alleged conduct underlying an earlier motion to compel discovery that plaintiff lost before Magistrate Judge Ashman. But plaintiff did not file a … Continue Reading
Millennium TGA, Inc. v. Doe, No. 10 C 5603, Slip Op. (N.D. Ill. Aug. 24, 2011) (Manning, J.).
Judge Manning held in abeyance Doe defendant's motion to quash a subpoena issued to its alleged internet service provider and Doe's motion to dismiss the case for lack of personal jurisdiction. Plaintiff Millennium TGA reasoned that the subpoenaed information would allow it to show that Doe's actions were directed at Illinois and within the Courts' jurisdiction.
The Court was "troubled" by Millennium TGA's claims that it needed jurisdictional discovery, as opposed to discovery only seeking Doe's identity. Millennium TGA already filed a complaint alleging jurisdiction upon information and belief. The Court, therefore, ordered Millennium TGA to file a brief detailing how the information it sought was necessary. And the Court held the motions in abeyance pending that brief. The Court also warned Millennium TGA that it would initiate sanctions proceedings if Millennium TGA had not met its Fed. R. Civ. P 11 obligations.
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Irrevocable Trust of Anthony J. Antonious v. Tour Edge Golf Manufacturing, Inc., No. 10 C 5552, Slip Op. (N.D. Ill. Apr. 17, 2011) (Kennelly, J.).
Judge Kennelly sanctioned two counsel, Silverman and Daghighian, for false statements made in Silverman's pro hac vice application which was filed by Daghighian in this patent case. Daghighian prepared and filed Silverman's application, without his consent or review, based upon prior applications the two had filed in other courts. In doing so, Daghighian stated for Silverman that he had never been suspended from practice and that he had not been held in contempt. The Court later learned that both statements were false. The Court noted that it would likely have granted Silverman's application had he explained the two instances that should have been identified, but despite that the misstatements were material.
The Court ordered that: 1) Silverman provide a copy of the Court's opinion to his state disciplinary authority; 2) Silverman pay a $5,000 fine to the Clerk to be put into the pro bono fund; and 3) Silverman was barred from seeking pro hac vice admission to the Northern District for three years without prior permission from the Court's Executive Committee. Silverman received the more severe sanctions of the two because he was significantly more experienced and because he failed to take personal responsibility in the declaration he provided the Court.
Daghighian received lesser sanctions because he had only been practicing five years and, while his violations were more egregious in some ways, he took responsibility for his actions in his declaration. The Court ordered that: 1) Daghighian provide a copy of the Court's opinion to his state disciplinary authority, but suggested that the authorities consider the mitigating factors the Court noted in rendering its decision; 2) Daghighian pay a $1,000 fine to the Clerk to be put into the pro bono fund; and 3) Daghighian's appearance and pro hac vice application were not stricken.
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Rosenthal Collins Group, LLC v. Trading Techs. Int'l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. June 1, 2011) (Coleman, J.).
Judge Coleman denied plaintiff Rosenthal Collins Group's ("RCG") motion to reconsider or clarify the Court's February 23, 2011 Order entering defendants judgment in favor of declaratory judgment defendant Trading Technologies ("TT") and sanctioning RCG $1 million. While the discovery misconduct - which the Court described as "attempted fraud" - related to invalidity, it was appropriate to enter default judgment as to infringement because TT's infringement case would have been "futile" if the "fabricated" evidence had been successfully used to invalidate the patents. Furthermore, RCG should not be allowed to benefit from the thwarting of its misconduct.
Finally, the Court's sanctions were not criminal, they were made pursuant to Fed. R. Civ. P. 37 and the Court's inherent powers.
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Optics Plantet, Inc. v. OpticSale, Inc., No. 09 C 7934, Slip Op. (N.D. Ill. Mar. 7, 2011) (Shadur, Sen. J.).
Judge Shadur denied defendants' (collectively "AKYR") motion to delay the contempt proceedings against it in this Lanham Act case. AKYR had failed to post a court ordered disclaimer for about eight months, and the Seventh Circuit denied AKYR mandamus relief. The Court, therefore, ordered that the parties appear to quantify the fee-shifting required to address AKYR's delay pursuant to 28 U.S.C. § 1927, and to discuss whether additional sanctions where warranted.
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DSM Desotech, Inc. v. 3D Sys. Corp., No. 08 C 1531, Slip Op. (N.D. Ill. Jan. 12, 2011) (Nolan, Mag. J.)
Judge Nolan granted in part defendant 3D System's motion to compel further Fed. R. Civ. P. 30(b)(6) testimony from plaintiff DSM Desotech ("DSM") in this patent dispute regarding 3D Systems Zephyr recoater. First, the Court held that the rules, responsibilities and dates of prosecution counsel's involvement was neither privileged, nor work product. Similarly, whether prosecution counsel was aware of the Zephyr recoater during prosecution was not privileged.
The Court held that a Local Rule 83.51.10 screen of DSM's former counsel, which had moved to a firm representing 3D Systems, did not prevent DSM from contacting its counsel to determine what they knew about the Zephyr recoater at the relevant time. Local Rule 83.51.10 does literally require that plaintiff have no contact "for or against" 3D Systems. But that reading is inconsistent with the purposes of the Rule.
Desotech was not required to gather information from a company it acquired, for the period before the acquisition. Pre-acquisition knowledge would not be imputed to the acquiring entity, DSM in this case. The Court also held that the fact that 3D Systems could or had gathered the requested information from other witnesses or documents did not relieve DSM of its duty to provide Rule 30(b)(6) testimony.
Finally, the Court denied both parties' requests for sanctions because there was room for reasonable disagreement between the parties.
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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Feb. 23, 2011) (Coleman, J.).*
Judge Coleman granted defendant/counter-plaintiff Trading Technologies' ("TT") motion for evidentiary sanctions and default judgment. Judge Moran previously dismissed plaintiff/counter-defendant Rosenthal Collins Group's ("RCG") motion for summary judgment regarding the alleged prior art Buist trading program for discovery abuse, ordered RCG to produce additional documents and things related to the Buist program, and ordered RCG to pay certain of TT's attorney's -- click here for the Blog's post on that decision. Initially, the Court the severity of a default judgment as a sanction, calling it "extreme," and noted that the Seventh Circuit required a showing of willfulness, bad faith or fault by a preponderance of the evidence in order to justify dismissing a case.
The Court held that the high standard was met in this case, for at least the following reasons:
During his deposition, Buist admitted modifying and overwriting source code in 2006 that he and by extension RCG held out as having been created in 1998 or 1999. And in the face of clear evidence of these facts, RCG continued to deny them, even calling the claims "libelous," "audacious," and "Oliver Stone-esque."
Buist later admitted "wiping" or erasing six of seven zip disks that originally contained the relevant source code and that were later produced by RCG because they allegedly contained the code. The seventh was also wiped, although there was a dispute regarding whether Buist or others had access to it when it was wiped. But the Court held that it was "impossible to believe that it is merely coincidence that the seventh disk happened to be wiped on May 2, 2006, which just happened to be the same day that TT was scheduled to inspect it."
There was evidence that "virtually every piece of media ordered produced by the Court in May 2007 and July 2008 was wiped, altered, or destroyed after those orders were entered . . . ." (emphasis in original).
Even if RCG and its counsel had no knowledge of the destruction of the evidence, the destruction might have been avoided if RCG had timely complied with the Court's orders to produce the materials. And regardless, RCG and its counsel should have preserved the evidence by taking custody of it.
Buist was RCG's agent and, therefore, RCG was bound by Buist's behavior and actions.
Based upon these determinations, the Court found clear and convincing evidence that "RCG, and its counsel, acted in bad faith and with willful disregard for the rules of discovery and this Court's orders." And because a monetary sanction alone was not sufficient, the Court entered a default judgment in favor of TT and dismissed RCG's complaint and struck its defenses to TT's counterclaim. The Court also fined RCG $1,000,000 for "egregious conduct before the Court" and ordered RCG's counsel to pay TT the attorney's fees and costs related to TT's motion for default judgment.
* I have a few earlier opinions from the Trading Technologies cases, but this one was significant enough that I moved it up. Click here for more on the case in the Blog's archives.
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DH Holdings, LLC v. MeridianLink. Inc., No. 10 C 2351, Slip Op. (N.D. Ill. Aug. 23, 2010) (Kennelly, J.).
Judge Kennelly denied defendant MeridianLink's motion for sanctions pursuant to Fed. R. Civ. P. 11, § 1927 and the Court's inherent powers. Plaintiff DH Holdings originally filed its Northern District patent infringement case in 2008, and Judge Norgle entered a default against MeridianLink when it failed to answer the complaint. MeridianLink later got the judgment overturned for improper service in the Central District of California, and then filed a declaratory judgment action in that district. DH Holdings responded by filing the instant case and simultaneously asking Judge Norgle to reopen the 2008 case. MeridianLink claimed that DH Holding unnecessarily multiplied the litigation by seeking to reopen the 2008 case and filing the instant case. But the Court held that DH Holding simply took prudent actions to maintain the status quo. DH Holding could not be certain that its original case would be reopened. So, filing a new case was a reasonable precaution.
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Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, Slip Op. (N.D. Ill. Nov. 8, 2010) (Denlow, Mag. J.).
Judge Denlow granted in part defendant Lear's motion for sanctions in this patent case regarding universal garage door openers. Plaintiff Johnson Controls ("JCI") received an anonymous email from someone calling themselves "Kova Kova," offering documents regarding Lear's development of the accused garage door opener. JCI questioned the anonymous emailer as to the confidentiality and ethical obligations that might surround the offered documents. But despite not receiving a direct answer, JCI eventually met with Kova Kova and received emailed documents from Kova Kova. JCI, however, testified that it never opened the documents, sent as email attachments. JCI also suggested by email that it would consider offering Kova Kova an engineering position and tuition reimbursement, but in a later email made clear it would not pay Kova Kova for testimony or documents, although it would retain Kova Kova counsel.
While JCI's offers of a job and tuition were close, they were not a bribe. Chamberlain never explicitly offered any remuneration for testimony or documents. And immediately after mentioning an engineering position and tuition, JCI sent an email making clear that it would not pay for testimony or documents. JCI did, however, violate its duties by waiting more than nine months to produce Kova Kova's emails and documents. While that violation did not warrant dismissing the case as Lear requested, it did warrant exclusion of any evidence from or related to Kova Kova, including his testimony, and JCI's payment of Lear's attorney's fees related to the motion.
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GZ Gourmet Food & Beverages v. Radioactive Energy of Ill., No. 07 C 7110, Slip Op. (N.D. Ill. Aug. 31, 2010) (Dow, J.).
Judge Dow granted plaintiff's counsel's motion to withdraw contingent upon counsel serving plaintiff with the Order by certified mail. Plaintiff had not responded to counsel in several months and was several months overdue in responding to discovery requests. The Court denied defendant's motion for sanctions based upon that delay. Instead, the Court offered plaintiff one additional opportunity to hire substitute counsel and begin prosecuting its case. The Court warned that corporate entities cannot appear pro se in federal court. The Court also warned that failure to retain counsel and appear at the next status could result in sanctions up to dismissal of plaintiff's case.
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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 95 C 4088, Slip Op. (N.D. Ill. Jun. 29, 2010) (Kim, Mag. J.).
Judge Kim granted declaratory judgment defendant Trading Technologies ("TT") approximately $290,000 of $375,000 requested in fees and costs pursuant to Fed. R. Civ. P. 37(b)(2) in this patent case.* On March 14, 2007, the Court held that declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") summary judgment motion was "misleading," "disingenuous" and "prematurely filed" - click here to read more about the opinion in the Blog's archives. The Court, therefore, found RCG's conduct sanctionable, struck the motion without prejudice, struck the supporting Buist declaration, and ordered RCG to pay costs for TT's software consultants, and attorney's fees and costs related to the sanction motion.
On July 17, 2008, the Court denied RCG's motion to vacate the sanction order and again ordered RCG to pay: 1) TT's consultant; 2) TT's deposition of the Buists; and 3) TT's prosecution of the sanctions motions. The Court also ordered the parties to comply with Local Rule 54.3 by trying to come to agreement on the issues.
Initially, the Court observed that "contentiousness and obvious material distrust" demonstrated by both sides had "leached" into the parties briefing. The Court awarded TT the full amount of its expert fees and costs because those fees and costs were specifically awarded by Judge Moran and because TT showed that all of the expert's work was impacted by or resulted from the misconduct. Those fees were approximately $52,000.
The Court also awarded TT's attorney's fees and costs of approximately $157,000 related to the depositions of the experts at issue. The only reduction was for a series of identical, cryptic time entries for "preparation of Buist witness kit". The court could not determine whether the fees were justified. The Court awarded TT its actual costs, instead of limiting the costs to the Fed. R. Civ. P. 54(d) limits because this sanction award was pursuant to Fed. R. Civ. P. 37 and, therefore, was not limited by Rule 54(d). The Court finally awarded $86,000 in fees and costs related to TT's sanctions motion. The Court generally found TT's fees and expenses reasonable, with limited exceptions. The Court limited fees for writing a "simple" two-page motion to two hours. The Court also deleted approximately $11,000 in apparently duplicative time entries.
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Square D Co. v. Elec. Soln's, Inc., No. 07 C 6294, Slip Op. (N.D. Ill., Jul. 22, 2008) (Moran, Sen. J.).
Judge Moran granted plaintiffs' motion to reopen discovery and compel production of certain documents, but tabled plaintiff's motion for sanctions. Plaintiffs alleged that defendants were selling counterfeit electrical products using plaintiffs' trademarks. The parties entered an agreed preliminary injunction pursuant to which defendant agreed not to sell any products with plaintiffs' trademarks, and to plaintiffs' inspection of defendants' inventory on or before February 29, 2008, unless the parties agreed to a later date.
When plaintiffs performed their inspection in April 2008, defendants had almost no inventory, had continued to sell trademarked products, and had few sales records. Defendants countered that they believed they were free to continue selling after February 29 because no injunctions had occurred as of that date. The Court ordered production of sales and other documents, and withheld judgment on sanctions for any violation of the preliminary injunction.
Practice Tip: When agreeing to an injunction, or any joint document, make sure the language is clear as to the parties' obligations and that the parties agree on them.
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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 17, 2008) (Moran, Sen. J.).
Judge Moran denied declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") motion to vacate the Court's March 14, 2007 order awarding declaratory judgment defendant Trading Technologies' ("TT") Fed. R. Civ. P. 37 sanctions - click here to read the Blog's post about that opinion and click here to read much more about this case and the related cases. In that earlier order, the Court held that RCG's motion for summary judgment of invalidity was "somewhat misleading" and possibly "disingenuous." Instead of dismissing the case as TT requested, the Court struck the declaration underlying RCG's motion, denied RCG's summary judgment motion with leave to refile a motion "supported by proper evidence" and awarded TT its costs and attorneys fees associated with the Rule 37 motion, as well as its software expert's fees.
In this motion, RCG argued that the Court should vacate that sanctions order because the Court held that TT had not proved by clear and convincing evidence that RCG acted willfully or with bad faith. But the Court held that Rule 37 sanctions could be based upon willfulness, bad faith or fault. Fault went to the reasonableness of the party's content, not necessarily intent. And the Court held that RCG's actions met the standard for fault. Furthermore, while clear and convincing was the burden of proof for dismissal, clear and convincing proof is not required for lesser sanctions.
Finally, the Court held that the categories of fees and costs sought by TT were within the scope of the Court's order, but ordered the parties to brief the reasonableness of the specific fees sought by TT, using the Local Rule 54.3 requirements (a rule usually used for post-judgment fees and costs).
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Angel Sales Inc. v. Hollywood Gadgets Inc., No. 07 C 1362, Min. Order (N.D. Ill. Nov. 19, 2007) (Denlow, Mag. J.).
Judge Denlow sanctioned defendant in the amount of plaintiff's attorney's fees and costs for preparation and attendance at a settlement conference before the Court. Defendant's counsel attended the conference, but defendant did not appear. In a subsequent order, the Court entered a sanctions award of $1,710 based upon plaintiff's fee affidavit.
There is not much to say about this opinion, but I included it as a practice tip and a cautionary tale. Parties often do not want to personally attend settlement conferences before judges, or they attempt to send a representative without full settlement authority. But that is a perilous choice. It can result in sanctions, as here, and, at the least, it usually harms the chances of settlement. The opposing party that took the time to be at the conference is generally offended that its time was wasted.
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Chicago Architecture Foundation v. Domain Magic LLC, No. 07 C 764, Slip Op. (N.D.Ill. October 12, 2007) (Norgle, J.).
Judge Norgle denied defendant's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Although defendant was a Florida corporation, defendant's website - www.chicagoarchitecturefoundation.com - played upon plaintiff Chicago Architecture Foundation's ("CAF") name and only included links to other Chicago businesses. The Court, therefore, held that defendant's website targeted the Northern District creating general personal jurisdiction.
Additionally, as a Fed. R. Civ. P. 37 sanction for failing to answer interrogatory responses as the Court ordered, the Court held that defendant generated revenue from the use of CAF's trademark.
Practice tip: Answer discovery requests on time and, if you cannot for some reason, at least answer them by the Court ordered deadline.
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Rosenthal Collins Group, LLC v. Trading Techs. Int’l, Inc., No. 05 C 4088, 2007 WL 844610 (N.D. Ill. Mar. 14, 2007) (Moran, Sen. J.).* Judge Moran denied in part and granted in part declaratory judgment defendant Trading Technologies’ ("TT") Rule 37 motion for sanctions. The Court held that declaratory judgment plaintiff Rosenthal Collins Group’s ("RCG") motion … Continue Reading
Ropak Corp. v. Plastican, Inc., No. 04 C 5422, 2007 WL 328880 (N.D. Ill. Jan. 30, 2007) (Valdez, Mag. J.). Magistrate Judge Valdez awarded plaintiff certain of its fees related to motions to compel based upon the Court’s August 15, 2006, order imposing Rule 37 discovery sanctions. The Court noted its "considerable discretion" before reducing the … Continue Reading