Crossfit, Inc. v. National Strength and Conditioning Association

Filing 176

ORDER Granting In Part and Denying In Part Motion for Sanctions (ECF Nos. 150, 162). Given the Court's ruling regarding the instant Sanctions Motion, and that the issues presented in the Supplemental Motion overlap those presented in the ins tant Sanctions Motion, the Court denies as moot the 174 Supplemental Motion. It is ordered that the Court grants Plaintiff's sanctions Motion as set forth above and denies without prejudice Plaintiff's Sanctions Motion regarding terminating sanctions. All specified deadlines shall be calculated from the date on which this Order is electronically docketed. Signed by Judge Janis L. Sammartino on 5/26/2017. (dxj)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 11 CROSSFIT, INC., a Delaware corporation, 14 15 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SANCTIONS Plaintiff, 12 13 Case No.: 14cv1191 JLS (KSC) v. (ECF Nos. 150, 162) NATIONAL STRENGTH AND CONDITIONING ASSOCIATION, a Colorado corporation, Defendant. 16 17 18 Presently before the Court is Plaintiff CrossFit, Inc.’s Motion for Terminating 19 Sanctions, or in the Alternative Issue, Evidentiary, and Monetary Sanctions (“Sanctions 20 Mot.”). (ECF Nos. 150, 162.) Also before the Court is Defendant National Strength and 21 Conditioning Association’s (“NSCA”) Opposition to (“Opp’n”), (ECF No. 156), and 22 Plaintiff’s Reply in Support of (“Reply”), (ECF No. 170), Plaintiff’s Sanctions Motion. 23 After considering the Parties’ arguments and the law, as well as carefully examining all 24 exhibits attached to the moving papers, the Court rules as follows.1 25 26 27 28 1 Plaintiff has also filed an Ex Parte Motion for Leave to File a Supplemental Motion in Support of Pending Motion for Terminating Sanctions Based on Recently Discovered Additional Discovery Misconduct (“Supplemental Mot.”). (ECF No. 174.) However, given the Court’s ruling regarding the instant Sanctions Motion, and that the issues presented in the Supplemental Motion overlap those presented in the instant Sanctions Motion, the Court DENIES AS MOOT the Supplemental Motion. 1 14cv1191 JLS (KSC) 1 2 BACKGROUND I. Factual Background 3 CrossFit is a relatively recent entrant in the arena of fitness and personal training. 4 (See Order Granting CrossFit Inc.’s Partial MSJ and Granting in Part and Den. in Part Nat’l 5 Strength and Condit. Ass’n’s MSJ (“MSJ Order”) 2, ECF No. 121.) By contrast, NSCA is 6 a nonprofit corporation that has been around for nearly half a century and is “dedicated to 7 the educational and professional exchange of ideas in the areas of strength development, 8 athletic performance, and fitness.” (See id.) Both CrossFit and the NSCA generate revenue 9 by credentialing and certifying trainers through their various programs. (Id.) NSCA also 10 disseminates publications through its “flagship journal,” the Journal of Strength and 11 Conditioning Research (“JSCR”). (Id.) 12 CrossFit contends that its popularity poses “an existential threat to the NSCA” 13 because as “more and more people move from the NSCA’s traditional fitness model to 14 CrossFit training . . . there will be fewer and fewer trainers seeking NSCA certifications.” 15 (Id.) In particular, CrossFit argues that in a specific study (the “Devor Study”) the NSCA 16 published false data regarding CrossFit participants’ injury rates. (Id. at 3.) This Court 17 previously concluded that the data were, as a matter of law, false. (See generally id.) 18 CrossFit further contends that the NSCA’s use of such false data was no accident—instead, 19 CrossFit alleges that the NSCA had a commercial motive to publish these false data, both 20 to harm CrossFit’s market share and continued growth, and to bolster the NSCA’s case for 21 heightened government regulation regarding the fitness industry that might preclude 22 CrossFit from continuing its certification programs and fitness centers in their current 23 forms. (See id. at 2–8; Sanctions Mot. 1–4.) 24 For the NSCA’s part, it denies any commercial motive, or that it even competes with 25 CrossFit. (See Answer to Compl. ¶ 27, ECF No. 27; see also Sanctions Mot. Ex. S. (NSCA 26 counsel noting that NSCA’s representative “testified that the NSCA has not had internal or 27 external communication regarding CrossFit’s training regimen . . . , has not made any 28 efforts to limit the growth of CrossFit certification or the proliferation of CrossFit, and . . . 2 14cv1191 JLS (KSC) 1 does not compete with CrossFit”).) Additionally, the NSCA notes that “nine months after 2 receiving the participant declarations” proving the Devor Study’s injury data were false, 3 the NSCA issued an Erratum addressing the false injury data. (Sanctions Mot. 5.) CrossFit, 4 however, maintains that the NSCA had a commercial motive to disparage CrossFit, that 5 the NSCA views CrossFit as a competitor, and further “contends the Erratum was 6 misleading” because it “still falsely suggested that two participants were injured during the 7 study.” (Id.) CrossFit has amended its complaint to add a cause of action to redress “the 8 additional harm stemming from the misleading nature of the Erratum and the NSCA’s 9 failure to issue a full retraction.” (Id.) “The NSCA has indicated that it intends to attack 10 CrossFit’s damages theories by arguing that the Erratum mitigated any damages and that 11 CrossFit was responsible for the widespread distribution of the false data.” (Id. at 3.) 12 II. Procedural Background 13 After several years of litigation in this federal action, the NSCA filed a separate suit 14 in state court against CrossFit alleging trade libel, defamation, and unfair business 15 practices. (Id. at 5–6.) The subject matter of this action and the state-court action largely 16 “directly overlap” such that discovery in both actions encompasses many of the same 17 issues; indeed, the parties agreed to a state-court “protective order mirroring the protective 18 order in this case.” (Id.) 19 After a contentious discovery period and only weeks prior to several pretrial 20 deadlines in this action, CrossFit received discovery from the state-court action that 21 appeared to either directly respond to discovery propounded in this action or contradict 22 assertions NSCA deponents had made in this action. (Id. at 6.) CrossFit then deposed Nick 23 Clayton—the NSCA’s “Education Coordinator”—in the state-court case, (id.), at which 24 time Mr. Clayton admitted that several of the statements in his federal-action declaration, 25 submitted under penalty of perjury, were false. (Sanctions Mot. Ex. I, 80:7–83:4, ECF No. 26 163-3, at 18–21.) Given this new information, CrossFit then “ran several controlled 27 searches in the state-court production” which “yielded hundreds of documents material to 28 the issues in this action and that the NSCA should have produced in response to CrossFit’s 3 14cv1191 JLS (KSC) 1 discovery requests in this case.” (Id. at 6.) Although the documents are too numerous to 2 comprehensively catalog, examples of withheld discovery are: 3  Documents that affirmatively demonstrate Mr. Clayton’s perjury. Specifically, 4 Mr. Clayton attended a CrossFit “Level 1” certification and testified in this action 5 that he did so only for his own personal interest and that he did not share the 6 documents regarding the certification with anyone at the NSCA. (Id. Ex. I.) 7 However, the withheld state-produced documents reveal (1) that Mr. Clayton 8 shared his certification-created documents—which he titled “Competitive 9 Analysis”—with many members of NSCA leadership, (id. Ex. H; see also Ex. 10 AV (Clayton email specifying: “Attached is my evaluation of the CrossFit Level 11 1 Course. I was not sure what format it needed to be in; consider this draft 1. I’ll 12 make revisions as needed” (emphasis added))); (2) that Mr. Clayton and NSCA 13 leadership focused specifically on the CrossFit certificate and its wording as 14 compared to the NSCA’s certificates, (id. Ex. K; see also Ex. J); and (3) that the 15 NSCA in fact paid for Mr. Clayton to attend the CrossFit certification after Mr. 16 Clayton submitted a detailed “Project Proposal” noting that CrossFit “is quite 17 possibly the hottest trend in training and conditioning,” (id. Ex. L); 18  A 2013 “Executive Summary” prepared for an NSCA Board of Director’s 19 “strategic planning retreat.” The Executive Summary notes that “the greatest 20 challenge facing the NSCA” is “[c]ompeting organizations and third-party fitness 21 programs, including CrossFit” and that “[t]he long overdue modernization of 22 military training protocols will leave a vacuum of expertise that if the NSCA 23 doesn’t pro-actively get involved in, some idiotic organization like CrossFit 24 will.” (Id. Ex. C.); 25  An email from the NSCA’s Media Relations Manager to many high-ranking 26 NSCA officers. The email was issued several days after the NSCA published the 27 Erratum and notes that “the point of confusion on the erratum is mostly based on 28 the two people mentioned who stated injury/medical condition for not 4 14cv1191 JLS (KSC) 1 completing.” (Id. Ex. M.) It continues: “Because we did not clarify that the injury 2 and medical condition were not associated with their workouts at the club people 3 are assuming that they were.” (Id.); 4  Several emails and internal NSCA documents titled, for example, “More CrossFit 5 Media,” that tracked media coverage of the Devor Study or the Erratum and 6 updated various NSCA team members on the same. (E.g., id. Exs. D, N.); 7  An email in which an NSCA director told a member of the United States Air 8 Force, who was considering NSCA certifications in regards to “establishing a . . . 9 standard for the training of fitness professional in the Air Force,” that “CrossFit 10 is not included in [NSCA’s] competitor analysis as it is neither accredited nor 11 was it designed to directly meet the needs of military personnel . . . .” (Reply Ex. 12 CB.); 13  Several NSCA emails discussing state legislative efforts to more tightly regulate 14 the fitness profession and corresponding certifications, including an email 15 summarizing a presentation for the NSCA’s Board of Directors and noting that 16 the Board “is fully on board . . . and is leaning toward taking a more proactive 17 role in legislation (. . . by proxy [through an advocacy organization]).” (E.g., 18 Sanctions Mot. Exs. AM, AN.); 19  A document cataloging “Request” numbers and “File Title[s][,]” in which the 20 NSCA’s certification director wrote that a document where “CrossFit” 21 certifications were mentioned was “THE JOB ANALYSIS REPORT 22 INFORMATION THAT THE NSCA CERTIFICATIONS ARE BUILT FROM 23 (CORE BUSINESS) AND IS CONFIDENTIAL AND PROPRIATORY [sic] 24 INFORMATION THAT IS CRITICAL TO THE SUCCESS OF OUR 25 CERTIFICATION PROGRAM – THIS REPORT AND FULL INFORMATION 26 SHOULD NOT BE SHARED WITH ANYONE.” (Id. Ex. A (capitalization in 27 original).) 28 /// 5 14cv1191 JLS (KSC) 1 Given that pretrial proceedings were only several weeks away at the time CrossFit 2 discovered these documents, CrossFit simultaneously moved to continue the pretrial 3 proceedings and for sanctions against the NSCA. (ECF Nos. 150, 153.) Given the gravity 4 and uncertainty of the discovery misconduct, the Court continued the pretrial proceedings. 5 (ECF No. 155.) The Court now addresses the pending Sanctions Motion. 6 LEGAL STANDARD 7 “Federal Rule of Civil Procedure 37 authorizes the district court, in its discretion, to 8 impose a wide range of sanctions when a party fails to comply with the rules of discovery 9 or with court orders enforcing those rules.” Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 10 585, 589 (9th Cir. 1983). Additionally, district courts have inherent power to “impose 11 sanctions including, where appropriate, default or dismissal.” Thompson v. Hous. Auth. of 12 City of L.A., 782 F.2d 829, 831 (9th Cir. 1986) (citing Link v. Wabash R.R. Co., 370 U.S. 13 626 (1961)). However, because dismissal is such a severe remedy it should be imposed 14 only in extreme circumstances, and “only where the violation is ‘due to willfulness, bad 15 faith, or fault of the party.’ ” In re Exxon Valdez, 102 F.3d 429, 432 (9th Cir. 1996). To 16 guide its discretion, “a district court should consider a five-part test, with three subparts to 17 the fifth part, to determine whether a case-dispositive sanction” is appropriate. Conn. Gen. 18 Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1096 (9th Cir. 2007). These 19 factors are: 20 21 22 23 24 (1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions. The sub-parts of the fifth factor are whether the court has considered lesser sanctions, whether it tried them, and whether it warned the recalcitrant party about the possibility of case-dispositive sanctions. 25 26 Id. (footnotes removed). However, “[t]his ‘test’ is not mechanical. It provides the district 27 court with a way to think about what to do, not a set of conditions precedent for sanctions 28 or a script that the district court must follow . . . .” Id. 6 14cv1191 JLS (KSC) 1 ANALYSIS 2 In the present case, Plaintiff moves for (1) terminating sanctions or, in the 3 alternative, (2) issue, evidentiary, and monetary sanctions. (See generally Sanctions Mot.; 4 Reply.) Defendants have submitted an eleven-page Opposition with five-and-a-half pages 5 of background, four pages in part opposing terminating sanctions and in part again 6 summarizing relevant background, and a single paragraph opposing issue, evidentiary, and 7 monetary sanctions. (See generally Opp’n.) Because an award of terminating sanctions 8 would render Plaintiff’s request for additional sanctions largely moot, the Court first 9 addresses terminating sanctions. 10 I. Terminating Sanctions 11 Plaintiff argues that the five factors weigh heavily in favor of terminating sanctions. 12 Defendant opposes by first arguing that the NSCA cannot make the threshold showing of 13 willfulness, bad faith, or fault on behalf of the NSCA, in part due to the varying scope of 14 discovery between the two actions, (Opp’n 6–9), and in part due to the return of an 15 employee not previously available during the federal court action and because “the 16 availability of a new computer operating system” made “a wider range of documents . . . 17 accessible” in the state-court discovery. Defendant next argues that the NSCA would be 18 irreparably prejudiced by dismissal, and that CrossFit is not truly prejudiced because the 19 NSCA “has agreed to CrossFit utilizing the documents produced in the state court in the 20 federal action[,]” the NSCA has agreed to allow CrossFit to take additional depositions, 21 and the relevant pretrial dates are continued sufficiently to allow CrossFit time to 22 adequately prepare for trial. (Id. at 9–10.) In its Reply, CrossFit points out the numerous 23 issues the NSCA’s Opposition did not address, and therefore tacitly concedes, as well as 24 arguing that the Opposition “offers hearsay-based excuses that . . . are belied by common 25 sense and the NSCA’s own conduct.” (See generally Reply.) The Court agrees with 26 Plaintiff. 27 As an initial matter, the Court agrees with Plaintiff that there is ample evidence of 28 willfulness, bad faith, or fault. To start, the NSCA produced Mr. Clayton’s “Competitive 7 14cv1191 JLS (KSC) 1 Analysis” document in the federal litigation, (Reply Ex. F), but never produced the recently 2 discovered documents detailing the NSCA’s planning, funding, and receipt of the 3 Competitive Analysis. And Mr. Clayton expressly admitted in his state-court deposition 4 that he lied in his federal deposition. (Sanctions Mot. Ex. I.) Defendant does not once 5 address this, let alone mention it, in its Opposition. (See generally Opp’n.) Next, one of the 6 NSCA’s 30(b)(6) witnesses—Keith Cinea—stated that the NSCA was not concerned that 7 the Erratum was misleading, (Reply Ex. CX), and, because the Erratum is a foundational 8 component of CrossFit’s damages calculations and claims, CrossFit requested all 9 documents “referring or relating to the Erratum[,]” (Sanctions Mot. Ex. W). However, 10 Defendant never produced in the federal action multiple documents referencing the 11 Erratum, including one email sent by the NSCA marketing team only several days after the 12 Erratum was issued and pointing out that many people were confused by the Erratum’s 13 implication that two people were injured by CrossFit when, in fact, they were not. (Id. Ex. 14 M.) Again, the Opposition nowhere addresses or even mentions these startling federal- 15 discovery omissions. (See generally Opp’n.) Additionally, a foundational component of 16 the NSCA’s case is that it did not view CrossFit as a competitor and therefore had no 17 commercial incentive to take any action against CrossFit. (See, e.g., Answer to Compl. ¶ 27 18 (denying that NSCA competes with CrossFit.) But numerous previously undisclosed 19 documents indicate exactly the opposite. (E.g., Sanctions Mot. Ex. C; Reply Ex. CB.) 20 Unfortunately, the Court could go on. But the Court does not need to. There is plainly 21 sufficient evidence to find willfulness, bad faith, or fault on the part of the NSCA in 22 withholding the recently discovered documents and in lying under oath in the federal 23 proceedings. See Henry v. Gill Indus., Inc., 983 F.2d 943, 947–48 (9th Cir. 1993). 24 Furthermore, nearly every factor weighs in favor of imposing terminating sanctions. 25 First, the public’s interest in expeditious resolution of litigation would be served. Not only 26 are significantly more hours of the Parties’ and the Court’s time now going to be devoted 27 to this matter solely due to Defendant’s misconduct, but the sheer breadth of the 28 misconduct means that terminating the case would essentially be a cleaner and more 8 14cv1191 JLS (KSC) 1 expedient disposal given the high number of issue and evidentiary sanctions the Court will 2 award. Second, the court’s need to manage its dockets counsels in favor of termination, 3 especially given the tremendous resources this case has already taken away from other, 4 deserving litigants, and the numerous discovery issues already presented and continuing to 5 be presented to Magistrate Judge Karen S. Crawford for resolution. Third, although the risk 6 of prejudice to the party seeking sanctions does not here weigh as heavily in favor of 7 terminating sanctions, it nonetheless weighs slightly in favor of terminating sanctions given 8 the sheer breadth of misconduct and Defendant’s refusal to accept responsibility for the 9 same.2 Plaintiff should rightly wonder whether documents have been—or will now be— 10 destroyed. See Valley Engineers Inc. v. Elec. Eng’g Co., 158 F.3d 1051, 1058 (9th Cir. 11 1998) (“Considering how Electric Engineering acted regarding the Carroll memorandum, 12 it was a reasonable inference that if there was other discoverable material harmful to its 13 case that its adversaries did not know about, it would be hidden forever.”). Fourth, the 14 public policy favoring disposition of cases on their merits, although usually weighing 15 against terminating sanctions, slightly weighs in favor of terminating sanctions in the 16 present case. Specifically, “[t]here is no point to a lawsuit . . . if it merely applies law to 17 lies[,]” id., and here, it is only largely by luck that Plaintiff discovered this expansive 18 catalog of highly relevant documents mere weeks before pretrial deadlines came due. 19 This brings the Court to the fifth and final factor: the availability of less drastic 20 sanctions. The sub-parts of the fifth factor are whether the court has considered lesser 21 sanctions, whether it tried them, and whether it warned the recalcitrant party about the 22 23 24 25 26 27 28 As one example, NSCA’s Corporate Counsel—Keith Cinea—declares in support of Defendant’s Opposition that: 2 At the time I conducted the search for documents as part of the federal action, the NSCA’s operating system consisted of Windows 7. The NSCA upgraded its operating system to Windows 10 sometime between the discovery in the federal and state cases. The search in the state case utilized Windows 10. My understanding is that utilizing the Windows 10 system may have resulted in more expansive search capabilities. (Cinea Decl. ¶ 8.) 9 14cv1191 JLS (KSC) 1 possibility of case-dispositive sanctions. In the present case, this factor therefore weighs 2 slightly against terminating sanctions, but only because all of Defendant’s misconduct was 3 discovered in one moment, almost immediately prior to the relevant pretrial deadlines. But 4 see Hester v. Vision Airlines, Inc., 687 F.3d 1162, 1170 (9th Cir. 2012) (“[I]t is appropriate 5 [for a district court] to reject lesser sanctions where the court anticipates continued 6 deceptive misconduct.” (second alteration in original) (quoting Computer Task Grp., Inc. 7 v. Brotby, 364 F.3d 1112, 1116–17 (9th Cir. 2004))). 8 After weighing all of the factors—and considering that they are merely a guide, 9 rather than a set way of analyzing terminating sanctions—the Court concludes that it is 10 well within its discretion to award terminating sanctions. However, the Court nonetheless 11 declines to do so at this time. In particular, the issue and evidentiary sanctions the Court 12 ultimately awards, infra Part II, significantly narrow the issues remaining for trial, and 13 there is currently no indication that the NSCA has actually destroyed evidence. And, 14 indeed, “[w]hat is most critical for case-dispositive sanctions, regarding risk of prejudice 15 and of less drastic sanctions, is whether the discovery violations ‘threaten to interfere with 16 the rightful decision of the case.’ ” Valley Eng’rs Inc., 158 F.3d at 1057. 17 However, in addition to the issue and evidentiary sanctions the Court awards in the 18 next Section, the Court agrees with Plaintiff that Defendant has made no assurances that it 19 has now produced all relevant documents. And even if Defendant had made such an 20 assurance, there would be little reason to believe such an assertion. Accordingly, the Court 21 awards the following Sanctions to address these valid concerns: 22 23 (1) Plaintiff SHALL commission a neutral forensic analysis of the NSCA’s servers and Defendant SHALL pay all costs relating to such forensic analysis; 24 (2) Defendant SHALL within fourteen days, under penalty of perjury, acquire 25 declarations from all relevant NSCA personnel either (a) assuring or reaffirming 26 that no documents relevant to this litigation have been destroyed or (b) admitting 27 to any destruction; 28 10 14cv1191 JLS (KSC) 1 (3) If at the conclusion of the neutral forensic evaluation it appears that documents 2 have been destroyed, or that the discovery misconduct is substantially greater 3 than the scope of which Plaintiff is currently aware, Plaintiff is GRANTED 4 LEAVE TO RENEW its Motion for Terminating Sanctions and present the 5 newly discovered evidence; and 6 (4) Defendant SHALL LODGE within fourteen days a copy of the document 7 referenced in Plaintiff’s Sanction Motion Exhibit A so that the Court may conduct 8 an in camera review of the document. Additionally, Plaintiff SHALL 9 PROVIDE a copy of this Order to the neutral forensic analyst so that she may 10 search for other instances of the document referenced in Exhibit A—or its 11 deletion—and any surrounding context.3 12 II. Issue, Evidentiary, and Monetary Sanctions 13 CrossFit supplies a list of thirty potential issue and adverse inference sanctions. 14 (Sanctions Mot. Ex. AW.) The NSCA opposes in a single paragraph, seemingly arguing 15 that once CrossFit uncovered the discovery misconduct the NSCA engaged with CrossFit 16 in several meet and confers and agreed to certain aspects of the relief CrossFit requested. 17 (Opp’n 10.) However, these several meet-and-confer efforts do not alter the Court’s 18 previous conclusion that it would be a valid exercise of the Court’s discretion to dispose of 19 the case in its entirety. That same analysis here counsels in favor of awarding CrossFit 20 issue and adverse inference sanctions as follows: 21 (1) 22 It is taken as established that the NSCA had a commercial motivation for making the false statement in the Devor Study. 23 24 25 26 27 28 Defendant alleges that the comment next to the responsive yet unproduced email—“THIS REPORT AND FULL INFORMATION SHOULD NOT BE SHARED WITH ANYONE[,]” (Sanctions Mot. Ex. A)—was merely an “advisement[] to legal counsel as to the nature of such documents . . . so it could be determined whether such documents are privileged or not discoverable.” (Opp’n 9.) Plaintiff counters that: “This plainly responsive report has yet to be produced in either the instant action or State Court Action, and the Opp[’n] does not address whether it was even provided to counsel in the federal matter. Equally revealing, the NSCA does not provide a declaration from [the party who created the document], but rather filters hearsay, once again, through [NSCA corporate counsel] Cinea.” (Reply 9 (emphasis original).) 3 11 14cv1191 JLS (KSC) 1 (2) 2 It is taken as established that the NSCA and CrossFit are in commercial competition. 3 (3) It is taken as established that the NSCA made the false statement in the Devor 4 Study with the intention of disparaging CrossFit and thereby driving 5 consumers to the NSCA. 6 (4) 7 It is taken as established that the NSCA was aware of the misleading nature of the Erratum. 8 (5) 9 It is taken as established that the Erratum’s statement, that two participants were injured during the course of the Study, misled the public and harmed 10 CrossFit. 11 (6) It is taken as established that the NSCA’s false statement in the Devor Study 12 was disseminated sufficiently to the purchasing public to constitute 13 advertising or promotion. 14 (7) 15 It is taken as established that the NSCA caused the false statement in the Devor Study to enter interstate commerce. 16 (8) 17 It is taken as established that it was foreseeable that the false statement in the Devor Study would be circulated to the media. 18 (9) It is taken as established that a loss in CrossFit’s certification revenue was the 19 natural and probable result of the false injury data in the Devor Study. 20 (10) The jury may, but is not required to, infer from the NSCA’s spoliation of 21 documents informing CrossFit’s Lanham Act claim that the NSCA violated 22 the Lanham Act as alleged in Count I of CrossFit’s Complaint. 23 (11) The jury may, but is not required to, infer from the NSCA’s spoliation of 24 documents informing CrossFit’s state law false advertising claim that the 25 NSCA violated California Business and Professions Code § 17500 as CrossFit 26 alleges in Count II of its Complaint. 27 /// 28 /// 12 14cv1191 JLS (KSC) 1 (12) The jury may, but is not required to, infer from the NSCA’s spoliation of 2 documents that the NSCA’s false statement in the Devor Study was made in 3 a commercial advertisement about CrossFit’s product. 4 (13) The jury may, but is not required to, infer from the NSCA’s spoliation of 5 documents that the NSCA’s false statement in the Devor Study was 6 commercial speech. 7 (14) The jury may, but is not required to, infer from the NSCA’s spoliation of 8 documents that CrossFit has been or is likely to be injured as a result of the 9 false statement in the Devor Study. 10 11 12 13 14 15 (15) It is taken as established that the NSCA actively supported state legislation that would regulate personal trainers. (16) It is taken as established that the NSCA was aware that the false statement in the Devor Study was being circulated to the media. (17) The NSCA shall not be permitted to enter evidence that it does not compete with CrossFit. 16 Additionally, CrossFit is GRANTED LEAVE TO FILE AN AMENDED 17 COMPLAINT within thirty days addressing alleged lost revenue from military 18 certifications and the NSCA’s allegedly intentional defamatory conduct. Further, 19 CrossFit—and only CrossFit—is GRANTED LEAVE to reopen fact and expert discovery 20 on all relevant claims. Finally, CrossFit requests all fees in connection with its Sanctions 21 Motion and ex parte Continuance, totaling $95,133.23. However, upon review, one 22 attorney’s declaration in support of the fee award notes that he “spent at least 4.5 hours” in 23 preparing the Reply Brief, and that his hourly rate in the matter “is $526.40.” (Nahama 24 Decl. ¶ 29, ECF No. 167-1.) Although he then lists his fees for such preparation as 25 “$23,951.20” the actual total should be $2,368.80. Accordingly, the Court AWARDS 26 Plaintiff $73,550.83 to account for this mathematical error. (Nahama Decl. ¶ 10, ECF No. 27 150-2; Danzig Decl. ¶ 1, ECF No. 150-15; Taylor-Copeland Decl. ¶ 1, ECF No. 150-16; 28 Ospina Decl. ¶ 2, ECF No. 150-17; Nahama Decl. ¶ 29, ECF No. 167-1; Danzig Decl. ¶ 1, 13 14cv1191 JLS (KSC) 1 ECF No. 167-28; Silver Decl. ¶ 1, ECF No. 167-29.) Defendant SHALL pay the fee award 2 within thirty days. 3 CONCLUSION 4 The Court GRANTS Plaintiff’s Sanctions Motion as set forth above and DENIES 5 WITHOUT PREJUDICE Plaintiff’s Sanctions Motion regarding terminating sanctions. 6 All specified deadlines SHALL be calculated from the date on which this Order is 7 electronically docketed. 8 9 IT IS SO ORDERED. Dated: May 26, 2017 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 14cv1191 JLS (KSC)

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