Coach, Inc. et al v. Visitors Flea Market, LLC et al
ORDER denying 184 Motion to Strike Defendants' supplemental Rule 26 disclosures and witnesses; denying 186 Motion to Strike Plaintiffs' witness. Signed by Magistrate Judge Thomas B. Smith on 2/18/2014. (Smith, Thomas)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
COACH, INC., COACH SERVICES, INC.,
Case No. 6:11-cv-1905-Orl-19KRS
VISITORS FLEA MARKET, LLC, DELROY
JOSEPHS, JULIO BATISTA, ET AL.,
This case comes before the Court without oral argument on Plaintiffs’ Motion to
Strike Defendants’ Supplemental Rule 26 Disclosures and Witness List (Doc. 184),
and Defendants’ Motion to Strike Plaintiffs’ Witness (Doc. 186).
Plaintiff manufactures, markets and sells fine leather and mixed material
products including handbags, wallets and accessories. (Doc. 182). Defendant
Visitors Flea Market, LLC operates an indoor flea market located in Kissimmee,
Florida. (Id.). The land and building are owned by Defendant Visitors Plaza, Inc.
(Id.). Until he passed away on November 23, 2013, Defendant Delroy Josephs was
the sole owner of Visitors Flea Market and Visitors Plaza. (Docs. 182, 184). Plaintiffs
complain that Defendants allowed vendors operating from rented flea market booths
to display, offer, and sell counterfeit goods bearing Plaintiffs trademarks and
copyrights. (Doc. 182). On November 22, 2011, Plaintiffs filed this lawsuit alleging
contributory trademark infringement and contributory and vicarious copyright
infringement. (Doc. 1). One of Mr. Josephs’ defenses is that he moved to the
Cayman Islands in 2007 or 2008 and left the management of the business to his
employees and son. (Id.).
Plaintiffs deposed Mr. Josephs on June 6, 2012, April 5, 2013 and June 3,
2013. (Doc. 184). He was diagnosed with cancer in June, 2013. (Id.). On June 20,
2013, Visitors Plaza and Mr. Josephs filed an unopposed motion to stay this action
due to Mr. Josephs’ diagnosis and anticipated chemotherapy treatment. (Doc. 137).
The Court granted the motion and stayed the case for 90 days. (Doc. 138). On
September 16, 2013, these Defendants filed a second motion to stay the case for an
additional 120 days which the Court denied. (Docs. 140, 144). On December 4,
2013, Defendants filed a third motion for stay, which the Court also denied. (Docs.
168, 177). This case is on the Court’s March 3, 2014 trial calendar. (Doc. 177).
On January 14, 2014, Defendants served the following supplemental
disclosures on Plaintiffs pursuant to Federal Rule of Civil Procedure 26(a)(1)(A):
a. Milicent (“Beth”) Coban–Mrs. Coban may testify about Delroy
(“Joe”) Josephs’ medical condition, travels to and from the United
States, his attention to business affairs in the United States after
moving to the Cayman Islands, and his estate.
b. Cristian Coban–Mr. Coban may testify about Joe Josephs’
medical condition, travels to and from the United States, his
attention to business affairs in the United States after moving to the
Cayman Islands, and his estate.
c. The curator, executor, or personal representative of Joe
Josephs’ estate–if appointed before the trial of this matter, the
defense may call the curator, executor, or personal representative
of Joe Josephs’ estate to testify as to the existence of the estate
and other matters that may arise concerning the estate.
Milicent Coban is Mr. Josephs sister, and Cristan Coban is her husband. (Doc.
186). Mrs. Coban is currently involved in legal proceedings in the United States and
the Cayman Islands concerning Mr. Josephs’ estate. (Id.). The estate is unsettled,
and no representative of the estate has been appointed. (Id.). Defendants explain
that they did not sooner disclose the Cobans because their information was
cumulative of information in Mr. Josephs' possession. The Cobans were not involved
in the operation of Visitors Flea Market prior to Mr. Josephs’ death, and possessed no
discoverable information regarding Plaintiffs' claims of infringement.
After Mr. Josephs died, Defendants determined that no previously disclosed
witness would be able to testify in an organized and coherent way about Mr. Josephs'
life away from Visitors Flea Market. Until Mr. Josephs died, Defendants never
considered the possibility that the Cobans would be asked to testify at trial. Now, they
argue that the Cobans’ testimony is urgently needed to rebut claims by Plaintiffs that
Mr. Josephs was actively involved in the day-to-day activities of Visitors Flea Market
and Visitors Plaza. They claim that if Mr. Josephs was alive and able to testify, he
could have explained clearly and at appropriate length about his lack of involvement
in the operation of Visitors Flea Market. Defendants believe he would have testified
that his life was focused on his two children, that he only traveled infrequently to
Orlando, most often around appointments with his physicians, and spent very little
time visiting his businesses. Although Mr. Josephs was deposed on three occasions,
Defendants say his deposition testimony will not suffice because counsel for parties
who are deposed rarely ask the sort of in-depth questions of their own clients during a
deposition that are necessary to develop a cogent story for trial. Defendants also
assert that no previously disclosed witness is able to testify in an organized and
coherent way about Mr. Josephs' life away from Visitors Flea Market.
Plaintiffs are asking the Court to strike all three witnesses from Defendants’
supplemental Rule 26 disclosures and witness list on the grounds that they were not
disclosed until 225 days after the discovery deadline, their testimony is irrelevant, and
their testimony may be highly prejudicial. (Doc. 184).
The parties filed their Joint Final Pretrial Statement on February 3, 2014.
(Doc. 182). Plaintiffs’ witness list includes Nancy Axilrod, Esq., of Coach, Inc., as its
“corporate representative.” (Id.). Ms. Axilrod is Plaintiffs’ vice president and deputy
general counsel. (Doc. 188). Defendants are moving the Court to strike her from
Plaintiffs’ witness list and exclude her from testifying at trial on the grounds that she
was never identified in Plaintiffs’ Rule 26 disclosures, Defendants have not had an
opportunity to depose her, and they will be prejudiced if she is permitted to testify.
(Doc. 186). Plaintiffs represent that she is not a fact witness, and that she was
designated as their corporate representative out of necessity after their former
corporate representative and intellectual property coordinator Dayanara Perez left
their employ and became unavailable to testify in Florida. (Id.).
Federal Rule of Civil Procedure 26(a)(1)(A)(i) provides that “[e]xcept as
exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a
party must, without awaiting a discovery request, provide to the other parties: 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, unless the use would be
solely for impeachment.” Rule 26(e)(1)(a) requires a party to supplement its initial
disclosures "in a timely manner" if the party learns that the disclosure was incorrect or
incomplete. Federal Rule of Civil Procedure 37(c) states that “[i]f a party fails to
provide information or identify a witness as required by Rule 26(a) or (e), the party is
not allowed to use that information or witness to supply evidence on a motion, at a
hearing, or at a trial, unless the failure was substantially justified or is harmless.”
“[T]he sanction of exclusion is automatic and mandatory unless the sanctioned party
can show that its violation of Rule 26(a) was either justified or harmless.’” Dyett v.
North Broward Hospital District, NO. 03-60804-CIV, 2004 WL 5320630 * 2 (S.D. Fla.,
Jan. 21, 2004) (quoting Salgado v. General Motors Corp., 150 F.3d 735, 742 (7th Cir.
Substantial justification means “justification to a degree that could satisfy a
reasonable person that parties could differ as to whether the party was required to
comply with the disclosure request.” Ellison v. Windt, No. 6:99-cv-1268-Orl-KRS,
2001 WL 118617 *2 (M.D. Fla. Jan. 24, 2001) (quotation and citation omitted). “A
failure to make the required disclosures is harmless when there is no prejudice to the
party entitled to receive the disclosure.” Hewitt v. Liberty Mutual Group, Inc., No.
6:09-cv-1183-Orl-18DAB, 268 F.R.D. 681, 683 (M.D.Fla., 2010). In deciding whether
the failure is harmless, the Court considers: “(1) the importance of the testimony; (2)
the reason for the appellant’s failure to disclose the witness earlier; and (3) the
prejudice to the opposing party if the witness had been allowed to testify.” Bearint v.
Dorell Juvenile Group, Inc., 389 F.3d 1339, 1353 (11th Cir. 2004). The party which
fails to comply with Rule 26(a) bears the burden of establishing that its non-disclosure
was substantially justified or harmless. Hewitt, 268 F.R.D. at 683.
A. Executor of Mr. Josephs’ Estate
Plaintiffs concede that Defendants could not have anticipated the existence of
a curator, executor or personal representative of Mr. Josephs’ estate when they made
their initial disclosures. Still, Plaintiffs object to any testimony concerning the
existence of the estate on the ground that it is not relevant to the parties’ claims and
defenses and will confuse and mislead the jury. But, Plaintiffs fail to explain how or
why the jury would be confused or mislead by this information. Their motion to strike
the curator, executor or personal representative of the estate is D ENIED. If such
person is appointed prior to trial then, at trial, the Court can rule on contemporaneous
objections to that person’s testimony.
B. The Cobans
The Court is satisfied that the Cobans’ testimony is relevant and important to
support Mr. Joseph’s defense that beginning in 2007 or 2008 he had only limited
involvement in the management of Visitors Flea Market. The Cobans’ testimony will
contradict any claim by Plaintiffs that Mr. Josephs intentionally allowed products
bearing their trademarks to be sold at Visitors Flea Market. The Cobans testimony
will also address the question of whether Mr. Josephs was willfully blind to the
infringing activity taking place at the flea market.
But, the Court rejects Defendants’ argument that they complied with Rule 26
because they timely supplemented their initial disclosures and included the Cobans in
their witness list when the need for the Cobans’ testimony arose. The Court also
rejects Defendants’ argument that reasonable people could differ about whether they
should have disclosed the Cobans prior to Mr. Josephs’ death. Defendants failed to
supplement their disclosures “in a timely manner” as required by Rule 26(e)(1)(a). Mr.
Josephs was diagnosed with cancer in June 2013. By September his condition had
not improved and he was scheduled to participate in a second round of chemotherapy
beginning in early October 2013. On September 12, 2013, his doctor wrote that Mr.
Josephs was under “a strict and rigid cancer treatment,” that he was unable to attend
any stressful situations, and could not travel except for treatment in the next three to
four months. (Doc. 140). Under the circumstances, Defendants should not have
waited for more than a month after Mr. Josephs died to recognize that he may be
unavailable to testify and that they might need the Cobans’ testimony.
Defendants argue that their supplemental disclosures are harmless because
the Cobans’ testimony will not surprise or unfairly prejudice Plaintiffs. They note that
before they disclosed the Cobans, Plaintiffs were aware of Mr. Josephs absence from
the United States, knew he traveled only once every one or two months to Orlando,
and had been told that Mr. Josephs spent only limited time at Visitors Flea Market. In
addition to this evidence, the Cobans are expected to explain, based upon their
personal observations, why Mr. Josephs was not in Central Florida or focused on
Visitors Flea Market. Although Plaintiffs may have anticipated that Mr. Josephs would
testify along these lines, because discovery is closed they have not had the
opportunity to depose the Cobans and learn precisely what they will say or if their
testimony could be subject to impeachment or rebuttal evidence. Thus, Defendants’
failure to timely disclose the Cobans is not harmless. To eliminate any unfair
prejudice to Plaintiffs, the Court will require Defendants to produce the Cobans for
deposition before trial begins. With this requirement, Plaintiffs’ motion to strike the
Cobans is DENIED.
C. Ms. Axilrod
Defendants seek to strike Ms. Axilrod as a witness for Plaintiffs because
discovery is closed and they have not had an opportunity to investigate or depose her.
They also argue that they don’t know anything about her training, knowledge of this
controversy, what she will testify about, or if there is evidence available to impeach or
rebut her testimony. Defendants allege that Ms. Axilrod is the face of Plaintiffs’
operation to sue anyone remotely connected with the alleged counterfeiting of
Plaintiffs’ products, and that she is frequently quoted in media outlets and stories
about Plaintiffs’ prosecution of its claims. According to Plaintiffs, Ms. Axilrod is not a
fact witness, her identity was disclosed during a July 20, 2012 deposition, and she
was designated out of necessity.
Defendants have already deposed Plaintiffs’ Rule 30(b)(6) corporate
representative and the parties have not explained why Ms. Axilrod’s testimony is
important to this controversy. But, Plaintiffs have provided a valid explanation for their
failure to sooner disclose her as a witness. Ms. Axilrod’s full name and title were
previously disclosed during the July 20, 2012 deposition of witness Ethan Lau. (Doc.
188-1). The Advisory Committee Notes to Rule 26(e) provide that there is “no
obligation to provide supplemental or corrective information that has otherwise been
made known to the parties in writing or during the discovery process, as when a
witness not previously disclosed is identified during the taking of a deposition . . .”
Advisory Committee Notes to 1993 Amendment. Now, the Court finds that Plaintiffs’
failure to amend their Rule 26 disclosures was substantially justified and that the
effect of adding Ms. Axilrod to Plaintiffs’ witness list was harmless. Accordingly,
Defendants’ Motion to Strike Plaintiffs’ Witness (Doc. 186) is D ENIED.
IT IS SO ORDERED.
DONE AND ORDERED in Orlando, Florida, on February 18, 2014.
Copies to all Counsel
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