ALLISON TRANSMISSION, INC. v. DEFEO MANUFACTURING, INC.
ORDER granting 57 Motion for Protective Order. Allison may not serve non-party discovery requests (for documents or depositions) on DeFeo's suppliers. Further, if it has not done so already, Allison must within seven days of this Order return to DeFeo all parts not "tagged" as counterfeit as provided by the May 15 Order. Signed by Magistrate Judge Debra McVicker Lynch on 11/21/2012. (TMA)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
ALLISON TRANSMISSION, INC.,
DeFEO MANUFACTURING, INC.,
Defendant/Third Party Plaintiff,
STELLAR SRKG ACQUISITION, LLC,
Third Party Defendant,
RUBBER TIME INDUSTRIAL CO. LTD.,
New Third Party Defendant.
) CASE NO.: 1:11-cv-1175-SEB-DML
Order on Defendant’s Motion for Protective Order
This matter is before the court on a motion for protective order (Dkt. 57) filed by
defendant DeFeo Manufacturing, Inc. DeFeo asks the court to prohibit plaintiff Allison
Transmission from seeking discovery from DeFeo’s suppliers. Allison has identified seven
entities that supply Allison products to DeFeo but which do not have distributorship relationships
directly with Allison. Allison wants to depose a Rule 30(b)(6) representative of each of these
entities and require testimony and documents about all sales transactions with DeFeo involving
parts branded as genuine Allison parts, its sales of transmission parts generally to DeFeo, its
knowledge of counterfeit Allison parts, and its investigation of the authenticity of Allison parts.
The relief DeFeo requests—a prohibition on discovery from third parties—should not be
lightly or routinely granted, but the court finds it appropriate under these circumstances. The
court has already afforded Allison broad discovery directed to its stated suspicions that DeFeo
has sold counterfeit parts beyond the part identified by the complaint. It should not be permitted
the additional, non-party discovery unless and until it comes forward with some fact—beyond
mere speculation—substantiating a good-faith belief that other parts from DeFeo’s inventory
may be counterfeit and that a particular supplier from whom it seeks this discovery could be
connected with those parts.
The scope of discovery has been the subject of an earlier dispute and order in this case.
Allison’s complaint—for unfair competition, false designation, and false advertising—alleges
that DeFeo is selling “unauthorized Allison transmission turbine speed sensors,” which the
complaint labels as the “Counterfeit Products.” (Dkt. 1, ¶¶ 21-25). The complaint does not
challenge the genuineness of any other DeFeo products bearing ALLISON trademarks and sold
as genuine Allison products. Allison insisted, however, that it should be permitted to discover
whether DeFeo possesses and is selling parts other than the turbine speed sensors that are
counterfeit, non-genuine Allison parts. Allison wanted to select from DeFeo’s inventory for
inspection and testing approximately 250 parts (which DeFeo valued at over $100,000), to be
delivered to Allison at DeFeo’s expense and retained by Allison until the case is over. Allison
also wanted all purchase and sales documentation for these 250 parts. This discovery, according
to Allison, would permit it to determine whether DeFeo was selling other counterfeit parts.
Allison also argued that counterfeit parts put the public’s safety—and not just Allison’s
Despite DeFeo’s strenuous protest that discovery in this case should be limited to the
turbine speed sensors, the court permitted Allison, in its Order of May 15, 2012, to examine
many other parts of Allison’s choice and to obtain underlying documentation regarding DeFeo’s
acquisition of those parts. The court determined that an incremental, sampling approach
appropriately balanced the relevance of the discovery and its burdens. The court’s May 15 Order
allowed Allison to choose for production and inspection any 50 parts it desired (later apparently
expanded to 67 parts by agreement of the parties), required DeFeo to identify and produce the
purchase documentation for each of the parts, and set a deadline for Allison to complete its
inspection work. The court expressed its willingness to expand beyond the 50 parts and the
documents discovery for those parts “depending on the results” of the discovery. Further, the
court required Allison to return all parts to Allison at the end of the inspection period except for
any parts it “has a reasonable, good-faith belief are counterfeit.” (See Dkt. 47 at pp. 4-5).
DeFeo has provided this discovery. Now Allison wants testimony and documents from
seven of DeFeo’s suppliers in furtherance, Allison maintains, of this same investigation for other
allegedly counterfeit parts. But after its examination and composite testing of 67 other parts of
its choice and after its review of the purchase documentation for those parts, Allison is unable to
identify any additional parts it in good faith believes are counterfeit.1 That failure convinces the
court that the discovery Allison seeks from DeFeo’s suppliers goes beyond that necessary for the
fair prosecution of the claims in this case. See Central States, Southeast and Southwest Areas
Pension Fund v. Waste Management of Michigan, Inc., 674 F.3d 630, 637 (7th Cir. 2012)
(quoting EEOC v. Harvey L. Walner & Assocs., 91 F.3d 963, 971 (7th Cir. 1996)) (“‘[D]iscovery
is not to be used as a fishing expedition.’”). It also lends some credence to DeFeo’s complaint
that Allison is attempting to use discovery in this case to interfere in DeFeo’s legitimate
relationships with suppliers who aren’t direct Allison distributors.
Perhaps Allison has chosen not to reveal a basis for believing other parts are counterfeit,
but that strategy would be difficult to square with the concerns for public safety it earlier
expressed. Furthermore, under these circumstances, it was incumbent upon Allison to provide
some basis for seeking this additional discovery.
The court has afforded Allison the opportunity to determine whether DeFeo is selling
additional counterfeit parts, the breadth of which could fairly be characterized as a controlled
fishing expedition. The court will not permit the expansion of discovery directed to this issue
unless and until Allison can articulate the basis for a good-faith, reasonable belief that DeFeo has
sold or is selling other counterfeit parts and can explain how a particular supplier from whom it
seeks discovery could be associated with that part.
The court GRANTS DeFeo Manufacturing’s motion (Dkt. 57) for a protective order.
Allison may not serve non-party discovery requests (for documents or depositions) on DeFeo’s
suppliers. Further, if it has not done so already, Allison must within seven days of this Order
return to DeFeo all parts not “tagged” as counterfeit as provided by the May 15 Order.
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana
All ECF-registered counsel of record via email generated by the court’s ECF system
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