Aviva Sports, Inc. v. Fingerhut Direct Marketing, Inc. et al

Filing 812

ORDER: The magistrate judge's March 20, 2013 Order 797 is AFFIRMED in part and VACATED in part. The award of sanctions against Defendant Manley is AFFIRMED. The award of sanctions against Lobbin and the Eclipse Group is VACATED. Lobbin and the Eclipse Group are now under notice of the potential sanctions being considered against them. They may submit to the Court any additional evidence or arguments as to why they should not be sanctioned for their role in the failed Rule 30(b)(6) deposition on or before May 17, 2013. Aviva may respond on or before May 24, 2013. (Please see order for complete details.) (Written Opinion) Signed by Judge Joan N. Ericksen on May 3, 2013. (CBC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Aviva Sports, Inc.,
Plaintiff,
v.

Civil No. 09-1091 (JNE/JSM)
ORDER

Fingerhut Direct Marketing, Inc., Menard, Inc.,
Kmart Corporation, Wal-Mart Stores, Inc., and
Manley Toys, Ltd.,
Defendant.
On March 20, 2013, the Honorable Janie S. Mayeron, United States Magistrate Judge,
issued an order granting in part and denying in part Plaintiff Aviva Sports, Inc.’s (“Aviva”)
Motion for Sanctions. In that order, the magistrate judge imposed sanctions on Defendant
Manley Toys, Ltd. (“Manley”) as well as on Manley’s attorney, Mr. Stephen M. Lobbin, and Mr.
Lobbin’s law firm, the Eclipse Group. Now before the Court are Manley, Lobbin, and the
Eclipse Group’s objections to the March 20 Order.
I.

Award of Sanctions Against Manley
The magistrate judge imposed sanctions against Manley based on Manley’s failure to

produce a properly prepared Rule 30(b)(6) witness. This was not the first time Manley failed to
produce an appropriate Rule 30(b)(6) witness. In January 2011, Aviva noticed a Rule 30(b)(6)
deposition of Manley, and Manley identified for deposition an individual who lacked knowledge
of many of the deposition topics and was not prepared to testify. On January 3, 2012, the
magistrate judge ordered Manley to produce a witness capable of testifying with respect to
various enumerated topics. See Order dated Jan. 3, 2012 (ECF No. 508). Manley produced
another witness, who was deposed on June 7, 2012 and December 11, 2012. After the
deposition, Aviva asserted—and the magistrate judge agreed—that this second witness was also

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woefully unprepared to testify and knew very little about Manley. Aviva moved for an award of
fees and costs incurred in connection with both depositions as well as in preparation of the
instant motion for sanctions. The magistrate judge granted in part and denied in part that motion,
awarding Aviva sanctions against Manley for the fees and costs incurred in connection with
preparing for and attending the second deposition as well as in preparing for and attending
Aviva’s motion for sanctions. The magistrate judge denied Aviva’s request for sanctions in
connection with the first failed Manley deposition.
Manley now objects to the magistrate judge’s order, asserting that it adequately selected
and prepared its Rule 30(b)(6) witness. The Court has reviewed Manley’s objections, the
magistrate judge’s orders, the briefs and evidence filed in connection with the motion for
sanctions, and the deposition transcript, and concludes that the magistrate judge’s order was
neither “clearly erroneous” nor “contrary to law.” See 28 U.S.C. § 636(b)(1)(A) (2006); Fed. R.
Civ. P. 72(a); D. Minn. LR 72.2(a). The award of sanctions against Manley is therefore
affirmed.
II.

Award of Sanctions against Lobbin and the Eclipse Group
In the March 20 Order, the magistrate judge also found that Manley’s attorney knew or

should have known that the second deponent was unprepared to provide meaningful answers to
the deposition topics and that the attorney therefore played a “key role” in the failure of the
second deposition. The magistrate judge therefore ordered that Lobbin and his law firm, the
Eclipse Group, also be personally liable for the sanctions award. Lobbin and the Eclipse Group
objected to the order, arguing in part that they were not provided with any notice that sanctions
against them were being considered. Aviva does not dispute this aspect of their objection.
Although Lobbin and the Eclipse Group cite no law in support of the proposition that they were

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entitled to any more notice than what was provided to their client, the Court nevertheless agrees
that they should have been afforded notice of the potential of sanctions against them, in addition
to sanctions being considered against Manley. 1
The Court therefore vacates that portion of the magistrate judge’s order that imposes
sanctions against Lobbin and the Eclipse Group. This Order now serves as notice that sanctions
against them may be considered for their role in the inadequate second attempt at Aviva’s Rule
30(b)(6) deposition of Manley. If Lobbin or the Eclipse Group wish to submit anything that they
have not already submitted in conjunction with their objection to the magistrate judge’s order,
they may do so on or before Friday, May 17, 2013. The Court will not consider any further
argument that the witness was, in fact, adequately prepared, as the Court has concluded that he
was not. Aviva may file a response to any such submission by Lobbin and the Eclipse Group on
or before Friday, May 24, 2013. The Court does not intend to conduct a hearing on this matter,
unless the parties request and demonstrate the need for such a hearing. In the event that Lobbin
and/or the Eclipse Group request a hearing, a telephonic appearance will not be permitted.
Therefore, IT IS ORDERED THAT:
1. The magistrate judge’s March 20, 2013 Order [Docket No. 797] is AFFIRMED in
part and VACATED in part.
2. The award of sanctions against Defendant Manley is AFFIRMED.
3. The award of sanctions against Lobbin and the Eclipse Group is VACATED.
4. Lobbin and the Eclipse Group are now under notice of the potential sanctions being
considered against them. They may submit to the Court any additional evidence or
arguments as to why they should not be sanctioned for their role in the failed Rule

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Like Manley, Lobbin and the Eclipse Group also assert that the selected Rule 30(b)(6)
witness was adequately prepared and provided appropriate answers to the deposition topics. The
Court rejects this argument, and affirms the magistrate judge’s conclusion that the deponent was
not sufficiently prepared and, in fact, knew very little at all about Manley.
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30(b)(6) deposition on or before May 17, 2013. Aviva may respond on or before
May 24, 2013.
Dated: May 3, 2013
s/Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge

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