Watkins Incorporated v. McCormick and Company, Incorporated
Filing
52
ORDER denying 36 Motion to Compel. (Written Opinion) Signed by Magistrate Judge Becky R. Thorson on 8/24/2020. (MSK)
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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Watkins Incorporated,
Civ. No. 15-2688 (DSD/BRT)
Plaintiff,
v.
McCormick and Company, Incorporated,
ORDER ON
MOTION TO COMPEL
Defendant.
Charles G. Frohman, Esq., Evan Nelson, Esq., and Geoffrey P. Jarpe, Esq., Maslon LLP,
counsel for Plaintiff.
David H. Bamberger, Esq., Edward S. Scheideman, III, Esq., and Paul Daniel Schmitt,
Esq., DLA Piper LLP (US), and Richard R. Voebel, Esq., Felhaber, Larson, Fenlon &
Vogt, P.A., counsel for Defendant.
This matter is before the Court on Plaintiff Watkins Incorporated’s Motion to
Compel. (Doc. No. 36.) Defendant McCormick and Company, Incorporated, opposes
Plaintiff’s Motion. (Doc. No. 43.) Based on the Court’s consideration, the file,
submissions, and proceedings herein, the Court denies Plaintiff’s Motion to Compel, with
leave for Plaintiff’s counsel to meet and confer with Defendant’s counsel to agree on two
clarified and narrowed interrogatories to replace Interrogatories 14 and 15.
Background
This case was filed in the District of Minnesota on June 9, 2015. (Doc. No. 1.) In
December 2015, the Judicial Panel on Multidistrict Litigation consolidated this action
with other putative consumer class actions from various districts for pretrial proceedings
in the United States District Court for the District of Columbia, with Judge Ellen S.
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Huvelle presiding. (Doc. No. 25.) After transfer to the D.C. Court, Plaintiff filed an
“Amended Complaint” on March 2, 2016. 1 (See Doc. No. 44, Decl. of Paul D. Schmitt
(“Schmitt Decl.”), Ex. 5.) A “Second Amended Complaint” was filed in the D.C. Court
on July 10, 2016. (Id. at Ex. 12.) The Court understands that the Second Amended
Complaint is the operative Complaint.
One of the discovery requests at issue in Plaintiff’s Motion to Compel is Plaintiff’s
Interrogatory No. 5. Plaintiff served Interrogatory No. 5 on May 29, 2016. (Doc. No. 42, 2
Ex. C at 6–7.) Interrogatory No. 5 states as follows:
INTERROGATORY NO. 5:
State the monthly sales of McCormick’s black pepper products for the
period of January 1, 2012 through the present, including:
a.)
Monthly unit sales by SKU for each McCormick black pepper
product sold in tins or Black Peppercorn Grinders;
b.)
The identity of each customer to whom McCormick black pepper
products were sold and the dates and quantities purchased;
c.)
The price(s) which each customer paid for each purchase of
McCormick black pepper products;
d.)
McCormick’s cost of goods sold for each McCormick
black pepper products sale;
e.)
McCormick’s profit on each sale of McCormick black
pepper products.
1
Before transfer, an Amended Complaint was filed on August 6, 2015. (Doc.
No. 44, Schmitt Decl., Ex. 5.)
2
Exhibits A-S filed at Docket No. 42 are associated with the Declaration of Evan A.
Nelson filed at Docket No. 39.
2
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(See Doc. No. 38, Mem. of Law in Support of Mot. to Compel (“Pl.’s Mem.”) 4–5.)
Plaintiff concedes that Defendant partially answered these requests but objected to the
request for McCormick’s profits. (Id. at 5.) Thus, as of at least June 27, 2016, Plaintiff
was aware of Defendant’s objection on multiple grounds, including relevance and
proportionality, to any discovery of Defendant’s profits. Plaintiff did not move to compel
a complete answer to Interrogatory No. 5 while the case proceeded in the D.C. Court.
Nothing barred Plaintiff from moving to compel a complete answer in 2016, 2017, 2018,
and 2019.
The D.C. Court held a Status Conference on September 18, 2019, and issued a
Scheduling Order. (Doc. No. 44, Schmitt Decl., Ex. 16.) The D.C. Court ordered that all
written discovery be propounded by October 18, 2019, all responses to written discovery
be completed by November 18, 2019, all depositions of fact witnesses be completed by
January 13, 2020, and all expert discovery be completed by March 9, 2020. (Id.)
Plaintiff served additional interrogatories and requests for production of
documents on October 15, 2019. (Doc. No. 42, Exs. F, G.) This additional set of written
discovery included Interrogatories 14, 15, and 20, and Document Request No. 14, which
are now at issue in Plaintiff’s Motion to Compel. Defendant objected to this written
discovery. In its discovery responses (and correspondence relating to its discovery
responses), Defendant reiterated its objections to Interrogatory Nos. 14, 15, and 20 as
“duplicative of Interrogatory 5” and the corresponding objections. (See Doc. No. 42,
Ex. J at 4; see also Doc. No. 42, Ex. H at 7–8, 10.) Defendant also objected to Document
Request No. 14 in its responses, but as far as this Court can tell, Document Request
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No. 14 was not mentioned by Plaintiff in its follow-up correspondence. (See Doc. No. 42,
Ex. J; see also Doc. No. 42, Ex. I at 5–6.) The written discovery requests at issue all
relate to Defendant’s profits. Plaintiff concedes that when it communicated alleged
deficiencies to Defendant at least as of November 20, 2019, Defendant reiterated “its
position that its profits were not recoverable in this case.” (Doc. No. 38, Pl.’s Mem. 8.)
Pursuant to the procedures provided by the September 18, 2019 Scheduling Order,
in November 2019, the parties informed the D.C. Court of their discovery dispute. (Doc.
No. 42, Exs. K, L.) Each side submitted an email to the D.C. Court summarizing their
position. (Id.) Plaintiff’s email to the D.C Court concluded with a request that the D.C.
Court order Defendant to “provide full responses to Interrogatories 14, 15, and 16 and
document request 14.” (Doc. No. 42, Ex. L.) Plaintiff’s email did not mention
Interrogatory No. 5. In its email, Defendant objected to any discovery of its profits,
arguing that Plaintiff never mentioned disgorgement of Defendant’s profits in its Second
Amended Complaint or in its sworn Declaration on damages, and Defendant claimed that
“disgorgement” of Defendant’s profits was not even mentioned until counsel’s November
22, 2019 meet and confer call. (Doc. No. 42, Ex. K.)
The D.C. Court held a telephone conference on November 25, 2019. The Court
and counsel agreed that a remand to the District of Minnesota would “best serve the
expeditious disposition of the litigation.” (Doc. No. 44, Schmitt Decl., Ex. 17.) In a letter
to Plaintiff dated November 26, 2019, Defendant communicated that the dispute would
be revisited after the transfer. (Doc. No. 42, Ex. M.) Plaintiff, however, claimed that the
Court had overruled Defendant’s objections and demanded supplementation. (Doc.
4
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No. 42, Ex. N.) On December 4, 2019, the D.C. Court issued a Suggestion of Remand.
(Doc. No. 44, Schmitt Decl., Ex. 17.) The D.C. Court suggested remand to “allow the
trial judge to resolve the current discovery dispute and, relatedly, decide the allowable
scope of plaintiff’s damages claims, and set its own schedule for the completion of
discovery, dispositive motions, and trial.” (Id. at 4.) A Transfer Order was issued. A
Certified Copy of Conditional Remand Order was filed on this Court’s Docket on
December 27, 2019 with an attached Docket Sheet. (Doc. No. 26.) About six months
later, on June 22, 2020, Plaintiff wrote Defendant complaining that it had not yet received
discovery responses from Defendant relating to Defendant’s profits. (Doc. No. 42,
Ex. O.)
This Court held a status conference on July 14, 2020, to discuss the status of the
case and an appropriate schedule. (Doc. No. 33.) A Pretrial Scheduling Order was issued
on July 16, 2020. (Doc. No. 34.) Prior the status conference, on July 9, 2020, the parties
filed a Stipulation for a Scheduling Order. (Doc. No. 30.) While the Recitals provided
that the “matter has been remanded to this Court for outstanding discovery, as well as
potential motion practice and a trial,” none of the parties made any mention of a
“substantial discovery dispute” that had carried-over from the D.C. Court. 3 (Doc. No. 30;
see Doc. No. 44, Schmitt Decl., Ex. 17 at 3 (stating in the Suggestion of Remand that the
“parties in Watkins advised the Court that they had a substantial discovery dispute”).
3
Based on the D.C.’s Suggestion of Remand, dated December 4, 2019, both parties
would have known that the D.C. Court had not decided the substantial discovery dispute,
but would “allow the trial judge to resolve” it. (Doc. No. 44, Schmitt Decl., Ex. 17 at 4.)
5
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Without an understanding of the “substantial discovery dispute,” this Court issued
a Pretrial Scheduling Order, adopting the parties’ proposal that fact discovery procedures
be commenced so that discovery would be completed by September 1, 2020, and that
expert discovery would conclude on or before January 15, 2021. The Court also required
the parties to make any updates to their initial disclosures on or before August 3, 2020.
(Doc. No. 34.) Based on the representations of counsel, the Court included the following
in its Scheduling Order: “The parties agreed that very little additional fact discovery is
required following remand.” (Id.)
After the parties secured their proposed schedule, Defendant wrote Plaintiff a
letter, “picking up the thread” from their “meet-and-confer last fall.” (Doc. No. 42,
Ex. R.) In its correspondence, Defendant reiterated its position that there were multiple
reasons why information relating to Defendant’s profits were not discoverable. (Id.) On
August 3, 2020, Plaintiff filed a Motion to Compel. (Doc. No. 36.) Defendants oppose the
motion. (Doc. No. 43.) A hearing was held on the matter on August 14, 2020. (Doc.
No. 47.)
ANALYSIS
Plaintiff moves to compel complete answers to Interrogatory Nos. 5, 14, 15, and
20, and for responses to Request for Production No. 14. (See generally Doc. No. 38, Pl.’s
Mem.) Federal Rule of Civil Procedure 26 governs discovery in federal court. Fed. R.
Civ. P. 26(b)(1). Rule 26(b)(1) provides:
Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party’s claim or defense and proportional to the needs of the
case, considering the importance of the issues at stake in the action, the
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amount in controversy, the parties’ relative access to relevant information,
the parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1).
The Court addresses each if the disputed requests below.
I.
Interrogatory No. 5
Plaintiff’s motion to compel a supplemental answer to Interrogatory No. 5 is
denied for lack of diligence. As discussed above, Plaintiff was well aware of Defendant’s
objections to the discovery of its profits in 2016 and Plaintiff failed to move to compel a
more complete response during the several years the case was pending in the MDL.
Therefore, the Court concludes Plaintiff was not diligent in pursuing a complete answer
to Interrogatory No. 5. See Stai v. Deshane, No. 14-cv-4152 (RHK/LIB), 2016 WL
11031224, at *4 (D. Minn. Jan. 22, 2016) (“While Plaintiff’s Motion was technically
filed timely according to the nondispositive motion deadline, his discovery practices
leading to this motion were not in any manner diligent . . . . A review of the record
discloses that Plaintiff’s general dissatisfaction with Defendants’ discovery responses
lingered without any action by Plaintiff’s counsel for several months, without any
substantive discussion initiated by Plaintiff’s counsel between the parties concerning the
adequacy of those responses, and without any attempt by Plaintiff to seek prompt and
timely Court intervention.”). Plaintiff’s Motion to Compel a supplemental answer to
Interrogatory No. 5 is denied.
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II.
Interrogatory No. 20
The Court also denies Plaintiff’s motion to compel a response to Interrogatory
No. 20 because it was not part of any action requested by Plaintiff in its email to the D.C.
Court prior to transfer. In its email informing the Court about the dispute, Plaintiff
concluded by requesting only that “the Court order McCormick to provide full responses
to Interrogatories 14, 15, and 16[4] and document request 14.” 5 (Doc. No. 42, Ex. L.)
Accordingly, the Court does not view Plaintiff’s request regarding Interrogatory No. 20
as part of the discovery dispute that was transferred over in the remand. Plaintiff’s motion
to compel an answer to Interrogatory No. 20 is therefore denied for lack of diligence and
failure to timely raise the issue before the D.C. Court.
III.
Document Request No. 14
Defendant argues in footnote 14 of its Memorandum in Opposition that Plaintiff’s
Document Request No. 14 6 was not included in any meet and confer correspondence.
4
Interrogatory 16 is not at issue in Plaintiff’s Motion to Compel Discovery.
5
Thus, had the D.C. Court ruled in Plaintiff’s favor, as Plaintiff hoped, the only
record of Plaintiff’s request for action was limited to Interrogatories 14, 15, and 16, and
Document Request 14.
6
Plaintiff’s Request for Production No. 14 states as follows:
All procurement contracts, purchase orders, and other documents regarding
McCormick’s purchase of black pepper during the time in which
McCormick was filling Downweighted Ground Black Pepper Containers in
accordance with McCormick’s “pepper weight reduction plan” referenced
in McCormick’s Rule 26(a)(1) Initial Disclosures and also referenced in
McCormick’s Answer to Watkins’s Interrogatory No. 1.
(Footnote Continued on Next Page)
8
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(Doc. No. 43, Def.’s Mem. 9, n.14.) Document Request No. 14, however, is cited in the
email correspondence to the D.C. Court indicating that this request was at issue. Even so,
however, the Court need not determine whether the failure to meet-and-confer bars this
request in Plaintiff’s motion because the Court finds that Plaintiff has not made a
sufficient showing that the information sought in Document Request No. 14 is relevant
and proportional pursuant to Rule 26. Plaintiff’s motion to compel discovery responsive
to Document Request No. 14 is denied on that basis.
IV.
Interrogatory Nos. 14 and 15
This leaves Interrogatory Nos. 14 and 15. They were served on October 15, 2019,
and are set forth below:
INTERROGATORY NO. 14:
State the total amount of revenue McCormick received from the sale
of McCormick’s Downweighted Ground Black Pepper Containers by SKU.
Identify all documents you refer to or rely upon to respond to this
Interrogatory.
INTERROGATORY NO. 15:
State the total costs of goods sold from the sale of McCormick’s
Downweighted Ground Black Pepper Container by SKU. Identify all
documents you refer to or rely upon to respond to this Interrogatory.
(Doc. No. 42, Ex. F at 7.)
After Defendant timely objected, Plaintiff brought the dispute to the D.C. Court’s
attention in November 2019. The D.C. Court received email correspondence from each
side about the dispute and held a status conference. The D.C. Court suggested remand to
(Doc. No. 42, Ex. G at 6–7.)
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the District of Minnesota to allow the trial judge to decide the discovery dispute.
Although this Court wishes that the parties would have alerted this Court of the carryover dispute right away, it is clear that both parties were aware of the unresolved dispute
and neither party raised it. 7 Accordingly, this Court will not place all the blame for the
delay—after remand—on Plaintiff, and will address the parties’ remaining arguments
regarding Interrogatory Nos. 14 and 15.
Defendant claims that the information requested through Interrogatory Nos. 14
and 15 is irrelevant because Plaintiff did not include the disgorgement of profits in its
prayer for relief. The parties cite to various case law supporting their positions about
whether a party is required to specifically plead the disgorgement of profits. Defendant
relies heavily on United States v. Osage Wind, LLC, No. 14-CV-704-GKF-JFJ, 2020 WL
3578351 (N.D. Okla. July 1, 2020). Plaintiff relies heavily on Yah Kai World Wide
Enterprises, Inc. v. Napper, 292 F.Supp. 3d 337 (D.D.C. 2018). Both the Osage and Yah
Kai cases are outside of the Eighth Circuit and neither case provides a sufficiently
definitive answer as to the pleading requirements for disgorgement of profits that might
apply in this case. Further, the parties disagree about whether the assertions that were
made combined with the discovery requests provided notice of disgorgement as a
7
In fact, in response to Plaintiff’s letter reasserting the dispute, Defendant shared
Plaintiff’s understanding that the “meet and confer process” had not concluded. (Doc.
No. 42, Ex. Q.)
10
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remedy. This Court will not delve into dispositive matters to resolve this discovery
dispute. 8
Defendant points out that Plaintiff repeatedly failed to include disgorgement as a
category of damages in its initial disclosures pursuant to Rule 26(a). Plaintiff responds
that disgorgement of profits does not belong in their initial disclosures because
Defendant’s profits are not Plaintiff’s “damages” and the amount of Defendant’s profits
cannot be calculated without Defendant’s information. But Plaintiff’s interpretation of the
word “damages” to avoid a disclosure of its intent to pursue disgorgement of Defendant’s
profits is belied by Plaintiff’s disclosure of its “Computation of damages” to include
reference to the injunctive relief sought. (Doc. No. 44, Schmitt Decl., Ex. 6 at 3; id. Ex. 7
at 4.) Further, in its Memorandum of Law, Plaintiff asserts that “Congress has authorized
the recovery of three different types of monetary damages for the Lanham Act violations
at issue here: Defendant’s profits, Plaintiffs’ actual damages, and Plaintiffs’ costs of
litigating the Lanham Act claim.” (See Doc. No. 38, Pl.’s Mem. 12 (quoting Yah Kai
World Wide, 292 F. Supp. 3d at 355) (emphasis added).) Importantly here, most of the
discovery and other pretrial work took place out of this District in the D.C. Court, and
this Court is unaware of the guidance and oversight by the D.C. Court regarding initial
disclosures. This Court nevertheless observes that even if the calculation of a category of
damages cannot be made until a later time, the identification of the category of
8
Nothing in this Order precludes the parties from filing dispositive motions on the
viability of a disgorgement of profits theory when the time comes. The deadline and
procedures for serving and filing dispositive motions is set forth in the Pretrial
Scheduling Order.
11
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disgorgement of Defendant’s profits in a Lanham Act case would promote the purpose of
initial disclosures. However, due to the unique circumstances of this case, this Court will
not impose a discovery sanction for failure to identify disgorgement as a category of
damages in initial disclosures.
Thus, this Court turns to Rule 26(b) to analyze whether supplemental answers to
Interrogatory Nos. 14 and 15 should be compelled. While information about Defendant’s
profits may be sufficiently relevant and proportional to warrant production, these
particular interrogatories, as drafted, are vague because they rely on Plaintiff’s difficult to
follow definition of the product, 9 and overly broad because they do not include any
temporal limits. Accordingly, counsel for the parties are required to immediately meet
and confer to clarify and narrow these two discovery requests as set forth in greater detail
below. Defendant must answer the new requests no later than 30 days after the parties
agree on clarified and narrowed interrogatories. 10 Counsel for the parties are also required
9
“The term ‘Downweighted Ground Black Pepper Containers’ means the Ground
Black Pepper Containers, as defined above, that were filled in accordance with
McCormick’s ‘pepper weight reduction plan’ referenced in McCormick’s Rule 26(a)(1)
Initial Disclosures and also referenced in McCormick’s Answer to Watkins’s
Interrogatory No. 1.” (Doc. No. 42, Ex. F at 3.)
10
At the July 14, 2020 status conference, this Court raised concerns regarding the
parties’ language for the exchange of expert reports. The Court was assured that counsel
were on the same page with respect to the interpretation of their proposals. The Court is
not confident that the parties are in alignment on discovery issues. An amended
scheduling order will be issued to clarify that the parties may not wait to produce factual
information in their expert reports that is (a) responsive to discovery requests; and (b) in
the parties custody, possession, or control. The parties must immediately evaluate their
obligation to supplement discovery responses and initial disclosures.
12
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to meet and confer about the discovery Defendant will now take on the issue of
disgorgement. Plaintiff, however, is not permitted to take any additional discovery, and
the September 1, 2020 deadline for fact discovery still applies to all other discovery.
ORDER
Based on the file, record submissions, and argument of counsel, and for the
reasons stated above, IT IS HEREBY ORDERED that:
1.
Plaintiff’s Motion to Compel (Doc. No. 36) is DENIED as follows:
a. Plaintiff’s Motion to Compel answers and responses to
Interrogatory Nos. 5 and 20, and Document Request No. 14 is denied.
b. Plaintiff’s Motion to Compel supplemental answers to
Interrogatory Nos. 14 and 15 is denied, except that the Court grants
Plaintiff leave to work with Defendant to clarify and narrow the two
requests.
i. Counsel for the parties must meet and confer immediately
and complete their meet and confer within seven days of this Order
to clarify and narrow the two interrogatories. If the parties cannot
agree on two revised interrogatories, then they must file letters
setting forth their competing proposals and arguments no later than
fourteen days after this Order.
ii. Defendant must supplement its answer to revised
Interrogatory Nos. 14 and 15 no later than thirty days after the
parties agree on the revised interrogatories, or, if no agreement to
clarify and narrow the interrogatories is reached, within seven days
following this Court’s order on competing proposals.
2.
Defendant’s Follow Up Discovery. After meeting and conferring
with Plaintiff, Defendant must file a proposal regarding the limitations for any additional
fact discovery Defendant believes is necessary due to this Order. Defendant’s proposal
must be filed no later than fourteen days after this Order. Defendant must commence
discovery procedures in time for the additional fact discovery on the follow-up issues to
be completed no later than December 15, 2020. Defendant must serve any new written
discovery by September 14, 2020. And fact deposition notices, including any 30(b)(6)
deposition notices with topics, must be served by Defendant no later than October 26,
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2020. Any fact depositions permitted by this Order must be completed by December 15,
2020. If there are any disputes regarding the taking of depositions remotely due to
COVID-19 concerns or the appropriate protocol, motions must be filed by October 26,
2020.
3.
The September 1, 2020 fact discovery deadline remains in place
for all other fact discovery. The Court will issue an amended schedule addressing expert
discovery and other unexpired deadlines.
Dated: August 24, 2020
s/ Becky R. Thorson
BECKY R. THORSON
United States Magistrate Judge
14
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