JUDE CLOTHING AND ACCESSORIES v. BACHMANN et al
Filing
61
OPINION/ORDER ON INFORMAL CROSS-MOTIONS to compel discovery - granting Plaintiffs informal motion to compel document discovery; granting Plaintiffs informal motion to compel Defendants depositions; granting in part Defendants informal motion to compel document discovery. Signed by Magistrate Judge Steven C. Mannion on 11/2/15. (DD, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
NOT FOR PUBLICATION
JUDE CLOTHING AND
ACCESSORIES,
Civil Action No.
Plaintiff,
2:14-cv-05566-SDW-SCM
v.
OPINION AND ORDER ON INFORMAL
CROSS-MOTIONS TO COMPEL
BACHMAN, et al.,
[D.E. 59, 60]
Defendants.
MANNION, Magistrate Judge:
Now before the Court are cross-motions to compel discovery.1
Plaintiff Jude Clothing and Accessories (doing business as “Jude
Connally” and hereafter as same) contends that defendants have
failed to “provide all the information” concerning their sales
and have “refused to appear for their depositions until they
receive… financial and customer information of Jude Connally.”2
Defendants counter that Jude Connally has refused to produce any
financial data despite clear direction from the Court.3
was
no
oral
argument.
Upon
consideration
of
the
There
parties'
submissions and for the reasons set forth herein, Plaintiff’s
(ECF Docket Entry No. (“D.E.”) 59, Plaintiff Letter Brief and
60, Defendants’ Letter Brief).
1
2
3
(D.E. 59 at 5).
(D.E. 60 at 1).
informal motion to compel is granted and Defendants’ informal
motion to compel is granted in part.
I.
BACKGROUND AND PROCEDURAL HISTORY
A. Factual Background
Jude Connally is a clothing designer and manufacturer.4
“sells
to
customers
online
up
states
Ruth
Bachmann
in
sells
Jude Connally accuses Megan Phillips (“Phillips”), its
and
boutiques
and
states.”5
manager,
of
50
to
account
hundreds
to
wholesale
former
potentially
in
It
over
(“Bachmann”),
20
its
former product manager, of conspiring with Jean Tremblay, Betsy
Tremblay, Jean G. Designs, and Gingy’s LLC (collectively the
“Tremblay Defendants”) to steal proprietary business information
and create a line of replica dresses for sale to Jude Connally’s
customers and others.6
Jean
G.
Designs
operates
women’s
retail
clothing
stores
under the name Gingy’s LLC in Pennsylvania and New Jersey.7
is
allegedly
owned
by
Jean
Tremblay.8
Her
daughter
It
Betsy
4
(D.E.
1-2, Amended Complaint ¶ 1).
5
(D.E.
59, Plaintiff Letter at 3).
(D.E.
1-2, Amended Complaint ¶¶ 13, 16, 21 – 31; D.E. 59 at 1).
6
7
(D.E. 1, Amended Comp. at ¶ 21).
8
(D.E. 1, Amended Comp. at ¶ 25).
2
Tremblay is alleged to be an owner of Gingy's ’LLC.9
Gingy’s LLC
has been a customer of Jude Connally for a number of seasons.10
Either Jean G. Designs or Gingy’s LLC cancelled 150 pieces
of a 300 piece dress order from Jude Connally at about the time
the alleged conspiracy was uncovered.11
This cancelation, Jude
Connally suspects, was because the Tremblay Defendants intended
to sell dresses that had been designed by Bachmann and Phillips
while they were still employed by Jude Connally.12 Jude Connally
further
alleges
solicit”
that
accounts
Defendants
“in
the
“solicited
New
England
or
and
intended
to
Mid-Atlantic
regions….”13
B. Procedural History
On June 24, 2014, Jude Connally filed its complaint against
defendants
Bachmann,
Phillips,
and
the
Tremblay
Defendants
(collectively “Defendants”) in New Jersey Superior Court.14
With
regard to damages, Jude Connally claims it has “suffered and
will continue to suffer damages as well as imminent, immediate
9
(Id.).
10
(Id.
at ¶ 23).
11
(Id.
at ¶ 66).
12
(Id.
at ¶¶ 67-68).
13
(Id.
at ¶ 59).
14
See (D.E. 1, Amended Comp.).
3
and irreparable harm.”15
Its damages include, “but [are] not
limited to, the salary paid to Bachmann during the period of
September 2013 to March 2014 … as well as lost sales, goodwill
and market share as a result of Defendants' unfair competitive
activities and unlawful conduct.”16
Defendants removed the action to this Court on September 8,
2014,17 and
Defendants
filed their respective
also
counterclaimed
pleadings.18
and
filed
The Tremblay
third-party
claims
against Jude Connally Zimmerman (“Zimmerman”)19 and Lisa Connally
Kenisic
(“Kenisic”)
alleging
various
theories
of
recovery,20
with a claim to “have been harmed and damaged in an amount to be
determined at trial.”21
(D.E. 1, Amended Comp. ¶¶ 96, 101, 106, 112, 118, 122, 126,
131, 134, 138, 145, 152).
15
16
17
18
(Id. at ¶¶ 160, 163).
(D.E. 1).
See (D.E. 12, 22, 23, 38, 40).
(D.E. 1, Amended Complaint at ¶ 4 (Zimmerman is Jude Connally’s
founder and Chief Executive Officer)).
19
20
See (D.E. 12, 22, 23, 38, 40).
(D.E. 22, Tremblay Counterclaim/Third-Party Complaint at ¶¶ 15,
19, 23, 27, 30, 35, 40, 45).
21
4
II.
DISCUSSION
A. § 636, Magistrate Judge Authority
Magistrate
judges
are
authorized
by
28
U.S.C.
§
636(b)(1)(A) to decide any pre-trial matter designated by the
Court. This District has specified that magistrate judges may
determine
any
72.1(a)(1).
Rule
37.1
non-dispositive
pre-trial
motion.
L.Civ.R.
This District has further provided in Local Civil
that
discovery
disputes
are
magistrate judge on an informal basis.
to
be
brought
to
the
Decisions by magistrate
judges must be upheld unless “clearly erroneous or contrary to
law.” 28 U.S.C. § 636(b)(1)(A).
B. Fed.R.Civ.P. 26(b)(1), Liberal Policy
Federal Rule of Civil Procedure 26 defines the scope of
discovery.22
obtain
Pursuant
discovery
relevant
to
any
to
regarding
party’s
subparagraph
any
claim
(b)(1),
non-privileged
or
defense.”23
“parties
matter
may
that
Courts
is
have
interpreted the federal rules to mean that discovery encompasses
“any matter that bears on, or that reasonably could lead to
22
23
Fed.R.Civ.P. 26.
Fed.R.Civ.P. 26(b)(1).
5
other matters that could bear on any issue that is or may be in
the case.”24
“When a party fails to make disclosure of discovery, the
opposing party may file a motion to compel.
When a motion to
compel
overrule
is
filed
and
asks
the
court
to
certain
objections, the objecting party must specifically show how each
discovery request is objectionable.”25
Damages discovery is “essential to give [d]efendants fair
notice of the scope of th[e] case, in order to assess their
exposure accurately, decide how and at what expense to conduct
their
defense,
prospects.”26
and
evaluate
any
potential
settlement
A plaintiff designer may prove its damages by
relying upon evidence of its profits or alleged lost profits.27
A defendant’s financial information may also be relevant to a
claim for disgorgement.28
Likewise, an increase in a defendant’s
profits that coincide with a decrease in a plaintiff’s profits
Kopacz v. Del. River and Bay Auth., 225 F.R.D. 494, 496 (D.N.J.
2004).
24
25
Kannaday v. Ball, 292 F.R.D. 640, 644 (D.Kan. 2013).
Oracle USA, Inc. v. SAP AG, 264 F.R.D. 541, 550 (N.D.Cal.
2009).
26
Symbol Technologies, Inc. v. Janam Tech. LLC, 729 F.Supp.2d
646, 652 (D.Del. 2010).
27
See Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d Cir. 2005)
(a defendant’s willfulness need not be shown to find that equity
favors disgorgement.).
28
6
could
be
used
to
show
the
amount
of
the
plaintiff’s
actual
damages.29
Jude
Connally’s
Amended
Complaint
claims
it’s
damages
include, “lost sales, goodwill and market share as a result of
Defendants'
unfair
conduct.”30
competitive
activities
and
unlawful
Plaintiff’s Letter Brief, however, measures damages
in terms of the ill-gotten revenue, salary, benefits, and startup
savings
relevance
enjoyed
and
undue
by
defendants.31
burden
favor
a
Jude
ruling
Connally
that
argues
limits
its’
discovery production to those customers and markets in which
Defendants
have
unlawfully
competed.32
It
reasons
that
if
Defendants only sold dresses in New Jersey and Pennsylvania, it
should not have to produce discovery concerning other states.33
Relevant information need not be admissible at trial to be
discoverable, but the party seeking discovery “has the burden of
showing” that the information sought is relevant to the subject
Garner v. Yarnall, No. CIV.A.03-4967, 2005 WL 834870, at *2
(E.D. Pa. Apr. 11, 2005).
29
30
(D.E. 1-2, Amended Comp. ¶¶ 160, 163).
31
(D.E.
32
(Id. at 2).
33
(Id. at 5).
59 at 2).
7
matter of the action and may lead to admissible evidence.”34 That
is because the sole purpose of discovery is to add flesh for
trial on the parties’ respective claims and defenses in the
given
action.
Discovery
is
not
a
fishing
expedition
for
dresses
New
potential claims or defenses.35
According
to
Defendants,
they
have
sold
Jersey, Pennsylvania, and over the Internet.36
in
Defendants have
not shown how information beyond those three markets is relevant
to the subject matter of this action or how it may lead to other
admissible evidence.
Defendants are, however, entitled to Jude
Connally’s financial data for those three markets.
Neither side may hold discovery hostage while awaiting the
other’s productions.
important
at
this
Doing so will invite sanctions.
stage,
is
that
both
sides
What is
disclose
their
respective damages claims and provide discovery.
An appropriate Order follows.
Caver v. City of Trenton, 192 F.R.D. 154, 159 (D.N.J.
2000)(quoting Nestle Foods Corp. v. Aetna Cas. & Sur. Co., 135
F.R.D. 101, 105 (D.N.J. 1990).
34
Smith v. Lyons, Doughty & Veldhuius, P.C., 2008 WL 2885887, at
*5 (D.N.J. July 23, 2008).
35
36
(D.E. 60 at 1-2).
8
ORDER
IT IS on this Monday, November 02, 2015,
1. ORDERED that Plaintiff’s informal motion to compel document
discovery
is
granted
consistent
with
the
Opinion
above.
All responsive discovery is to be produced within ten days;
and it is further
2. ORDERED
that
Plaintiff’s
informal
Defendants’ depositions is granted.
confer
within
seven
days
on
a
motion
to
compel
Counsel to meet and
schedule
to
produce
Defendants for deposition on a rolling basis over the next
60 days; and it is further
3. ORDERED that Defendants’ informal motion to compel document
discovery is granted in part consistent with the Opinion
above.
All responsive discovery to be produced within ten
days.
11/2/2015 6:18:59 PM
Original: Clerk of the Court
cc: All parties
File
9
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