Rosehoff, Ltd. v. Truscott Terrace Holdings LLC et al

Filing 59

DECISION AND ORDER. Plaintiff's request for expenses including reasonable attorneys fees incurred in connection with Plaintiff's motions to compel is GRANTED. Plaintiff's affidavit of such expenses shall be filed within 30 days; Defendants' response shall be filed within 15 days thereafter. Oral argument shall be at the court's discretion.Signed by Hon. Leslie G. Foschio on 5/10/2016. (SDW)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
ROSEHOFF, LTD.,

DECISION
and
ORDER

Plaintiff,
v.
TRUSCOTT TERRACE HOLDINGS LLC,
TRUSCOTT TERRACE HOLDINGS GROUP LLC,
TRUSTCOTT TERRACE INTERNATIONAL HOLDINGS
GROUP, LLC,
GREGORY GANNON,
GORDON GANNON,
Defendants.
________________________________________
APPEARANCES:

14-CV-277S(F)

BARCLAY DAMON, LLP
Attorneys for Plaintiff
CHARLES B. von SIMSON, of Counsel
200 Delaware Avenue, Suite 1200
Buffalo, New York 14202
STEPHEN F. SZYMONIAK, ESQ.
Attorney for Defendants
262 Brompton Road
Williamsville, New York 14221

In this declaratory judgment action, filed April 16, 2014, Plaintiff seeks to annul
various property rights Plaintiff claims Defendants have asserted in Cataclean, an aftermarket automobile fuel additive which purports to enhance auto engine performance
particularly for fuel injection systems and catalytic converters. As alleged by Plaintiff,
which owns trademark registrations and patents in the Cataclean packaging and
compound, Defendants’ claims cover numerous aspects of the Cataclean product
including copyright, trademark, trade dress, and patent rights relating to labelling, bottle
design, and the underlying chemical compound of the Cataclean product under both
U.S. and U.K. law. The Truscott Defendants are assignees of patents and trade dress
1

rights relating to the Cataclean product and Defendants Gregory and Gordon Gannon
(“the Gannon Defendants”) brother who are former managers of the U.S. distributor for
Cataclean, Cataclean Americas LLC, (“CAL”). After Plaintiff caused the termination of
the Gannon Defendants’ management authority in CAL in 2013, Defendants asserted
rights in the Cataclean products against Plaintiff and certain of Plaintiff’s customers and
licensees. Plaintiff’s First Set of Interrogatories and Document Requests which included
a request for production of electronically stored documents, particularly e-mails, relevant
to Plaintiff’s claims, was served April 17, 2015. Because of Defendants’ failure to fully
respond (Dkt. 42-5), Plaintiff moved to compel (Dkt. 35) which was granted on the
record (Dkt. 41) following oral argument on July 29, 2015. Thereafter, on October 28,
2015, Plaintiff again moved to compel more complete responses to Plaintiff’s document
requests noting Defendants’ response served June 15, 2015 (Dkt. 42-5) had failed to
produce any responsive e-mails. (Dkt. 42) (“Plaintiff’s motion”). Plaintiff also moved to
compel the deposition of Defendant Gordon Gannon.
In Defendants’ response, Defendants stated Defendants were withdrawing
Defendants’ statutory trade dress, bottle design (Dkt. 55-1 at 7), private label copyright
registration, and patent claims. Dkt. 42-5 (passim); Dt. 49 ¶ 20. Despite Defendants’
stated intention to moot all but Plaintiff’s claims relating to the Defendants’ asserted
rights to the Cataclean bottle design and labelling, Plaintiff maintains the requested
discovery remained relevant to Defendants’ continued refusal to abandon Defendants’
common law rights in the design of the plastic bottle which Defendants claim enhances
the marketing and use of the Cataclean product. Dkt. 50 (“Defendants will defend
common law or secondary meaning rights to the [Cataclean] bottle design as

2

challenged in Plaintiff’s second cause of action [alleging Defendants’ asserted trade
dress rights in the bottle]”) (bracketed material added).1 Finding that Defendants had
failed to demonstrate Defendants had made a reasonable effort to search for and
produce responsive documents, especially e-mails between the Gannon Defendants,
the court, by Decision and Order filed December 4, 2015, (Dkt. 48) (“The December 4,
2015 D&O”), granted Plaintiff’s motion and required Defendants produce the requested
documents and provide affidavits describing all computers and storage devices or
services used by Defendants during the relevant period of 2010 – 2014 to create and
store responsive documents, particularly e-mails, and, if such devices were destroyed,
the circumstances of such destruction. December 4, 2015 D&O at 4. The court also
directed Defendant Gordon Gannon’s deposition be conducted within 30 days, id., and
that Defendants show cause why Plaintiff’s expenses incurred in connection with
Plaintiff’s motion should not be awarded pursuant to Fed.R.Civ.P. 37(a)(5)(A) (“Rule
37(a)(5)(A)”), and how such expenses should be apportioned between Defendants and
Defendants’ counsel. Id.
In opposition to the award of sanctions, Defendants contend that based on
Defendants’ stated willingness during mediation to withdraw Defendants’ previously
asserted rights in the Cataclean product, labelling and bottle design, except for
Defendants’ common law trade dress rights in the shape of the bottle, any inadequacies
in Defendants’ required responses to Plaintiff’s document requests should be excused.
Dkt. 49 ¶¶ 19, 26 (referring to Defendant Truscott Terrace Holdings, LLC’s common law
right to the Cataclean bottle design, acquired by assignment from Defendant Gregory

1

In Plaintiff’s recently filed motion for summary judgment (Dkt. 55), Plaintiff states Defendants also
continue to assert Defendants’ registered copyright in the Cataclean bottle’s labelling. Dkt. 55-1 at 4.
3

Gannon who designed the bottle, Dkt. 49-3 ¶ 32, and Defendants’ “reasonable” decision
not to engage in full-throated discovery until a suitable stipulation significantly reducing
the scope of Plaintiff’s claim had been executed).2 In response to the court’s direction
in the December 4, 2015 D&O to describe Defendants’ effort to comply with Plaintiff’s
document requests, Defendants also filed the Affidavits of Defendants Gregory Gannon
and Gordon Gannon (Dkts. 49-3 and 49-5, respectively) and the Affidavit of Sheila
Gannon, wife of Defendant Gregory Gannon (Dkt. 49-4).
In Gregory Gannon’s affidavit, Mr. Gannon recounts using three computers to
produce potential responsive documents between 2008 and 2014. Specifically, Gregory
Gannon states that files created in an HP laptop were transferred to an Apple iMac 27 in
2010, when the HP laptop was discarded. Dkt. 49-3 ¶¶ 9-10. Because of subsequent
user problems with the Apple iMac computer, Gregory Gannon’s files on the iMac were
then transferred to a replacement which Apple provided. Id. ¶ 11. In 2012, another HP
laptop was used by Defendants’ bookkeeper which was turned over in 2014 to Gregory
Gannon who used it for CAL business purposes, and in early 2015 transferred all
remaining files from the iMac to the HP. Id. ¶ 14. According to Gregory Gannon, the
iMac was left in the family’s garage from which his wife, without his knowledge,
discarded it in the “summer of 2015.” Id. ¶ 15. In her affidavit, Sheila Gannon stated
that the iMac 27 computer previously used by Defendant Gregory Gannon was
discarded, without Gregory Gannon’s knowledge, by her sometime during the summer
of 2015. Dkt. 49-4 ¶ ¶ 5, 6. In his affidavit, Defendant Gordon Gannon states that prior
to responding to Plaintiff’s document requests, he reviewed all pertinent e-mails stored
in an external hard drive after backing up all documents stored in an iMac 27 computer
2

The record does not indicate any such stipulation was ever executed.
4

he, like Defendant Gregory Gannon, used at that time, Dkt. 49-5 ¶ 17, and forwarded
copies of relevant e-mails to Defendants’ attorney who in turn served them on Plaintiff.
Dkt. 49-5 ¶ 19.
According to Gregory Gannon, he has reviewed all the files on the HP computer
and avers all responsive documents including e-mails have now been produced to
Plaintiff. Id. ¶ 16. However, Gregory Gannon also disclosed, for the first time in this
action, Dkt. 51 ¶ 5, the existence of a host server (as opposed to the CAL e-mail
account, used by the Gannon Defendants, which Defendants had identified in response
to Plaintiff’s interrogatories in a related state court action, see Dkt. 53-1 at 6,
Interrogatory No. 16)) for his e-mails maintained for Defendants Gregory and Gordon
Gannon while they were acting as managers of CAL, by one Paul Connelly
(“Connelly”),3 a non-party, during the period February 2009 – October 2013 (“the
Cataclean server”). Dkt. 49-3 ¶ 21. In particular, Plaintiff maintains Defendants did not,
in response to Plaintiff’s interrogatories and document requests, disclose the location or
identity of the server or the custodian of the server as such, see Defendants’ Initial
Disclosures, Exh. C, Dkt. 51-3; von Simson Declaration, Dkt. 51 ¶ 7; von Simson
Declaration, Dkt. 53 ¶¶ 3-5,4 but merely mentioned the existence of a “catacleanus.com”
e-mail account in response to Plaintiff’s interrogatories in the state court action. See
Dkt. 53-1 at 6-7 re: Interrogatory No. 15; Dkt. 53-2 at 6-7 re: Interrogatory No. 16.
Although Defendant Gregory Gannon averred “[a]ny hard copies of” “the information or
e-mails stored on that [the Cataclean] server” were provided to Plaintiff “in discovery in
3

The record indicates three different spellings for Mr. Paul Connelly’s name: Connelly, Dkt. 50-2 at 4;
Conneley, Dkt. 50-2 at 4; Connally, Dkt. 51 ¶ 4.
4
In answer to Plaintiff’s Interrogatory No. 15, requesting Defendants identify all persons or entities which
had provided “computer services” to Defendants, Defendants Gordon and Gregory Gannon stated that
“Respondent is not aware of any.” Dkt. 53-1 at 6; Dkt. 53-2 at 6.
5

prior New York state litigation,” Dkt. 49-3 ¶ 22 (bracketed material added), Defendants’
attorney subsequently advised Plaintiff’s attorney that Defendants had “no specific
recollection of requesting that copies of the information stored on the Cataclean server
be provided.” Dkt. 51 ¶ 12 (referencing Dkt. 51-2 ̶ a January 3, 2016 e-mail of Stephen
Szymoniak, Defendants’ attorney, to Charles von Simson, Plaintiff’s attorney).
Defendants’ attorney further advised Plaintiff that Defendant Gregory Gannon recalled
that the Cataclean e-mail server “had been shut down.” Dkt. 51-2 ¶ 3. Based on
Defendants’ refusal to assist Plaintiff in obtaining access to Paul Connelly, the custodian
of Defendants’ heretofore undisclosed e-mail server in order to obtain copies of stored
responsive documents, Dkt. 51 ¶ 13, Plaintiff concluded Defendants were resisting
discovery of relevant e-mails causing Plaintiff to obtain directly from Connelly a back-up
copy of the Defendants’ e-mails stored on the Cataclean server which Plaintiff is
reviewing with the assistance of a forensic electronic discovery expert. Dkt. 51 ¶ 14.
According to Plaintiff, based on an initial review of the back-up file obtained by Plaintiff,
in the expert’s opinion the back-up file from the Cataclean server contains a “significant
volume” of relevant e-mails. Id. ¶ 15.
In opposing Plaintiff’s sanction request, Defendant Gordon Gannon claims he
was not properly served with the summons and complaint in this case and that as a
New Jersey resident who has not transacted business in New York State, the court
lacks personal jurisdiction over him. Dkt. 49-5 ¶¶ 29-30. Defendant Gordon Gannon
also asserts that his pending motion to dismiss on this ground, Dkt. 20, filed along with
Defendants’ motion to vacate a default on October 28, 2014 (which was granted by the
District Judge, Dkt. 24), remains unresolved by the court. Id. ¶ 33. Notwithstanding this

6

objection, Defendant Gordon Gannon states he will attend a deposition in this district if
directed by the court. Id. ¶ 38.
In its reply, Plaintiff contends Defendants failed to identify the Cataclean server in
Defendants’ initial disclosures pursuant to Fed.R.Civ.P. 26(a), Dkt. 51 ¶ 7 (referencing
Dkt. 51-2), which disclosure could have avoided Plaintiff’s motions to compel on the
issue of Defendants’ e-mails, Dkt. 51 ¶ 8, and that contrary to Defendant Gregory
Gannon’s assertions, when Plaintiff served its document requests in this action because
he had knowledge of the server’s location and custodian Paul Connelly, Defendant
Gregory Gannon had access to the Cataclean server. Dkt. 51 ¶¶ 9-10.
In Plaintiff’s supplementary response, Plaintiff represents that in answering
Plaintiff’s interrogatories served in the related state court action Defendants failed to
describe the Cataclean e-mail server as a storage device for Defendants’ responsive emails. See Dkt. 53 ¶¶ 3-5 (referencing Defendant Gordon Gannon’s interrogatory
answers dated September 22, 2014, to Plaintiff’s Interrogatories Nos. 15-16, Dkt. 53-1
at 6-7 and Defendant Gregory Gannon’s interrogatory answers dated September 22,
2014 Dkt. 53-2 at 6-7). Specifically, Plaintiff contends, Dkt. 51 ¶ 11, the
“catacleanus.com” e-mail server was “newly identified” by Defendant Gregory Gannon,
because a plain reading of Defendants Gordon and Gregory Gannon’s related
interrogatory answers to Plaintiff’s Interrogatory No. 16, requesting identification of
Defendants’ e-mail providers in the state action, included the “catacleanus.com”
reference but does not identify this e-mail account or website as a server and thus a
storage device for Defendants’ e-mails.5

5

By declaration of Defendants’ attorney, Dkt. 54, Defendants object to Plaintiff’s Supplemental
Declaration (Dkt. 53) as an unauthorized sur-reply filed in violation of Local Rule Civ.P. 7(a)(6). However,
7

At the outset, the court finds no merit in Defendants’ contention that the
Defendants fully complied with their discovery obligations because the parties had
reached, through mediation, an understanding that Defendants intended to withdraw
nearly all of Defendants’ previously asserted various forms of property rights in the
Cataclean product, triggering Plaintiff’s action, including the design of its bottles and
labelling used to market, distribute and facilitate use of the product, except for
Defendant Gregory Gannon’s common law claim to the design of the Cataclean bottle,
and thus justified Defendants’ failure to provide complete responses to Plaintiff’s
discovery requests. Plaintiff contends that Defendants’ adherence to this single
common-law claim nevertheless warranted the broad scope of Plaintiff’s requests, and
Defendants do not argue otherwise. Plaintiff further contends, also undisputed by
Defendants, that Defendants’ willingness to limit Defendants’ claims in this action
occurred after the court granted Plaintiff’s second motion to compel in the December 4,
2015 D&O. See Dkt. 51 ¶ 28; Dkt. 52 (passim). Thus, that nearly all of Plaintiff’s claims
eventually would be mooted by some future stipulation did not warrant Defendants’
failure to timely provide relevant document discovery until after Plaintiff’s second motion
to compel, filed October 28, 2015, and cannot avoid sanctions pursuant to Rule
37(a)(5)(A) which requires sanctions where discovery responses are provided after a
motion to compel is filed unless the moving party failed to attempt to avoid motion
practice, such failure was substantially justified, or an award of sanctions under the
circumstances would be unjust.

as the court finds Plaintiff’s supplemental filing provides relevant information, the filing is approved nunc
pro tunc, and Defendants’ objection on this ground is overruled.
8

Here, that Plaintiff had previously moved, in compliance with Fed.R.Civ.P.
37(a)(1), to compel and the court granted from the bench Plaintiff’s first motion
establishes Plaintiff has satisfied the good-faith attempt to avoid judicial intervention and
Defendants do not argue otherwise. Like Defendants’ contention that the anticipated
reduction in Plaintiff’s claims relaxed Defendants’ duty to more thoroughly and promptly
respond to Plaintiff’s document ̶ stored e-mails ̶ production requests, Defendants’
further contention that Defendants, particularly Defendant Gordon Gannon, were not
obliged to respond to Plaintiff’s discovery requests because Defendants had previously
moved to dismiss based on a lack of personal jurisdiction also has no merit. While it is
true, as previously noted, supra, at 6, that when Defendants moved to vacate the
default Defendants also moved for dismissal before Judge Skretny based on jurisdiction
issues, and the court has not yet addressed Defendants’ jurisdictional motion,
Defendants nevertheless have not taken steps to request a ruling by the District Judge
on this issue and, instead, have proceeded to respond to Plaintiff’s discovery requests
and Plaintiff’s motions to compel without seeking a stay pending resolution of the
jurisdictional questions ̶ lack of proper service and long-arm jurisdiction ̶ raised by
Defendants’ motion.6 Moreover, Defendants have responded to Plaintiff’s recently filed
motion for summary judgment. See Dkt. 57. Finally, in the Scheduling Order filed
February 25, 2015, the court specifically required Defendants to file a motion to dismiss
on the jurisdictional issue by March 27, 2015 (Dkt. 31), but no further motion was filed.
Although under Judge Skretny’s referral order, Dkt. 26, the undersigned is without
authority to consider dispositive motions and therefore cannot address Defendants’

6

Plaintiff opposed Defendants’ motion to dismiss on the ground it was untimely under Fed.R.Civ.P.
12(a)(1), i.e., not filed within 21 days of service of the summons and complaint. Dkt. 21 at 12.
9

jurisdictional defense, caselaw indicates that where a defendant fails to object to a
motion to compel discovery based on a lack of personal jurisdiction, such failure
constitutes an acquiescence to jurisdiction, or a willingness to litigate as a form of
consent to the court’s jurisdiction which does not bar judicial consideration of a motion
to compel. See North Shore Concrete and Associates, Inc. v. City of New York, 1996
WL 391597, at *2 (E.D.N.Y. July 10, 1996) (failure to oppose motion to compel by
asserting lack of personal jurisdiction established that non-party witness acquiesced to
court’s jurisdiction) (citing caselaw). Here, a review of Defendants’ opposition to
Plaintiff’s motions to compel (see Dkts. 37 and 45) (passim) shows that in neither of
Defendants’ opposition papers did Defendants raise the jurisdictional defense. Thus,
because of Defendants’ failure to oppose on personal jurisdiction grounds Plaintiff’s
motions to compel production of e-mails and Defendant Gordon Gannon’s deposition,
Defendants’ belated reliance on Defendants’ jurisdictional motion presents no bar to the
imposition of sanctions for failure to more completely respond to Plaintiff’s document
production requests in this matter.
As noted, sanctions, at a minimum reasonable attorneys fees, incurred in
prosecuting a motion to compel are mandated by Rule 37(a)(5)(A) unless the failure of
the responding party to provide discovery was substantially justified or an award of
attorneys fees would, under the circumstances, be unjust. A party’s failure to provide
discovery is substantially justified if a genuine dispute exists or if there is an objectively
reasonable basis for the failure. See Parsi v. Daioleslam, 778 F.3d 116, 126 (D.C. Cir.
2015) (citing caselaw). An award of attorneys fees may be unjust where the party’s
failure was based on factors beyond the party’s control. See Scott-Iverson v.

10

Independent Health Association, Inc., 2016 WL 1458239, at *3 (W.D.N.Y. Apr. 14,
2016). Here, the record supports a finding that as to Defendant Gordon Gannon’s
refusal to schedule an oral deposition, such refusal was not substantially justified.
Although Gordon Gannon and his counsel may have believed the court lacked
jurisdiction over him, this objection was not interposed by Defendants in opposition to
Plaintiff’s motions to compel, nor in accordance with the Scheduling Order, and, as
such, it is not unreasonable to find it was waived for the purposes of Plaintiff’s motion to
compel Gannon’s deposition. See North Shore Concrete and Associates, Inc., 1996
WL 391597, at *2. Additionally, Defendants’ failure to reference the Cataclean server in
this action when Defendants could have done so in Defendants’ disclosures and
responses to Plaintiff’s document requests, as well as in a related state court action,
and later disclosed its existence for the first time in this action in response to the
December 4, 2015 D&O, supports that there was no obstacle beyond Defendants’
control, for example any refusal by Mr. Connelly’s to provide a copy of the back-up
stored e-mails upon Defendants’ request, to such production in response to Plaintiff’s
document requests and motions. Defendants point to no other circumstances that
would warrant a finding that it would be unjust to award attorneys fees as to this part of
Plaintiff’s motion. As to Defendants’ production of CDs and a flash drive which
contained copies of Defendants’ documents and e-mails stored on the Gannon
Defendants’ personal computers after Plaintiff’s motion was filed, see December 14,
2015 D&O at 1, other than Defendants’ irrelevant belief that the pace of discovery in this
case should be slower because Defendants anticipated the number of Plaintiff’s claims
were to be reduced, such belief was unreasonable given that Defendants, particularly

11

Gregory Gannon, intended to continue to assert common law protection in the
Cataclean bottle design and a copyright in its labelling thereby requiring Plaintiff to
engage in comprehensive discovery requests directed to these asserted interests.
Significantly, Defendants did not request a protective order to limit the scope of
discovery pursuant to Fed.R.Civ.P. 26(c) based on this supposed ground. Further,
Defendant Gregory Gannon’s assertion that e-mails from the Cataclean server had
been provided to Plaintiff was subsequently contradicted by Defendants’ attorney, as
noted, supra, at 5 (referencing Dkt. 51 ¶ 12). Thus, Defendants’ repeated failures to
identify the Cataclean server as a source of responsive documents or to provide
responsive e-mail documents which could have been obtained by Defendants from the
undisclosed Cataclean server and the Gannon Defendants’ computers prior to Plaintiff’s
motions were not substantially justified, and Defendants point to no circumstances
beyond Defendants’ control, including a lack of access, excusing an earlier and more
complete production that would render the award of Plaintiff’s attorneys fees as to this
component of the dispute unjust.
Regarding the Cataclean e-mail server utilized by Defendants until 2013,
particularly Defendant Gregory Gannon, when Plaintiff served on April 17, 2015 the
document request at issue, the court considers whether Defendant Gregory Gannon,
had possession, custody, or control of responsive documents as a basis to require
production by a party as required by Fed.R.Civ.P. 34(a)(1) (“Rule 34(a)(1)”) of the
server maintained by a non-party. Here, the record does not indicate Gregory Gannon
had physical possession or custody of the server at that time as the device was
maintained by Connelly apparently at a location other than premises used by

12

Defendants for Defendants’ business purposes while, for example, CAL’s managers .
Nevertheless, a party may, for Rule 34(a)(1) purposes, have sufficient control of
responsive documents despite the absence of physical control if the party has actual
control or the practical ability to obtain documents from a non-party in response to a
discovery request. See Alexander Interactive, Inc. v. Adorama, 2014 WL 61472, at *3
(S.D.N.Y. Jan. 16, 2014) (citing caselaw); see also In re NTL, Inc. Securities Litig, 244
F.R.D. 179, 195 (S.D.N.Y. 2007) (citing caselaw). For purposes of Rule 34(a)(1), actual
control by a party includes where the party has both access and the practical ability to
possess the requested documents, here copies of the Defendants’ e-mails responsive
to Plaintiff’s requests, stored by Defendants on the Cataclean server in connection with
the conduct of CAL’s business by the Gannon Defendants. Alexander Interactive, Inc.,
2014 WL 61472, at *3 (quoting Thai Lao Lignite (Thailand) Co. v. Government of Lao
People’s Democratic Republic, 924 F.Supp.2d 508, 515 (S.D.N.Y. 2013)). Evidence
required to establish such practical ability to obtain documents includes “cooperative
agreements or contracts between the responding party and non-party, the extent to
which the non-party has a stake in the outcome of the litigation, and the non-party’s past
history of cooperating with document requests.” Id. “Where control is contested, the
party seeking production of documents bears the burden of establishing the opposing
party’s control over those documents.” Id. (citing caselaw).
In this case, Defendant Gregory Gannon belatedly acknowledged the existence
and location of the Cataclean e-mail server which had been used by the Gannon
Defendants over a substantial period of time, maintained by Connelly, a non-party, who
promptly, Dkt. 51 ¶ 14, responded to Plaintiff’s subpoena to obtain a copy of Defendant

13

Gregory Gannon’s e-mails stored on the server thus indicating the e-mails remained
readily available on the server well after the Gannon Defendants were terminated in
2013 from their managerial positions in CAL. Moreover, by his belated disclosure in
response to the court’s order to show cause, Defendant Gregory Gannon acknowledged
his prior use of the server and awareness of the identity of Mr. Connelly as the
custodian who maintained the Cataclean server. Significantly, Defendant Gregory
Gannon’s disclosure of the Cataclean e-mail server came as a result of his declaration
in response to the court’s direction in the December 4, 2015 D&O requiring Defendants
list all storage devices used by Defendants for e-mail storage during the period 20102014 whether maintained by Defendants or a third-party, December 4, 2015 D&O at 4,
supporting that absent the court’s required full disclosure regarding Defendants’ use of
computer data storage services, including any provided by a third-party, the existence of
this apparent cache of responsive information would have remained unknown to
Plaintiff. Although Plaintiff points to no specific examples of prior cooperation between
Defendants and Connelly with respect to Defendants’ ability to access the records
stored on the server after 2013, that Connelly had maintained the server over a
substantial period of time for Defendants, particularly Gregory and Gordon Gannon,
while the Gannon Defendants, and CAL, were until 2013 his customers and readily
cooperated with Plaintiff by responding to Plaintiff’s subpoena in January 2016,
providing a copy of Defendants’ e-mails which remained stored on the server,
reasonably supports a finding that Connelly would have equally cooperated with
Defendants, who were Connelly’s former customers and to whom Connelly had over
several years provided day-to-day computer services as the person who maintained the

14

server, had they contacted him and requested he search the server and provide a hard
copy of Defendants’ e-mails for production to Plaintiff. See In re NTL, Inc. Securities
Litig, 244 F.R.D. at 196 (absence of continuing business or contractual relationship
providing for party’s right to obtain documents does not bar finding that responding party
had practical ability to obtain and produce documents) (citing Exp.-Imp. Bank of the
United States v. Asia Pulp & Paper Co., 233 F.R.D. 338, 341-22 (S.D.N.Y. 2005)
(plaintiff bank had practical ability to obtain relevant documents from its non-party
former employee or at least was required to request its former employee to produce the
documents “before asserting that they have no control over documents in the former
employee’s possession.”)) Further, Defendants do not dispute Defendants had the
practical ability to obtain a copy of Defendants’ e-mails from Connelly when Defendants
were served with Plaintiff’s document production request on April 17, 2015.
Additionally, that the server had been shut-down, as Defendants argue, Dkt. 52 at 3 ¶
15, did not, as demonstrated by Plaintiff’s ability to obtain hard copies of Defendants’ emails, affect the continued presence of Defendant’s e-mails stored on the server and
Defendants’ ability, based on Defendants’ continued ownership interest in the stored emails, to request Connelly to provide Defendants with a copy of all Defendants’ e-mails
then stored on the server responsive to Plaintiff’s request. See Brown v. Tellermate
Holdings, Ltd., 2014 WL 298705,1 at *8 (S.D. Ohio July 1, 2014) (information, such as
e-mails in a Google or Outlook account, stored on a server owned or maintained by an
e-mail provider remains owned by the e-mail account user subject to discovery).
Defendants, particularly Defendant Gregory Gannon’s, failure to make a similar inquiry
and request of Connelly in response to Plaintiff’s document requests together with

15

Defendants’ attorney’s refusal to cooperate with Plaintiff in contacting Connelly
therefore amounts to a conscious disregard of Defendants’ duty of production of
relevant information justifying the inference that Defendants were thereby attempting to
avoid such production. That Defendants disclosed Defendants’ Cataclean e-mail
account or website, but not the Cataclean e-mail server on which such e-mails were
stored, in the state action ignores the difference between an e-mail account and a
server, which enables providing the e-mail service to a user such as Defendants, or
storage device for computer data such as e-mail back-up records,7 and is therefore
irrelevant to whether Defendants failed in their obligation to search for and produce
responsive e-mail records stored on the Cataclean server, or its identity and location, in
this action. See Brown, 2014 WL 2987051, at *2 (responding party and counsel have
duty to make reasonable investigation to locate and produce ESI responsive to
discovery requests). Defendants’ response to Plaintiff’s Document Demand No. 24,
Dkt. 42-5 at 8, seeking documents “referring or relating to” Defendant Gregory
Gannon’s rights in the Cataclean trade dress, design and label, that all of Defendants’
responsive documents, including copies of relevant e-mails, were previously provided to
Plaintiff was therefore untrue. Taken as whole, the record thus supports Defendants
had the practical ability based on Defendants’ prior business relationship with Mr.
Connelly and Connelly’s demonstrated cooperativeness, see Alexander Interactive, Inc.,
2014 WL 61472, at *3; In re ATL, Inc. Securities Litig., 244 F.R.D. at 196-97 (citing Asia
7

“Email (Electronic Mail): An electronic means for sending, receiving, and managing communications via
a multitude of different structured data applications (email client software), such as Outlook or Lotus
Notes, or those often knows as “webmail,” such a Google Gmail or Yahoo Mail.” THE SEDONA
CONFERENCE GLOSSARY: E-DISCOVERY & DIGITAL INFORMATION MANAGEMENT (THIRD EDITION), September
2010 Version at 19.
“Server: Any central computer on a network that contains ESI or applications shared by multiple users of
the network on their client computers. A computer that provides information to client machines.” Id. at
47.
16

Pulp & Paper Co., 233 F.R.D. at 341-42), to obtain and produce these records in
response to Plaintiff’s April 2015 document requests as required under Rule 34(a)(1)
and failed to do so timely in order to avoid the necessity of Plaintiff’s repeated motions
seeking such production. As such, Defendants’ failure to identify fully and produce the
e-mail records stored on the Cataclean server and the other documents including
copies of e-mails, floppy discs, and hard drives, belatedly produced by Defendants from
their own computers, prior to Plaintiff’s motions was not substantially justified, see Rule
37(a)(5)(A) (discovery responses provided after motion to compel subject to sanctions),
and no circumstances are present that would make an award of Plaintiff’s attorneys fees
unjust.
Turning to the proper allocation of Plaintiff’s expenses between Defendants and
Defendants’ attorney as required by Rule 37(a)(5)(A), the record indicates that
Defendants’ failure to timely produce responsive documents prior to Plaintiff’s motions
resulted from Defendants’ attorney’s erroneous views as to a justification, such as a
possible reduced scope of Plaintiff’s claims, for Defendants’ piecemeal responses.
Further, because counsel served Defendants’ answers to Plaintiff’s interrogatories in the
state action which made reference to the Defendants’ Cataclean e-mail account and
website, but not the Cataclean server disclosed by Defendant Gregory Gannon in this
action, counsel either knew of or reasonably should have known of the Cataclean server
from Defendant Gregory Gannon as a possible source of responsive e-mails requiring
Defendants to make a reasonable search for and produce such records. Nor does the
fact that the Cataclean server was shut down as a result of Plaintiff’s letter of Connelly
requesting a cessation of use of the Cataclean trademark in connection with maintaining

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Defendants’ e-mail account, as Defendants argue, Dkt. 52 at 3 ¶ 15, excuse
Defendants’ failure to produce. See Brown, 2014 WL 2987051, at *6 (deactivation of email account does not destroy stored information available for required production).
Counsel therefore had a duty to facilitate full disclosure and production by Defendants.
See Alexander Interactive, Inc. v. Adorama, Inc., 2013 WL 6283511, at *7 (S.D.N.Y.
Dec. 4, 2013) (“‘Discovery in our adversarial system is based on a good faith response
to demands for production by an attorney constrained by the Federal Rules and by
ethical obligations.’” (quoting Rozell v. Ross-Holst, 2006 WL 163143, at *4 (S.D.N.Y.
Jan. 20, 2006))); see also, Brown, 2014 WL 2987051, at **18, 24 (awarding attorneys
fees as sanctions jointly against defendant and its counsel where counsel failed to
reasonably investigate to assure defendant’s compliance with valid discovery request
for stored ESI). Thus, it is proper to allocate responsibility for Plaintiff’s attorneys fees
equally between Defendants and Defendants’ attorney pursuant to Fed.R.Civ.P.
37(a)(5)(A).
CONCLUSION
Based on the foregoing, Plaintiff’s request for expenses including reasonable
attorneys fees incurred in connection with Plaintiff’s motions to compel is GRANTED.
Plaintiff’s affidavit of such expenses shall be filed within 30 days; Defendants’ response
shall be filed within 15 days thereafter. Oral argument shall be at the court’s discretion.
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: May 10, 2016
Buffalo, New York

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