Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_12-cv-00386/USCOURTS-azd-4_12-cv-00386-2/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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Defendant’s Motion for Summary Judgment (Doc. 95) is addressed in a separate order.

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

ORDNANCE TECHNOLOGIES

(NORTH AMERICA) INC.,

Plaintiff,

vs.

RAYTHEON COMPANY,

Defendant. 

RAYTHEON COMPANY AND

RAYTHEON MISSILE SYSTEMS, 

Counterclaimants,

vs.

ORDNANCE TECHNOLOGIES

(NORTH AMERICAN) INC.,

Counter-defendant. 

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No. CV 12-386-TUC-CKJ

ORDER

Pending before the Court is Defendant’s Motion for Sanctions (Docs. 116, 117, and

118).1

 A response (Docs. 126, 127, 128, 131, 136, and 137) and a reply (Doc. 138) have

been filed. Argument was presented to the Court on January 30, 2015.

Case 4:12-cv-00386-CKJ Document 152 Filed 03/13/15 Page 1 of 7
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Factual and Procedural Background

Ordinance Technologies (North America), Inc. (collectively, with its predecessor in

interest Ordinance Technologies (UK) Limited, “OTNA”) filed this action against Raytheon

Missile Systems (collectively, with Raytheon Company, “Raytheon”) on May 18, 2012.

OTNA’s Complaint against Raytheon alleges claims of (Count 1) Statutory Misappropriation

of Trade Secrets, (Count 2) Common Law Misappropriation of Trade Secrets, (Count 3)

Breach of Contract, (Count 4) Breach of Implied Contract, (Count 5) Breach of Implied

Covenant of Good Faith and Fair Dealing, (Count 6) Unjust Enrichment, (Count 7)

Conversion, (Count 8) Interference with Contract or Business Expectancy, (Count 9) Unfair

Competition, and (Count 10) a violation of the Lanham Act. Complaint (Doc. 1). 

On May 30, 2013, Raytheon filed a Partial Motion for Summary Judgment (Doc. 35).

The deadline for the response was extended to July 29, 2013. OTNA filed its response on

July 30, 2013. A Statement of Facts (and supporting documents or controverting evidence)

was not filed contemporaneously with the late-filed response. After Raytheon pointed out

this failure in its August 22, 2103 reply (Doc. 43), OTNA filed a Statement of Facts on

November 22, 2103. Raytheon filed a Motion to Strike and for Sanctions (Doc. 55). The

Court granted the Motion to Strike (Doc. 59). Subsequently, the Partial Motion for Summary

Judgment was granted; the only remaining claim is Count 3.

The parties subsequently presented a discovery dispute regarding untimely and

incomplete responses to interrogatories to the Court on December 3, 2013. The Court

ordered, inter alia, Raytheon was permitted to conducted additional depositions; the Court

stated it would consider awarding costs and attorneys’ fees to Raytheon if future events

warranted it. See Doc. 63. On April 11, 2014, pursuant to a stipulation of the parties, the

Court ordered possible limitations on the use of evidence by OTNA. See Doc. 91. Pursuant

to that same stipulation, the Court ordered OTNA to pay Raytheon $2,500 for costs

associated with resolving the dispute. However, the payment was not a statement that OTNA

admitted “liability or that it [had] engaged] in any sanctionable conduct.” Id.

On June 18, 2014, a Motion for Summary Judgment on Plaintiff’s Third Claim for

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Relief was filed by Raytheon (Doc. 95). OTNA’s response to Raytheon’s Motion for

Summary Judgment was due on August 26, 2014. OTNA filed it response on August 29,

2014. OTNA did not seek leave to extend the deadline prior to the deadline. Raytheon has

filed a Reply (Doc. 145).

Additionally, Raytheon filed a Motion to Strike OTNA’s Opposition to Raytheon’s

Motion for Summary Judgment and for Sanctions (Doc. 116). The Court has denied the

request to strike the documents, but the imposition of alternate sanctions remains pending.

On August 26, 2014, the date OTNA’s response was due, Matthew Elstein (“Elstein”),

counsel for OTNA, requested Raytheon agree to additional time to file a response; the reason

for the requested extension was simply that additional time was needed. The day after the

response was due, another attorney contacted Raytheon’s counsel and advised them that

Elstein had a medical emergency and could not file the response the day before. That

attorney also stated that, because of medical tests, contacts with Elstein were sporadic.

Raytheon’s investigation indicates that, during the evening of August 26, 2014 (the

response deadline), Elstein filed five documents in another case. The next day, when contact

was supposed to be sporadic because of medical tests, Elstein appeared in court on another

matter. Raytheon asserts:

The real issue appears to have been a work flow conflict relating to work Mr. Elstein

was doing in the McAdam case that overlapped with this case. At best, Mr. Elstein had

some medical issue that impacted his ability to manage his workload and he chose the

McAdam case over this case. At worst, material misrepresentations were made to

purportedly justify why the Opposition in this case was not filed. In any event, OTNA

did not seek leave to file its Opposition late. When OTNA sought to submit late

evidence in connection with Raytheon’s earlier motion for summary judgment without

seeking leave of Court, OTNA’s evidence was stricken and OTNA was sanctioned.

[Doc. 59] The result should be no different here.

Motion for Sanction, Doc. 116, p. 4.

Elstein asserts a contract attorney had prepared the documents that were filed in the

McAdam case on August 26, 2014, he sought extra time from Raytheon because he wanted

additional time to review deposition transcripts (but did not state that to Raytheon’s counsel),

he needed immediate medical attention the late evening of August 26, 2014, and he attended

the McAdam hearing the following day against medical advice.

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Raytheon also asserts that Elstein claimed his wife was having a medical emergency

in the other case to get a continuance . . . he actually appeared in Tucson for a deposition in

this case. Elstein asserts that, although he had informed McAdam counsel that he needed a

continuance because of his wife’s medical issues, upon discussing the history of this case

with his wife, they agreed that he should not seek to continue the Raytheon depositions, so

he attended them.

The declaration of Elstein, filed September 25, 2014, indicates that Elstein would

submit emergency room records to the Court for in camera review. See Docs. 127 and 130.

The Court did not receive the documents prior to the hearing, but counsel provided the

documents to the Court during the January 30, 2015, hearing. The declaration of Elstein’s

colleague, the declaration of Elstein’s wife and the attachments to Elstein’s declaration

generally corroborate the information provided by Elstein. 

III. Motion for Sanctions (Doc. 116)

OTNA’s response was untimely filed in this case. Additionally, the history of this

case exhibits that OTNA has repeatedly missed deadlines and has not requested extensions

prior to deadlines. Further, although counsel for OTNA had indicated that documents

supporting his reason for filing the response late would be sent via Federal Express, the Court

did not receive those documents until the January 30, 2105 hearing. Although Elstein states

he was well enough to take care of the ministerial task of docketing the briefs prepared by

the contract counsel in another case, he does not state why he did not do the ministerial task

of filing a motion to extend the deadline in this case. As pointed out by Raytheon, the Court

still has not been provided with an adequate explanation for this failure.

The Ninth Circuit has stated, “[d]istrict courts have inherent power to control their

dockets. In the exercise of that power they may impose sanctions . . .” Thompson v. Hous.

Auth. of City of Los Angeles, 782 F.2d 829, 831 (1986) (per curiam) (citing Link v. Wabash

Railroad Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1961). Indeed, Local Rule

83.1(f)(1)(A) provides that the court may, “upon its own initiative” impose appropriate

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2

The Martine Family Trust court ordered the attorney to pay a specified amount to the

Clerk of Court as a sanction for failing to comply with the Rule 16 scheduling order without a

finding of contempt.

3

The listed Rule 37(b)(2) sanctions include: (ii) prohibiting the disobedient party from

supporting or opposing designated claims or defenses, or from introducing designated matters

in evidence; (iii) striking pleadings in whole or in part; (iv) staying further proceedings until the

order is obeyed; (v) dismissing the action or proceeding in whole or in part; (vi) rendering a

default judgment against the disobedient party; or (vii) treating as contempt of court the failure

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sanctions upon a party who, “without just cause” violates or fails to conform to the Federal

Rules of Civil Procedure or any order of the court. The court may, under this Rule, order a

sanction that is just under the circumstances, which may include the imposition of a fine,

entry of dismissal or a default judgment, or an order imposing costs and attorney fees.

“District courts have broad discretion in interpreting and applying their local rules.”

Simmons v. Navajo County, Ariz., 609 F.3d 1011, 1017 (9th Cir. 2010) (citing Miranda v.

Southern Pacific Transp. Co., 710 F.2d 516, 521 (9th Cir. 1983). A court has “inherent

power to impose a variety of sanctions to regulate its docket, promote judicial efficiency and

deter frivolous filings.” Resolution Trust Corp. v. Dabney, 73 F.3d 262, 267 (10th Cir.1995)

(citing Chambers v. NASCO Inc., 501 U.S. 32, 50 (1991); see e.g. Official Airline Guides,

Inc. v. Goss, 6 F.3d 1385, 1396 (9th Cir.1993) (“Sanctions are appropriate against a party

who violates a court settlement order that the person with settlement authority attend the

settlement conference.”).

“[C]ourts and commentators agree that sanctions may be imposed for a party's

unexcused failure to comply with a Rule 16 order, even if that failure was not made in bad

faith.” Martin Family Trust v. Heco/Nostalgia Enterprises Co., 186 F.R.D. 601 (E.D.Cal.

1999) (citations omitted).2

 Discovery rules allow for a finding of contempt if the Court’s

orders are violated. See e.g. 156 A.L.R. Fed. 601. This situation is comparable. Further,

Fed.R.Civ.P. 16(f) authorizes the court to impose sanctions on a party's motion or on its own

motion, including any sanction authorized by Rule 37(b)(2)(A)(ii-vii), if a party or its

attorney fails to obey a scheduling order or other pretrial order.3

 In Thompson, the court

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to obey any order except an order to submit to a physical or mental examination. Fed.R.Civ.P.

16(f) does not state these are the exclusive sanction options. 

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discussed factors to be weighed in determining whether dismissal or default would be an

appropriate sanction. Although this Court is not considering those sanctions, the Court does

find consideration of the factors to be appropriate. See e.g. Valley Eng'rs Inc. v. Elec. Eng'g

Co., 158 F.3d 1051, 1057 (9th Cir. 1998) (The factors are “not a series of conditions

precedent before the judge can do anything,” but a “way for a district judge to think about

what to do.”). Here, there is a public interest in expeditious resolution of litigation, the Court

needs to manage its docket, and public policy favors the disposition of cases on their merits.

Although Raytheon argues that it has been prejudiced (e.g., need to constantly police OTNA,

expenses), the prejudice does not extend to affecting the merits of Raytheon’s positions as

to the issues. Moreover, the Court is considering a less drastic sanction than dismissal or

striking in this case.

The Court accepts that Elstein in good faith believed he would complete and file the

response in a timely manner, but was unable to do so for medical reasons. However, most

significant to the Court is that Elstein was able to complete the ministerial tasks in the

McAdam case, but did not apparently even attempt to complete the ministerial task of filing

a request to extend the deadline in this case. In light of the history in this case (e.g., untimely

and incomplete disclosure, missed deadlines), the Court finds the imposition of financial

sanctions is warranted in this case. The Court finds it appropriate for OTNA and/or Elstein

to pay Raytheon’s costs and attorneys’ fees in preparing and arguing the Motion for

Sanctions. Additionally, the Court finds it appropriate for Elstein to pay an additional sum

of $2,500.00 to the Southern Arizona Legal Aid, Inc., as a sanction.

Accordingly, IT IS ORDERED:

1. Defendant’s Motion for Sanctions (Doc. 116) is GRANTED. 

2. OTNA and/or Elstein shall pay Raytheon’s costs and attorneys’ fees in the

preparation and arguing of the Motion for Sanctions. Raytheon shall forthwith submit an

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affidavit of costs and fees to the Court. 

3. Elstein shall pay $2,500.00 to the Southern Arizona Legal Aid, Inc.,

http://www.sazlegalaid.org/get-involved/donate, Southern Arizona Legal Aid, 2343 E.

Broadway Blvd., Suite 200, Tucson, AZ 85719-6007, as an additional sanction.

DATED this 13th day of March, 2015.

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