Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-07093/USCOURTS-cand-4_06-cv-07093-7/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1121 Trademark Infringement

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CRS RECOVERY, INC., et al.,

Plaintiffs,

v.

JOHN LAXTON, et al.,

Defendants.

___________________________________/

No. C-06-7093 CW (EMC)

ORDER DENYING PLAINTIFFS’

MOTION FOR DISCOVERY

SANCTIONS; DENYING

DEFENDANT’S MOTION FOR

PROTECTIVE ORDER; AND

VACATING HEARING AND BRIEFING

SCHEDULE FOR PLAINTIFFS’

MOTION FOR ORDER DEEMING

SPECIFIED RFA’S ADMITTED

(Docket Nos. 80, 111, 113)

On July 23, 2008, the Court held a hearing on Plaintiffs’ motion for discovery sanctions and

Defendant’s motion for protective order. At the hearing, the Court DENIED both motions. The

Court also VACATED the hearing for Plaintiffs’ motion for an order deeming specified RFA’s

admitted. This order memorializes the Court’s rulings and further provides the basis for its rulings.

I. DISCUSSION

A. Plaintiff’s Motion for Discovery Sanctions

Plaintiffs have moved for evidentiary and monetary sanctions. That motion is denied. In

their opening brief, Plaintiffs invoked only Federal Rule of Civil Procedure 37 as a basis for

sanctions. But, under that rule, evidentiary sanctions may be issued only when, e.g.:

(1) a party fails to obey a discovery order, see Fed. R. Civ. P. 37(b)(2); 

(2) a party fails to provide information as required by Rule 26(a) or (e), see Fed. R. Civ. P.

37(c)(1);

(3) a party fails to appear for deposition. See Fed. R. Civ. P. 37(d)(e).

Case 4:06-cv-07093-CW Document 130 Filed 07/25/08 Page 1 of 5
United States District Court

For the Northern District of California

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1 Mr. Laxton’s attorney improperly claimed attorney-client privilege with respect to the question

“Why do you think Barnali Kalita was the true owner [of RL.com]?” Laxton Depo. at 63; see also id.

at 58-59 (asserting the privilege with respect to the question “Is there anything else that you think

justifies your belief that Mr. Kalita was the true owner of RL.Com and had the right to transfer it to

you?”). 

Similarly, Mr. Laxton’s attorney improperly claimed attorney-client privilege with respect to the

questions “Any facts to support a claim against Mr. Li Qiang, who is the person that got the transfer of

the registration of RL.Com from Mayberry?” and “You sued Mr. Qiang, as you already agreed. Why?”

Id. at 77-78. In addition, Mr. Laxton’s attorney improperly instructed Mr. Laxton not to answer what

he claimed were argumentative questions and 30(b)(6) questions. See, e.g., id. at 40-41, 74 (e.g., “Northbay Real Estate is a phony name; is that correct?”; “[S]o what’s the point of having [North Bay

Real Estate which has nothing to do with real estate]?”; “There may be other documents that you have

not produced that are relevant to RL -- Northbay’s registration of RL.Com?”).

Finally, Mr. Laxton’s counsel improperly prevented Mr. Laxton from answering some questions

based on the objection of legal conclusion. See, e.g., id. at 57-58 (claiming that questions about

affirmative defenses asked for legal conclusions). 

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None of the situations above apply in the instant case.

Similarly, Rule 37 does not provide for an award of monetary sanctions in a case such as

this. If Plaintiffs had moved for an order compelling discovery (e.g., because defense counsel

improperly asserted attorney-client privilege) and prevailed, then they could ask for fees pursuant to

Rule 37(a)(5); however, Plaintiffs have not filed such a discovery motion and instead have filed a

motion for sanctions only.

The Court acknowledges that it has the inherent authority to issue sanctions of the kind

sought by Plaintiffs, see Halaco Eng’g Co. v. Costle, 843 F.2d 376, 380 (9th Cir. 1988) (noting that

a court may use its inherent power to impose sanctions for discovery abuses that may not be a

technical violation of the discovery rules), and that, in their reply brief, Plaintiffs referred to the

Court’s inherent authority as a basis for sanctions. However, as that point was not raised until the

reply brief, the Court shall not consider it. In any event, the Court is not inclined to exercise such

power in this instance.

Even if the Court were to consider whether sanctions should be issued pursuant to its

inherent authority, it would not award the sanctions sought by Plaintiffs. First, Plaintiffs have failed

to provide sufficient evidence of spoliation; the only evidence is that the emails were routinely

destroyed. Consequently, an evidentiary sanction is not appropriate. Second, although Mr. Laxton

improperly refused to answer at least some questions at the deposition,1

 Plaintiffs have not

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United States District Court

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28 In addition to the above, the Court notes that Mr. Laxton’s counsel hampered the deposition of

Mr. Laxton by, e.g., making long speaking objections and cutting off or interrupting Plaintiffs’ counsel.

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demonstrated why a sanction less severe than an evidentiary sanction -- i.e. ordering Mr. Laxton to

answer the questions at a continued deposition -- would not be an adequate remedy. See Chambers

v. NASCO, Inc., 501 U.S. 32, 44-45 (1991) (noting that, “[b]ecause of their very potency, inherent

powers must be exercised with restrain and discretion” and “[a] primary aspect of that discretion is

the ability to fashion an appropriate sanction for conduct which abuses the judicial process”). 

Third, even though Mr. Laxton’s counsel made some improper objections and it is not clear that Mr.

Laxton’s medical condition was the real reason for the termination of the deposition, see Laxton

Depo. at 81 (“I’m feeling really tired. I have a three-hour drive ahead of me. I’m very nervous to be

driving in the dark, three hours north, in the rain. I had a family function to go to tonight, but it will

be over by the time I get there anyway. So I just would like to redo this, or if you need to ask me

some questions at another time, that would be fine.”), a sanction more appropriate than a monetary

sanction is available, i.e., an order for Mr. Laxton to appear at a continued deposition to answer

questions to which there were improper objections and to complete the deposition. The Court also

notes that a monetary sanction, particularly in the amount of $6,200, seems unwarranted since it

appears that the deposition might have been completed had Plaintiffs’ counsel been prepared to start

at 9:30 a.m. as noticed.

Accordingly, the Court denies Plaintiffs’ request for evidentiary and monetary sanctions. 

The Court also denies Defendants’ request for fees related to Plaintiffs’ motion because not only

Plaintiffs but also Defendants failed to engage in a good faith meet and confer.

B. Motion for Protective Order

Defendant has asked that the Court bar his deposition from going forward on July 24, 2008. 

The Court denies the request because the bottom line is that Defendant agreed to have his earlier

deposition continued; Plaintiffs should be able to complete the deposition with whatever time is left

remaining from the earlier deposition. At the deposition, Plaintiffs may ask questions about events

that have taken place since the earlier deposition.

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United States District Court

For the Northern District of California

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The Court, however, shall not require Defendant to produce at the July 24 deposition the

documents that Plaintiffs asked for in the new notice of deposition. Plaintiffs should not be able to

require Defendant to produce documents on a shorter timeline than that provided for by Federal Rule

of Procedure 34. See 7-30 Moore’s Fed. Prac. -- Civ. § 30.22[1] (“If the deponent is a party, the

notice may be accompanied or preceded by a request made in compliance with Rule 34 for the

production of documents, electronically stored information, and tangible things at the taking of the

deposition. The procedure in Rule 34 (rather than Rule 45) applies to the request.”); Fed. R. Civ. P.

34(b)(2)(A) (“The party to whom the request is directed must respond in writing within 30 days after

being served.”).

The parties’ respective requests for attorney’s fees are both denied.

II. CONCLUSION

For the foregoing reasons, both parties’ motions are denied. 

In addition, the Court hereby vacates both the hearing and briefing schedule on Plaintiffs’

motion for an order deeming specified RFA’s admitted. See Docket No. 113. The Court orders the

parties to meet and confer in good faith and either in person or by telephone to resolve the dispute. 

A written meet and confer shall not be adequate. If the parties are unable to resolve the dispute, then

they may file a joint letter no longer than five single-spaced pages which informs the Court what the

specific dispute is and the parties’ respective positions on the dispute. The parties should cite in the

letter any relevant authority and attach only necessary exhibits.

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United States District Court

For the Northern District of California

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Finally, the Court orders that the parties are barred from filing any further discovery motions

in the case absent leave of the Court. If there is a discovery dispute, then the parties shall use the

joint letter process described above. Based on the joint letter, the Court shall either issue a ruling or

it may ask for further briefing and/or a hearing. The parties have failed to conduct themselves

responsibly and have needlessly proliferated this dispute. In the future, the Court will not hesitate to

impose sanctions if it finds conduct not justified.

This order disposes of Docket Nos. 80 and 111.

IT IS SO ORDERED.

Dated: July 25, 2008

_________________________ EDWARD M. CHEN

United States Magistrate Judge

Case 4:06-cv-07093-CW Document 130 Filed 07/25/08 Page 5 of 5