Opinion
No. 04 Civ. 8644 (NRB).
January 17, 2006
Counsel for Plaintiffs Harvey Shapiro, Esq. Sargoy, Stein, Rosen Shapiro, New York, NY.
Counsel for Defendants Marvin David, Esq. Breyer David, New York, NY.
MEMORANDUM AND ORDER
On November 3, 2004, Guangdong Foodstuffs Import Export (Group) Corp. ("Guangdong"), a Chinese corporation and Golden Lyon Investment Co. d/b/a W.Y. International, Inc., a California Corporation ("W.Y.") (together, "plaintiffs"), filed a complaint against Daytop Trading Corp. ("Daytop") and Chiu Wa Tsang ("Tsang"), Daytop's owner (together, "defendants"), alleging trademark and copyright violations in connection with defendants' alleged unauthorized use of allegedly counterfeit bottles of soy sauce hearing the trademark and label of "Pearl River Bridge" brand soy sauce, to which plaintiffs own the rights. That same day, having found good cause, this Court signed a seizure order authorizing the United States Marshal to "secure and remove any and all unauthorized cartons and containers" of Pearl River Bridge brand soy sauce. On November 9, 2004, the seizure was effected, and defendants subsequently agreed to allow plaintiffs' counsel to retain possession of the allegedly counterfeit soy sauce containers pendente lite.
On December 23, 2004, plaintiffs amended the complaint in order to add Ngai Sing Inc. ("Ngai Sing") as a defendant, alleging that Ngai Sing supplied Daytop with the infringing soy sauce containers. This Court entered a default judgment against Ngai Sing on September 12, 2005.
On April 11, 2005, plaintiffs served their "First Set of Interrogatories" and "First Request for the Production of Documents," which were due on May 16, 2005. On July 18, 2005, plaintiffs' counsel informed the Court that Daytop and Tsang had failed to respond to these requests. Three days later, the Court held a phone conference with the parties, informing the defendants that its non-compliance was unacceptable and ordering them to comply with plaintiffs' discovery requests. On September 13, 2005, this Court, having been informed that defendants had still not complied with their discovery obligations, entered a second order requiring that defendants provide discovery within fourteen days, stating that the defendants would be subject to sanctions, including the possibility of a default judgment, if they failed to do so.
Fourteen days later, on September 27, 2005, plaintiffs' counsel requested that we enter a default judgment against defendants for their "continuing violations of court orders." Letter of Harvey Shapiro, dated September 27, 2005. The next day, defendants provided their responses, and plaintiffs agreed to withdraw their request for default judgment. However, on October 27, 2005, plaintiffs again requested that we enter a default judgment, stating that defendants' production was "substantially inadequate" and did not comply with this Court's orders. Letter of Harvey Shapiro, dated October 27, 2005. Defendants responded that same day, stating that their production was "as complete as the [d]efendants could furnish at the time" and that they continued "to search for additional documents." Letter of Marvin M. David, dated October 27, 2005. After reviewing these letters, the Court scheduled a phone conference to discuss the on-going discovery dispute with the parties, which was postponed after plaintiffs' counsel informed the Court that the defendants had supplemented their discovery responses with additional documents. However, on November 17, 2005, plaintiffs reiterated their request for a default judgment, alleging that defendants' responses were still inadequate. See Letter of Harvey Shapiro, dated November 17, 2005. In his letter, plaintiffs' counsel specified how defendants' responses were inadequate, explaining that the records produced were vague, indecipherable, and often in Chinese. Moreover, the small number of documents produced suggested that defendants were withholding additional responsive documents. See id. Defendants responded that "listing names in Chinese . . . is how [Tsang] does his business" and further acknowledged withholding documents, stating that the original records "consist of thousand [sic] of pieces of paper and will take an indefinite amount of time to review." Letter of Marvin M. David, dated November 18, 2005.
The Court held another phone conference on December 2, 2005, during which defendants' counsel agreed to produce Tsang for a deposition on December 8, enabling plaintiffs' counsel to seek detailed information about his record-keeping. On December 16, 2005, plaintiffs' counsel requested default judgment yet again, alleging that during his deposition Tsang openly acknowledged the existence of important documents, including purchase invoices, sales records, purchase payments, and inventory charts, that had not been produced during discovery. See Letter of Harvey Shapiro, dated December 16, 2005. Defense counsel responded by arguing that his "client made a good faith effort to comply with the disclosure demanded," excusing the non-production of certain documents by reiterating that "those are actually numbered in the thousands. . . ." Letter of Marvin M. David, dated December 23, 2005. Defendants' counsel again insisted that Tsang would "continue to look for documents which were unavailable at the time of his deposition and furnish them, if he finds them," but he made no representation that these documents would ever be produced. Id.
Although we are troubled by defendants' willful and repeated failures to comply with court-ordered discovery, we do not believe that it is appropriate to enter a default judgment until defendants are given an opportunity to produce the documents described by Tsang at his deposition. Accordingly, defendants have two weeks to produce all responsive documents. Failure to fully comply with this order will result in the entry of a default judgment.
Moreover, as a sanction pursuant to Fed.R.Civ.P. 37(a), we order that the reasonable expenses, including attorney's fees, incurred by plaintiffs in deposing Tsang and in preparing the subsequent letter to the Court be paid by defendants. To this end, plaintiffs' counsel should submit a sworn affidavit to the Court setting forth his fees and expenses.
SO ORDERED.