Opinion
Misc 1:23-mc-00492 8:23-cv-00496-WLH-ADSx
01-19-2024
In the Matter of Subpoena Issued to Third-Party Prestige Beauty Group, LLC in Action Pending in the United States District Court for the Central District of California entitled ABERCROMBIE & FITCH TRADING, CO., an Ohio Corporation, Plaintiff, v. BEAUTY ENCOUNTER, INC., a California Corporation; A.A. IRIE PERFUME, INC., a Florida Corporation; HAZ INTERNATIONAL, INC., a Delaware Corporation; L.A. FRAGRANCES, INC., a California Corporation; NANDANSONS INTERNATIONAL, INC., a New York Corporation; PM TRADING CORP, a California Corporation; PRESTIGE BEAUTY GROUP, LLC, a New Jersey limited liability company; and DOES 1-10, inclusive, Defendants.
BLAKELY LAW GROUP Brent H. Blakely (BB1966) Attorneys for Plaintiff Abercrombie & Fitch Trading Co.
BLAKELY LAW GROUP Brent H. Blakely (BB1966) Attorneys for Plaintiff Abercrombie & Fitch Trading Co.
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL FURTHER RESPONSES AND DOCUMENTS IN RESPONSE TO SUBPOENA AGAINST PRESTIGE BEAUTY GROUP, LLC
Lewis J. Liman United States District Judge
MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
This Motion to Compel concerns defaulting defendant and third-party Prestige Beauty Group, LLC's (“Prestige”) failure to produce documents in response to the Subpoena issued by plaintiff Abercrombie & Fitch Trading, Co. (“Plaintiff” or “Abercrombie”). In this trademark infringement and counterfeiting matter, Plaintiff asserts that Prestige, as well as other defendants, manufactured, distributed, offered for sale, and/or sold the “Accused Products” - fragrance products that imitate legitimate Abercrombie FIERCE cologne as shown below:
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What started as a case against a single defendant - Beauty Encounter, Inc. (“Beauty Encounter”) - is turning out to be an intricate and seemingly never-ending web of infringers. Plaintiff made several investigative purchases of the Accused Products from Beauty Encounter and confirmed they were counterfeit. Through discovery, Plaintiff tracked Beauty Encounter's suppliers, the largest of which appears to be Prestige, who purchased more than $2 million worth of the Accused Products from a Singaporean entity. Abercrombie does not sell to nor has ever authorized this Singaporean entity to sell legitimate Abercrombie products.
Although Plaintiff is aware of two of Prestige's customers - Beauty Encounter and defendant PM Trading Corp (“PM Trading”) - Prestige conceals documents relating to its sales of the Accused Products (among other things) by conspicuously stating that it is “not in possession nor has any documents” in response to Plaintiff's Subpoena for Documents. These responses are not only questionable in light of Prestige's sophisticated operations, but also ignores the “custody or control” tenet of FRCP 45. Accordingly, Plaintiff brings this Motion to compel Prestige's further responses and documents to confirm that Prestige has conducted a diligent search and reasonable inquiry as required and that all responsive documents in its “possession, custody, and control” have been produced.
II. STATEMENT OF RELEVANT FACTS
On March 20, 2023, Plaintiff filed its initial Complaint against Beauty Encounter in the Central District of California. Through discovery, Plaintiff learned that Beauty Encounter purchased the Accused Products from six suppliers, including PM Trading and Prestige. Blakely Decl. ¶ 2. PM Trading also obtained the Accused Products from Prestige and another entity. Id.
On August 18, 2023, Plaintiff issued a Subpoena to Produce Documents to Prestige, who was served with the same on August 21, 2023. Blakely Decl. ¶ 3, Exhs. A, B. The Subpoena requested Prestige to comply at Plaintiff's counsel's New York office, 247 Water Street, Unit 1, New York, New York 10038, which is within 100 miles of Prestige, located at 5 Sutton Place, Edison, New Jersey 08817. Id.; Fed. R. Civ. Proc. 45(c). Prestige's response was due September 1, 2023. Blakely Decl. ¶ 3.
On October 2, 2023, Plaintiff filed its First Amended Complaint adding Prestige (and others) as a defendant. Blakely Decl. ¶ 4. As Prestige failed to Answer, the Clerk entered default against Prestige. Id.
On December 1, 2023, Prestige finally responded to the Subpoena at issue in this Motion. Blakely Decl. ¶ 5, Exh. C. The only documents it provided were invoices and purchase orders between Prestige and its supplier in Singapore. Id.
On December 4, 2023, Plaintiff began meeting and conferring with Prestige by asking whether Prestige has any other documents responsive to the Subpoena, including but not limited to, sales records, given Plaintiff is aware of at least two of Prestige's customers (PM Trading and Beauty Encounter). Blakely Decl. ¶ 6.
On December 5, 2023, pursuant to the CDCA's Local Rules, Plaintiff issued a meet and confer letter to Prestige and requested a teleconference within 10 days. Blakely Decl. ¶ 7. To date, Plaintiff has not heard a response from Prestige nor received any further documents. Id.
III. FURTHER RESPONSES AND DOCUMENTS ARE WARRANTED
Plaintiff requests further responses and/or documents to Request Nos. 1, 2, 6-8, 11. In response to each of these document requests, Prestige indicates that it “is not in possession nor has any documents [or communications] as identified” in the Request. Blakely Decl., Exh. C (emphasis added).
Prestige's responses ignore the “custody or control” prong of FRCP 34 & 45 such that it unclear whether Prestige has (a) conducted a diligent search and reasonable inquiry and (b) produced any responsive documents in its custody or control, rather than documents in its mere possession. See Fed. R. Civ. Proc. 45(a)(1)(A)(iii) (commanding a third party to produce documents “in that person's possession, custody, or control”); Allstate Ins. Co. v. A & F Med. P.C., 2016 U.S. Dist. LEXIS 168554 at *13 fn. 3, *18-19 (E.D.N.Y. Dec. 6, 2016) (ordering nonparty to produce documents within his “control” and not just his possession when his response to the subpoena only noted he had no documents within his possession); Ramos v. Swatzell, 2014 U.S. Dist. LEXIS 202043 at *7 (C.D. Cal. Aug. 6, 2014) (ordering third party to affirm in response to the subpoena that they have conducted a diligent search and all responsive documents in their possession, custody, and control have been produced); Am. Fedn. of musicians of U.S. & Can. v. 212 Prods. LLC, 2022 U.S. Dist. LEXIS 20917 at *30 (C.D. Cal. Jan. 10, 2022) (same); In re ATM Fee Antitrust Litig., 233 F.R.D. 542, 545 (N.D. Cal. 2005) (Rule 45 and Rule 34 document requests reach documents within possession, custody, or control of the subpoenaed person); In re Weatherford Int'l Sec. Litig., 2013 U.S. Dist. LEXIS 154446 at *6-7 (S.D.N.Y. Oct. 28, 2013) (noting the “possession, custody, or control” requirement of FRCP 34 applies to subpoenas under FRCP 45).
These responses are also questionable in light of Prestige's sophisticated operations and the fact that Prestige has at least two known customers - Beauty Encounter and PM Trading. The only documents Prestige produced were in response to Request No. 3, which asks for importation documents. Blakely Decl. ¶ 3, Exhs. A, C. Prestige produced invoices and purchase orders between it and its Singaporean supplier which total approximately $2.7 million worth of purchases of the Accused Products. Blakely Decl., Exh. C. While it conceivable that smaller businesses may fail to keep adequate records of its sales, emails, and customer information, it begs the question why a large entity such as Prestige claims it has zero documents in its “possession”, especially when the purchases occurred as recent as 2022. Blakely Decl. ¶ 5.
For example, Request No. 8 asks for documents “sufficient to identify all PERSONS who purchased one or more ACCUSED PRODUCTS from YOU.” Blakely Decl., Exh. A. Responsive documents would include purchase orders, invoices, letters, emails, etc. from Prestige to its customers which identify the customer's contact information. In fact, Beauty Encounter has produced some invoices relating to its purchase of the Accused Products from Prestige, so why does Prestige claim it has no documents with any of its customers, including but not limited to Beauty Encounter? Prestige is likely harboring this information in an attempt to salvage its business relationships, but that is not a proper objection to withhold documents. In any event, Prestige's objections are waived due to Prestige's untimely response to the Subpoena and Prestige indeed did not formally raise any. See Fed. R. Civ. Proc. 45(d)(2)(B).
Without understanding who Prestige's customers are, Plaintiff is prevented from further investigating the reach of the infringement. Plaintiff is entitled to discover who else is selling the Accused Products. Because trademark infringement claims are centered around a consumer's likelihood of confusion, every instance in which a consumer purchases a product from a business causes further harm to Plaintiff and expands the playing field for consumers to be confused. See AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). These unidentified entities are also potential defendants. Lockheed Martin Corp. v. Network Solutions, Inc., 1997 U.S. Dist. LEXIS 10314 at *8-9 (C.D. Cal. Mar. 19, 1997) (any member of the distribution chain can be sued); North Face Apparel Corp. v. Dahan, 2014 U.S. Dist. LEXIS 201737 at *17-18 (C.D. Cal. Mar. 14, 2014) (“members of a common distribution are jointly and severally liable for trademark infringement”).
Further, documents relating to Prestige's customers would identify the amount of units sold to its customers and the sales derived from the same. Prestige's profits are relevant to Plaintiff's recoverable damages under 15 U.S.C. § 1117(a) should Prestige set aside the default and continue litigating the matter. 15 U.S.C. § 1117(a) (plaintiff is entitled to recover defendant's profits). Only disclosing how much Prestige purchased from its suppliers is just one part of the equation.
In addition, Request Nos. 1, 2, 6, and 11 include communications documents (i.e., emails, letters, memoranda, etc.) regarding the Accused Products, Prestige, Beauty Encounter, and Prestige's suppliers and/or manufacturers of the Accused Products. Blakely Decl., Exh. A. Emails between Prestige and its suppliers or customers relating to the Accused Products are highly relevant to Plaintiff's trademark infringement claims. For example, emails showing Prestige acknowledges the counterfeit nature of the Accused Products (or on the flip side, any claimed authenticity) would provide evidence of willfulness. Adobe Sys. v. Cain, 2008 U.S. Dist. LEXIS 97227 at *11 (N.D. Cal. Oct. 22, 2008) (“willful infringement requires ‘knowledge that the defendant's conduct constitutes trademark infringement'”). In this modern age of technology, it has become the norm for businesses to communicate via email and sometimes text messages. Accordingly, it begs the question why Prestige claims to have no responsive documents, albeit only in its “possession.”
Finally, No. 7 requests agreements between Prestige and Beauty Encounter relating to the Accused Products. Beauty Encounter specifically specifies what types of agreements (i.e., contracts) it is looking for within the Request - “design, development, procurement, supply, sales and invoicing, marketing, licensing, and indemnification.” Blakely Decl., Exh. A. Similar to the communications documents, any agreements that might discuss the authenticity (or lack thereof) of the Accused Products or any agreement (or lack thereof) in Prestige indemnifying Beauty Encounter is relevant to Plaintiff's trademark infringement lawsuit. Prestige's response makes it unclear whether a diligent search and reasonable inquiry has been performed and whether there are documents within Prestige's “custody or control”, and not just its mere possession.
Further, in light of Prestige's failure to participate in the California action, Plaintiff is prejudiced from being able to obtain further discovery from Prestige. Although Plaintiff has issued a subpoena for Prestige's appearance at deposition, it is likely that Prestige will also fail to comply in light of the fact that it has failed to communicate or cooperate with Plaintiff thus far. Therefore, this Court should grant Plaintiff's Motion in order to provide Plaintiff with means to conduct discovery against Prestige.
IV. CONCLUSION
For the foregoing reasons, this Court should order Prestige to affirm that it has conducted a diligent search and inquiry in response to the Subpoena Requests at issue and compel Prestige to produce responsive documents in its possession, custody, or control to Request Nos. 1, 2, 6-8, 11.
Prestige Beauty Group shall inform the Court by letter on the docket by January 29, 2024, whether it consents to transfer of the motion to compel to the United States District Court for the Central District of California pursuant to Federal Rule of Civil Procedure 45(f).
SO ORDERED.
DECLARATION OF BRENT H. BLAKELY IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL FURTHER RESPONSES AND DOCUMENTS IN RESPONSE TO SUBPOENA AGAINST PRESTIGE BEAUTY GROUP, LLC
DECLARATION OF BRENT H. BLAKELY
I, Brent H. Blakely, declare as follows:
1. I am an attorney with Blakely Law Group, counsel of record for plaintiff Abercrombie & Fitch Trading, Co. (“Plaintiff” or “Abercrombie”) in the above-referenced action. I have personal knowledge of the facts stated herein, and if called as a witness, I would and could testify competently thereto. I make this declaration in support of Plaintiff's Motion to Compel Further Responses and Documents in Response to Subpoena Against Prestige Beauty Group, LLC (“Prestige”).
2. On March 20, 2023, Plaintiff filed its initial Complaint against defendant Beauty Encounter, Inc. (“Beauty Encounter”) in the Central District of California. Through discovery, my office learned that Beauty Encounter purchased the Accused Products from six suppliers, including defendant PM Trading Corp (“PM Trading”) and Prestige. PM Trading also obtained the Accused Products from Prestige and another entity.
3. On August 18, 2023, Plaintiff issued a Subpoena to Produce Documents to Prestige, who was served with the same on August 21, 2023. The Subpoena requested Prestige to comply at my firm's New York office, 247 Water Street, Unit 1, New York, New York 10038, which is within 100 miles of Prestige, located at 5 Sutton Place, Edison, New Jersey 08817. Prestige's response was due September 1, 2023. Attached as Exhibit A is a true and correct copy of the Subpoena. Attached as Exhibit B is a true and correct copy of the proof of service.
4. On October 2, 2023, Plaintiff filed its First Amended Complaint adding Prestige (and others) as a defendant. As Prestige failed to Answer, the Clerk entered default against Prestige.
5. On December 1, 2023, Prestige provided its responses to the Subpoena at issue in this Motion. The only documents it provided were invoices and purchase orders between Prestige and its supplier in Singapore. These invoices show that Prestige purchased the Accused Products for approximately $2.7 million from 2020-2022. Attached as Exhibit C is a true and correct copy of Prestige's responses.
6. On December 4, 2023, my office began meeting and conferring with Prestige by asking whether Prestige has any other documents responsive to the Subpoena, including but not limited to, sales records, given Plaintiff is aware of at least two of Prestige's customers (PM Trading and Beauty Encounter). My office did not receive a response.
7. On December 5, 2023, pursuant to CDCA's Local Rules, my office issued a meet and confer letter to Prestige and requested a teleconference within 10 days. To date, my office has not heard a response from Prestige nor received any further documents.
I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.
Executed on December 20, 2023 in Manhattan Beach, California.
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