Opinion
99 Civ. 11490 (RCC)
September 14, 2000
Hon. Richard C. Casey, United States District Judge, Milton Springut, Esq., Kalow Springut Bressler, LLP for Plaintiff.
William Thomashower, Esq., Kaplan, Thomashower Landau, for Defendants.
The Court, having reviewed the submissions of the parties following the last conference in this matter, issues the following discovery rulings:
1. Spring Deposition. Plaintiff Gucci proffered Jay Spring, one of its employees, as its expert witness regarding the alleged counterfeiting of the subject Gucci watches. Spring was designated by Gucci as its "expert" in an attempt to avoid disclosure of the so-called "Guerry report," which details various indicia suggesting that the subject watches are counterfeit. The Spring deposition was taken at a relatively early stage because the Court believed that substantial incontestible evidence of counterfeiting would be likely to speed the ultimate resolution of this case.
Suffice it to say, Mr. Spring was not up to the task of establishing that the subject watches were counterfeit. Accordingly, Gucci now wishes to proffer an "additional" expert on the same subject. The defendants counter that Gucci should be required to proceed without the benefit of any expert testimony regarding the allegedly counterfeit nature of the subject watches because the deadline for the Spring deposition has passed.
As noted above, the deposition of Gucci's "expert" was taken well in advance of the time that expert witnesses generally would be deposed in a case such as this. Although Gucci's tactic of priming Mr. Spring to be able to testify only about limited indicia of counterfeiting appears to have backfired, I see no reason why Gucci should now be left without an expert and, therefore, potentially unable to attempt to prove its case.
On the other hand, the defendants certainly should not be prejudiced by Gucci's failed attempt to limit their inquiry into the reasons why the subject watches allegedly are counterfeit. The defendants are therefore entitled to recover their legal fees and expenses arising out of Gucci's designation of Mr. Spring as its expert. Counsel are directed to confer within the next ten days in a good faith effort to determine the extent of those fees and expenses. If counsel are unable to agree, the Court will review any disputed charges. It bears emphasis that the Court's willingness to allow Gucci to substitute a new expert is expressly conditioned on its prompt payment of the fees and expenses reasonably attributable to the designation of Mr. Spring as an expert. Additionally, if a new expert is designated, Gucci will not be permitted to limit the interrogation of that witness to questions about the exterior of the watches.
2. Bank of New York Subpoena. Prior to the date that this case was referred to me for general pretrial supervision, Judge Casey indicated, during a January 6, 2000, conference, that he would not quash a subpoena directed to the Bank of New York ("BNY") which sought records relating to defendants Innopex, Ltd., Imperial Trading Ltd., Frankel and Wexel. Judge Casey's refusal to quash the subpoena was predicated on the parties entering into an appropriate confidentiality agreement. Since then, the parties have, in fact, signed, and the Court has "so ordered," a Stipulation and Confidentiality Order which provides differing degrees of protection for "Confidential" and "Highly Confidential" documents.
The Defendants concede that Judge Casey declined to narrow or quash the BNY subpoena, but argue that the scope of their discovery has been tightly controlled and that similar restrictions on the scope of Gucci's discovery are appropriate. There are three principal difficulties with this argument. First, as noted above, Judge Casey has already considered this issue and ruled. Second, the mere fact that detailed discovery has been permitted (or disallowed) with respect to one issue (assuming that were to be established), does not suggest that discovery relating to a different issue in the case must be handled identically. Finally, even if I were writing on a clean slate, the obvious intent of the BNY subpoena was to verify where the defendants acquired their "Gucci" watches and the volume of their purchases. There consequently is no way to narrow the breadth of the subpoena since BNY obviously does not know which of the payees is a potential source of counterfeit watches. The alternative suggested by the defendants — that they simply produce the relevant bank documents from their own files — is plainly an inadequate substitute since the very purpose of the BNY subpoena was to secure information regarding the defendants' purchases from a disinterested source.
Judge Casey did, of course, indicate that the BNY documents should be produced subject to a protective order. In my view, it is appropriate that those documents be treated as "Highly Confidential," and therefore restricted to counsel and expert witnesses, unless and until Gucci is able to show that a wider distribution is warranted. Any documents received from BNY shall therefore be stamped "HIGHLY CONFIDENTIAL."
3. "Guerry Report". By memorandum endorsement dated April 4, 2000, I denied the defendants' request for production of the "Guerry Report." Thereafter, the defendants renewed their request for production of that document based upon the May 24, 2000 deposition of Mr. Spring. I have read the Spring deposition in its entirety. Based upon that review, I do not believe that the defendants have shown that Mr. Spring used the report to refresh his memory for the purpose of testifying either while testifying or before testifying. Accordingly, there is no basis for production of the report pursuant to Fed.R.Evid. 612. Similarly, the defendants have not shown that Gucci has made any selective disclosures or taken any affirmative action with respect to the report which would warrant its disclosure on the ground of implied or "at issue" waiver. See generally, Granite Partners v. Bear, Stearns Co., 184 F.R.D. 49 (S.D.N.Y. 1999) (Sweet, J.).
4. Disqualification or Sanctioning of Counsel. By letter dated May 4, 2000, Gucci seeks to disqualify Mr. Thomashower from further representation of the defendants in this case based upon various alleged misdeeds, including a potential conflict of interest arising out of his simultaneous representation of the "Canadian" and "Exclusive" defendants. The most troubling of these contentions is the suggestion that Mr. Thomashower made a knowing misrepresentation to Judge Casey, on January 6, 2000, when he stated that "the defendants have no more of the accused watches which everyone agrees have been returned." (1/6/00 Tr. at 17). While this statement is, at a minimum, poorly worded, there has been considerable confusion in this case concerning the proper categorization of the accused watches, certain "work product" watches, and the like. Gucci consequently has not shown that Mr. Thomashower, in fact, affirmatively sought to mislead the Court. Moreover, with respect to the alleged conflict, the Court has reviewed the documentation submitted by Mr. Thomashower regarding his representation of all of the defendants in this case. Based upon that in camera review, the Court finds that there is no basis to disqualify Mr. Thomashower's firm under Disciplinary Rule 5-105.
5. Subpoenas to Authorized Gucci Retailers. The defendants have renewed their request to take the depositions of three authorized Gucci retailers — Federated/Macy's, Tourneu, and Kenjo — which previously were stayed by this Court. The defendants initially sought those depositions to determine the source of the retailers' Gucci watches, the constituent parts of those watches, and how the retailers determined whether the watches supplied to them were genuine. (See 3/25/00 Tr. at 31-35). Despite the renewed request, in the exercise of its discretion to control the timing and sequence of discovery, the Court adheres to its prior ruling. Additionally, because those depositions are not now scheduled, the Court declines to consider at this time whether Gucci's counsel may properly represent the retailers at those depositions.
6. Alleged Antitrust Violation. The defendants maintain that the deposition testimony in this case demonstrates that Gucci may have violated the antitrust laws by engaging in a resale price maintenance conspiracy. They further maintain that discovery as to this issue should be permitted at this juncture because, inter alia, the antitrust violations were pleaded "not merely as a counterclaim but also as the `Eighth Affirmative Defense' to the trademark claims." (See 6/2/00 letter from Mr. Thomashower to the Court at 2-3). Although the antitrust defense rests upon a singularly slender reed, the Court will permit limited discovery regarding this issue at this time. The scope of that discovery will be addressed at the next conference in this matter.
7. Status/Settlement Conference. The Court will conduct a conference on September 28, 2000, at 10:30 a.m., as previously scheduled, to consider the prospects of settlement and, if need be, any outstanding discovery issues.
SO ORDERED.