Monday, February 04, 2013

Court Concludes Defendants' Reliance on a Vendor to Accomplish Collections was "Insufficient"

Peerless Indus., Inc. v. Crimson AV, LLC, No. 1:11-cv-1768, 2013 WL 85378 (N.D. Ill. Jan. 8, 2013)

In this case, the court concluded that Defendants’ reliance on a vendor to accomplish collections from a non-party whose documents were in Defendants’ control was “insufficient” and granted Plaintiff’s motion for sanctions. Specifically, the court ordered Defendants to “show that they in fact searched for the requested documents and, if those documents no longer exist or cannot be located," to "specifically verify what it is they cannot produce” and ordered Plaintiff to submit its bill of costs related to preparation of the motion.

Plaintiff alleged patent infringement and design patent infringement “arising out of defendants’ manufacture and sale of certain TV mounts.” “Closely related to this action, though not a party,” was Plaintiff’s former supplier of the at-issue mounts, Sycamore Manufacturing Co., Ltd. (“Sycamore”). Sycamore is located in China.

In the course of discovery, the court held that Defendant Crimson AV, LLC (“Crimson”) “was in control” of Sycamore’s documents and found that “the evidence suggested” that Tony Jin, the president of Sycamore, "was principal of both Crimson and Sycamore, and that he exercise[d] a considerable amount of financial and managerial control over both corporations.” The court further found that because of this control, “Crimson was ‘able to obtain the relevant documents from Sycamore.’” According to the court, “[t]his order of course required defendants to contact individuals at Sycamore and play a role in obtaining the necessary discovery.”

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Source: ediscoverylaw.com

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