LEONARD P. STARK, District Judge.
Pending before the Court are four post-trial motions, one of which was filed by Plaintiff Andrew Paul Leonard ("Plaintiff' or "Leonard") and the remaining of which were filed by Defendant Stemtech Health Sciences, Inc. ("Defendant" or "Stemtech").
The factual background and procedural history of this case leading up to the filing of the pending motions are detailed in the Court's prior opinions. For present purposes, the following background will suffice.
Plaintiff Leonard brought suit against Defendant Stemtech Health Sciences, Inc. — which later changed its name to Stemtech International, Inc. ("Stemtech" or "Defendant") — as well as John Does 1-100, for copyright infringement, in violation of the Copyright Act of 1976, 17 U.S.C. § 101, et seq., and the common law, relating to certain photographic images created by Plaintiff. On October 11, 2013, following a four-day trial, the jury returned a verdict finding Stemtech liable for direct, vicarious, and contributory copyright infringement with respect to two of Leonard's copyrighted images: Images 3 and 4. (D.I. 229, 230) The jury awarded Plaintiff actual damages of $1.6 million. (Id.)
At the end of the trial, the Court directed the parties to meet and confer and submit a form of judgment order. (See D.I. 240 at 248) On October 17, 2013, Plaintiffs counsel advised the Court that the parties were unable to reach agreement upon the form of judgment. (D.I. 231) The next day, the parties submitted a total of three competing forms of order, which differed primarily in respect to whether to incorporate an award of prejudgment interest. (D.I. 232, 233) On October 22, 2013, the Court denied Plaintiffs request for entry of either of its proposed forms of judgment, without prejudice to Plaintiffs ability to renew its request for an award of prejudgment interest, following the filing of a motion and full briefing. (D.I. 235)
On November 8, 2013, Plaintiff filed a Motion for an Award of Prejudgment Interest on the jury's monetary award. (D.I. 241) Defendant opposed the motion and briefing on it was completed on December 5, 2013. (D.I. 242, 243, 244) On July 8, 2014, the Court issued a Memorandum Order denying Plaintiffs request for prejudgment interest
Thereafter, the parties filed additional motions. On July 31, 2014, Defendant filed a Motion For Attorney Fees (D.I. 250) as well as a Motion For Costs (D.I. 251). On August 14, 2014, Defendant filed a Motion For a New Trial or Remittitur. (D.I 258) Finally, on November 4, 2014, Plaintiff filed a Motion For Costs and Attorney Fees. (D.I. 264) Briefing on the various motions was completed on November 24, 2014.
Stemtech has asked the Court to grant it a new trial, unless, in the alternative, Leonard agrees to remittitur of the judgment from $1,600,000 to just $1,804. (D.I. 258 at 18-19) Below the Court evaluates each of the multiple grounds Stemtech asserts as the bases for its requested relief.
Stemtech moves for a new trial pursuant to Federal Rule of Civil Procedure 59(a), which provides in pertinent part:
New trials are commonly granted in the following situations: (1) where the jury's verdict is against the clear weight of the evidence, and a new trial must be granted to prevent a miscarriage of justice; (2) where newly-discovered evidence exists that would likely alter the outcome of the trial; (3) where improper conduct by an attorney or the court unfairly influenced the verdict; or (4) where the jury's verdict was facially inconsistent. See Zarow-Smith v. N.J. Transit Rail Operations, 953 F.Supp. 581, 584 (D.N.J. 1997). The decision to grant or deny a new trial is committed to the sound discretion of the district court. See Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980); Olefins Trading, Inc. v. Han Yang Chem. Corp., 9 F.3d 282, 289 (3d Cir. 1993) (reviewing district court's grant or denial of new trial motion under "abuse of discretion" standard).
Where the ground for a new trial is that the jury's verdict was against the great weight of the evidence — which is the principal, but not exclusive, basis on which Stemtech moves — the court should proceed cautiously, because such a ruling would necessarily substitute the court's judgment for that of the jury. See Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir. 1993).
Although the standard for grant of a new trial is less rigorous than the standard for grant of judgment as a matter of law — in that the court need not view the evidence in the light most favorable to the verdict winner — a new trial should only be granted where "a miscarriage of justice would result if the verdict were to stand," the verdict "cries out to be overturned," or where the verdict "shocks [the] conscience." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1352-53 (3d Cir. 1991).
Stemtech first seeks a new trial on Leonard's claim for vicarious copyright infringement. In order to prevail on his claim for vicarious infringement, Leonard had to prove: (1) direct infringement by a third party, (2) Stemtech's right and ability to supervise the infringing conduct by a third party, and (3) Stemtech's obvious and direct financial benefit from the third party's direct infringement. See Perfect 10 Inc. v. Amazon, Inc., 508 F.3d 1146, 1179 (9th Cir. 2007); see also Jury Instr. (D.I. 227) at #22. Although Stemtech challenges Leonard's showing on each of these elements, the Court finds that the record supports the jury's verdict, which is not against the clear weight of the evidence.
Stemtech contends that Leonard failed to prove direct infringement by any Stemtech distributor. (D.I. 258 at 6) Citing broadly to a 107-page swath of trial transcript, Defendant argues that Leonard did not testify specifically about each instance of purported direct infringement and did not include in his testimony for each infringement the detail that the unauthorized reproduction of his images occurred on a platform that was owned or operated by a Stemtech distributor. (Id.) Stemtech further suggests that Photo Researchers, a firm with which Leonard contracted to license some images, may have authorized some or all of these uses of Leonard's images. (Id.)
The Court agrees with Leonard that the record contains sufficient evidence from which a reasonable jury could find that Stemtech's distributors directly infringed Leonard's copyrights. The jury could reasonably have credited all of the following evidence: (1) testimony by Leonard that he had valid copyrights for the images involved (see D.I. 261 at 15 (citing D.I. 237 at 138-50; D.I. 238 at 38-45); (2) testimony regarding the unauthorized use of the copyrighted images (D.I. 261 at 15-16; D.I. 238 at 79, 85-86, 90, 98, 100); and (3) testimony regarding the unauthorized use of the images by Stemtech distributors in association with Stemtech marketing material and internet links to Stemtech (D.I. 256 at 16; D.I. 238 at 57211-165211; PX 51-143). While the jury was not compelled to credit all of this evidence, it was free to do so, leaving the finding of direct infringement not against the clear weight of the evidence.
In this regard, it is also noteworthy that at trial, Stemtech told the jury that it agreed that some amount of infringement of Leonard's copyrighted images did occur. In closing argument, Defendant (through counsel) admitted that some of its distributors did copy Plaintiffs Images 3 and 4 without permission. (See D.I. 240 at 169, 184-85)
Stemtech also challenges Leonard's showing with respect to the second element of vicarious infringement, that Stemtech had the right and ability to supervise any infringing conduct of its distributors. Stemtech analogizes its relationship with its distributors with that between Google and operators of third-party websites, which were found to be outside the control of Google for purposes of vicarious infringement in Perfect 10, 508 F.3d at 1173. Again, the Court agrees with Leonard that there was sufficient evidence in the record from which a reasonable jury could have found that Stemtech had the right and ability to stop the infringing activities of its distributors. Brian Noar, Stemtech's compliance officer, and George Antarr, a Stemtech vice president, testified that Stemtech had multiple means of communicating with its distributors, as well as means to influence the distributors to limit or stop their infringing uses of Leonard's images, including requiring them to "stay within our [Stemtech's] policies and procedures" by withholding from non-compliant distributors money and access to essential back office tools. (D.I. 239 at 251-53, 291-94, 300-04, 309) The contractual and financial relationship between the defendant and the third parties in Perfect 10 was more limited in scope than the relationship the jury could reasonably have found existed between Stemtech and its distributors. It would have been reasonable to find that the threat of termination of distributorship provided sufficient leverage for Stemtech to rein in an errant distributor whenever Stemtech chose to do so, particularly given the undisputed evidence the jury heard of Stemtech succeeding in stopping the unauthorized behavior of certain distributors. (See D.I. 258 Ex. 2, 286-87)
Stemtech further contends that Leonard failed to establish any obvious and direct benefit to Stemtech from its distributors' infringement, citing the absence of evidence that distributors' use of the images attracted customers or new distributors to Stemtech. (D.I. 258 at 9) However, the jury heard the testimony of Stemtech's Noar, who explained that use of Leonard's images in Stemtech's marketing materials assisted in the recruitment of new distributors, and the more distributors there are the more product that will be sold, and, therefore, the more revenue that will be generated. (D.I. 239 at 249-50) Another Stemtech witness, Antarr, testified to the importance of using pictures (and not just words) in marketing materials, to show what a stem cell looks like. (See id. at 41-42)
In sum, Stemtech has failed to persuade the Court that permitting the jury's verdict of vicarious infringement to stand would result in a miscarriage of justice, shocks the conscience, or cries out to be overturned.
Stemtech next seeks a new trial on Leonard's claim for contributory copyright infringement. In order to prevail on his claim for contributory infringement, Leonard had to prove: (1) direct infringement by a third party; (2) Stemtech's knowlege that the third party was directly infringing; and (3) material contribution. See Parker v. Google Inc., 242 Fed. Appx. 833, 837 (3d Cir, 2007); see also Jury Instr. #24. Although Stemtech challenges Leonard's showing on each of these elements, the Court finds that the record supports the jury's verdict, which is not against the clear weight of the evidence.
With respect to the first element, direct infringement by Stemtech's distributors, the analysis here is no different that that already set out above with respect to the same element of Leonard's vicarious infringement claim.
Turning next to Stemtech's contention that Leonard failed to prove it had knowledge that its distributors were infringing, the jury heard from Leonard that he, himself, provided Stemtech notice of such infringing activity by its distributors. (See D.I. 237 at 19; D.I. 240 at 168) As discussed above, there was also evidence that Stemtech stopped certain infringing activities of its distributors, activities of which it was undisputed Stemtech had knowledge. A reasonable jury could have found from this evidence that Stemtech also came to have knowledge of additional infringing activities (and for whatever reason chose not to stop them).
The record also supports a finding that Stemtech materially contributed to its distributors' infringement by knowingly taking steps that were substantially certain to result in direct infringement by those distributors. See Perfect 10, 508 F.3d at 1170-71. The jury heard evidence from which it could have found that Stemtech wanted to use Leonard's images in its marketing materials, used those images in the marketing materials it distributed to its distributors, and it required its distributors to use these marketing materials, all in an effort to drive larger sales and obtain further revenues. (See D.I. 261 at 18-19) (citing evidence)
In sum, Stemtech has failed to persuade the Court that permitting the jury's verdict of vicarious infringement to stand would result in a miscarriage of justice, shocks the conscience, or cries out to be overturned.
Stemtech asserts that the jury's damage award is excessive, based on the wrong standard, and that Plaintiffs expert, Jeffrey Sedlik, expressed an opinion on damages that was speculative and unsupported by the evidence. (D.I. 258 at 12-19) Specifically, Defendant claims that Leonard's actual damages should have been based on amounts Leonard received from licensing or the amounts used in negotiations between Leonard and Stemtech. (Id. at 14) Stemtech also attacks Sedlik's use of multipliers in opining on the estimated value of lost licenses, describing the multipliers as punitive and, therefore, improperly used in calculating actual damages. (See id. at 15-16; Ex. 2 at 169-76) In Defendant's estimation, Leonard's actual damages cannot exceed $1,804. (D.I. 258 at 18-19)
To warrant a new trial on the grounds of excessive damages, the Court must find that the jury's award (1) is grossly excessive, shocking, or monstrous; (2) is clearly not supported by the evidence; (3) results in a plain injustice; (4) is based on speculation or guesswork; or (5) is the product of passion or prejudice. See Garrison v. Mailers N. Am., Inc., 820 F.Supp. 814, 822 (D.Del. 1993); Del Monte Dunes at Monterey, Ltd. v. City o.fMonterey, 95 F.3d 1422, 1435 (9th Cir. 1996); Eich v. Bd. ofRegentsfor Central Mo. State Univ., 350 F.3d 752, 762-763 (8th Cir. 2003). While the $1.6 million damages figure returned by the jury is excessive and surprising, the Court concludes it is not
In denying prejudgment interest, the Court held: "The jury's $1.6 million verdict more than fully compensates Plaintiff for the misappropriated value of his property. As Plaintiffs expert witness, Professor Jeff Sedlick, testified at trial, $1.6 far exceeds the aggregate value Plaintiff `received for all of [his] 92 previous licenses Photo Researchers obtained over a 15-year time period for the use of the Leonard's Image 3 or 4. . . .'" (D.I. 247 at 4) (quoting D.I. 243 at 15) There the Court further summarized some of the pertinent damages-related evidence:
(D.I. 247 at 4)
All of the foregoing indicates that another reasonable jury
The $1.6 million actual damages figure is not
Other evidence could have been found by the jury to corroborate the reasonableness of Sedlik's opinions. For example, the jury heard evidence that Leonard had demanded $700,000 for alleged infringement on several websites and for a license to use his images with his impression. (See DX878, 879, 973, 1020, 1024) Similarly, defense counsel mentioned in argument that Leonard had made a demand of $300,000 for the use of a single image. (See D.I. 240 at 175) Defendant did not object to admission of evidence of these demands. While these large dollar figures are not evidence of actual agreements between a willing buyer and a willing seller, they are at least somewhat probative of fair value (as some indication of the value Leonard has placed on his property) and may have, in the context of the entire record, caused the jury reasonably to view Professor Sedlik's figures not unreasonable. (See also generally D.I. 239 at 68-69) (Gerard, whose company represented Leonard in licensing efforts, testifying that his images were popular for editorial and commercial use)
Plaintiffs licensing agent, Mr. Gerard, provided additional bases from which a jury could reasonably find that use of Leonard's images was very valuable. Gerard testified that Leonard's images were "very popular," in part because "for many, many years, they were the only ones [of their kind] that I could get and the only ones that I could make available to my clients." (D.I. 239 at 48, 49) The images were also "beautiful." (Id. at 50) As a result, Gerard testified, Leonard "made a significant amount of money" and "the per-image popularity . . . was a lot higher for Andy's material, just because of the subject matter." (Id. at 48, 49) Gerard further explained how he licensed one of Leonard's images to Time, Inc. for a cover photo on Time Magazine, which he described as the "Holy Grail . . . having that up there with your credit is very, very significant." (Id. at 53-54)
Finally, while Stemtech devotes a great deal of attention to arguing that Leonard's damages case is based on nothing more than speculation or guesswork, the Court already rejected these contentions when it denied Stemtech's Daubert motion to exclude the testimony of Professor Sedlik. Stemtech particularly emphasizes that "Leonard's own licensing fees should have been used to calculate his actual damages." (D.I. 258 at 13) Of course, Stemtech was free to retain an expert who could have expressed this very opinion and calculated Leonard's actual damages based on his own licensing history — but that is not the trial strategy Stemtech chose to pursue. Importantly, Stemtech has done nothing to overcome the thorough, persuasive analysis articulated by Judge Burke in his Memorandum Order denying Stemtech's Daubert motion seeking to exclude Professor Sedlik's testimony. (D.I. 203)
There, Magistrate Judge Burke wrote:
(D.I. 203 at 3-4, 7-12) (internal footnotes omitted)
Accordingly, the Court concludes that the damages awarded by the jury do not provide a basis for granting Stemtech a new trial.
Stemtech next insists that Leonard, his attorney, and his expert witness all committed various acts of misconduct at trial, resulting in such unfair prejudice to Stemtech's case as to warrant a new trial. (See D.I. 258 at 19-20) Having presided at the trial, the Court is firmly of the view that none of the purported misconduct (to the extent it even occurred) unfairly influenced the verdict.
For example, Stemtech claims that Leonard and his lawyer improperly referred to the financial disparity between the parties on multiple occasions, pointing out that Stemtech was an "international, multinational or global corporation." (Id. at 20-22) But it was obvious — and impossible for the jury not to learn — that Plaintiff is an individual and Defendant is a corporation. As there is a financial disparity between most individuals and most corporations, this fact, too, was essentially impossible for the jury not to know. Additionally, "International" is part of Stemtech International's name, so, again, it was unavoidable for the jury to hear this fact. (See, e.g., D.I. 220 at 2 (advising jury pool as early as voir dire that "Defendant Stemtech . . . was previously known as Stemtech Health Sciences, Inc. and is now known as Stemtech International, Inc.")
Stemtech also faults Plaintiff's counsel for suggesting during closing argument that Stemtech views its misuse of Plaintiff's copyrighted images as analogous to a parking violation, in an effort to encourage the jury to apply an improper damages standard. (See D.I. 258 at 23-24; see also D.I. 240 at 220-21, 224) What Defendant is referring to is a portion of Plaintiff's rebuttal argument, during which counsel made an analogy between Stemtech's damages theory and a person who fails to put money in a parking meter and then responds to the resulting parking ticket by offering to pay the meter amount rather than a larger fine. (See D.I. 240 at 220-21) There was nothing objectionable about this fair response to defense counsel's closing argument 2013 nor was any objection made to it. Moreover, even if counsel's comment was improper, considered in the context of all the damages evidence before the jury, the Court is confident that the comment did not unfairly influence the verdict.
Stemtech further contends that Plaintiff's use of the word "pyramid" to describe Stemtech's business organization was deliberately intended to "appeal to the jury's passion and prejudice." (D.I. 258 at 22-23) But witnesses associated with both parties referred to the structure of Defendant's business as consistent with a pyramid, in that there is Stemtech at the top, and below it are top level distributors, and those distributors help recruit other distributors, and so on. (See D.I. 239 at 258-59 (Stemtech's Noar explaining Stemtech organizational structure, including responding to contention it is "pyramid" by denying it is
These conclusions become all the more evident when Defendant's current complaints are put in the proper context of the full trial. In his
(D.I. 240 at 207) Defense counsel was free to pursue this strategy-but, having done so (and it evidently having failed), Defendant cannot now persuasively complain that it received an unfair trial.
Stemtech makes additional criticisms of Leonard and his attorney, but he fails to make any persuasive showing that any of them — individually, or collectively-could have unfairly influenced the verdict. Having sat through trial, and having seen that the fleeting references to which Defendant cites were not prominent features of the trial, the Court concludes that there is no "reasonable probability" that the jury's verdict was influenced by what Defendant characterizes as improper conduct by Plaintiff and his litigation team. See generally Fineman, 774 F. Supp. at 269-70. The Court will not grant Defendant relief on this basis.
As a final basis for obtaining a new trial, Stemtech identifies what it believes are a host of erroneous, prejudicial evidentiary rulings. Stemtech contends that the Court wrongly "affected the trial's outcome by improperly admitting evidence that: (1) exaggerated the alleged infringements potentially attributable to Stemtech; (2) supported a legally improper and inflated damages award; and/or (3) was intended to inflame the jury or cast Stemtech in a bad light." (D.I. 258 at 25-26) Stemtech supports its contention with a table summarizing items of "Improper Evidence," listing no fewer than 94 exhibits and portions of testimony of six trial witnesses.
The Court finds that Stemtech's criticisms do not provide a meritorious basis for ordering a new trial. All of the evidence of which Stemtech now complains was admitted either over Stemtech's objection (and in such cases Stemtech has failed to provide any persuasive basis for the Court to reconsider its earlier decision) or in the absence of any such objection (and in such cases the Court perceives no basis to provide relief at this late date).
As the Third Circuit has explained — in a case relied on by Stemtech (see D.I. 258 at 25) — it is possible for evidentiary rulings to support a new trial (if a court is later persuaded it made a mistake), but not if "it is highly probable that the error did not affect the outcome of the case." Goodman v. Pa. Turnpike Comm., 293 F.3d 655, 667 (3d Cir. 2002). Here, it is highly probable that the purported errors highlighted by Defendant did
Once again, the Court finds no basis for granting Stemtech a new trial.
Finally, Stemtech contends that as an alternative to a new trial, "Leonard could agree to remit a portion of the verdict in excess of the amount supportable by the evidence." (D.I. 258 at 18) (citing Kazan v. Wolinski, 721F.2d911, 914 (3d Cir. 1983)) The only amount of damages Stemtech agrees may be justified is $1,804, for direct infringement. (See D.I. 258 at 18) Thus, according to Stemtech, "unless Leonard agrees to remit $1,598, 196 of the jury's excessive verdict, a new trial must be ordered." (Id. at 18-29)
For all of the reasons already described, particularly in connection with analyzing Stemtech's contention that the damages award justifies a new trial (see above), the Court disagrees with Stemtech. Leonard has, of course, not agreed to the remittitur proposed by Stemtech, and the Court will not compel Leonard to so agree. Instead, for all the reasons already given, the Court will deny Stemtech's motion for a new trial.
Stemtech seeks to recover $96,686.59 attorney fees it incurred in defending itself in what has been referred to as Leonard II, the second, related case brought by Leonard against Stemtech. (D.I. 250 at 11) See Andrew Paul Leonard d/b/a APL Microscope v. Stemtech International, Inc., C.A. No. 12-86-LPS-CJB (D. Del.). Leonard II was filed on January 27, 2012, less than two months after Magistrate Judge Burke issued a Report and Recommendation (D.I. 149) ("Report II") recommending that the Court grant Stemtech's motion for summary judgment in the original Leonard I case, "which had the effect of knocking out Leonard's claims for statutory damages, attorney fees and profits, leaving only his nominal actual damages [claims]." (D.I. 250 at 5)
There is no question that Stemtech is the prevailing party in Leonard II. (See, e.g., C.A. No. 12-86-LPS-CJB D.I. 27) ("In Leonard II, Plaintiff Andrew Paul Leonard, d/b/a APL Microscope take nothing, the action be dismissed on the merits and Defendant Stemtech International, Inc. recover taxable costs incurred therein from Plaintiff Andrew Paul Leonard, d/b/a APL Microscope. . . ."))
It is also clear that the Copyright Act provides, in pertinent part, that a "court in its discretion may allow the recovery of full costs by or against any party" and, further, that "the court may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. In exercising such discretion, a court usually evaluates four factors: (1) frivolousness, (2) motivation, (3) objective unreasonableness (both in the factual and legal components of the case), and (4) the need in particular circumstances to advance considerations of compensation and deterrence. See Lieb v. Topstone Industries, Inc., 788 F.2d 151, 155-56 (3d Cir. 1986). Having undertaken this evaluation, the Court has determined that the appropriate exercise of its discretion is to deny Stemtech's motion.
The Court is not persuaded by Stemtech that Leonard II was an "objectively unreasonable and frivolous lawsuit that was filed in bad faith." (D.I. 250 at 8) Despite evidence Leonard obtained in Leonard I — which, by the time he filed Leonard II, included evidence that "headshots" on distributors' websites were placed on those websites by distributors' themselves, and not by Stemtech — Leonard has reason to believe Stemtech was engaged in ongoing and new infringement, that was not the subject of Leonard I. He had a non-sanctionable, non-frivolous basis to file Leonard II.
Stemtech's characterization of Leonard II as being motivated by bad faith, with a purpose of harassment, and being objectively unreasonable, is contradicted by the objective facts that the Court denied Stemtech's motion to dismiss and motion for sanctions filed in Leonard II. (See C.A. No. 12-86-LPS-CJB D.I. 25, 26)
(Id. 25 at 17, 20-21, 25)
In light of these facts, there is no basis for the relief now sought by Stemtech. The Court will exercise its discretion to deny Stemtech's motion.
Stemtech seeks $6,255.30 as taxable costs for being the prevailing party in Leonard II. (D.I. 251) Leonard has posed objections to the request. (D.I. 257)
Pursuant to D. Del. LR 54.1, the proper procedure is to file a bill of costs, to be reviewed by the Clerk of Court, rather than a motion seeking judicial review. Thereafter, a party opposing the Clerk's determination may file a motion for review of that decision. See Fed. R. Civ. Proc. 54(d).
Accordingly, the Court will deny Stemtech's motion for costs without prejudice to its right to file a bill of costs.
Leonard seeks to recover from Stemtech the fees and costs associated with taking the deposition of Stemtech's IT Director, George Tashjian, which Leonard contends was necessitated "[b]ecause Stemtech denied [certain] Requests for Admission [Requests]," at which, in Leonard's view, Tashjian "readily admitted that Stemtech's denials to the Requests were wrong." (D.I. 264 at 1) Leonard explains that "the issue involving these requests was an important part of Plaintiff's proof, namely, that Stemtech owned certain internet domains and provided its registered distributors with websites with sub-domains." (Id. at 2) Stemtech denied these Requests — even though what Leonard asserted was true — and did so without consulting Tashjian. (See id.) Leonard learned these latter facts only at Tashjian's deposition. Leonard seeks to recover $2,275 in attorney fees as well as the $773.30 it paid for the transcript of Tashjian's deposition. (See id.)
Federal Rule of Civil Procedure 37(c)(2) provides:
Stemtech opposes the motion on several grounds. First, Stemtech contends "Leonard inexplicably and unreasonably waited" to file the motion until nearly two years after Stemtech denied the Requests and approximately 20 months after Leonard believes he proves the denials were wrongly provided. (See D.I. 265 at 1) The Court disagrees with Stemtech, as it points to no firm deadline for filing a Rule 37(C)(2) motion, see Chemical Eng'g Corp. v. Essefindus. Inc., 795 F.2d 1565, 1574 (Fed. Cir. 1986) ("No Rule specifies the time during which a Rule 37(c) motion must be filed, and as explained in the advisory committee note to Rule 37(c), the Rule is intended to provide post-trial relief."); evaluating whether the admission sought was of substantial importance may, in some circumstances, require waiting until very late in a case to evaluate; and, under the particular circumstances here, Stemtech's litigation strategy-which appeared to include denying any infringement by its distributors and any control over its distributors' websites until admitting certain aspects of liability at trial, all rendered Leonard's delay not unreasonable. Even if such a "motion should normally be deemed waived if it is not made prior to trial," Mercy v. County ofSuffolk, New York, 748 F.2d 52, 55-56 (2d Cir. 1984); see also Popeil Bros., Inc. v. Schick Elec., Inc., 516 F.2d 772, 778 (7th Cir. 1975) ("We conclude that Rule 37(c) expenses and fees must be timely sought prior to judgment and appeal, and that if the judgment is silent in regard thereto, they are deemed waived or denied."), here, with two consolidated cases, with a magistrate judge handling all pretrial matters, with the lack of prejudice to Stemtech from Leonard's delay, and given Stemtech's overall litigation strategy, the Court concludes that Leonard's motion is not untimely.
Stemtech next argues that the Requests were "objectionable and, more importantly, they were of no substantial importance." (D.I. 265 at 1) Stemtech bases this argument on the fact that "not a single domain name that was at issue in the responses [to the Requests] was even mentioned at trial, let alone admitted as evidence;" nor was Tashjian a witness at trial. (Id.) Stemtech unfairly undermines the importance of the evidence sought (and eventually obtained) by Leonard. The substantial importance of the domain evidence is demonstrated by its use by Leonard in defeating a Stemtech motion for summary judgment. (See D.I. 266 at 3) Less directly, the importance of the evidence is shown by the fact that Stemtech could not take certain positions at trial, knowing that Leonard could prove the contrary, thanks to the Tashjian deposition transcript, a purpose that could have been served equally as well by proper responses to the Requests. For instance, as Leonard explains, at trial Leonard could ask Noar-Stemtech's only witness at trial — "the questions that he did, knowing that he could pull Mr. Tashjian's transcript should Mr. Noar try and deny these facts" as to the relationship between Stemtech's conduct and its distributors' infringement. (D.I. 266 at 3) Stemtech also asserts that the Requests were objectionable as "vague and ambiguous, call[ing] for the premature disclosure of expert witness information and for a legal conclusion." (D.I. 265 at 6) These objections are unavailing, as the Requests plainly and properly seek admission of the facts that "Stemtech provides independent distributors websites with sub-domains of the official Stemtech owned domain." (D.I. 264 Ex. A at 4) Stemtech offers no explanation for why it would respond to such requests for factual evidence without even consulting the fact witness who could best answer them (i.e., Tashjian).
Stemtech's final contention has more merit. Stemtech persuasively debunks Leonard's assertion that Leonard took Tashjian's deposition
Ultimately, then, the Court is confronted with a situation in which neither side's position is entirely meritorious. Leonard is correct that Stemtech should have admitted the Requests and that the facts Leonard sought to confirm were of substantial importance. The timing of Leonard's motion, while not ideal, was not so delayed as to unfairly prejudice Stemtech, nor does it (given the nature of the issues raised) make it more difficult for the Court to resolve. However, Leonard has wholly failed to persuade the Court that it took Tashjian's deposition
Under the circumstances, the Court can fathom no better resolution than to rule for each side in part. Thus, the Court will grant Leonard's motion, but reduce the amount he seeks to recover by 50%. This result is fair to both sides as it avoids the unfair outcome of awarding Leonard all of his fees and costs — when they were not all or even mostly necessitated as a result of Stemtech's improper conduct — and also avoids the unfair outcome of allowing Stemtech to escape unscathed despite its improper denials of the Requests.
For the reasons stated above, IT IS HEREBY ORDERED that:
1. Stemtech's Motion For a New Trial or Remittitur (D.I. 258) is DENIED.
2. Stemtech's Motion For Attorney Fees (D.I. 250) is DENIED.
3. Stemtech's Motion For Costs (D.I. 251) is DENIED WITHOUT PREJUDICE.
4. Leonard's Motion For Costs And Attorney Fees Pursuant to Fed. R. Civ. Proc. 37(c)(2) (D.I. 264) is GRANTED to the extent that Stemtech SHALL PAY Leonard fifty percent (50%) of the costs and fees sought by Leonard.
5. The Clerk of Court is directed to CLOSE this case.
(D.I. 250 at 9) (emphasis in original although modified in form for consisistency)
