ALETA A. TRAUGER, District Judge.
Pending before the court is the plaintiffs' Motion for Review (Docket No. 348), to which the defendants have filed a Response in opposition (Docket No. 361). For the reasons stated herein, the Motion for Review will be granted in part and denied in part.
Plaintiff Samuel David Moore, along with Dave Prater, was part of the popular singing duo, "Sam & Dave," which released the songs "Soul Man" and "Hold On', I'm Comin'" in the 1960's. Sam & Dave ceased performing together by the 1980's and, although Prater died in 1988, Sam Moore continues to perform and make celebrity appearances, at times holding himself out as "the Soul Man," "The Legendary Soul Man," or some variation thereof. Sam Moore, his wife Joyce Moore, and The SJM Trust (collectively, "plaintiffs") claim to possess intellectual property rights in several unregistered trademarks, including the terms "Soul Man," "The Legendary Soul Man," and "The Original Soul Man," each of which invoke the Sam & Dave song and albums that utilized the term "Soul Man."
In 2008, defendant The Weinstein Company LLC, d/b/a Dimension Films ("TWC") released a feature film called Soul Men, starring Samuel L. Jackson and Bernie Mac. Broadly, the movie concerns a pair of estranged soul music backup singers, who reunite to take a cross-country road trip to attend the funeral of their former lead singer. Pursuant to contractual agreements with TWC and/or its affiliates, defendant Metro-Goldwyn Mayer Studios, Inc. distributed Soul Men in theaters nationwide, defendant Genius Products, LLC distributed a DVD version of the movie (following its brief theatrical run), and Concord Music Group, Inc. distributed the Soul Men Original Motion Picture Soundtrack.
In this lawsuit, the plaintiffs broadly allege that the defendants violated their intellectual property, publicity, and/or privacy rights by producing and/or distributing Soul Men and its soundtrack. They allege, inter alia, that Soul Men was in fact based on the history of "Sam & Dave" and painted them in a false light, sought to capitalize on the alleged "Soul Man"-related marks without permission, improperly competed with certain of Sam Moore's works, and otherwise diluted the plaintiffs' interests in the alleged marks.
In the First Amended Complaint, the plaintiffs alleged that Joyce Moore was a "co-owner of the rights referenced" in the First Amended Complaint, that "Plaintiff SJM Trust is a Tennessee Irrevocable Trust," and that The SJM Trust "is the ultimate beneficiary of the trademarks and the rights that flow through and from the Moores." (Docket No. 146 ("First Am. Compl.") ¶¶ 1 and 23.) The plaintiffs also alleged that they collectively own the intellectual property rights being asserted. (See, e.g., First. Am. ¶¶ 76 ("Despite actual knowledge of the Plaintiffs' request to not infringe on their rights, the Weinsteins proceeded ahead without ever obtaining Plaintiffs' consent or a license."); 116 ("Defendants' SOUL MEN is identical in appearance, sound, and meaning to the SOUL MEN mark owned by the Plaintiffs, and is highly similar in appearance, sound, and meaning to the SOUL MEN mark owned by the Plaintiffs."); and 126 (referencing confusion generated by defendants' alleged "continuing use of Plaintiffs' marks") (all emphases added).) Furthermore, the plaintiffs alleged that they had continuously utilized the "Soul Man"-related marks in connection with Sam Moore's performances. (See, e.g., id. ¶ 113) ("SOUL MAN has, without interruption, functioned as a mark for the goods and services of Sam Moore . . . .")
During the course of a remarkably contentious discovery process, the Magistrate Judge made the following four decisions that are the subject of the Motion for Review:
On March 7, 2012, 14 days from the date of denial of the 2/22/12 MJ Order Denying Reconsideration, the plaintiffs filed the instant Motion for Review, which seeks relief from the Magistrate Judge's refusal to reconsider his previous decisions concerning the Application for Fees, the defendants' Renewed Motion to Compel, the plaintiffs' Motion to Amend, and the plaintiffs' Renewed Motion to Compel Reclassification/Non-Redacted Documents.
Although the plaintiffs have characterized the instant motion as a "Motion for Review" pursuant to Rule 72 and Local Rule 72.02(b), the court is concerned that the plaintiffs reflexively sought "reconsideration" by the Magistrate Judge of his 2/2/12 and 2/3/12 Orders in the first instance, thereby affording themselves "two bites at the apple" and an extra 14 days to seek review. Nevertheless, as described herein, one of the arguments raised in the Motions for Reconsideration is, in part, meritorious. Also, aside from pointing out the peculiar procedural posture of the instant motion, the defendants do not request denial of the Motion for Review on this basis and instead address the underlying merits of the 2/2/12 MJ Order, the 2/3/12 MJ Order, and the 2/22/12 MJ Order Denying Reconsideration. Under these circumstances, the court will address the merits of the arguments raised by the plaintiffs in support of their Motion for Review, to the extent those arguments were properly preserved below.
Under Fed. R. Civ. P. 72(a) and 28 U.S.C. § 636(b), a district court may modify a Magistrate Judge's ruling on non-dispositive preliminary matters only where that ruling is "clearly erroneous or contrary to law." This is a "limited standard of review." Massey v. City of Ferndale, 7 F.3d 506, 509 (6th Cir. 1993). A ruling is clearly erroneous "where it is against the clear weight of the evidence or where the court is of the definite and firm conviction that a mistake has been made." Galbraith v. N. Telecom, Inc., 944 F.2d 275, 281 (6th Cir. 1991) (internal citations omitted). The test is "not whether the finding is the best or only conclusion that can be drawn from the evidence, or whether it is the one the reviewing court would draw. Rather the test is whether there is evidence in the record to support the lower court's finding, and whether its construction of the evidence is a reasonable one." Heights Cmt'y Congress v. Hilltop Realty, Inc., 774 F.2d 135, 140 (6th Cir. 1985).
In their Renewed Motion to Compel, the defendants identified various discovery abuses by the plaintiffs, including, inter alia, their continued failure to provide meaningful information regarding alleged licensing and enforcement efforts, their damages, and the nature of The SJM Trust. The defendants demanded certain discovery sanctions and/or an award of reasonable attorney's fees pursuant to Fed. R. Civ. P. 37(a)(5)(a) and 37(c)(1). In granting the Renewed Motion to Compel (Docket No. 247), the Magistrate Judge admonished the plaintiffs for "drag[ging] their feet and [fail]ing to respond to document requests," finding that "enough is enough." (Docket No. 247 at p. 17.) The Magistrate Judge found that, as the defendants had argued, the plaintiffs had continued to provide evasive/non-responsive information to the defendants on relevant issues (see, e.g., id. at pp. 14 (as to interrogatories regarding licensing and enforcement efforts, "Plaintiffs' responses are not responsive to the requests . . . .")) and had failed to comply with his previous discovery orders. (Id. at p. 19.) In particular, as to discovery concerning The SJM Trust, he found that the plaintiffs' foot-dragging was "either due to bad faith, fault, or a continued search for a theory that does not exist," and he was "very concerned that The SJM Trust has no claims in this lawsuit . . . ." (Id. at p. 14.) As a sanction for the plaintiffs' continued discovery abuses, the Magistrate Judge found that the defendants were entitled to fees pursuant to Rule 37(a)(5)(A). He explicitly warned the plaintiffs that continued failure to participate in discovery in violation of the court's discovery orders would lead to additional sanctions.
The defendants accordingly submitted an Application for Fees supported by the Declaration of Robb Harvey (Docket No. 256), which attached billing records reflecting approximately 68 hours of work allegedly "incurred in connection with their Renewed Motion to Compel" (id. at ¶ 4 and Ex. 1) and 25 hours of work preparing the Application itself (id. at ¶ 4 and Ex. 2). The defendants' Application requested reimbursement at the following rates: Robb Harvey — $400; Heather Hubbard — $270; Emily Zibart — $210; David C. Scott — $200; and Jeana Clark (paralegal) — $160. With respect to time spent on the Renewed Motion to Compel, the application listed time entries between April 11, 2011 and July 15, 2011, the date on which the defendants filed their Reply Brief concerning the Renewed Motion to Compel.
The plaintiffs opposed the requested fee award, essentially arguing that (a) no fees should have been awarded in the first place;
The Magistrate Judge granted the defendants' Application, but sustained some of the plaintiffs' objections, as follows: he disallowed three time entries totaling 2.9 hours as insufficiently detailed and/or reflecting work that would have been performed regardless (see 2/2/12 MJ Order at p. 2, n.2),
The plaintiffs challenge the Magistrate Judge's refusal to reconsider his decision concerning the Application for Fees on two grounds: (1) the fees should not have been awarded in the first place; and (2) the refusal to disallow additional time entries manifested clear error.
As to the first argument, it is both untimely and entirely without merit. First, the Magistrate Judge granted the defendants' request for fees on August 3, 2011. Although the plaintiffs have sought to re-argue this issue to the Magistrate Judge multiple times (see Docket No. 257 at pp. 2-8;
Regardless, having reviewed the record in detail, the court agrees with the merits of the 8/3/11 MJ Order, which properly sanctioned the plaintiffs for refusing to comply with their discovery obligations. In particular, the plaintiffs' allegations that The SJM Trust had an ownership interest in the alleged intellectual property rights at issue appear to have been false,
Under these circumstances, the Magistrate Judge properly found that the defendants were entitled to fees pursuant to Rule 37(a)(5)(a), which provides that, if a motion to compel is granted, the court may award "reasonable expenses incurred in making the motion, including attorney's fees."
In their Motion for Review, the plaintiffs challenge the assessment of hours relative to the Renewed Motion to Compel, but not the reduced rates applied by the Magistrate Judge, the reduced award of two hours of attorney time relative to the Application for Fees, or the manner in which the Magistrate Judge calculated the fees associated with preparing the Application.
As an initial matter, two of the plaintiffs' arguments in the Motion for Review were not properly preserved. First, the plaintiffs argue that some of the time entries reflect time spent dealing with defendants' discovery deficiencies, instead of, or in addition to, time spent on plaintiffs' deficiencies. Second, the plaintiffs argue that it was per se inappropriate to allow any time entries reflecting work performed "nearly three months" before the Renewed Motion to Compel was filed. The plaintiffs did not raise either of these arguments in opposing the Application for Fees, even though all of the relevant information was available to them at the time. Therefore, these arguments were not properly preserved and will be summarily rejected. However, the court will consider whether any fees, including fees for time spent several months before the Renewed Motion to Compel was filed, should have been disallowed on properly preserved grounds, such as lack of relatedness to the Renewed Motion to Compel.
Having considered the plaintiffs' objections, the court agrees with the plaintiffs that, relative to a handful of time entries, the Magistrate Judge should have reconsidered his decision and disallowed additional entries. First, it was inconsistent for the Magistrate Judge to disallow the May 9, 2011 Zibart entry without disallowing three other entries that similarly reflected work that would have been performed regardless of the plaintiffs' discovery deficiencies. See 5/9/11 Hubbard — 1.0 ("Review additional discovery response letter from A. Lutzker and coordinate efforts to upload and review documents and analyze revised discovery responses"); 5/9/11 Hubbard — 1.1 ("review additional documents and responses to document requests produced by Plaintiffs"); 5/10/11 Zibart — 0.7 ("Review plaintiffs' supplemental discovery responses to requests for documents and identify issues therein"). Second, two entries do not contain sufficient detail to demonstrate relatedness to the plaintiffs' discovery deficiencies necessitating the Renewed Motion to Compel. See 4/26/11 Hubbard — 0.2 ("follow up on outstanding discovery"); 5/26/11 Harvey — 1.9 ("Work on discovery dispute issues.")
As to the remaining time entries, the court finds the plaintiffs' objections to be without merit. First, the defendants provided itemized billing entries, not block billing. Second, except as noted above, it was not clear error for the Magistrate Judge to find that none of the challenged entries reflected redundant and/or duplicative entries. Third, it was not clear error for the Magistrate Judge to allow entries for time spent on tasks other than specifically researching and drafting the Renewed Motion to Compel. First, the plaintiffs have not shown that only hours spent on researching and drafting a Motion to Compel constitute time spent "making the motion" for purposes of Rule 37(a)(5)(A), a position for which they provide no case law authority. To the contrary, district courts within the Sixth Circuit have found that, under appropriate circumstances, fees for time spent on certain activities other than researching and drafting the motion are recoverable under Rule 37(a)(5)(A), because good faith efforts to identify and resolve discovery disputes are a necessary precondition to recovering expenses and attorney's fees for an opposing party's discovery failures.
Furthermore, here the Magistrate Judge originally deferred decision on the issues raised by the original Motion to Compel, presumably in the hope that the plaintiffs would honor their discovery obligations without further court intervention. Had the plaintiffs honored those obligations, the issue would not have come before this court again. Instead, the plaintiffs chose to engage in a campaign of delay and obfuscation, requiring the defendants to expend significant good-faith efforts "policing" the plaintiffs before being forced to renew the Motion to Compel to the obtain the long-requested discovery. Accordingly, it was not clear error for the Magistrate Judge to find that, under the exceptional circumstances presented by this case, efforts undertaken with respect to the initial Motion to Compel and/or as a necessary precursor to the Renewed Motion to Compel were properly reimbursable pursuant to Rule 37(a)(5)(a). In sum, the court will disallow four additional time entries totaling $1,486.50,
In their Motion for Sanctions, the defendants argued that, in violation of the court's orders, the plaintiffs had failed to search for and produce all responsive records by a court-ordered September 1, 2011 deadline and had improperly continued to withhold tax returns and accounting records, among various other discovery deficiencies. In particular, the plaintiffs still had not produced any tax returns or complete accounting records to show income and expenses related to the alleged trademarks, rights of publicity, appearances, or other rights asserted in the lawsuit.
Among other forms of relief, the defendants requested that the court impose one or more of the following sanctions: (1) preclude the plaintiffs from presenting any evidence regarding damages or, alternatively, draw an adverse inference that the plaintiffs had never received income for, or related to, any purported trademarks, rights of publicity, or other rights asserted in the lawsuit; (2) preclude the plaintiffs from relying on documents not produced; (3) preclude the plaintiffs from relying on ESI; and/or (4) award reasonable attorney's fees to the defendants for bringing the motion.
In the 2/2/12 MJ Order, the Magistrate Judge found as follows:
(Id. at pp. 3-4.) As a sanction for this conduct, he recommended that (1) the defendants "are entitled to an adverse inference with regard to Plaintiffs' claim that they received income from the intellectual property asserted in the lawsuit" (reflecting the lesser of the two sanctions requested by the defendants); and (2) the plaintiffs be precluded from relying on any records not yet produced. (Id.) However, he did not grant the defendants' additional request for attorney's fees.
The plaintiffs did not object to the second recommendation (relating to reliance on certain records), which the court will therefore adopt without further analysis. However, the plaintiffs initially moved for "clarification" of the adverse inference recommendation, arguing that it was "overbroad" because (1) Sam Moore and Joyce Moore never possessed responsive tax records to produce in the first place; and/or (2) an adverse inference regarding "intellectual property" would encompass Sam Moore's publicity rights, which plaintiffs contended had "absolutely no nexus" to the failure to produce tax returns. (Id. at p. 8.) The Magistrate Judge denied the motion, finding that his recommendation was clear. (Docket No. 330.)
In the Motion for Review, the plaintiffs argue that the Magistrate Judge committed clear error by refusing to reconsider and/or clarify his previous decision. The plaintiffs essentially reiterate on review the arguments that they made in their Motion for Reconsideration.
The court finds the plaintiffs' arguments to be without merit. The record — which this court has reviewed in detail — indicates that the plaintiffs essentially played a game of "hide the ball" with respect to their licensing efforts, enforcement efforts, and alleged damages. They provided evasive discovery responses, refused to produce responsive records or to declare that none existed, appear to have made affirmative misrepresentations in the Complaint/First Amended Complaint and in discovery about the The SJM Trust, and have engaged in unreasonable word-smithing of the Magistrate Judge's Orders,
As to the argument that the sanction related to "intellectual property" is overbroad, the court disagrees. First, in their Response to the Motion for Sanctions below, the plaintiffs did not argue that the sanctions suggested by the defendants, if imposed, should be limited to "trademark" licensing income. Therefore, the plaintiffs did not properly preserve this argument for review. Second, even addressing the merits of the plaintiffs' argument, the court finds no indication of clear error. The plaintiffs essentially complain that the recommended adverse inference "could be understood to mean Sam Moore's income from performances and/or his publicity rights." (Docket No. 348 at p. 6.) The court interprets the Magistrate Judge's order precisely to have that scope: the sanction encompassing "intellectual property"reflects one of the (lesser) sanctions requested by the defendants in their Motion for Sanctions, which the Magistrate Judge considered and granted.
Thus, the court finds no clear error in the Magistrate Judge's recommendation of an adverse inference that is broader than the self-serving language the plaintiffs would prefer. However, to ensure that the record is clear, the court will modify the adverse inference to the form originally requested by the defendants in their Motion for Sanctions, which reads as follows: "The plaintiffs have never received income for or related to any purported trademarks, rights of publicity, or other rights asserted in this lawsuit."
The plaintiffs filed a Motion to Amend on November 22, 2011, nearly one year after the CMO deadline to do so, nearly two months after the close of fact discovery, and just seven weeks before dispositive motions were due. In the Motion to Amend, the plaintiffs sought leave to do the following: (1) dismiss The SJM Trust as a party by removing it from the First Complaint;
Because the plaintiffs would have required an amendment to the CMO to file the proposed Second Amended Complaint, under Fed. R. Civ. P. 16(b)(4) they were required to demonstrate "good cause" to amend the CMO on the eve of summary judgment. After considering the plaintiffs' arguments, the Magistrate Judge found that the plaintiffs had not shown good cause for requesting amendments to the Lanham Act and state law publicity claims at this late stage, rather than much earlier in this lawsuit's proceedings (if not at its outset). With respect to the proposed copyright claim, the Magistrate Judge found that the plaintiffs had not shown good cause for proposing the amendment much earlier in the case, that adding the claim would be highly prejudicial to the defendants, and that adding the claim would require re-opening discovery.
In their Motion for Review, the plaintiffs challenge the Magistrate Judge's rulings as to the Lanham Act, state law publicity, and proposed copyright claims. As to the proposed amendments concerning the Lanham Act and state law publicity claims, the plaintiffs in their Motion for Review have not identified any aspect of the record that rebuts the Magistrate Judge's finding that the amendments should have been made, if at all, much earlier.
As to the new copyright claim, the plaintiffs similarly could have raised the claim much Amend and elsewhere, that The SJM Trust has no claims to assert in this lawsuit, they have not yet filed a Motion for Voluntary Dismissal pursuant to Fed. R. Civ. P. 41. At any rate, in the 2/3/12 MJ Order, the Magistrate Judge noted that both parties appeared to agree that The SJM Trust should be dismissed. earlier in the litigation, but chose to wait until after the close of discovery to request leave to do so.
Furthermore, the possibility of re-opening discovery to address the late-filed copyright claim and the potential need to add an indispensable party (see Docket No. 284 at p. 16) to the case with respect thereto are simply not acceptable at this stage. It was not clear error for the Magistrate Judge to find that the substantial prejudice to the defendants and the potential need to re-open discovery also compelled denial of the request to add the unjustifiably untimely copyright claim.
In sum, as concerns the Motion to Amend, the plaintiffs simply re-argue points considered and appropriately addressed by the Magistrate Judge, without providing any basis for a finding of clear error.
In the 2/3/12 MJ Order, the Magistrate Judge granted in part and denied in part the plaintiffs' renewed request to reclassify certain records marked as "Attorney Eyes Only" and to provide the plaintiffs with unredacted versions of these documents. The Magistrate Judge had examined a banker's box of over 200 challenged records and made the following findings:
In the Motion for Review, the plaintiffs first argue that the 2/3/12 MJ Order was unclear because it did not require the defendants to produce unredacted copies of the challenged documents to plaintiffs. To the contrary, the order is quite clear that the trade secret redactions were proper and that the documents would be furnished to the plaintiffs in redacted form — the same form available to the plaintiffs' attorneys. The Magistrate Judge plainly did not commit clear error by denying the plaintiffs' request for clarification on this issue.
The plaintiffs further argue that they were prejudiced by the redactions in preparing their opposition to the Motion for Summary Judgment. However, the plaintiffs make this argument in blanket fashion, without citation to any specific records, without citation to any legal authority, and without any discussion of how the defendants' redactions of highly sensitive "trade secret" information somehow prejudiced them. Furthermore, the plaintiffs do not contend that the defendants, in their Motion for Summary Judgment, relied on the redacted information in any fashion. Therefore, the court finds no basis to find that the Magistrate Judge's decision in this regard constituted clear error.
The plaintiffs also contend that it was clear error for the Magistrate Judge to preclude them from viewing additional Attorneys' Eyes Only materials (i.e., those not utilized by the defendants in their Motion for Summary Judgment) until after the summary judgment stage. Again, the plaintiffs make this argument in blanket and conclusory fashion: they do not reference any particular records among the 200+ records at issue; nor do they explain specifically how they were prejudiced by the inability to view certain records personally.
Finally, the plaintiffs contend that it was clear error for the Magistrate Judge to find that the plaintiffs and the defendants are "competitors," thereby entitling the defendants to assert trade secret objections in the first place. The court disagrees. The plaintiffs have repeatedly asserted that the defendants compete with them — indeed, they assert an unfair competition claim under the Lanham Act and, in Response to the pending Motion for Summary Judgment (Docket No. 340 at pp. 28-29), they have argued that "[t]he parties both offer the same type of goods and services . . . . Defendants' Movie and DVD compete directly with Plaintiffs' DVD and Defendants' Soundtrack competes directly with Plaintiffs' CD and musical performance services." Accordingly, it was plainly not clear error for the Magistrate Judge to find that the parties are competitors and, therefore, that the defendants are entitled to protect their trade secrets from the plaintiffs.
In sum, the plaintiffs have not demonstrated that the Magistrate Judge's reasoned consideration of the 200+ documents submitted for in camera review manifested clear error in any respect.
For the reasons stated herein, the plaintiffs' Motion for Review will be granted in part and denied in part. The plaintiffs will be ordered to pay to the defendants $16,021.00 in reasonable attorney's fees. The court will modify the recommended adverse inference as expressed herein and will otherwise accept the Magistrate Judge's recommendations. The remainder of the relief requested in the Motion for Review will be denied.
An appropriate order will enter.
On November 22, 2011 — after the close of fact discovery — the plaintiffs also filed a Motion for Leave to Amend the First Amended Complaint (Docket No. 277), which the defendants opposed (Docket No. 284), and the plaintiffs filed a Reply (Docket No. 290). The 2/3/12 MJ Order resolved both the Motion to Amend and the Renewed Motion to Compel Reclassification/Non-Redacted Documents.
