Month: February 2015

Copyright Infringement Case Implodes Due To Rule 37(c) Violations

BWP MEDIA USA INC. v. RICH KIDS CLOTHING COMPANY, LLC, Dist. Court, WD Washington 2015 – Google Scholar.

This is a fairly routine case in which BWP sued Rich Kids alleging that Rich Kids infringed its copyrights on three photographs. To support its claim of copyright infringement, BWP produced three screen shots of Rich Kids’ website allegedly showing that BWP’s photographs were copied without permission.

Rich Kids responded to the motion for summary judgment by arguing that the screen-grab exhibit should be stricken because it was not produced during discovery. Rich Kids also filed its own summary judgment motion in which it argued that BWP failed to produce admissible evidence upon which a reasonable jury could find copyright infringement.

The district court granted Rich Kids’ motion for summary judgment based on its finding that BWP violated Rule 37. That finding was, in turn, based on a finding that BWP had failed to comply with the Rule 26(a)(1)(A) automatic disclosure requirements. The Court explained:

“Federal Rule of Civil Procedure 26(a)(1)(A) requires a party to make certain initial disclosures to other parties “without awaiting a discovery request[.]” Those disclosures include “a copy — or a description by category and location — of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims[.]” Fed. R. Civ. P. 26(a)(1)(A)(ii). Parties are further required, under Rule 26(e), to supplement or correct initial disclosures on an ongoing basis.

In this case, BWP indicated in its initial disclosures its “possession of materials relevant to Defendant’s commission of copyright infringement on its website, including digital files of screen shots of the website depicting Defendant’s commission of copyright infringement.” (Dkt. 28-1 at 3.) No materials were included in the disclosures. RKCC submits evidence showing it sought production of the materials identified in plaintiff’s initial disclosures, and that BWP failed to comply with that request. Specifically, in an email dated October 30, 2014, the deadline for filing discovery-related motions and some two weeks prior to the close of discovery, counsel for RKCC reminded counsel for BWP that he had “never received any documents at all from BWP[,]” other than the exhibit attached to the complaint, described above. (Dkt. 24-1 at 2.) Defendant’s counsel indicated he was considering filing a motion to compel, which would be withdrawn when documents were produced. (Id.) In an email later that same day, RKCC’s counsel reiterated:

As to the documents, I’m referring to any documents envisioned by the initial disclosure rules “all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use [sic] to support its claims or defenses, unless the use would be solely for impeachment[.]”

(Dkt. 24-1 at 3.) He added: “Of course, if BWP doesn’t plan to rely on any documents other than the pleadings to support its claims, that’s fine. I guess I would just ask for confirmation.” (Id.) Counsel for RKCC attests that counsel forBWP provided the requested confirmation by telephone that BWP would not rely on any documents other than those included in the pleadings. (Dkt. 24, ¶4.)


In sum, the Court concludes that, pursuant to Rule 37(c), BWP is foreclosed from relying on the evidence attached to its motion for summary judgment and is restricted to relying on the evidence attached to its complaint and/or otherwise properly produced during the course of discovery. Within that framework, the Court proceeds to the pending motions for summary judgment.”

The court held that BWP violated Rule 26 by failing to disclose the screen-grab exhibit and held that, pursuant to Rule 37(c), BWP had no admissible evidence to support its claims of copyright infringement.

Separately, the Court denied Rich Kids’ motion for Rule 11 sanctions because Rich Kids did not comply with the safe harbor (providing the other party 21 days in which to withdraw the claims) and did not file the sanctions motion as a separate motion.

In sum, an excellent opinion on these issues.

Edward X. Clinton, Jr.

Seventh Circuit Sanctions Foreclosure Defense Lawyer

On February 11, 2015, the Seventh Circuit issued two opinions sanctioning Wendy A. Nora, a foreclosure defense attorney. The first case is captioned In Re: Desa L. Rinaldi and Roger P. Rinaldi, Nos. 13-3865 & 14-1887 and Wendy A. Nora and HSBC Bank, USA, N.A., et al.

In 2009, HSBC filed a mortgage foreclosure suit against the Rinaldis in state court. The Rinaldis “counterclaimed against HSBC, Wells Fargo, and the lawyers involved in the foreclosure, alleging that the mortgage paperwork produced by HSBC had been fraudulently altered and that HSBC lacked standing to enforce the mortgage.” Opinion at 2. The Rinaldis lost the state court case and did not appeal. However, when HSBC agreed to modify the loan rather than foreclose, the state court vacated the judgment.  The Rinaldis then refiled the same counterclaims against the same parties they previously sued. Those proceedings were halted when the Rinaldis filed a bankruptcy petition, which had the effect of automatically staying the state case.

In the bankruptcy case HSBC filed a proof of claim and the Rinaldis filed adversary claims against HSBC, Wells Fargo and the lawyers involved. After the bankruptcy court and district court rejected the claims the Rinaldis, through their lawyer, filed a Rule 59(e) motion to alter or amend judgment.  That motion was denied and the court admonished the Rinaldis and their lawyer that “‘any further frivolous submissions will result in an award of appropriate sanctions against the Rinaldi’s attorney.'”

In December 2013, the Rinaldis appealed to the Seventh Circuit. However, in March 2014 they moved to dismiss the bankruptcy case on the ground that they had newly discovered evidence that the mortgage was void. The bankruptcy court granted the motion. Nora then moved to withdraw as the attorney for the Rinaldis. Nora moved to intervene in the case and sought relief under Rule 60(b). The district court imposed sanctions for motions it deemed “frivolous.” The sanction was modest – $1,000. Nora appealed that sanctions order, but the Seventh Circuit affirmed. The Seventh Circuit noted that the appeal on the merits was moot (because the bankruptcy petition had been dismissed) but held that because the Rinaldis had caused the appeal to become moot, the decisions of the bankruptcy court and district court would have preclusive effect.

The court also affirmed the $1,000 sanction on the ground that the attorney’s filings were “confusing, frivolous, and needlessly argumentative.”

The second opinion released on February 11, 2015 was In Re: Wendy A. Nora, No. 13-2676, in which the Seventh Circuit addressed its order that Nora “show cause why she should not be sanctioned for pursuing a frivolous appeal,…and why she should not be disciplined for conduct unbecoming a member of the bar.” The court ordered Ms. Nora to pay a sanction of $2,500 but decided to suspend the sanction “until such time, if ever, that Nora submits additional frivolous or needlessly antagonistic filings.” The court held that Nora had raised frivolous arguments in the case captioned, PNC Bank, N.A. v. Spencer, 763 F.3d 650 (7th Cir. 2014). The Spencer case was another foreclosure case that had been removed to the federal court after four years of litigation in state court. After the case was remanded for lack of subject matter jurisdiction, Nora filed an appeal to the Seventh Circuit. The appeal was frivolous because there was no right to appeal a remand and because there was no colorable basis to assert federal jurisdiction. The court also discussed Nora’s “needless antagonism” towards opposing counsel and the judge.

Comment: the fact that two opinions were published on the same day concerning the same lawyer has to be the Seventh Circuit’s way of politely warning members of the foreclosure bar to resist the temptation to engage in frivolous litigation.

Edward X. Clinton, Jr.

If you don’t disclose it or produce it, you can’t use it.

Bryntesen v. CAMP AUTOMOTIVE, INC., Dist. Court, D. Idaho 2015 – Google Scholar.

There is an old saying in the legal world that “if you don’t produce it, you can’t use it at trial.” Here, the plaintiffs filed suit apparently against a company that sold or leased them an RV. There was a dispute about payment and, at some point, the plaintiffs were arrested by the police.  Plaintiffs failed to disclose in discovery videos of the arrest.

The court sanctioned the plaintiffs under Rule 37, and also awarded them legal fees and costs for brining the motion. Instead, the court held that the plaintiffs could not use the videos in their case because they deprived the defense of the opportunity of asking questions about the videos in discovery.

The pertinent quote is this one:

Plaintiffs only produced the videos after Sheree Bryntesen acknowledged their existence during her deposition. And only after disclosing the videos of the incident, did Plaintiffs’ counsel “investigate whether any other media files had also been inadvertently omitted from previous disclosure and discovery responses.” Plf. Br., at p. 5, Dkt. 76. “It was then that Plaintiffs’ counsel discovered that the video of the telephone conversation between Casey Bryntesen and Scott Grumbly had not yet been disclosed or produced.” Id.

Mistakes and oversights happen, but the number of mistakes and oversights here are troubling. Especially where the disclosure was not ultimately made until after the vast majority of the depositions occurred — depriving defense counsel of the opportunity to ask most witnesses, particularly the officers involved in the arrest, about the videos. Plaintiffs failed to timely disclose the videos as required by Rule 26(a) and (e). And, under these circumstances, the Court finds that the late disclosure was not substantially justified or harmless — as is necessary to avoid Rule 37 sanctions. Repeated oversights are not substantial justification, and defense counsel’s inability to question witnesses about the videos during their depositions is surely not harmless….

Here, the proper sanction is to preclude Plaintiffs from using the videos on a motion, at a hearing, or at trial. Defendants may still use the videos. However, if they do so, the Court will then allow Plaintiffs to use them as well — Defendants can make that choice.”

In, sum an excellent opinion discussing the rationale for the preclusion of evidence.

Edward X. Clinton, Jr.