Bullets2bandages, LLC v. Caliber Corporation ( 2019 )

2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 BULLETS2BANDAGES, LLC, Case No.: 18cv669-GPC(MSB) 12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART CALIBER CORPORATION’S MOTION TO REOPEN 14 CALIBER CORPORATION, DISCOVERY AND CONTINUE DATES 15 Defendant. [ECF NO. 57] 16 17 AND RELATED COUNTERCLAIMS 18 19 20 21 Currently before the Court is Caliber Corporation’s (“Caliber”) “Motion to Re-open 22 Discovery and Extend Existing Dates for 90 Days” [ECF No. 57 (“Mot.”)], 23 Bullets2Bandages, LLC’s (“B2B”), 2 Monkey Trading LLC’s (“2 Monkey”), and Lucky Shot 24 USA LLC’s (“Lucky Shot”) Opposition to the motion [ECF No. 72 (“Opp’n”)], and Caliber’s 25 Reply [ECF No. 74 (“Reply”)]. For the reasons set forth below, Caliber’s motion is 26 GRANTED in part and DENIED in part. 27 / / / 2 Plaintiff B2B and Defendant Caliber manufacture and sell bullet-shaped bottle 3 openers. (ECF No. 5 at 9.) In 2013, B2B filed a suit against Caliber alleging trademark 4 infringement of B2B’s U.S. Trademark Registration No. 4,364,453 for the mark CALIBER, 5 and Caliber counterclaimed against B2B for Caliber’s Trademark Application No. 6 85/588,703 for its Bullet Trade Dress. (See Bullets2Bandages, LLC v. Caliber Corp., 7 13cv3134-CAB(BLM), ECF Nos. 1 & 15.) On June 9, 2014, B2B and Caliber entered into a 8 Settlement Agreement, pursuant to which B2B assigned to Caliber all rights to the 9 CALIBER mark and agreed to not use the phrase “the original” in relation with its sale of 10 bullet-shaped bottle openers. (ECF No. 5 at 10.) On June 9, 2014, B2B’s U.S. Trademark 11 Registration No. 4,364,453 was assigned to Caliber, and Caliber granted B2B a 12 worldwide, non-exclusive license to both the CALIBER mark and the Bullet Trade Dress. 13 (Id. at 9-10.) 14 In this action, Plaintiff B2B alleges that in reliance on the Settlement Agreement, 15 it manufactures products that it sells to wholesalers, including 2 Monkey, which in turn, 16 sell the products to consumers through Amazon and Etsy websites. (ECF No. 1 at 4.) 17 B2B discovered that someone complained to Amazon and Etsy that 2 Monkey’s 18 products were infringing, and the websites removed 2 Monkey’s listings. (Id.) B2B filed 19 this suit against Caliber alleging breach of contract, interference with existing 20 contractual relations, interference with prospective economic relations, and unfair 21 competition. (Id. at 6-9.) Caliber filed counterclaims against B2B for breach of contract, 22 interference with prospective economic relations, negligent misrepresentation, 23 common law unfair competition, federal unfair competition, and federal trademark 24 infringement. (ECF No. 5 at 16-22.) Caliber also asserted claims against Third-Party 25 Defendants Lucky Shot and 2 Monkey for common law unfair competition, federal 26 trademark infringement, federal unfair competition, and counterfeiting. (Id. at 22-29.) 27 Third-Party Defendants counterclaimed against Caliber seeking a declaration that 2 No. 4,630,557; 4,364,453; and 4,930,487. (ECF No. 28 at 17-22.) 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure 16(b)(4) provides that a scheduling order 5 regulating discovery “may be modified only for good cause and with the judge’s 6 consent.” Fed. R. Civ. P. 16(b)(4). The Rule 16 good cause standard focuses on the 7 “reasonable diligence” of the moving party. See Noyes v. Kelly Servs., 488 F.3d 1163, 8 1174 n.6 (9th Cir. 2007); Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 9 2000). In its recent ruling, the Ninth Circuit has instructed district courts to consider the 10 following factors when ruling on a motion to amend a Rule 16 scheduling order to 11 reopen discovery: 12 1) whether trial is imminent, 2) whether the request is opposed, 3) whether the non-moving party would be prejudiced, 4) whether the moving party 13 was diligent in obtaining discovery within the guidelines established by the 14 court, 5) the foreseeability of the need for additional discovery in light of the time allowed for discovery by the district court, and 6) the likelihood 15 that the discovery will lead to relevant evidence. 16 17 City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1066 (9th Cir. 2017) (citation 18 omitted). “District courts have ‘broad discretion to manage discovery and to control the 19 course of litigation under Federal Rule of Civil Procedure 16.’” Hunt v. Cty. Of Orange, 20 672 F.3d 606, 616 (9th Cir. 2012) (quoting Avila v. Willits Envtl. Remediation Trust, 633 21 F.3d 828, 833 (9th Cir. 2011)). 22 III. DISCUSSION 23 Defendant Caliber seeks to reopen discovery to obtain information regarding the 24 Asset Purchase Agreement (“the AP Agreement”), which Plaintiff B2B and Third-Party 25 Defendant 2 Monkey executed after fact discovery cutoff. (See Mot.) Caliber argues 26 that the execution of the AP Agreement justifies reopening discovery and represents a 27 change in circumstances providing good cause for extending the remaining deadlines. 2 new claims of trademark infringement and unfair competition against B2B by 3 retroactively removing B2B’s trademark license and granting it to 2 Monkey, (3) creates 4 new breach of contract claims against Third-Party Defendants by allegedly transferring 5 the license to 2 Monkey, and (4) creates new interference with prospective economic 6 advantage claims against Third-Party Defendants. (Id. at 4-5.) Caliber also contends 7 that if it is not allowed to conduct discovery into the AP Agreement, it can only pursue 8 the claims arising out of the Agreement by filing a separate lawsuit, even though those 9 claims are intertwined with the existing trademark infringement and breach of contract 10 claims asserted in this case. (Id. at 5.) 11 B2B, 2 Monkey, and Lucky Shot (“the non-moving parties”) oppose Caliber’s 12 motion arguing that reopening discovery will prejudice them and will not lead to 13 relevant evidence. (Opp’n at 3-5.) In support, they assert that motions for summary 14 judgement have been submitted, and the rulings on those motions could affect the 15 need for any additional discovery. (Id. at 3-4.) The nonmoving parties also argue that 16 Caliber was provided sufficient evidence that the AP Agreement is valid, including an 17 unreacted copy of the AP Agreement marked as Attorneys’ Eyes Only, a copy of the 18 cancelled check that 2 Monkey paid to B2B under the AP Agreement, and the affidavit 19 filed in support of B2B’s motion to substitute parties. (Id. at 4.) The nonmoving parties 20 further contend that the AP Agreement does not create new claims and ask the Court to 21 deny Caliber’s motion. (Id. at 5.) 22 Caliber replies that the nonmoving parties made the discovery regarding the AP 23 Agreement directly relevant to the claims at issue in this case, and reopening discovery 24 will not prejudice them. (Reply at 3.) Caliber states that some of the pending claims are 25 independent of the issues that will be resolved by the rulings on the motions for 26 summary judgement, and will require analysis of the AP Agreement that purports to 27 retroactively change the relationship between B2B and 2 Monkey. (Id. at 4.) Caliber 2 Agreement is a sham, the limited evidence regarding the AP Agreement provided to 3 date is one-sided and incomplete, and Caliber needs an opportunity to issue formal 4 document requests, interrogatories, and obtain deposition testimony related to the AP 5 Agreement, its formation, repercussions, and validity. (Id. at 5-6.) Caliber thus moves 6 to reopen discovery and extend existing dates by ninety days. (Id. at 6.) 7 A. Caliber’s Motion to Reopen Discovery 8 On November 15, 2018, the Court issued a Scheduling Order Regulating Discovery 9 and Other Pre-trial Proceedings setting May 10, 2019, as the deadline for fact discovery. 10 (ECF No. 35 at 2.) On April 25, 2019, the Court granted the parties’ joint motion to 11 continue fact discovery deadline until July 9, 2019. (ECF No. 44 at 2.) The Court further 12 extended the deadline until August 26, 2019, for the limited purpose of obtaining third 13 party discovery regarding the validity of the U.S. Trademark Registration No. 4,630,557. 14 (ECF No. 48.) On September 12, 2019, Third-Party Defendants notified Caliber via e-mail 15 that “B2B and 2 Monkey entered into a contract today where B2B assigned its business 16 assets around the bullet trade dress and license to 2 Monkey.” (Mot. at 3-4; see also 17 ECF No. 57-3 at 1.) 18 The factors considered by courts in determining whether to amend a scheduling 19 order weigh in favor of reopening discovery. See City of Pomona, 866 F.3d at 1066. 20 Pretrial Conference in this case is set for March 6, 2020, and the trial has not yet been 21 scheduled. (See ECF Nos. 35, 44, 48.) Although nonmoving parties oppose Caliber’s 22 motion arguing, in part, that they will be prejudiced if discovery is reopened, any alleged 23 prejudice from reopening discovery into the AP Agreement is directly attributable to the 24 actions of those parties. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 25 (9th Cir. 1992) (“Although the existence or degree of prejudice to the party opposing the 26 modification might supply additional reasons to deny a motion, the focus of the inquiry 27 is upon the moving party’s reasons for seeking modification.”). Notably, B2B and Caliber 2 Agreement was executed weeks after the close of fact discovery, and Caliber could not 3 have requested discovery about the AP Agreement within the deadlines set by the 4 Court. 5 The Court also notes that on November 1, 2019, District Judge Curiel denied 6 2 Monkey’s motion to substitute it in place of Plaintiff B2B. (See ECF No. 65.) Judge 7 Curiel reasoned, in part, that the indemnity provision in the AP Agreement is limited, 8 applies only to losses incurred in this case, and does not provide that 2 Monkey assumes 9 all of B2B’s liability. (Id. at 7.) The discovery Caliber seeks in the instant motion is 10 directly relevant to the purported transfer of assets via the AP Agreement. Caliber 11 maintains that the AP Agreement creates new legal relationships between the parties 12 with respect to the Bullet Trade Dress, and new causes of action with respect to the 13 Bullet Trade Dress and B2B’s license under the same. (See Mot. at 10.) Caliber seeks 14 relevant information without which it may not meaningfully assess the validity of the AP 15 Agreement and its implications on the claims asserted in this case. 16 Having considered the City of Pomona factors, the Court finds good cause to 17 modify the scheduling order. See City of Pomona, 866 F.3d at 1066. The Court GRANTS 18 Caliber’s motion to reopen discovery into the AP Agreement. However, to the extent 19 Caliber is seeking to reopen all discovery,1 the motion is DENIED. Accordingly, Caliber 20 shall serve its discovery requests related to the AP Agreement by December 16, 2019. 21 Responses to the requests must be provided by January 10, 2020. See Fed. R. Civ. P. 22 34(b)(2)(A). Further, if Caliber seeks to conduct any depositions related to the AP 23 Agreement, those depositions must be completed by January 24, 2020. 24 / / / 25 26 1 The Court notes that the parties filed a separate discovery motion, addressing Caliber’s request to 27 compel further discovery responses from B2B, 2 Monkey, and Lucky Shot. (See ECF No. 75.) The Court 1 B. Caliber’s Motion to Continue Remaining Deadlines by Ninety days 2 Caliber moves the Court to extend all remaining deadlines by ninety days, arguing 3 the requested extension is needed to investigate the impact of the AP Agreement 4 pending causes of action, and litigate additional claims created by the AP Agreement. 5 ||(See Mot. at 10.) B2B contends that no additional discovery is warranted and asks the 6 || Court to deny Caliber’s motion to continue dates. (See Opp’n at 1, 5.) 7 The Court reviewed the docket and notes that the remaining deadlines in this 8 || case are the March 6, 2020 Pretrial Conference and related pre-trial dates. (ECF No. 35.) 9 || There are several motions pending before District Judge Curiel, including Caliber’s 10 || “Motion for Summary Judgment” [ECF No. 59] and “Motion for Leave to File Amended 11 || Counterclaims and Third-Party Claims” [ECF No. 64], and Lucky Shot’s “Motion for 12 ||Summary Judgement” [ECF No. 68]. In light of the procedural posture of the case, and 13 || the timeframe for the discovery into the AP Agreement specified above, the Court does 14 || not find good cause to continue the remaining pre-trial dates by ninety days at this 15 stage of litigation. Accordingly, the Court DENIES without prejudice Caliber’s motion to 16 || continue. However, if after the District Judge’s rulings on the pending motion(s) Caliber 17 deems it necessary to continue the remaining deadlines, it may renew its motion at that 18 || time. 19 IT IS SO ORDERED. 20 ||Dated: December 6, 2019 _ TZ. 21 4 L <—{—\. 3 Honorable Michael S. Berg United States Magistrate Judge 23 24 25 26 27 28