United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OPINION & ORDER
M. PARKER, MAGISTRATE JUDGE
matter is before the court on a motion to exclude evidence
under the authority of Rule 37, Fed. R. Civ. P., (ECF Doc.
No. 70) filed by plaintiff, Design Basics, LLC. Plaintiff
seeks to exclude defendants' use “of any evidence,
whether directly or indirectly, on the issue of expenses,
deductions, or allocations under § 504(b) that is not
specifically identified payment evidence in Exhibit A to
Defendant's Supplemental Response to Plaintiff's
Interrogatory No. 9.” Defendant opposes the motion to
exclude. The parties have consented to my
motion for Rule 37 sanctions is not well taken and will be
Design Basics, Inc., is a building design firm that creates,
markets, publishes, and sells licenses for the use of
architectural designs. Plaintiff holds certificates of
copyright registration issued by the United States Copyright
Office for most of its designs. Plaintiff's designs at
issue in the present case are: (1) Plan No. 2408 - Crawford;
(2) Plan No. 2326 - Greensboro; (3) Plan No. 2355 - Waverly;
(4) Plan No. 4998 - Holden; (5) Plan No. 7614 - Southwick;
(6) Plan No. 8108 - Rose Hollow; and (7) Plain No. 2377 -
filed this lawsuit on September 4, 2014, claiming that
defendant, Petros Homes, Inc., infringed on plaintiff's
copyrighted plans by manufacturing and selling homes that
used plaintiff's designs. Plaintiff amended its complaint
on February 24, 2016 to add Gary Naim and Sam Petros as
defendants. Plaintiff's amended complaint asserts
a single cause of action: copyright infringement. Defendants
have completely denied liability.
Standard of Review
well established that the scope of discovery is within the
sound discretion of the trial court." Lavado v.
Keohane, 992 F.2d 601, 604 (6th Cir. 1993). The Sixth
Circuit reviews a decision to invoke discovery sanctions
under Federal Rule of Civil Procedure 37 for abuse of
discretion. Beil v. Lakewood Eng'g & Mfg.
Co., 15 F.3d 546, 551 (6th Cir. 1994).
26(a)(3), Fed. R. Civ. P., requires a party to make pretrial
disclosures of the documents or exhibits the party expects to
offer at trial and those it may offer if the need arises.
Fed.R.Civ.P. 26(A)(iii). "… Unless otherwise
directed by the court, these disclosures must be made at
least 30 days before trial." Id. "Unless
the court orders otherwise, all disclosures under Rules
26(a)(1) through (3) must be made in writing, signed, and
served." Fed.R.Civ.P. 26(a)(4).
37, Fed. R. Civ. P., authorizes the court to impose sanctions
if a party fails to make a disclosure by the required date.
“A party that without substantial justification fails
to disclose information required by Rule 26(a) or 26(e)(1),
or to amend a prior response to discovery as required by Rule
26(e)(2), is not, unless such failure is harmless, permitted
to use as evidence at a trial … any witness or
information not disclosed. In addition to or in lieu of this
sanction, the court, on motion and after affording an
opportunity to be heard, may impose other appropriate
sanctions.” Fed.R.Civ.P. 37(c)(1).
may thus be sanctioned, including having its evidence
excluded if the failure to timely disclose was without
“substantial justification” or creates
“harm”" to the other party. The Sixth
Circuit uses four factors to review a Rule 37 sanction:
first, whether the party's failure to cooperate in
discovery is due to willfulness, bad faith, or fault; second,
whether the adversary was prejudiced by the party's
failure to cooperate in discovery; third, whether the party
was warned that failure to cooperate could lead to the
sanction; and fourth, in regard to a dismissal, whether less
drastic sanctions were first imposed or considered.
Freeland v. Amigo, 103 F.3d 1271, 1277 (6th Cir.
court has conducted several telephone conferences in this
case to deal with discovery disputes between the parties.
Plaintiff's motion to exclude evidence (ECF Doc. No. 70)
relates to an ongoing discovery dispute. Plaintiff contends
that defendants have not provided enough specific evidence
and/or analysis related to their alleged expenses, which
defendant will try to prove at trial to offset any prima
facie damages showing made by plaintiff. Plaintiff wants
defendants to identify the specific records reflecting the
costs that were incurred in constructing and selling each
infringing house. Defendants have provided computer generated
summary reports listing their claimed costs that defendants
created in the ordinary course of business but printed in
response to discovery requests. They have also provided
documents evidencing the expenses listed in the
“summaries.” However, plaintiff argues that
defendants have not provided the detailed analysis of these
records which plaintiff has repeatedly requested. Plaintiff
seeks to exclude the summary reports because defendants have
not identified the specific documents supporting their
claimed expenses for each home construction project.
Plaintiff also complains that the defendants failed to
prepare their representative, Gary Naim, to testify with
sufficient depth regarding the topic of deductible expenses
during a Rule 30(b)(6) deposition.
opposition, defendants claim that they produced a computer
generated job cost detail report for each of the more than 80
homes in dispute. Defendants argue that these job cost detail
reports are business records maintained in the ordinary
course and were not merely litigation-created summaries of
expenses. Defendants also argue that they produced available
invoices, purchase and work orders, receipts, check stubs,
and other similar payment records corresponding to the line
item costs within the job cost reports. Defendants represent
that they uploaded the supporting documentation onto a
cloud-based network, thereby making them electronically
available and searchable. ...