Kinon Surface Design v. Hyatt Int'l Corp.
| Decision Date | 10 August 2021 |
| Docket Number | 19 C 7736 |
| Parties | KINON SURFACE DESIGN, Plaintiff, v. HYATT INTERNATIONAL CORP., et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
On April 23, 2021, defendants, Hyatt International Corporation and Hyatt International Technical Services, Inc. filed a Motion for a Protective Order (which is based, in the main on previous litigation between the parties) stating that:
The motion was briefed, and Judge Kendall conducted an oral argument on the motion on July 21, 2021, and then referred the motion to me that day. [Dkt. ##111, 112]. For the following reasons, the motion [Dkt. #95] is denied.
As the party seeking the protective order, Defendants have the burden of showing “good cause” for its entry. Kosek v. Ethicon, Inc., 2020 WL 6203310, at *2 (N.D. Ill. 2020); In re Watts Coordinated Pretrial Proc., 2020 WL 7398789, at *3 (N.D. Ill. 17, 2020); ED&F Capital Markets Ltd. v. JVMC Holdings Corp., 335 F.R.D. 174, 177 (N.D. Ill. 2020). Notably, to show good cause, the movant must submit “a particular and specific demonstration of fact.” Flores v. Bd. of Trustees of Comm. College Dist. No. 508, 2015 WL 7293510, at *3 (N.D. Ill. 2015). “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning are insufficient.” In re Watts Coordinated Pretrial Proc., 2020 WL 7398789, at *3. Federal Rule of Civil Procedure 26 “confers broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required.” Taylor v. Cook Cty. Sheriff's Off., 2019 WL 4415765, at *9 (N.D. Ill. 2019). Accord Gordon v. Countryside Nursing & Rehab. Ctr., LLC, 2012 WL 2905607, at *2 (N.D. Ill. 2012). The parties' present dispute, as is, is no candidate for the protective order the defendants want entered.
If you aren't enamored with or somehow invested in wavy olive-green lines on a white background, read no further because that is what this case - and two others - is about. Plaintiff's president, Richard Satz, came up with the pattern - and the process to make similar patterns - and plaintiff uses it in a variety of applications in interior design. In this instance, the application was for panels to be used for headboards in hotel rooms at the Grand Hyatt Hotel in Dalian, China. Way back in 2011, plaintiff sold two sample panels to China Resources, the owner of the Grand Hyatt Hotel, for, $4650 each. Mr. Satz and the representative from China Resources were unable to reach a deal for the hotel to use the panels, but Mr. Satz saw photos of what he thought were identical patterns on headboards in the hotel on the hotel's website - and other travel websites about the hotel - in 2018. See, generally, Kinon Surface Design, Inc. v. Hyatt Corp., 2019 WL 4731655, at *1 (S.D. Fla. 2019). And that launched three copyright infringement lawsuits, the first two in the Southern District of Florida and third one here.
Plaintiff brought the first lawsuit against Hyatt Corporation, and it culminated in a jury trial wherein the jury determined, in pertinent part, that although plaintiff had an enforceable copyright and had suffered a loss, Hyatt Corporation was not responsible for that loss. Plaintiff brought the second copyright infringement suit against several other Hyatt entities: Hyatt International Corporation (“HIC”), Hyatt International Technical Services, Inc. (“HITS”), Hyatt of China Limited (“HCL”), and Hyatt International Hotel Management (Beijing) Co. (“HIHM”). See Kinon Surface Design, Inc. v. Hyatt Int'l Corp., 2019 WL 8989596, at *1 (S.D. Fla. 2019). Plaintiff voluntarily dismissed that suit, and filed suit here against HIC, HITS, Hyatt of China (“HOC”), and HIHM, as well as China Resources. Kinon Surface Design, Inc. v. Hyatt Int'l Corp., 2020 WL 7123068, at *1 (N.D. Ill. 2020). And here we are, again, in a different court, with the same plaintiff and - if not the same defendants - then related ones, arguing once more over that pattern of wavy olive-green lines
It is thus not surprising that, as the defendant complains, much of the discovery sought in this case doubles back over the prior lawsuit. And it does raise the question: why doesn't plaintiff simply make use of the discovery from that case instead of retracing steps here? But, as it happens, the parties agreed to a confidentiality order in the previous case, which precluded plaintiff from employing discovery obtained in the previous case in other litigation. It provides:
Designated Materials shall be used solely for purposes of, and in connection with, this Lawsuit and the information contained therein shall not be used or disclosed for any other purpose, including, without limitation, any business or commercial purpose.
[Dkt. #102-1, at 4]. The plaintiff claims that it tried to reach an agreement with defendants regarding the use of the previous discovery in the current litigation, but defendants refused. Defendants don't bother to address this point in their response, other than to say they don't understand it. [Dkt. #103, at 3]. Yet, it is perfectly clear. Defendants can either work it out, or they will have to revisit trampled ground. In either case, they have not made a showing of “good cause” for a protective order.
The remainder of the defendants' motion is a sort of rambling complaint about the breadth of the plaintiff's discovery requests. Some have no time limits. Some appear not to be relevant. And so on. The plaintiff's response brief is no better; it doesn't address any of those complaints. Whatever the parties did over the telephone on April 23rd, they did not meet and confer in good faith as Local Rule 37.2 requires.
In addition to the defendants' failure to respond to the plaintiff's offer to compromise and reach an agreement regarding the discovery from the previous case, the parties - as can best be gleaned from the defendants' motion - have left 27 document requests, 6 interrogatories, and 10 30(b)(6) deposition topics on the table. It's unclear how many of those can be remedied by a rational agreement regarding the discovery in the previous case due to the manner in which the parties have gone about presenting their disputes to the court. But suffice it to say, given what's left to do, a brief phone call the day a party is filing a discovery motion is not negotiating in good faith. See, e.g., Chicago Regal Council of Carpenters Pension Fund v. Celtic Floor Covering, Inc., 316 F.Supp.3d 1044, 1046 (N.D. Ill. 2018)(“An ultimatum on one side, met with steadfast defiance on the other, is not a good faith discussion.”); Gunn v. Stevens Security & Training Servs., Inc., 2018 WL 1737518, at *3 (N.D. Ill. 2018)(“A party that steadfastly maintains a position without support is not engaging in a good faith discussion.”); Infowhyse GmbH v. Fleetwood Grp., 2016 WL 4063168, at *1 (N.D. Ill. 2016)(“...adamantly clinging to the positions with which they began” amounts to a failure “to comply, in good faith, with the requirements of Local Rule 37.2.”).
One example - and it is an example that cuts both ways - will show how far the parties are from adequately focusing their battles in order to bring them in a crystalized form to the court for resolution. The defendants rely on the evidentiary ruling from the previous trial regarding the admissibility of “bookings” revenue evidence to argue that it is not discoverable. But, clearly, it was discoverable in the previous case or it would not have been submitted as a potential trial exhibit. The defendants' argument ignores the fundamental principle that evidence does not have to be admissible to be discoverable. E.E.O.C. v. Konica Minolta Bus. Sols. U.S.A., Inc., 639 F.3d 366, 369 (7th Cir. 2011); Nw. Mem'l Hosp. v. Ashcroft, 362 F.3d 923, 930 (7th Cir. 2004). That being said, plaintiff makes no attempt in its response brief to explain how bookings revenue information is relevant. And “unfortunately... saying so doesn't make it so....” United States v. 5443 Suffield Terrace, Skokie, Ill., 607 F.3d 504, 510 (7th Cir. 2010). Accord Madlock v. WEC Energy Group, Inc., 885 F.3d 465, 473 (7th Cir. 2018); Stromberg Motor Devices Co. v. Zenith Carburetor Co., 254 F. 68, 69 (7th Cir. 1918). See also Donald J. Trump for President, Inc. v. Secy of Pennsylvania, 830 F. Appx 377, 381 (3rd Cir. 2020)( ).
Relevance is not presumed. As the Supreme Court and the Seventh Circuit have cautioned “[f]ailure to exercise [control over what is and is not relevant] results in needless and enormous costs to the litigants and to the due administration of justice.” Art Akiane LLC. v. Art & Soulworks LLC, 2020 WL 5593242, at *5 (N.D. Ill. 2020). See cases collected in Sapia v. Bd. of Educ. of the City of Chicago, 2017 WL 2060344 at *2 (N.D. Ill. 2017). And they have emphasized that the core requirement of Rule 26(b)(1) that non-privileged material sought in discovery must be “relevant” should be firmly applied. Herbert v. Lando, 441 U.S. 153, 177 (1979). Accord Regan-Touhy v. Walgreen Co., 526 F.3d 641 648-49 (10th Cir. 2008); Gonzalez...
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