Phillips USA, Inc. v. Allflex USA, Inc.
| Decision Date | 30 November 1994 |
| Docket Number | No. 94-2012-JWL.,94-2012-JWL. |
| Citation | 869 F. Supp. 842 |
| Parties | PHILLIPS USA, INC., and William Felton & Company Pty., Limited, Plaintiffs, v. ALLFLEX USA, INC., Allflex New Zealand, Ltd., Allflex, S.A., and S.F.I.E., Defendants. |
| Court | U.S. District Court — District of Kansas |
COPYRIGHT MATERIAL OMITTED
Paul P. Hasty, Jr., Richmond M. Enochs, and Karl W. Kuckelman, Wallace, Saunders, Austin, Brown & Enochs, Chartered, Overland Park, KS, for Phillips USA, Inc. and William Felton & Co. Pty., Ltd.
Kathleen A. McNamara, Jolley, Walsh & Hager, P.C., Kansas City, MO, Dennis G. Martin, Jill M. Pietrini, Blakely, Sokoloff, Taylor & Zafman; and C Dickinson Hill, Los Angeles, CA, for Allflex USA, Inc., Allflex New Zealand, Ltd., Allflex North American Holdings, Inc. and Allflex, S.A.
William R. Sampson and Paul W. Rebein, Shook, Hardy & Bacon, Overland Park, KS, for N.J. Phillips Pty. Ltd.
This matter is currently before the court on an abundance of motions ripe for decision in this case. They are: the Motion of Allflex USA, Inc. ("Allflex USA") to Dismiss for Failure to Prosecute and Failure to Comply With Discovery Orders (Doc. # 13); the Motion of Allflex USA to Compel Response to Third Request for Production of Documents From Allflex USA and for Dismissal and Other Sanctions (Doc. # 14); the Motion of Allflex S.A. ("Allflex SA") to Dismiss for Lack of Personal Jurisdiction and for Failure to Prosecute (Doc. # 101); the Motion of Allflex New Zealand, Ltd. ("Allflex NZ") to Dismiss for Lack of Personal Jurisdiction and Failure to Prosecute and for a More Definite Statement (Doc. # 132); the Motion of Allflex NZ and Allflex SA for Summary Judgment on all Claims (Doc. # 143); the Motion of Allflex USA for Summary Judgment on the Remaining Counts of the Complaint (Doc. # 146); the Motion of William Felton & Co., et al. to Amend the Court's Scheduling Order (Doc. # 156); the Motion of William Felton & Co., et al. for Leave to Take the Deposition of Robert Yates Out of Time (Doc. # 158); the Request of Defendants for Oral Argument on the Motions (Doc. # 160); the Motion of William Felton & Co., et al. to Extend Time to File Expert Report (Doc. # 162); the Motion of William Felton & Co., et al. for Leave to Take the Depositions of Robert Myles Abrahams and Anthony Burrell (Doc. # 172); the Motion of William Felton & Co., et al. to Compel Allflex USA to Produce Documents Requested in Plaintiffs' Request for Production (Doc. # 175); the Motion of William Felton & Co., et al. for Order Granting Relief From Protective Order (Doc. # 181); and the Motion of William Felton & Co., et al. for Supplemental Order for Determination Under Fed.R.Civ. Pro. 54(b) (Doc. # 202).
The court rules as follows: the Motion of Allflex USA to Dismiss for Failure to Prosecute and Failure to Comply With Discovery Orders is granted; the Motion of Allflex USA to Compel Response to Third Request for Production of Documents From Allflex USA and for Dismissal and Other Sanctions is granted in part; the Motion of Allflex NZ and Allflex SA for Summary Judgment on all Claims is granted; the Motion of Allflex USA for Summary Judgment on the Remaining Counts of the Complaint is also granted. The Motion of William Felton & Co., et al. for Supplemental Order for Determination Under Fed.R.Civ.Pro. 54(b) is denied, as is Defendant's Request for Oral Argument. All remaining motions are denied as moot.
The procedural history of this case is a long and tortured one. The present action was filed by plaintiffs Phillips USA, Inc. ("Phillips USA") and William Felton & Company Pty. Ltd. ("Felton & Co.") against Allflex USA, Allflex NZ, Allflex SA, N.J. Phillips Pty. Ltd. ("NJP") and various other defendants on January 7, 1994. It involves a number of claims, including breach of fiduciary duty, tortious interference with contract and civil conspiracy arising out of a series of transactions concerning the sale and distribution of veterinary products manufactured by NJP and distributed in the United States by plaintiff Phillips USA and, additionally, Allflex USA. This is the second action by plaintiff Phillips USA alleging such claims against Allflex USA, Allflex NZ, Allflex SA, NJP and others. Phillips USA first filed suit in 1992 (the "1992 action"), but that complaint was dismissed in late 1993.
Before entering litigation in the United States, plaintiffs Phillips USA and Felton & Co. brought an action in the Federal Court of Australia, New South Wales District ("Australian action") against NJP alleging, among other things, breach of an exclusive distributorship agreement with Felton & Co. On May 29, 1992, the Australian court found that the shipment of NJP products to Allflex NZ for ultimate distribution in the United States constituted a breach of the distribution agreement which then existed between Felton & Co. and NJP.
On December 10, 1993, the court dismissed with prejudice plaintiff Phillips USA's claims against NJP in the 1992 Kansas action. On plaintiff's motion, the court dismissed without prejudice plaintiff's claims against Allflex USA, Allflex NZ and Allflex SA. However, upon reconsideration of that order the court vacated its prior order, granted plaintiff a dismissal without prejudice, but attached certain stringent conditions. Phillips USA, Inc. v. Allflex USA, Inc., No. 92-2405-JWL, 1994 WL 171709 (D.Kan. Apr. 15, 1994). The court ordered that due to Phillips USA's refiling of its action against Allflex USA, two motions by Allflex USA for Rule 37 sanctions, seeking dismissal of all claims as an appropriate sanction in the 1992 action (Docs. # 185 and # 194 in the 1992 action), would be automatically revived and considered as pending in the new case. Allflex USA's Motion to Dismiss for Failure to Prosecute and Failure to Comply With Discovery Orders (Doc. # 13) and its Motion to Compel Response to Third Request for Production of Documents From Allflex USA and for Dismissal and Other Sanctions (Doc. # 14) have been revived and are deemed pending in this action.
While discovery disputes in this action have been presented directly to the district judge, Magistrate Judge Gerald Rushfelt managed and presided over the discovery phase of the 1992 Kansas action. Considering that certain of Allflex USA's motions now pending in this case seek dismissal due as a result of alleged discovery abuses on the part of plaintiff Phillips USA in the 1992 action, a report and recommendation was sought from Magistrate Judge Rushfelt on those motions. Also at issue in the motions is the consequence, if any, of Phillips USA's failure to obey certain orders of the magistrate. Magistrate Judge Rushfelt issued his report and recommendation on June 21, 1994, advising the district court to dismiss all of Phillips USA's claims against Allflex USA. Both plaintiff and defendant have had an opportunity to object or respond to the report and have made several filings along those lines.
Another condition attached to the judgment in the 1992 action was that the refiled action be set for trial on a schedule commensurate with it being litigation originally commenced in 1992. As a result of this condition, the timing for the filing of dispositive motions in this action became compressed and many motions are now at issue and pending simultaneously. This order addresses all pending motions in this action.
Allflex USA seeks to impose the sanction of dismissing all claims of Phillips USA pursuant to Federal Rule of Civil Procedure 37. It contends that Phillips USA has disobeyed several discovery orders, that it has provided only inadequate and belated responses to others, and that it failed to comply with an order and sanction to pay $1000 as directed by the magistrate. After thorough review of defendant's motion and plaintiff's responsive papers, the magistrate concluded that Phillips USA chose a strategy of delay and contempt for the judicial process, that it failed without adequate explanation or excuse to comply with orders of the court directing completion of discovery, and that Phillips USA's conduct amounted to willful and not simply involuntary noncompliance with court orders. The report concluded that Allflex USA's motion for dismissal as a sanction should be granted. Plaintiff has since filed objections to the report and Allflex USA has responded.
The court must make a de novo review of any portion of the magistrate judge's recommendation to which specific objection is made. 28 U.S.C. § 636(b)(1). The court may accept, reject, or modify the recommendation, or refer the matter back to the magistrate judge with additional instructions. 28 U.S.C. § 636(b)(1); Mathews v. Weber, 423 U.S. 261, 271, 96 S.Ct. 549, 554, 46 L.Ed.2d 483 (1976). The court has conducted a de novo review of Magistrate Judge Rushfelt's report and recommendation, plaintiff's specific objections and the relevant law. Having carefully and thoroughly conducted this review, the court is persuaded that Magistrate Judge Rushfelt's factual determinations were entirely correct and that his conclusions were based upon the proper legal standards. The report and recommendation is, therefore, adopted in its entirety. In addition, the court sets forth its independent reasoning and the basis of its considered judgment that the magistrate's report reaches precisely the correct result, that plaintiff Phillips USA's claims against defendants Allflex USA and Allflex NZ must be dismissed.
Plaintiff Phillips USA does not argue that the magistrate has misapprehended the relevant law in its report, nor does it object to the majority of the proposed findings. Instead, plaintiff takes issue with three specific findings made. It argues that the magistrate incorrectly determined that Phillips USA: (1) failed to comply with a June 8, 1993 order to supplement...
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