United States v. Maverick Marketing, LLC, 020720 USCIT, 17-00174

Docket Nº:17-00174, Slip Op. 20-17
Opinion Judge:Claire R. Kelly, Judge
Party Name:UNITED STATES, Plaintiff, v. MAVERICK MARKETING, LLC ET AL., Defendants and Consolidated Defendants.
Attorney:Stephen Carl Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for plaintiff United States. With him on the brief were Joseph H. Hunt, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assis...
Judge Panel:Before: Claire R. Kelly, Judge
Case Date:February 07, 2020
Court:Court of International Trade
 
FREE EXCERPT

UNITED STATES, Plaintiff,

v.

MAVERICK MARKETING, LLC ET AL., Defendants and Consolidated Defendants.

No. 17-00174

Slip Op. 20-17

Court of Appeals of International Trade

February 7, 2020

Granting in part and denying in part Defendants' motions to compel discovery and consider sanctions.

Stephen Carl Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for plaintiff United States. With him on the brief were Joseph H. Hunt, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Claudia Burke, Assistant Director.

Barry Marc Boren, Law Offices of Barry Boren, of Miami, FL, and Gerson M. Joseph, Gerson M. Joseph, P.A., of Weston, FL, for defendants Maverick Marketing, LLC and Good Times USA, LLC.

Rhonda A. Anderson, Rhonda A. Anderson, P.A., of Coral Gables, FL, for defendant Gateway Import Management, Inc.

Before: Claire R. Kelly, Judge

MEMORANDUM AND ORDER

Claire R. Kelly, Judge

Kelly, Judge: Before the court are motions to compel discovery, see [Defs.' Maverick Marketing, LLC & Good Times USA, LLC's] Mot. Order Compelling Disc. & Consideration Sanctions, Sept. 26, 2019, ECF No. 67 ("Maverick's Mot."); [Defs.' Gateway Import Management, Inc. & Good Times USA, LLC's] Mot. Order Compelling Disc. & Consideration Sanctions, Sept. 26, 2019, ECF No. 66 (from associated docket Ct. No. 17-00232) ("Gateway's Mot.") (collectively, "motion to compel"), filed pursuant to United States Court of International Trade ("USCIT") Rule 37(a)(2).1 Defendants Gateway Import Management, Inc. ("Gateway"), Good Times USA, LLC ("Good Times"), and Maverick Marketing, LLC ("Maverick") contend that the United States ("Plaintiff") has inadequately responded to Defendants' requests for production ("RFPs") and interrogatories, and ask the court to enter an order compelling Plaintiff to "provid[e] meaningful answers to the questions asked and specifically identify[] the documents referred to in their responses[.]" See Gateway's Mot. at 15; Maverick's Mot. at 17. Defendants also request that this court enter sanctions against Plaintiff for its alleged failure to respond to requested discovery. Gateway's Mot. at 1; Maverick's Mot. at 1. Plaintiff counters that Defendants' motion to compel is "unwarranted" and requests the court to deny the motion. See Pl.'s Opp'n Defs.' Mots. Compel. at 1, Oct. 11, 2019, ECF No. 69 ("Pl.'s Opp'n Br.").

For the following reasons, this court grants Defendants' motion to compel with respect to the following RFPs and Interrogatories: Maverick RFP Nos. 4, 10, 11, 12, 13, 14, 15, 16, 19, 20, 22, 24, 26, 27, 28, 29; Maverick Interrogatory Nos. 8, 9, 11, 19, 24; Gateway RFP Nos. 4, 5, 11, 12, 13, 14, 15, 16, 17, 19, 20, 22, 24, 27, 28, 29, 30; Gateway Interrogatory Nos. 8, 9, 11, 19, 24; Good Times RFP Nos. 1, 3, 9, 10, 13, 23; Good Times Interrogatory No. 19. However, Defendants' motion to compel is denied with respect to the following RFPs and Interrogatories: Maverick RFP Nos. 9, 21, 25, 30, 31, 32, 33, 38, 39; Maverick Interrogatory Nos. 15, 20, 21, 25; Gateway RFP Nos. 10, 21, 26, 31, 32, 33, 34, 39, 40; Gateway Interrogatory Nos. 15, 20, 21, 25; Good Times RFP Nos. 4, 5, 6, 7, 8, 11, 15, 17, 18, 19, 20, 21; and, Good Times Interrogatory Nos. 7, 9, 10, 22, 23.

Finally, this court declines to consider sanctions against Plaintiff, at this juncture, for an alleged failure to comply with Defendants' motion to compel.

BACKGROUND

Plaintiff commenced separate actions pursuant to section 592 of the Tariff Act of 1930, as amended 19 U.S.C. § 1592(d) (2012), 2 which were later consolidated. See Am. Summons, Aug. 3, 2017, ECF No. 8; Compl., July 10, 2017, ECF No. 2; Order, Sept. 12, 2019, ECF No. 66 (consolidating Ct. Nos. 17-00174, 17-00232, 19-00004, and 19-00019 under Ct. No. 17-00174). Plaintiff seeks to recover unpaid Federal Excise Tax ("FET"), with respect to entries of cigars made between July 10, 2012 and March 27, 2015 and alleges Defendants' FET calculations were not, as statutorily required, based on arm's-length transactions. See Compl. at ¶¶ 1, 21-33; see also Pl.'s Opp'n Br. at 1.

Defendants raise several affirmative defenses. Relevant here, Maverick, Good Times, and Gateway, argue that they were not negligent "because they received and reasonably relied on professional advice from their customs house broker and an experience trade attorney" and fully complied with applicable statutes and regulations.3See Defs. [Maverick] & [Good Times's] Answers to Compl. at Third Affirm. Defense, Mar. 29, 2018, ECF No. 48 ("Maverick & Good Times's Answer); Def. [Gateway's] Answer to Compl. at Third Affirm. Defense, Aug. 1, 2018, ECF No. 49 ("Gateway's Answer") (from associated docket Ct. No. 17-00232).4 Defendants also argue that they "were not negligent" because "Plaintiff had established a uniform practice" of allowing the same behavior complained of in this case. See id. at Fifth Affirm. Defense.

On March 12, 2019, Defendants served their respective interrogatories on Plaintiff. See Gateway's Mot. at Exs. C-D; Maverick's Mot. at Exs. C-D. Thereafter, on April 4, 2019, Defendants served their respective RFPs on Plaintiff. Gateway's Mot. at Exs. A- B; Maverick's Mot. at Exs. A-B. On April 12, 2019, Plaintiff responded to Defendants' interrogatories; following an agreed extension of time, Plaintiff replied to Defendants' RFPs on June 7, 2019. Gateway's Mot. at Exs. E-H; Maverick's Mot. at Exs. E-H. On June 27, 2019, Defendants notified Plaintiff of their objections to Plaintiff's RFP and interrogatory responses. Gateway's Mot. at Exs. I-L; Maverick's Mot. at Exs. I-L. Plaintiff responded to Defendants' objections on July 10, 2019 and supplemented its responses. Gateway's Mot. at Exs. M-N; Maverick's Mot. at Exs. M-N.

This court conferenced with the parties twice in an effort to resolve their dispute. See Teleconference, Oct. 18, 2019, ECF No. 72; Memo. & Order, Nov. 1, 2019, ECF No. 73; Teleconference, Jan. 24, 2020, ECF No. 83; Order, Jan. 24, 2020, ECF No. 85. Unfortunately, a significant number of items remain in dispute. See Defs.' Discovery Status Report, Feb. 3, 2020, ECF No. 89.[5]

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1582. See United States v. Maverick Mktg., LLC, 42 CIT__, ___, 322 F.Supp.3d 1373, 1379 (2018) (holding that the court possesses subject-matter jurisdiction in this case) ("Maverick I"); see also United States v. Gateway Imp. Mgmt., 42 CIT___, 324 F.Supp.3d 1328 (2018). This court has broad discretion in deciding discovery matters. See United States v. Greenlight Organic, Inc., 41 CIT__, __, 280 F.Supp.3d 1367, 1378 (2017). USCIT Rule 26(b)(1) permits "discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of discovery in resolving the issues, and whether the burden or expense of the discovery outweighs its likely benefit." USCIT R. 26(b)(1). Information within the scope of discovery need not be admissible in evidence to be discoverable. Id. "Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed.R.Evid. 401.

DISCUSSION

I. Discovery of Trademark and Audit Information Concerning Nonparties

Defendants requested every document or record "which identifies all the trademarks on the cigars manufactured by [various commercial entities] that were imported by [various importers.]" Maverick Status Report at Maverick RFP Nos. 30-33; Gateway Status Repot at Gateway RFP Nos. 31-34.6 Defendants contend that the requested trademark information is relevant because it supports Defendants' affirmative defenses, against Plaintiff's penalty action under 19 U.S.C. § 1592(a), which provides that no person may, by negligence, introduce or attempt to introduce any merchandise into the commerce of the United States by a material and false statement or omission. Maverick's Mot. at 8; Gateway's Mot. at 7; see also United States v. Ford Motor Co., 463 F.3d 1267, 1279 (Fed. Cir. 2006) (To establish a violation of section 1592(a), "Customs has the burden merely to show that a materially false statement . . . occurred; once it has done so, the defendant must affirmatively demonstrate that it exercised reasonable care under the circumstances."). Defendants contend that their requests are proper because they tend to show that Defendants acted in reasonable belief that the goods were properly entered, and the FETs were...

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