Plaintiff Renee Gabet is the owner of United States Trademark Registration No. 2,549,750 in connection with perfumes, body oils, room fragrances and essential oils for personal use and Trademark Registration No. 3,990,283 in connection with shampoos, hair conditioners, body soaps, and body powders. The registered mark, “RISE ‘N SHINE,” is used on products sold by Plaintiff Annie Oakley Enterprises, Inc., (“Annie Oakley”) which is owned by Gabet. Plaintiffs allege in their Amended Complaint that Defendants Rise N Shine Online, LLC, (“RNSO”) and Eric Young sold products on Amazon's website and elsewhere that infringed upon the trademarks owned by Plaintiffs.[1] [Dkt. 12.]

In May 2020, Plaintiffs settled their claims against RNSO and those parties stipulated to the entry of a final judgment as to one claim and entry of a permanent injunction against RNSO, which the Court entered. [Dkt. 61.] The claims against Eric Young and the remaining claims against RNSO were then dismissed with prejudice pursuant to Federal Rule of Procedure 41(a)(2). [Dkt. 64.] The claims against Amazon remain.

On August 7, 2020, the undersigned granted Amazon's motion to compel with regard to Amazon's Interrogatory No. 6. [Dkt. 97.] The Interrogatory sought “plaintiffs’ revenues on a quarterly basis for each of Plaintiffs’ Products since July 1, 2012.” [Dkt. 77-2 at 7.] Plaintiffs lodged various objections to the interrogatory, which the undersigned overruled. Plaintiffs also asserted that they were unable to respond to the interrogatory because they

[Dkt. 77-9 at 9-10.] However, the undersigned held as follows:

[Dkt. 97 at 6.] Accordingly, the undersigned ordered Plaintiffs to provide a complete and unequivocal response to Interrogatory No. 6 within fourteen days of the date of the Order.

*2 Fourteen days later, on August 21, 2020, Plaintiffs served a supplemental response to Interrogatory No. 6, which stated:

[Dkt. 190-2 at 6.] Along with the supplemental response, Plaintiffs served 2,632 pages of documents, which Plaintiffs describe as follows:

[Dkt. 190-10 at 1.]

In addition to this supplemental response, Plaintiffs filed a timely objection to the undersigned's ruling. [Dkt. 108.] Judge Magnus-Stinson overruled the objection on November 12, 2020. [Dkt. 138.] Judge Magnus-Stinson noted that the undersigned had rejected Plaintiffs’ assertion that they “do not have and cannot calculate quarterly revenue figures by product” as “inconsistent with Plaintiffs’ position in this lawsuit that Amazon's sale of allegedly infringing products has resulted in lost sales for Plaintiffs” and found that that conclusion was “certainly not clearly erroneous.” Id. at 9-10. Judge Magnus-Stinson explained:

[Dkt. 138 at 10.]

Plaintiffs have not further supplemented their response to Interrogatory No. 6 since Judge Magnus-Stinson's order.

In the instant motion, Amazon asks the Court to dismiss this case as a sanction for Plaintiffs’ failure to produce the information sought by Interrogatory No. 6 despite being ordered to do so by the Court. Alternatively, they ask for “dismissal of plaintiffs’ claims for damages, including Amazon's profits.” [Dkt. 161 at 19.] In response, Plaintiffs assert that their response to Interrogatory No. 6 is complete and truthful because they do not, in fact, have information from which they could calculate their revenues for each of their products.

A. Failure to Comply with the Court's Order with Regard to Interrogatory No. 6

It is axiomatic that “[t]he Court cannot compel a party to disclose that which it does not have,” Slabaugh v. LG Elecs. U.S.A., Inc., 2015 WL 420012, at *3 (S.D. Ind. Jan. 30, 2015), and, of course, a party cannot be sanctioned for not disclosing what it does not have. Ordinarily, when, as here, a party's claim that it does not have responsive information seems “entirely implausible on its face,” the next step is for the opposing party to conduct “discovery about discovery” in order to fully examine the implausible position. Sometimes, of course, this discovery reveals that the implausible is true; other times, it reveals that a party failed to take reasonable steps to search for responsive information or that the party or its counsel attempted to be too clever by half by, for example, taking an unreasonably narrow view of the discovery requests. To some degree, all of these appear to be true in this case.

Defendant had the opportunity to conduct discovery about discovery when it took the combined deposition of Gabet and Annie Oakley on September 11, 2020. One of the topics listed for Annie Oakley's deposition was “Plaintiffs’ discovery responses.” [Dkt. 190-1 at 3.] From the deposition excerpts provided to the Court,[2] it appears that Defendant touched on the subject of to what extent Plaintiffs tracked the sales of their products, but did not delve into the topic in any detail.

Plaintiffs sell their products to customers in their studio in Ligonier, Indiana, and online through their website. They also make wholesale sales to dealers. With regard to sales in the studio, Defendant elicited the following testimony from Plaintiffs:

[Dkt. 190-6 at 4.] With regard to inventory tracking, Defendant elicited the following testimony from Plaintiffs:

Id. at 6.

Plaintiffs provided the following additional information in a declaration from Gabet that they submitted with their response to the instant motion:

[Dkt. 190-7.]

*6 Thus, it appears that Plaintiffs’ assertion that they cannot calculate their revenues on a quarterly basis for each of the relevant products since July 1, 2012, is literally true. Because of the manner in which Plaintiffs kept their records in the ordinary course of their business, Plaintiffs do not have, and have never had, sales information for each of their products. But it is equally clear that they have had some revenue information about some of their products for at least some periods of time. Plaintiffs were obligated to produce that information in response to Interrogatory No. 6. They did not do so, and, in fact, still have not done so. They did produce certain reports and other documents that contain responsive information, and the undersigned is satisfied by their explanation of why they do not have additional responsive information. However, they have not even attempted to demonstrate that the document production satisfied their obligation to respond to the interrogatory. See Fed. R. Civ. P. 33(d) (party producing business records in response to an interrogatory must show that “the burden of deriving or ascertaining the answer will be substantially the same for either party”); [Dkt. 138 at 11 n.2] (Judge Magnus-Stinson noting “Plaintiffs have not attempted to invoke [Rule 33(d)] or to make the necessary showing under that Rule.”).[6] Therefore, Plaintiffs have failed to comply with the Court's order to provide a complete and unequivocal response to Interrogatory No. 6.

B. Appropriate Sanction

Federal Rule of Civil Procedure 37(b)(2) provides that where, as here, a party fails to obey a discovery order, the court “may issue further just orders” that “may include the following”:

The rule makes the issuance of sanctions permissive, rather than mandatory, and “[d]istrict courts have broad discretion in supervising discovery, including deciding whether and how to sanction such misconduct, for they are much closer to the management of the case and the host of intangible and equitable factors that may be relevant in exercising such discretion.” Hunt v. DaVita, Inc., 680 F.3d 775, 780 (7th Cir. 2012) (citing Park v. City of Chicago, 297 F.3d 606, 614 (7th Cir. 2002) (finding no abuse of discretion in choice not to impose sanction for discovery failure); Melendez v. Illinois Bell Telephone Co., 79 F.3d 661, 670-71 (7th Cir. 1996) (finding no abuse of discretion in choice to impose sanction for discovery failure)).

In this case, Amazon seeks the sanction of dismissal. Dismissal as a sanction pursuant to Rule 37(b)(2) is appropriate only if the court finds that a party's failure to comply with a discovery order was due to “willfulness, bad faith, or any fault.” Ramirez v. T&H Lemont, Inc., 845 F.3d 772, 776 (7th Cir. 2016) (citing Societe Internationale pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 212 (1958)). “Fault” in this context “does not require a showing of intent, but presumes that the sanctioned party was guilty of ‘extraordinarily poor judgment’ or ‘gross negligence’ rather than mere ‘mistake or carelessness.’ ” Id. (citations omitted). In addition, “[a]part from the discovery rule, a court has the inherent authority to manage judicial proceedings and to regulate the conduct of those appearing before it, and pursuant to that authority may impose appropriate sanctions to penalize and discourage misconduct” if the court finds that a party “abused the judicial process or otherwise conducted the litigation in bad faith.” Id.

*7 The undersigned does not find that Plaintiffs’ failure with regard to Interrogatory No. 6 warrants dismissal. When ordered to do so by the undersigned, Plaintiffs provided a supplemental response that expressly eliminated any claim for lost profits and provided the responsive information that they had, albeit not in the form of a proper interrogatory answer, even while pursuing their objection to the undersigned's order. While it certainly would have been preferable for Plaintiffs to provide a complete explanation of why they lacked additional responsive information along with their supplemental response, Plaintiffs have done so now, and presumably would have done so during their deposition if Amazon had pursued that line of questioning.

Amazon argues that it has been prejudiced by Plaintiffs’ failure to comply with the Court's order because it “does not know what plaintiffs contend are their own revenues for their own products bearing their trademarks at issue in this case.” [Dkt. 161 at 16.] But even if Plaintiffs had fully complied with the Court's order, Amazon still would not know what those revenues are, because Plaintiffs simply do not have more than the small subsets of revenue information that they have provided. The prejudice described by Amazon in its brief, see [Dkt. 161 at 16-18], is not the result of Plaintiffs’ discovery violation, but rather was caused by the manner in which Plaintiffs operated their business.

Amazon also argues that the Court should consider certain other instances of what it terms bad faith by the Plaintiffs during the course of this litigation, because it is appropriate for the Court to “weigh not only the straw that finally broke the camel's back, but all the straws that the recalcitrant party piled on over the course of the lawsuit” in determining the proper sanction for a discovery violation. e360 Insight, Inc. v. Spamhaus Project, 658 F.3d 637, 643 (7th Cir. 2011).

First, Amazon points out that Amazon fully prevailed on both its own motion to compel, [Dkt. 97 and Dkt. 138], and Plaintiffs’ motion to compel [Dkt. 96; Dkt. 130; Dkt. 138.] The undersigned also ruled in Amazon's favor with regard to Plaintiffs’ objection to the deposition of Eric Young, [Dkt. 177]; Plaintiffs’ objection to that ruling remains pending before Judge Magnus-Stinson. [Dkt. 200.] Amazon also argues that Plaintiffs “improperly withheld their settlement agreement with the initial RNSO defendants in this lawsuit” and that Plaintiffs’ “attempts to keep the settlement agreement from Amazon was willful and exhibited reckless disregard for Amazon's rights to discovery in this case.” [Dkt. 161 at 23.] But the cases cited by Amazon involve witness tampering, Ramirez, 845 F.3d 772, and lying and otherwise hiding relevant evidence, Negrete v. Nat'l R.R. Passenger Corp., 547 F.3d 721 (7th Cir. 2008). Plaintiffs here did not attempt to hide evidence—clearly Amazon knew of the existence of the settlement agreement—they simply attempted, unsuccessfully, to convince the Court that it should not have to produce the agreement to Amazon. Federal Rule of Civil Procedure 37(a)(5) provides for an award of attorney's fees against a party who takes positions that are not substantially justified in a discovery motion, and Amazon has filed an appropriate motion seeking such an award in this case. However, the positions taken by Plaintiffs in the discovery disputes in question do not provide support for the sanctions sought by Amazon in the instant motion. There is a difference between losing discovery motions and misconduct.

The final instance of alleged bad faith pointed to by Amazon involves the stipulated final judgment submitted by Plaintiffs and RNSO to the Court as part of their settlement. [Dkt. 60.] That submission, which was entered by the Court on May 21, 2020, [Dkt. 61], contained the following findings of fact:

[Dkt. 61 at 2.] Amazon asserts that, in fact, RNSO had used the website www.risenshineonline.com as early as August 2016 and that Plaintiffs were aware of that fact when they filed the stipulated final judgment.[7] Amazon asserts that the likely explanation for this false statement appearing in the stipulated final judgment is that Plaintiffs wish to use that statement in support of their claim that their judgment against RNSO is a covered advertising injury under an insurance policy purchased by RNSO on March 20, 2019.

Amazon cites to no authority for the proposition that it is improper for parties to stipulate to inaccurate facts in an agreed judgment. In order for the inclusion of a false statement to constitute an attempt to defraud the Court, as Amazon asserts in its reply brief, the statement would have to be material to an issue to be decided by the Court. In this case, it clearly was not. The Court was not misled by the false statement; the Court simply performed the ministerial act of entering the judgment stipulated to by the parties. If Plaintiffs were to represent otherwise in a future suit over insurance coverage, that could constitute fraud on the court in that case, but in any event the judgment and the statements of fact therein are binding only on the parties who agreed to it; those parties might be bound by the statements of fact therein in this or another proceeding, but those factual stipulations are not binding on anyone else. Accordingly, Amazon's assertions regarding the agreed judgment do not bolster their claim that the severe sanctions they seek are appropriate.

The undersigned finds that the appropriate sanction for Plaintiffs’ failure to properly respond to Interrogatory No. 6 after being ordered to do so by the Court is to bar Plaintiffs from seeking actual damages of any kind in this case. Plaintiffs have affirmatively stated that they are not seeking to recover “monetary damages comprising lost profits from lost sales”; to the extent that they intended to seek any other form of actual damages, they may not do so.[8] In addition, Plaintiffs should also be barred from introducing any evidence, testimony, or argument regarding their own revenues or the quantity of their own sales. Amazon argues that Plaintiffs’ revenues are relevant to issues other than a claim for actual damages. For example, Amazon cites Sorensen v. WD-40 Co., 792 F.3d 712, 731 (7th Cir. 2015), for the proposition that Plaintiffs’ “revenues are also relevant to the strength of the claimed trademarks, and thus whether the accused products were likely to confuse consumers into believing they were purchasing Annie Oakley products.” [Dkt. 161 at 16.] In fact, the Court in Sorensen noted that the plaintiff in that case had not offered “sales data showing that products bearing the mark are so widely sold that a jury could infer that many consumers are aware of the mark” or otherwise offered evidence demonstrating the strength of his mark. Because Plaintiffs have failed to properly provide their revenues data in discovery—in part because they do not have it, and in part because they failed to use the information they do have to craft an appropriate interrogatory response—they will not be permitted to use any such data at trial. Amazon is not required to prove the absence of significant revenues by Plaintiffs, and Plaintiffs will not be able to present evidence about their own revenues.

*9 The undersigned further finds that Amazon should be permitted to recover its attorney's fees for the briefing of the instant motion. This is appropriate because Plaintiffs failed to provide a viable explanation for their assertion that they could not provide a compete response to the interrogatory until their response to the instant motion. In addition, if Amazon can reasonably document the time its counsel spent analyzing the documents provided by Plaintiffs along with their supplemental response—work that Plaintiffs should have done as part of their interrogatory response—Amazon will be permitted to recover for that as well.

C. Counsel's Frivolous Argument

One additional issue must be addressed. In moving for an extension of time to respond to the instant motion, Plaintiffs argued the following: “Amazon's Motion for Sanctions is a dispositive motion as it seeks dismissal. However, it was filed long after Amazon's dispositive motion deadline, and should be stricken.” [Dkt. 165 at 2-3.] In ruling on that motion, the undersigned noted “that Plaintiffs’ suggestion that Defendant's motion for sanctions should be stricken because it seeks the sanction of dismissal but was filed after the dispositive motion deadline is utterly without merit, and Plaintiffs’ counsel is reminded that making frivolous arguments may subject him to sanctions pursuant to 28 U.S.C. § 1927.” [Dkt. 169.]

Unfortunately, Plaintiffs did not heed the undersigned warning. In their response to the instant motion, Plaintiffs advance the same frivolous argument. Plaintiffs argue that Amazon's motion was untimely because it was filed after the deadline for dispositive motions and “[t]he sole relief sought by its Motion of Sanctions is that ‘this case be dismissed with prejudice’ [which] ... makes it a dispositive motion.” [Dkt. 189 at 14-15.] While Amazon does seek dismissal, in fact, as noted above, Amazon also seeks alternative relief of “dismiss[al of] plaintiffs’ damages claims, including the claim for Amazon's profits.” [Dkt. 160 at 2.] Even if it had only sought dismissal of the case, however, the sanctions motion would not have been subject to the dispositive motion deadline, which clearly applies only to motions seeking to dispose of some or all of the case on the merits. The undersigned recommends that, pursuant to 28 U.S.C. § 1927, Plaintiffs’ counsel, Paul Overhauser, be required to personally pay that portion of any attorney's fees award that can be attributed to responding to this frivolous argument, which counsel advanced after being admonished not to do so.

For the reasons and to the extent set forth above, the undersigned recommends that Amazon's motion for sanctions [Dkt. 160] be GRANTED and that the Court bar Plaintiffs from (1) seeking actual damages of any kind in this case and (2) introducing any evidence, testimony, or argument regarding the amount of their own revenues or the quantity of their own sales. The undersigned further recommends that Plaintiffs’ counsel, Paul Overhauser, be required to personally pay that portion of any attorney's fees award that can be attributed to responding to responding to the frivolous argument that he advanced after being admonished not to do so. Amazon shall file any motion for attorney's fees related to the motion for sanctions within fourteen days of the date of this Order.

Any objections to the Magistrate Judge's Report and Recommendation shall be filed with the Clerk in accordance with 28 U.S.C. § 636(b)(1) and Fed. R. Civ. P. 72(b), and failure to timely file objections within fourteen days after service shall constitute a waiver of subsequent review absent a showing of good cause for such failure.

*10 SO ORDERED.

Distribution:

Service will be made electronically on all ECF-registered counsel of record via email generated by the Court's ECF system.

The term “Plaintiffs” is used to refer to one or both of the Plaintiffs throughout this Order, except in those instances in which the distinction between them is relevant.

Plaintiffs filed excerpts of the deposition along with their response brief. Because Defendant did not provide any additional excerpts with its reply brief, the Court assumes that the excerpts provided by Plaintiffs contain the relevant testimony.

Plaintiffs explain: “Over a period of months after getting the 2017 POS System, we began entering the bar codes that we had into the System [f]or RISE N SHINE branded products to which we assigned bar codes, mainly essential oils. None of our RISE N SHINE branded bath and beauty products like shampoo, conditioner, lotion, soap, bath salts and the like have bar codes. This is because we have been too busy to put bar codes on all products and have had more important things to do.” [Dkt. 190-7 at 2.]

Amazon correctly notes that “[w]hen asked about this specific document in deposition, Annie Oakley's corporate representative did not recall when or why this invoice was printed and never represented that it was maintained in a ‘trademark file’ or was printed for the purpose of authenticating the first sale of a Rise ‘N Shine-branded product.” [Dkt. 206 at 10.] However, the deposition testimony in question indicates that the invoice was something that was used in a prior trademark case, not something that was printed for the purpose of the instant case. Thus, Amazon's argument that Gabet's declaration “directly contradicts” her deposition testimony on this issue, [Dkt. 206 at 10], is inaccurate.

In their reply brief, Amazon argues that Gabet's declaration establishes that Plaintiffs spoliated evidence in July 2019, after this case was filed, the Plaintiffs “destroyed years of data from their bookkeeping software.” [Dkt. 206 at 9.] The issue of whether Amazon is entitled to an adverse inference because of spoliation of evidence has been raised by Amazon in its summary judgment briefs and is not addressed herein.

In fact, it does not appear that Amazon is able to obtain all of the relevant information from the documents that Plaintiffs could. For example, as Amazon points out, one of the invoices lists the item number sold as “GWPRS,” [Dkt. 206 at 8]; presumably, Plaintiffs know which product that code refers to, while Amazon does not.

For purposes of this Order, the undersigned will assume that both of these assertions are true, but notes that “Annie Oakley vigorously denies that it submitted false statements to the Court in a joint stipulation for connection with the settlement.” [Dkt. 189 at 12.]

This bar does not preclude Plaintiffs from seeking the equitable remedy of disgorgement of Amazon's profits.