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Gilead Sci., Inc. v. Safe Chain Sols. LLC

2024 WL 665953 (E.D.N.Y. 2024)

February 17, 2024

Marutollo, Joseph A., United States Magistrate Judge

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Summary

Gilead Sciences filed a motion for sanctions against several defendants for failing to produce requested discovery. However, the court denied the motion, stating that Gilead had not provided sufficient evidence for the imposition of sanctions and that the defendants' conduct did not warrant such measures. The court also noted that much of the delay in producing discovery was due to agreed-upon extensions.

Additional Decisions

GILEAD SCIENCES, INC., GILEAD SCIENCES IRELAND UC, and GILEAD SCIENCES LLC, Plaintiffs,
v.
SAFE CHAIN SOLUTIONS LLC, et al., Defendants

21-CV-4106

United States District Court, E.D. New York

Filed February 17, 2024

Counsel

Aron Russell Fischer, Devon Hercher, Thomas Philip Kurland, Angelica H. Nguyen, Geoffrey Potter, Gizele Rubeiz, George Soussou, Timothy Alan Waters, Maxwell Kendall Weiss, Patterson Belknap Webb & Tyler LLP, New York, NY, Andrew I. Haddad, New York, NY, Jonathan Ohring, Yankwitt LLP, White Plains, NY, for Plaintiffs Gilead Sciences Ireland UC, Gilead Sciences, LLC.
Aron Russell Fischer, Devon Hercher, Thomas Philip Kurland, Angelica H. Nguyen, Geoffrey Potter, Gizele Rubeiz, George Soussou, Timothy Alan Waters, Maxwell Kendall Weiss, Patterson Belknap Webb & Tyler LLP, New York, NY, Andrew I. Haddad, New York, NY, for Plaintiff Gilead Sciences, Inc.
Maya Addady, Anthony V. Famularo, Jr., Stanley R. Goodman, Penina Green, Richard S. Schurin, Steven Stern, Stern & Schurin LLP, Garden City, NY, Benjamin Brafman, Zach Intrater, Brafman & Associates, P.C., New York, NY, for Defendant Scripts Wholesale Inc.
Maya Addady, Anthony V. Famularo, Jr., Stanley R. Goodman, Penina Green, Richard S. Schurin, Steven Stern, Stern & Schurin LLP, Garden City, NY, for Defendant Steven Diamantstein.
Andrew Avsec, Howard Michael, Jason Stiehl, Crowell & Moring LLP, Chicago, IL, William E. Copley, William E. Jacobs, Matthew S. Krauss, August J. Matteis, Weisbrod Matteis & Copley PLLC, Washington, DC, Kelly T. Currie, Crowell & Moring LLP, New York, NY, for Defendants Safe Chain Solutions, LLC, Charles Boyd, Patrick Boyd.
Mark A. Berman, Hartmann Doherty Rosa Berman & Bulbulia, LLP, Hackensack, NJ, Robert E. B. Hewitt, III, Schwartz, Conroy & Hack, PC, Garden City, NY, Caroline McLean Shulim, Hartmann Doherty Rosa Berman & Bulbulia LLP, New York, NY, for Defendants Worldwide Pharma Sales Group, Inc., Adam S. Brosius.
Lauren Marie Bernstein, Stephen Justin Ginsberg, Moritt Hock & Hamroff LLP, Garden City, NY, Michael Schwab, Moritt Hock & Hamroff LLP, New York, NY, for Defendants Med-Connect Enterprises, LLC, John Panagiotopoulos, Mike Zangari, Paul Rosell, Riccardo Massana.
Juan Diego Berrio, Berrio & Berrio, P.A., Miami, FL, for Defendants Carlos Vega, Francy Bedoya, Ronald Vidadurre.
Gregory Nicholas Brescia, Michael Seamus O'Malley, Gordon Rees Scully Mansukhani, Harrison, NY, Anthony V. Famularo, Jr., Richard S. Schurin, Stern & Schurin LLP, Garden City, NY, Kerry K. Jardine, Peter G. Siachos, Gordon Rees Scully Mansukhani, Charleston, SC, for Defendant Lieb Pharmacy, Inc.
Gregory Nicholas Brescia, Michael Seamus O'Malley, Gordon Rees Scully Mansukhani, Harrison, NY, Anthony V. Famularo, Jr., Stern & Schurin LLP, Garden City, NY, Kerry K. Jardine, Peter G. Siachos, Gordon Rees Scully Mansukhani, Charleston, SC, for Defendant Raoul Diamantstein.
Maria Campese, Matthew J. Conroy, Robert E. B. Hewitt, III, Schwartz, Conroy & Hack, PC, Garden City, NY, for Defendants Lin Pharmacy Inc., Samuel Yakubov, Monica A. Ngo.
Jason Canales, Canales PLLC, New York, NY, for Defendant Edvin Ovasapyan.
Joseph W. Carbonaro, Joseph Carbonaro, New York, NY, for Defendants DSP Consulting, Inc., Venkata Srinivas Mannava, Swetha Ketineni, Babashiloh Enterprises LLC.
Louis A. Craco, Jr., Allegaert Berger & Vogel, LLP, New York, NY, for Defendant Francis Fata, Ascan Pharmacy.
Matthew Jacobs, Jacobs Law Group, Thousand Oaks, CA, Sydney Jane Darling, Crum & Forster, Morristown, NJ, for Defendants Everything Pharmacy Related II, Inc., Mohammad Etminan.
Albert Y. Dayan, Law Office of Albert Y. Dayan, Kew Gardens, NY, for Defendant Daniel Gelbinovich.
Miguel Del Aguila, Miguel Del Aguila P.A., Coral Gables, FL, for Defendants Invicta Wholesale Supply LLC, Jorge Caba.
Gerald J. Di Chiara, Garden City, NY, for Defendant Zafar Abdullaev.
Andrey Spektor, Bryan Cave Leighton Paisner LLP, New York, NY, Hector Joseph Diaz, Diaz Law PLLC, Scottsdale, AZ, Gregory Everts, Quarles & Brady LLP, Madison, WI, for Defendants Propharma Distribution LLC, Levi Ellis.
Anthony V. Famularo, Jr., Stanley R. Goodman, Penina Green, Richard S. Schurin, Steven Stern, Stern & Schurin LLP, Garden City, NY, for Defendant NER250 LLC.
Burr Forman, Robert Vencill Williams, Burr & Forman LLP, Tampa, FL, for Defendant Streamline Rx LLC.
Oleg A. Mestechkin, Mestechkin Law Group P.C., Brooklyn, NY, James R. Froccaro, Port Washington, NY, for Defendant Peter Khaim.
James R. Froccaro, Port Washington, NY, for Defendants 5 Continental LLC, 441 Willis Ave LLC, Etzhaim Inc., 214 Jamaica LLC, 91 Park LLC, 91 Rego LLC, 93 Everton LLC, B. & O. Estates LLC, Khaim Family Irrevocable Living Trust, Oksana Poltilova.
Alec Sauchik, Kristina Giyaur, Sauchik & Giyaur, P.C., New York, NY, for Defendant Tariel Begiyev.
Stanley R. Goodman, Penina Green, Richard S. Schurin, Steven Stern, Stern & Schurin LLP, Garden City, NY, for Defendant Jeffrey S. Beetley.
Penina Green, Richard S. Schurin, Steven Stern, Stern & Schurin LLP, Garden City, NY, for Defendant USDV Pharma LLC.
Henry Alexander Moreno, Holland & Knight LLP, West Palm Beach, FL, Jonathan Nassau Halpern, Holland & Knight LLP, New York, NY, for Defendants Proven Pharmaceuticals, LLC, William Scott Wise.
Mark Y. Moon, Trenk Isabel Siddiqi & Shahdanian P.C., Livingston, NJ, for Defendants Maryland Pharmacies Inc., Primerx Inc., Sekar Venkatesh.
Oscar A. Herasme, Oscar Herasme, Englewood, NJ, Henry Eduardo Marines, Law Offices of Henry E. Marines, P.A., Miami, FL, for Defendant Gustavo Fernandez.
Javier A. Solano, Law Offices of Javier A. Solano PLLC, New York, NY, Michael Peter Kushner, Kushner Law Group, PLLC, Brooklyn, NY, for Defendant Make It Happen Marketing Inc.
Michael Peter Kushner, Kushner Law Group, PLLC, Brooklyn, NY, Javier A. Solano, Law Offices of Javier A. Solano PLLC, New York, NY, for Defendant Quan Hernandez.
Richard David Lane, Jr., Marshall, Dennehey, Warner, Coleman & Goggin, New York, NY, for Defendant Island Chemists.
Richard David Lane, Jr., Marshall, Dennehey, Warner, Coleman & Goggin, New York, NY, for Defendant Randolph Mohabir.
Jacob Laufer, Law Office of Jacob Laufer, New York, NY, for Defendant Gabriel Betesh.
Shulamis Peltz, Jacob Laufer, P.C., New York, NY, Jacob Laufer, Law Office of Jacob Laufer, New York, NY, for Defendant Rxwholesale.Com LLC.
Doron Aviram Leiby, Miller Leiby & Associates PC, New York, NY, for Defendant Igor Aminov, Gold Tower Refinery Inc.
Roman Leonov, Lust & Leonov, New York, NY, for Defendants Yisel Lopez, Armando Herrera.
Henry Eduardo Marines, Law Offices of Henry E. Marines, P.A., Miami, FL, for Defendant Omom Pharmaceuticals Inc.
David Lee McGee, Beggs & Lane, RLLP, Pensacola, FL, for Defendant John Levitan.
Gigio Koshy Ninan, Shankar Ninan & Co. LLP, New York, NY, for Defendants Gopesh Patel, V.L.S. Pharmacy, Inc.
Russell Louis Porter, Wilson Elser Moskowitz Edelman & Dicker LLP, New York, NY, for Defendants PCSIONE, LLC, Pharmacy Consulting Services, Inc., David Dunn.
Jonathan Savella, New York, NY, for Defendant Ishbay Shukurov.
Bettina Schein, New York, NY, Nicholas Gregory Kaizer, Levitt & Kaizer, New York, NY, for Defendants Boris Abramov, Hashem Yitbarach, LLC.
Leo Shalit, Leo Shalit, P.C., Corona, NY, for Defendant Alex Gelbinovich.
Patrick D. Tobia, Richard D. Trenk, Trenk Isabel Siddiqi & Shahdanian P.C., Livingston, NJ, for Defendants Maryland Pharmacies Inc., Primerx Inc., Sekar Venkatesh.
Robert Vencill Williams, Burr & Forman LLP, Tampa, FL, for Defendant Pavan Mantripragada.
Carlos A. Ziegenhirt, Carlos A. Ziegenhirt, P.A., Miami, FL, for Defendants John Doe 61, John Doe 62, Blue Sea Marine Inc., Alexander Orriols.
John Levitan, Pro Se.
Zafar Abdullaev, Rego Park, NY, Pro Se.

Marutollo, Joseph A., United States Magistrate Judge

MEMORANDUM & OPINION

*1 On February 9, 2024, Plaintiffs Gilead Sciences, LLC, Gilead Sciences Ireland UC, and Gilead Sciences LLC's (collectively, “Gilead”) moved for sanctions pursuant to Fed. R. Civ. P. 37 against Defendants Etzhaim Inc. LLC, Oksana Poltilova, B&O Estates LLC, 214 Jamaica LLC, Khaim Family Irrevocable Living Trust and its trustee Mark Politov, A&P Rockaway LLC, 91 Park LLC, 91 Rego LLC, 93 Everton LLC, Swetha Ketineni, Babashiloh Enterprises LLC, 5 Continental Ventures LLC, AP Funding LLC, 441 Willis Ave LLC, La Vie Jewels of NY LLC, AG Worldwide Sales Inc (collectively, the “Relief Defendants”). See Dkt. No. 1306 (“Gilead's February 9, 2024 Motion”). For the reasons set forth below, Gilead's February 9, 2024 Motion is DENIED.

I. DISCUSSION[1]

a. Gilead's Request for Sanctions Pursuant to Fed. R. Civ. P. 37(b)(2)(A)(ii)

Gilead moves for an order from this Court pursuant to Fed. R. Civ. P. 37(b)(2)(A)(ii) to prohibit the Relief Defendants from contesting the following claims: (i) “the Trust and LLCs are all alter egos of [Peter] Khaim”; (ii) “the assets held by the [Khaim] Defendants are held for and on behalf of [Peter] Khaim; and (iii) “such assets represents Khaim's profits form the sale of counterfeit and infringing Gilead Products.” Dkt. No. 1306, at 2-3. This request is denied.

Gilead has failed to set forth a basis for the imposition of an order prohibiting the Relief Defendants from imposing defenses against the aforementioned claims. Specifically, Gilead has not demonstrated that the Relief Defendants failed to “obey an order to provide or permit discovery” under Fed. R. Civ. P. 37(b). Additionally, Gilead's motion fails to cite to any pertinent legal authority to support the proposition that an order under Rule 37 should be imposed to prohibit the Relief Defendants from responding to those specific claims.

Moreover, sanctions imposed under Fed. R. Civ. P. 37 typically involve facts demonstrating that are far more egregious violations of the court's directives than what has been established here. See Balk v. New York Inst. of Tech., No. 11-CV-509 (JFB) (AKT), 2013 WL 6990767, at *8 (E.D.N.Y. Sept. 30, 2013). For example, in Wilson v. Pasquale's DaMarino's, Inc., No. 10-CV-2709 (PGG), 2013 WL 1195603, at *7 (S.D.N.Y. Mar. 25, 2013), the court imposed the ultimate sanction of entering a default judgment against defendants for their “willful” misconduct, which had continued for an excess of two years, without a “valid reason,” rendering a less severe sanction than default ineffective. Specifically, the court in Wilson found that defendants had “deliberately obstructed these proceedings in a variety of ways, including by refusing to produce discovery or to appear at deposition, failing to attend court conferences, and failing to respond to orders to show cause.” Balk, 2013 WL 6990767, *9 (citing Wilson, 2013 WL 1195603, at *7). Further, the court found that defendants’ “frequent retention and dismissal of lawyers” without “credible explanation” made such a sanction necessary.” Wilson, 2013 WL 1195603, at *7.

*2 The Relief Defendants’ conduct, though dilatory, falls short of the sanctionable conduct discussed in Wilson. See also RLI Ins. Co. v. May Constr. Co., No. 09-CV-7415 (PKC), 2011 WL 1197937, at *2-3 (S.D.N.Y. Mar.22, 2011) (holding that defendant's willful disobedience of multiple court orders coupled with multiple warnings which were ignored provided a basis for striking defendant's answer as lesser sanctions would be insufficient to remedy his failure). In fact, as set forth at the February 16, 2024 status conference, much of the Relief Defendants’ delay in producing responsive discovery responses was rooted in agreed-upon extensions with Gilead. See also Dkt. No. 1306 at 4-5.

In sum, Gilead has simply failed to demonstrate why sanctions pursuant to Fed. R. Civ. P. 37(b)(2)(A)(ii) are warranted at this juncture. The request is denied.

ii. Gilead's Request for Sanctions Pursuant to Fed. R. Civ. P. 37(b)(2)(A)(i)

Gilead also requests that this Court deem certain facts established and prohibit any opposition by the Relief Defendants to its claims pursuant to Fed. R. Civ. P. 37(b)(2)(A)(i). Dkt. No. 1306, at 2-4. This request is also denied.

Fed. R. Civ. P. 37(b)(2)(A)(i) permits courts to sanction a party for violating a discovery order by deeming certain facts established. Such a sanction is warranted for failure comply with a court order “when the failure to comply with a court order is due to willfulness or bad faith or is otherwise culpable.” Daval Steel Products, Division of Francosteel Corp. v. M/V Fakredine, 951 F.2d 1357, 1367 (2d Cir. 1991); see also S. New England Tel. Co. v. Glob. NAPs Inc., 624 F.3d 123, 147 (2d Cir. 2010) (Supreme Court precedent “permits a court to presume from a party's willful failure to answer a discovery request relating to a particular issue that the facts of that issue are established against the noncompliant party”) (discussing Insurance Corporation of Ireland Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, (1982)). “Noncompliance with discovery orders is considered willful when the court's orders have been clear, when the party has understood them, and when the party's non-compliance is not due to factors beyond the party's control.” Baba v. Japan Travel Bureau International, 165 F.R.D. 398, 402-03 (S.D.N.Y. 1996) (Sotomayor, J.), aff'd, 111 F.3d 2 (2d Cir. 1997).

Gilead here, in its motion, mischaracterizes Fed. R. Civ. P 37. Sanctions pursuant are not, as Gilead surmises, simply imposed once “a party fails to serve its answers, objections, or written response to documents requests.”. Dkt. No. 1306, at 2 (quotations in original). Instead, the sanctions that Gilead requests against the Relief Defendants are to be directed at a party's willful violation of a discovery order. See,, e.g. Martinenko v. 212 Steakhouse, Inc., No. 22-CV-518 (JLR) (RWL), 2023 WL 2919559, at *8 (S.D.N.Y. Apr. 12, 2023). But Gilead fails to point at a discovery order that has been violated by the Relief Defendants. Therefore, Gilead's request for sanctions pursuant to Fed. R. Civ. P. 37(b)(2)(A)(i) is denied.

To be clear, however, the denial of Gilead's requests should not—and does not—obviate the Relief Defendants from meaningfully participating in discovery. The Relief Defendants are cautioned that this Court retains the authority to recommend, sua sponte, that default be entered against any party that fails to meaningfully participate in discovery—even if an answer has already been interposed on their behalf. See e.g. Dkt. No. 1286; Trustees of the Paper Producs, Miscellaneous Chauffers, Warehousemen & Helpers Union Local 27 Welfare Tr. Fund & Pension Fund v. J & J Int'l Logistics, Corp., No. 12-CV-1475 (ILG) (VMS), 2013 WL 5532710 at *3 (E.D.N.Y. Oct. 4, 2013).

II. CONCLUSION

*3 In light of the foregoing, Gilead's February 9, 2024 Motion for sanctions pursuant to Fed. R. Civ. P. 37(b)(2)(A)(i)-(ii) is DENIED.

SO ORDERED.

Footnotes

[1]

The Court assumes the parties’ familiarity with the general factual and procedural background of this case.