NutriQuest, LLC v. AmeriAsia Import LLC

Background

The Court considered AmeriAsia’s motion to enforce a protective order and impose sanctions under Federal Rule of Civil Procedure 37(b)(2) and the Court’s inherent power. The Court referred to the defendants collectively as “AmeriAsia.” The motion concerned the disclosure to NutriQuest of documents marked “attorney’s eyes only” by non-party Lonsdale Packaging, Inc.

Counsel for NutriQuest confirmed that the disclosure occurred and admitted that the improper handling resulted from a mistake. Counsel also made efforts to ensure that NutriQuest destroyed all copies of the documents after discovering the disclosure.

Rulings

The Court had already granted the motion in part and denied it in part at an October 30, 2018 hearing. This order memorialized those rulings.

The Court granted in part AmeriAsia’s request for a monetary sanction payable to the Court. It ordered Gislason & Hunter LLP, NutriQuest’s counsel, to pay $500 for failing to use reasonable efforts to prevent the disclosure. The Court considered counsel’s candor and willingness to accept responsibility, the absence of an intentional violation, and the destruction of the documents. These factors led the Court to impose a more modest sanction than AmeriAsia requested.

The Court denied AmeriAsia’s request for NutriQuest, its counsel, or both to pay the expenses, including attorney’s fees, incurred in bringing the motion. The Court found that AmeriAsia’s efforts to discuss the issue with NutriQuest’s counsel before filing were insufficient. It also found that the motion was largely unnecessary because NutriQuest’s counsel had substantially agreed before filing to the meritorious non-monetary steps needed to correct the problem.

The Court further required future efforts to resolve issues before seeking court intervention to include at least one in-person meeting or personal telephone conversation between counsel. Email alone would not be sufficient going forward.

The Court denied in part without prejudice AmeriAsia’s request for non-monetary relief. It instructed the parties to negotiate a stipulation that would address the protective-order violations and prevent similar mistakes while protecting both parties’ interests. The Court specifically rejected relief that would prevent NutriQuest from contacting individuals or entities identified in the protected documents when NutriQuest already had a pre-existing business relationship with them. The Court found that such relief would give AmeriAsia an unwarranted windfall.