Yoomi Babytech, Inc. v. Anvyl, Inc.

Background

Yoomi Babytech, Inc. brought claims against Anvyl, Inc., VitalPure LLC, Feel Well, LLC, and Legacy Chemical Corporation concerning the defendants’ alleged failure to deliver compliant hand sanitizer. The court had previously dismissed several claims for failure to state a claim, while allowing contract and warranty claims to continue. This opinion addressed only Anvyl’s motion for sanctions.

The dispute involved a June 18, 2020 email from Albertsons explaining why it was canceling Yoomi’s remaining orders. The original email listed three reasons: the product was three weeks late, there had been purchase-order and location changes, and the product was selling very slowly in stores. After receiving the email, Eric Friedberg of Cohen Friedberg and Associates forwarded it to Yoomi’s chief executive officer and counsel. Friedberg added the words “due to yellow” to the third reason and highlighted those words in yellow. Yoomi later produced the modified email as a standalone PDF during discovery. The original email was not included in that initial production and was produced later.

Anvyl’s Motion

Anvyl argued that Yoomi had committed fraud on the court and violated Federal Rule of Civil Procedure 26(g) by altering the email, producing it in a way that made it appear to be the original, withholding the original, and certifying that the documents had been produced as they were kept in the usual course of business. Anvyl requested dismissal of Yoomi’s second amended complaint and an award of the attorney fees and costs associated with the sanctions motion.

Rule 26(g) requires an attorney to certify that a discovery production is complete and correct after a reasonable inquiry, consistent with existing law, and not made for an improper purpose. A court may impose sanctions for a violation without substantial justification. The court also explained that fraud on the court requires clear and convincing evidence that a party intentionally and repeatedly lied about issues central to the truth-finding process. Dismissal is a severe sanction and should be used only when lesser sanctions would not be effective.

Court’s Analysis

The court held that Anvyl had not shown by clear and convincing evidence that Friedberg acted with fraudulent intent when he added “due to yellow.” The court noted that Yoomi’s claims did not depend only on whether yellowing caused Albertsons to cancel the orders. The original email identified multiple reasons for cancellation, and the record included evidence that the sanitizer had yellowed and that Albertsons recalled or rejected hundreds of thousands of bottles. Friedberg also stated that he added the words as his own comment and highlighted them to distinguish them from Albertsons’ text. The court reasoned that highlighting the added language made it less likely that he intended to present it as part of the original email.

The court also concluded that clear and convincing evidence did not establish that Yoomi produced the modified email with an intent to defraud. The court recognized that Yoomi produced the modified email separately and produced the original later. But Yoomi did not deny that Friedberg had modified the email, explained that the incomplete production could have resulted from the complexity of discovery, and invited Anvyl to depose Friedberg after Anvyl raised the issue. Anvyl declined that deposition invitation.

Disposition

The court concluded that sanctions were not warranted and DENIED Anvyl’s motion for sanctions. The clerk was directed to terminate motions 136 and 139, which included the sanctions motion and the related motion for oral argument. The opinion did not decide the merits of Yoomi’s remaining contract and warranty claims.