Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-00329-WYD-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv-0329-WYD-CBS CACHE LA POUDRE FEEDS, LLC., a Colorado limited liability company, Plaintiff, v. LAND O' LAKES, INC., a Minnesota corporation; LAND O' LAKES FARMLAND FEED, LLC, a Minnesota limited liability company; AMERICAN PRIDE CO-OP, a Colorado cooperative corporation; POUDRE VALLEY COOPERATIVE ASSOCIATION, INC., a Colorado cooperative corporation; FRANK BEZDICEK, individually, and in his official capacity as Director of Marketing, Land O' Lakes, Inc.; ROBERT DEGREGORIO, individually, and in his official capacity as President, Land O' Lakes Farmland Feed, LLC; and As yet unidentified entities and individuals participating in concert with the aforenamed defendants, Defendants.

PLAINTIFF'S REPLY TO DEFENDANTS' RESPONSE TO PLAINTIFF'S MOTION IN LIMINE TO ALLOW EVIDENCE OF DEFENDANTS' DESTRUCTION OF EVIDENCE TO PROVE WILLFUL MISCONDUCT

The Plaintiff, Cache La Poudre Feeds, L.L.C. ("Treiber"), by and through its attorneys, Santangelo Law Offices, P.C. and Thomas R. French, P.C., respectfully submits the following Reply to Defendants' Response to Plaintiff's Motion in Limine to Allow Evidence of Defendants' Destruction of Evidence to Prove Willful Misconduct.

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EVIDENCE OF DESTRUCTION OF DOCUMENTS IS RELEVANT TO PROVE WILLFUL MISCONDUCT & BAD FAITH BY LAND O' LAKES. The real issue raised here is whether Land O' Lakes' destruction of evidence is relevant and, therefore, admissible to prove willful misconduct by Land O' Lakes ("LOL"). LOL does not dispute that willful infringement, or intent to infringe, may be proved by circumstantial evidence. Jellibeans, Inc. v. Skating Clubs of Ga. Inc., 716 F.2d 833, 843 (11th Cir. 1983). Nor does LOL ever address or discuss the issues of whether willful misconduct is relevant to prove entitlement to an award of LOL's profits, entitlement to punitive damages, entitlement to attorneys' fees or to rebut LOL's remote good faith junior user affirmative defense. Because LOL never addresses these issues, it apparently concedes the relevance and admissibility of its destruction of documents to prove Plaintiff's entitlement to an award of LOL's profits, entitlement to punitive damages, entitlement to attorneys' fees and to rebut LOL's remote good faith junior user affirmative defense. LOL does not submit any argument that evidence of destruction of evidence should not be allowed to prove these matters. LOL does contend that its conduct is not relevant on the issue of willful trademark infringement. LOL ignores the instruction of law given by this Court in the similar trademark infringement case of Purebred Co. v. Star Kist Foods, Inc. et. al., 00-D-665, U.S.D.C. Co. ("Purebred"). In Purebred, this Court instructed the jury as follows about the relevance of willful misconduct and bad faith:

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Instruction # 51, Purebred. (Emphasis supplied). There is no question that proof of willful misconduct and bad faith are relevant evidence on Treiber's claim of intentional trademark infringement. Treiber's Second Claim for Relief in the Third Amended Complaint is titled INTENTIONAL TRADEMARK INFRINGEMENT and alleges that the Defendants willfully and intentionally infringed Treiber's PROFILE mark. LOL contends that there is no connection between willful misconduct in general and willful trademark infringement. P. 10, Response. Simply put, that is not accurate. Circumstantial evidence of willful infringement, or intent to infringe, may be proved by circumstantial evidence. Jellibeans, Inc. v. Skating Clubs of Ga. Inc., supra. Moreover, Instruction #51 given in Purebred states that willfulness "involves an intent to infringe or a deliberate disregard of a mark holder's

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rights."

There is a clear connection between willful misconduct and willful trademark

infringement. In addition, evidence of willful misconduct is clearly relevant to prove Treiber's punitive damages claim. As the jury was also instructed in Purebred "If you find beyond a reasonable doubt that one or more of the Defendants acted in a fraudulent, malicious, or willful and wanton manner, you may award a reasonable sum as punitive damages...." Instruction # 66, Purebred, supra, and that "Willful and wanton conduct means an act or omission ... which ... was done heedlessly and recklessly, either without regard to the consequences or without regard to the rights of others, particularly, the Plaintiff." Instruction # 68, Purebred. Evidence of LOL's conduct is relevant to prove that it aced recklessly, heedlessly, and without regard to the rights of Treiber. In Scott v. IBM Corp., 196 F.R.D. 233, 249 (D.C.N.J. 2000), the Court held that evidence of document destruction was proper circumstantial evidence to prove a claim of pretext firing: "Given that the evidence of spoliation in this case might be interpreted by the jury as circumstantial evidence of IBM's desire to cover up discriminatory reasons for discharging Mr. Scott, the court will permit the use of spoliation evidence for plaintiff's pretext theory." 196 F.R.D. at 249. The Court specifically found that evidence destruction may be relevant to prove discovery sanctions, or to prove causes of action for money damages. 196 F.R.D. at 247. Similarly, the evidence destruction in this case should be allowed as circumstantial evidence of LOL's desire to cover up improper trademark usage. LOL makes its own "bright line" rule that, "Judge Shaffer's discovery findings are not relevant to whether Land O' Lakes intentionally infringed Plaintiff's PROFILE mark." P. 7,

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Response of LOL to Treiber's Motion in Limine ("Response").

Logically and legally, any

evidence of willful misconduct or bad faith by Land O' Lakes related to its alleged Profile trademark is, at least, circumstantial evidence that is relevant to prove willful trademark infringement. That the misconduct was related to the discovery process, does not make the evidence irrelevant to prove Treiber's substantive claims. Especially is that true where, as here, the misconduct is by LOL employees, not lawyers hired by LOL to represent it in this litigation. If this Court allows as evidence the factual findings of Judge Shaffer, the case will not be turned into a trial about discovery. His findings will allow the jury to see evidence which is relevant to show LOL misconduct, and should be admitted for that reason. LOL says that Strasser v. Yalamanchi, 783 So.2d 1087, 1093 (Fla. 4th DCA 2001) stands for the idea that evidence of LOL's destruction of evidence should not be allowed because "evidence related to pre-trial discovery should normally not be a matter submitted for the jury's consideration on issues of liability." P. 7, Response. However, the Court in Strasser found that the trial court did not err in admitting evidence of pre-trial discovery conduct, that the disputed evidence was directly relevant, and specifically found that admission of such evidence would not "unnecessarily complicate and confuse the issues before the jury." 783 So.2d at 1093. Strasser supports Treiber and not LOL. LOL contends that Treiber's motion is contrary to the law of the case because Judge Shaffer ruled that LOL did not act in bad faith in completing discovery in this case. The issue decided by Judge Shaffer is not the same as the issue here involved. Judge Shaffer decided whether discovery sanctions should be imposed under F.R.C.P. 37. different: The issues here involved are

Whether substantive evidence relevant to prove willful misconduct, bad faith,

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exceptional circumstances allowing attorneys' fees under the Lanham Act, and to disprove LOL's good faith should be allowed. F.R.C.P. 37 discovery rulings do not preclude relevant evidence offered to prove these matters. Judge Shaffer's finding on bad faith does not preclude use of his factual findings for other evidentiary purposes. Circumstantial evidence of willful misconduct is relevant to prove intent to infringe, bad faith infringement, willful and wanton conduct, and exceptional circumstances entitling Treiber to attorneys' fees. LOL's, "practice of expunging the hard drives of former employees even after this litigation commenced," and its knowledge that, "an accessible source of information (i.e., computer hard drives used by departed employees) was being eliminated as a routine practice," are relevant, circumstantial evidence on the issue of LOL's willful and bad faith. This is so whether or not there was sufficient evidence of discovery bad faith for an adverse inference instruction. Magistrate Judge Shaffer had a discrete task: To determine

whether the destruction of evidence should lead to a discovery sanction under F.R.C.P. 37. He made that decision, but did not determine whether evidence of destroyed data was relevant for other purposes, or was relevant on the issue of willful or bad faith infringement. Assuming arguendo that this Court does not allow the factual findings of Judge Shaffer to prove willful misconduct, Treiber should still be allowed to introduce evidence that LOL adopted an automatic email destruction program in May 2002, that LOL made no effort to determine whether former employees involved in the Profile mark had any responsive documents, or knew where responsive documents might be located, that LOL continued its practice of expunging the hard drives of former employees even after this litigation commenced, that lawyers for LOL were aware that an accessible source of information (i.e., computer hard

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drives used by departed employees) was being eliminated as a routine practice, and that LOL ignored a letter from Treiber's lawyer asking it to retain all documents that might be relevant in any litigation. That evidence can be introduced through the testimony of LOL Vice President and in-house counsel Peter Janzen. At a minimum, this evidence is circumstantial evidence of willful misconduct and bad faith. It is evidence that helps prove LOL's deliberate disregard of Treiber's rights, reckless activity by LOL, and LOL's knowing wrongful conduct. LOL contends that admission of this evidence would be unfairly prejudicial and confusing. The Court in Strasser v. Yalamanchi, supra, found precisely to the contrary when it considered the same contention in a similar situation. LOL says that it would be confusing and misleading to admit isolated statements out of context. Treiber will call Peter Janzen as a witness, and he can provide any needed context to the findings. Alternatively, Mr. Janzen can testify as to the matters which show evidence destruction because he has the personal knowledge to testify as to these relevant facts. LOL also apparently attempts to confuse the Court by its contentions in two different portions of its Response that Treiber must show LOL's intent to benefit from the Profile mark. See, e.g. p. 10 and p. 12, Response. Treiber's reverse confusion claims do not depend on proving LOL's intent to benefit. As this Court instructed the jury in Purebred, "As to reverse confusion, intent to infringe is not a relevant factor." Instruction 30, Purebred.

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CONCLUSION Magistrate Judge Shaffer's factual findings are relevant on the following issues: 1. Whether LOL acted willfully or in bad faith in infringing Treiber's PROFILE trademark. 2. Whether LOL acted willfully and wantonly for purposes of assessing punitive or enhanced damages. 3. Whether exceptional circumstances entitle Treiber to attorneys' fees under the Lanham Act. 4. The equitable circumstances entitling Treiber to a profits' award. As such, his factual findings should be allowed to go to the jury. In the alternative, Peter Janzen should be allowed to testify as to these relevant matters as he did in his F.R.C.P. 30(b)(6) deposition. RESPECTFULLY SUBMITTED this 11th day of May, 2007.

By:

s/Thomas R. French Thomas R. French THOMAS R. FRENCH, P.C. Attorney for Plaintiff 125 South Howes Street, Suite 401 Fort Collins, CO 80521 Telephone: (970) 484-0360 Fax: (970) 482-6964 Email: [email protected]

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CERTIFICATE OF SERVICE (CM/ECF) I certify that on the 11 day of May, 2007 I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] and that I have mailed Plaintiff's Summaries to the following non-CM/ECF participants by U.S. mail, postage prepaid, as follows: Mr. Ryan Stern Dean & Stern, P.C. 4155 E. Jewell Avenue Suite 703 Denver, CO 80222 Mr. Ted Svitavsky 7785 Highland Meadows Parkway Suite 203 Windsor, CO 80528

By:

s/Thomas R. French Thomas R. French THOMAS R. FRENCH, P.C. Attorney for Plaintiff 125 South Howes Street, Suite 401 Fort Collins, CO 80521 Telephone: (970) 484-0360 Fax: (970) 482-6964 Email: [email protected]

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