Free Motion in Limine - 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 MOTION IN LIMINE TO ALLOW EVIDENCE OF DEFENDANTS' DESTRUCTION OF EVIDENCE TO PROVE WILLFUL MISCONDUCT

Certificate of Compliance with D.C.COLO.LCivR 7.1 Counsel for Plaintiff Cache La Poudre Feeds, LLC have conferred with counsel for Defendants, Mr. Greg Tamkin, about the relief Plaintiff desires in an effort to resolve the matter. Mr. Luke Santangelo spoke with Mr. Tamkin by telephone on March 22, 2007 and on April 19, 2007 in efforts to resolve this matter, but was unsuccessful in doing so. *************************************** 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

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Motion in Limine to allow evidence of Defendants' destruction of documents to prove willful misconduct. EVIDENCE OF DESTRUCTION OF EVIDENCE IS RELEVANT TO PROVE WILLFUL MISCONDUCT & BAD FAITH BY LAND O' LAKES. Treiber alleges that Land O' Lakes ("LOL") willfully infringed Treiber's PROFILE

trademark, and that it is entitled to LOL's profits and enhanced damages. The Lanham Act provides that successful infringement plaintiffs, "shall be entitled ... subject to the principles of equity, to recover (1) defendant's profits ..." 15 U.S.C. § 1117. Willful misconduct and bad faith are both relevant to an award of profits in such cases. Western Diversified Serv. Inc. v. Hyundai Motor America, Inc., 427 F.3d 1269, 1273 (10th Cir. 2005). In the similar trademark infringement case of Purebred Co. v. Star Kist Foods, Inc. et. al., No. 00-665/01-481, (D. Colo. 2002), this Court instructed the jury about the relevance of willful misconduct and bad faith as follows.

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Instruction # 51, Purebred Co. v. Star Kist Foods, Inc. et. al., No. 00-665/01-481, (D. Colo. 2002) (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. Evidence of willful misconduct is relevant on Treiber's claims for punitive damages and for attorneys' fees. Punitive damages require proof of acts that a defendant has acted in a fraudulent, malicious, or willful and wanton manner. See, e.g., C.R.S., Section 13-21-102(1)(a). The Lanham Act allows attorneys fees in exceptional cases (see 15 U.S.C. § 1117), and the Tenth Circuit has held that an exceptional case is one in which the trademark infringement is, "malicious, fraudulent, deliberate or willful." VIP Funds, Inc. v. Vulcan Pet, Inc., 675 F.2d 1106, 1107 (10th Cir. 1982). Evidence of willful misconduct by LOL is, therefore, relevant on the willful infringement of trademark claim, the claim for punitive damages, and the claim for attorneys' fees. LOL has also pled the remote good faith junior user affirmative defense. LOL's bad faith and willful misconduct are also relevant to rebut evidence that LOL acted in good faith in using the Profile mark. 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). In Western Diversified Services, Inc. v. Hyundai Motor America, Inc., 427 F.3d 1269, 1274 (10th Cir. 2005), the Tenth Circuit found that willful infringement may be proven by defendants' deceptions,

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misrepresentations to the Court, or by a defendant using its economic muscle to weaken a plaintiff, among other things. Willful misconduct and bad faith by LOL will here be proved by commissions and omissions. Willful or bad faith infringement will be proved, in part, by LOL's admitted

knowledge of Treiber's PROFILE mark before LOL decided to use the Profile mark, and by LOL's admissions that it was not entitled to use the Profile mark. LOL's willful misconduct will also be proved, in part, by its omissions. LOL here failed to investigate Treiber's common law rights to the Profile mark before it decided to use its Profile mark, and failed to stop its use of the Profile mark even after Treiber notified LOL in April, 2002 and later obtained a federal trademark registration for PROFILE. In this context of willful commissions and omissions, LOL's conduct in failing to preserve electronically stored information and other documents ­ after this lawsuit was filed ­ is unquestionably relevant on the issue of LOL's willful or bad faith misconduct. When he addressed issues of evidence destruction and discovery violations by LOL, Magistrate Judge Shaffer made the following findings relevant to willfulness and bad faith in his March 2, 2007 Memorandum Order Regarding Plaintiff's Motion for Relief from Discovery Violations ("Order"): 1. "[L]and O' Lakes adopted an automatic email destruction program in May 2002....", p. 3, Order. 2. "After February 24, 2004, Defendants unquestionably had an obligation to preserve and produce non-privileged materials responsive to properly framed discovery requests", p. 19, Order.

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3. "[L]and O' Lakes 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," p. 26, Order. 4. "[L]and O' Lakes continued its practice of expunging the hard drives of former employees even after this litigation commenced," and, with respect to certain employees, "[S]uch a procedure ... violated Defendants' obligation to preserve evidence in this case", p. 29, Order. 5. "[C]ounsel [for LOL] was aware that an accessible source of information (i.e., computer hard drives used by departed employees) was being eliminated as a routine practice ....", p. 30, Order. 6. In house counsel for LOL, who was also a corporate vice president, engaged in "questionable practices" and failed, "in many respects to discharge ... obligations to coordinate and oversee discovery....", pp. 30-32, Order. Although these findings were made in the different context of discovery obligations, they remain relevant to proof of willfulness and bad faith on other issues. In the different context of discovery obligations, Magistrate Judge Shaffer did not find that LOL's failure to preserve relevant documents was the product of bad faith. p. 44, Order. He was requested to order an adverse inference instruction as a remedy for evidence destruction, but did not do so. He found that he could not remedy the destruction of evidence with an adverse inference instruction because of a Tenth Circuit case which held that bad faith destruction was a necessary predicate to an adverse inference instruction. pp. 43-44. Order.

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However, that ruling does not preclude use of his findings for other evidentiary purposes. As recognized in the instructions given in Purebred, supra, circumstantial evidence of willful misconduct is unquestionably 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," its, "questionable practices", 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 in an infringement and damages context. This is so, whether or not there was sufficient evidence of 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. 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. It is noteworthy that Judge Shaffer did not conclude that the destruction of evidence was only inadvertent or negligent. His factual findings that, "[L]and O' Lakes 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, "was aware that an accessible source of information (i.e., computer hard drives used by departed employees) was being eliminated as a routine practice ....", that LOL had an obligation to preserve and produce documents that were not preserved or produced, and that LOL engaged in "questionable practices" are, at a minimum, evidence which the jury should be allowed to consider when determining willfulness and bad

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faith. These findings should be allowed as evidence relevant to prove LOL's willful misconduct and bad faith in an infringement and damages context. Treiber proposes that the above six factual findings of Magistrate Judge Shaffer, be allowed to the jury, much as stipulations would be presented to the jury. It is significant that LOL did not dispute any of these findings at any time. Evidence of willful misconduct and bad faith exists, the findings of Magistrate Judge Shaffer in the Order are undisputed, and the jury should be allowed to hear this relevant evidence. Plus, the Court should be allowed to consider this evidence in making its decisions on damages to be awarded and attorneys' fees. CONCLUSION The above six findings by Magistrate Judge Shaffer in his Order are relevant on the issue of LOL's willful misconduct and bad faith on at least 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 an award of profits. As such, these six findings should be allowed as evidence to the jury.

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RESPECTFULLY SUBMITTED this 20th day of April, 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 20th day of April, 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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