United States District Court, S.D. New York
June 25, 2004.
CIELO CREATIONS, INC., Plaintiff,
GAO DA TRADING CO. LTD., Defendant.
The opinion of the court was delivered by: BARBARA JONES, District Judge
Plaintiff moves for attorneys fees and costs incurred in
conducting a second day of deposition of Defendant company's
principal. For the reasons below, Plaintiff's motion is granted
On March 12, 2004, Plaintiff Cielo Creations, Inc. instituted
this trademark infringement action against Gao Da Trading Co.,
Ltd., and obtained from this Court an order to show cause and a
seizure order on the same date. On April 12, this Court entered,
on the parties' consent, a preliminary injunction order during
the pendency of this proceeding, which included a provision for
expedited discovery and an order for recall ("Consent Order").
Plaintiff wrote a letter to the Court, dated April 27, 2004,
detailing Defendant's repeated failures to respond to discovery
required by the Consent Order and to discovery requests subsequently propounded by Plaintiff, despite extensions of time
and Plaintiff's efforts to obtain the responses. By order dated
April 29, the Court directed Defendant to respond to the
outstanding discovery requests specified in Plaintiff's April 27
letter and scheduled a conference with the Court for May 5.
During the May 5 conference, and by order of the same date
memorializing the conference, the Court directed Defendant to
respond to all outstanding discovery requests in an expedited
manner, and to produce its principal, Jian-Feng Dai, for
deposition "noticed by counsel." (5/5/04 Order). The Court also
stated to Defendant's counsel, Habin Wang,
I can't impress upon you enough that some hard work
has to go into this in terms of trying to respond to
the Plaintiff's requests. You are going to have to
work with your client and try to help him find this
information. That's really his duty and your duty as
his lawyer in response to the court's order and, I
believe it was, a consent judgment in this
case. . . .
You  have a bunch of questions that have been put
to you [previously]. You can expect that those are
the questions [Plaintiff is] going to want answers
to. So I expect you to have your client prepared to
respond at the deposition under oath. OK?
Of course, we all know what being under oath means.
If you lie under oath there can be problems. So, I'd
like him to be as prepared as possible and I need
him to be forthcoming because that's his obligation
once he's under oath. . . .
(5/5/04 Tr. at 13-14) (emphasis added).
On May 17, 2004, Plaintiff noticed both a Rule 30(b)(6)
deposition and the deposition of Mr. Dai, pursuant to Rule 30(A)(1). The deposition was conducted on May 21.
Despite the Court's admonitions regarding the need to properly
prepare Mr. Dai for his deposition, Mr. Dai admitted that he did
not meet with his counsel to prepare for the deposition:*fn1
Q: Mr. Dai, what did you do to prepare for your
A: Nothing. I have not prepared anything.
Q: Did you meet with your attorney?
A: No, besides meeting with him this morning
downstairs. . . .
Q: So is it your testimony that you did not speak to
your attorney at all about this deposition today?
MR. WANG: I object to this line of questioning. . . .
Don't answer that.
A colloquy between the attorneys ensued, resulting in Mr.
Wang's objection on the grounds of privilege and his instruction
to his client not to answer the question. (Dai Dep. at 14-18). In
fact, in the course of five transcript pages, Mr. Wang instructed
his client not to answer a pending question on grounds of
attorney client privilege seven times, even though not one
question requested information concerning the contents of an
attorney-client communication. (Id. 14-19).*fn2
Defendant's attorney was also inappropriately argumentative
with the first translator brought in by Plaintiff to translate
Mr. Dai's Mandarin Chinese into English. Although the translator was certified to translate Mandarin, Defendant's attorney
continually argued with the interpreter and made speaking
objections. Plaintiff's counsel requested that Mr. Wang cease
making speaking objections and stated that all objections to
translation would be preserved. Mr. Wang responded "I can not
allow that." Mr. Wang suggested to Plaintiff's counsel that he
should have hired someone whose first language was Mandarin, and
went so far as make derogatory remarks about Hong Kong after the
translator stated that she was raised there. (Dai Dep. at 38-40).
MR. WANG: Hong Kong is a place in the past Century
was [sic] ruled by British.
INTERPRETER: So what? I learned Mandarin since I was
in 7th Grade.
MR. WANG: [Interpreter], I speak from my experience
here, in terms of language skills. People who are
educated in Hong Kong, they belittle Mandarin because
of the colonial culture.
Mr. Wang continued on this topic for about a minute longer, and
then the deposition went off the record. When it resumed,
Plaintiff's counsel stated that the interpreter refused to
continue the deposition and left. Plaintiff was able to obtain a
second Mandarin translator, but she was only available from 12:30
Plaintiff moves for attorneys fees and costs that it will incur
in taking a second day of deposition of Mr. Dai on the grounds
that this second day was necessitated by Mr. Dai's "lack of
preparedness" and "defendant's counsel's aggressive interference in the questioning" during the first day of the
deposition. (Pl's 5/26/04 Ltr. at 1).
After reviewing the videotapes and the transcript of Mr. Dai's
deposition, the Court finds Mr. Wang's conduct sanctionable under
Federal Rule of Civil Procedure 37, 28 U.S.C. § 1927 and the
Court's inherent power. Accordingly, Plaintiff's motion is
granted in part.
1. Federal Rule of Civil Procedure 37
Federal Rule of Civil Procedure 37 provides for the imposition
of sanctions, including attorneys fees and costs, for certain
discovery abuses. Fed.R.Civ.P. 37; see also Roadway Exp.,
Inc. v. Piper, 447 U.S. 752, 763 (1980). Such discovery abuses
include failure to comply with a discovery order, see Roadway
Exp., 447 U.S. at 763, and failure to make available, after
being ordered by a court, "such number of persons as will be able
to give complete, knowledgeable and binding answers" on its
behalf a corporation noticed under Rule 30(b)(6). See Reilly v.
Natwest Markets Group Inc., 181 F.3d 253, 268 (2d Cir. 1999)
(citation and quotation marks omitted). "Rule 37 sanctions must
be applied diligently both `to penalize those whose conduct may
be deemed to warrant such a sanction, [and] to deter those who
might be tempted to such conduct in the absence of such a
deterrent.'" Roadway Exp., 447 U.S. at 763-764 (quoting
National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 643
(1976)); see also Daval Steel Prods. v. M/V Fakredine,
951 F.2d 1357, 1364-1365 (2d Cir. 1991) (explaining that
Rule 37 "envisions some judicial intervention between a discovery request
and the imposition of sanctions . . . [which] serves to alert the
offending party to the seriousness of its noncompliance. . . .
and specifically informs the recalcitrant party concerning its
In this case, as noted supra, Defendant has a history of
noncompliance with discovery requests and with the Consent Order
entered by this Court. In addition, the Court specifically
ordered Defendant's counsel to produce Mr. Dai pursuant to
Plaintiff's notice of deposition, which included a 30(b)(6)
notice that specified topics to be addressed during the
deposition and a request "to produce at [Mr. Dai's] examination"
certain categories of documents, which were described in an
attachment to the Notice.
Despite the Court's efforts to impress upon counsel the
importance and necessity of preparing his client for the
deposition, counsel did not meet with or prepare Mr. Dai prior to
the deposition. Mr. Dai was unable to testify regarding certain
topics listed in the 30(b)(6) notice and to produce the
documents from some of the categories Plaintiff requested. The
Court finds this conduct sanctionable under Rule 37. 2. 28 U.S.C. § 1927
Pursuant to 28 U.S.C. § 1927, a court may impose sanctions
Any attorney or other person admitted to conduct
cases in any court of the United States or any
Territory thereof who so multiplies the proceedings
in any case unreasonably and vexatiously may be
required by the court to satisfy personally the
excess costs, expenses, and attorneys' fees
reasonably incurred because of such conduct.
28 U.S.C. § 1927. Section 1927 sanctions may be awarded against
an attorney for discovery abuses. See Apex Oil Co. v. Belcher
Co. of New York, Inc., 855 F.2d 1009
, 1019-20 (2d Cir. 1988).
The Court finds that Mr. Wang's behavior prior to and during
the Dai deposition unreasonably multiplied proceedings such that
it also warrants sanctions under Section 1927. First, Mr. Wang
objected to and instructed his client not to answer several
questions without any legal basis. These objections were "so
completely without merit as to require the conclusion that they
must have been undertaken for some improper purpose such as
delay." Salovaara v. Eckert, 222 F.3d 19, 35 (2d Cir. 2000)
Second, because Mr. Wang did not prepare Mr. Dai or produce
documents Plaintiff requested, Plaintiff did not get the
discovery to which it was entitled. Specifically, Mr. Dai was
unable to answer certain properly noticed questions and Plaintiff
was unable to elicit testimony on documents Defendant did not produce.
Third, Mr. Wang's hostile and inappropriate remarks towards the
interpreter led to her departure and a truncated deposition.
Mr. Wang's actions have required Plaintiff to take an
additional day of deposition in order to get the information it
likely would have obtained during the first day if not for his
improprieties, making sanctions under Section 1927 appropriate.
Accordingly, the Court awards Plaintiff sanctions pursuant
3. The Court's Inherent Powers
In addition to statutory authority, courts possess inherent
power to impose sanctions. These powers are "governed not by rule
or statute but by the control necessarily vested in courts to
manage their own affairs so as to achieve the orderly and
expeditious disposition of cases." Chambers v. NASCO, Inc.,
501 U.S. 32, 44-45 (1991). These powers are discretionary, and
provide Court with the ability to fashion an appropriate sanction
for conduct that abuses the judicial process. Id.
In light of the behavior that this Court has found to be
improper and to have impeded expeditious resolution of this case,
the Court is within its discretion to impose sanctions against
Mr. Wang pursuant to its inherent power to manage its affairs.
4. Defendant's Objections
Defendant objects to the imposition of sanctions, in part because it goes against the "American Rule that the attorneys'
fees . . . may not be awarded to the prevailing party unless
authorized by agreement[,] statute or court rule." (Def's 6/8/04
Ltr. at 1).
The Court does not agree. As is discussed supra, a Court may
award attorneys fees and costs under both its statutory authority
and its inherent power. In fact, the Supreme Court has repeatedly
held that "`[t]here are ample grounds for recognizing . . . that
in narrowly defined circumstances federal courts have inherent
power to assess attorney's fees against counsel,' even though the
so-called "American Rule" prohibits fee shifting in most cases."
Chambers, 501 U.S. at 45 (quoting Roadway Express, Inc. v.
Piper, 447 U.S. 752 (1980)). These circumstances include "when a
party has `acted in bad faith, vexatiously, [and] wantonly.'"
Id. at 45-46 (quoting Alyeska Pipeline Serv. Co. v. Wilderness
Soc., 421 U.S. 240, 258-259 (1975)); see also
28 U.S.C. § 1927.
Defendant also opposes Plaintiff's motion on the grounds that
the translator was not qualified to translate Mandarin.
Specifically, Defendant repeats his objection the translator's
"competency" because her "first language is Cantonese." (Def's
6/8/04 Ltr. at 2). Defendant alleges that "[d]uring the first
hour of the deposition, on at least two occasions, [the
translator] left out part of Mr. Dai's answer because she did not
understand what Mr. Dai was saying for the left out part."
(Id.) In response, Plaintiff argues that the translator was competent
and not able to translate only because Mr. Wang repeatedly
interrupted and argued with her.
Regardless of whether the translations were completely
accurate, Defendant's behavior was nonetheless improper. Mr. Wang
repeatedly made speaking objections regarding the translations,
even after Plaintiff's offer to preserve all objections to
translation. Mr. Wang was also hostile towards the translator and
made inappropriate remarks. This conduct led to a delay in the
deposition of several hours.
The Court grants Plaintiff's motion for sanctions, and awards
it attorneys fees and costs incurred for 3 hours of Mr. Dai's
May 21 deposition, as well as the costs to be incurred in
taking a second day of deposition of Mr. Dai.