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Fresh Del Monte Produce, Inc. v. Del Monte Foods, Inc.

United States District Court, S.D. New York

December 8, 2014

FRESH DEL MONTE PRODUCE, INC., Plaintiff,
v.
DEL MONTE FOODS, INC., Defendant.

OPINION AND ORDER

GABRIEL W. GORENSTEIN, Magistrate Judge.

Plaintiff Fresh Del Monte Produce, Inc. ("FDP") has brought this suit against Defendant Del Monte Foods, Inc. ("DMFI") seeking a declaratory judgment, an injunction, and damages for breach of contract based on a license agreement between the two parties. See Complaint, filed Dec. 19, 2013 (Docket # 1) ("Compl."), at 14-16 and ¶¶ 44, 55, 58, 64.[1] DMFI has counterclaimed for breach of contract under the same license agreement, trademark infringement, and unfair competition. See Del Monte Foods, Inc.'s Answer and Counterclaims for: (1) Declaratory Judgment; (2) Breach of Contract; and (3) Trademark Infringement and Unfair Competition, filed Mar. 31, 2014 (Docket # 16) ("Counterclaims"), at 22-23 and ¶¶ 69, 76-78. DMFI has now moved to amend its answer and counterclaims.[2] For the reasons that follow, that motion is granted.

I. BACKGROUND

A. The License Agreement

DMFI's predecessor in interest, DMC, registered the "Del Monte" trademark (the "Mark") throughout much of the world. See Compl. ¶ 2. Pursuant to an agreement between the parties dated December 5, 1989 (the "License Agreement"), FDP possesses the exclusive right to use the Mark for "fresh fruit, fresh vegetables and fresh produce"; "certain refrigerated and frozen fruit products, " including those made with fruit from a list of "Non-Utilized Fruit"; and certain "other, specified non-fresh products." Id . ¶¶ 3, 14-15; see License Agreement Exhibit B (annexed as Ex. 1 to Aguiar Decl.), at 45. The License Agreement permits FDP to add fruits to the Non-Utilized Fruit List when certain conditions are met. See Compl. ¶¶ 15-17. The parties have litigated issues arising under the License Agreement on two prior occasions, in 1998 and 2008. See id. ¶¶ 19-23.

B. The Parties' Claims

In this case, FDP claims that DMFI improperly refused to allow FDP to add avocado, pomegranate, coconut, and kiwi to the Non-Utilized Fruit list. See Compl. ¶¶ 24-32. FDP also alleges that DMFI or its licensees are using the Mark to sell frozen or refrigerated products containing Non-Utilized Fruit, including melon, berry, papaya, banana, coconut, pomegranate, and/or kiwi, even though FDP holds the exclusive right to use the Mark for these products. See Compl. ¶¶ 33-37.

DMFI counterclaims that FDP improperly used the Mark on pureed, sterilized avocado products not made from Non-Utilized Fruit, see Counterclaims ¶¶ 26, 28-29, 34; used the Mark on avocado products that were misleadingly labeled as "fresh, " see id. ¶¶ 26, 30, 38, 77; falsely told DMFI's licensees that they were interfering with FDP's exclusive rights to use the Mark for certain products, see id. ¶¶ 39, 44, 49, 54; and breached the License Agreement by improperly deeming coconut, pomegranate, kiwi, lemon, and lime added to the list of Non-Utilized Fruit, see id. ¶¶ 43, 48, 53, 58, 62. DMFI further alleges that "FDP's use of the Mark, including in connection with the sale or distribution [sic] Hass Avocado and the Guac Products, constitutes infringement" under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a). Id . ¶ 76.

DMFI's proposed amendment to its counterclaims adds allegations that FDP "breached the License by manipulating the Mark" into a logo for its Nature Made line of products without DMFI's knowledge or consent, and that FDP "violated the Lanham Act by using a Logo so similar to the Mark that consumers will be misled or confused and will associate DMFI's goodwill with FDP's non-Del Monte products." DMFI Mem. at 3; see Proposed First Amended Counterclaims (annexed as Ex. 1 to Rudzin Decl.), ¶¶ 63-72.

C. Status of Discovery

On April 21, 2014, this Court issued a scheduling order for this case. (Docket # 20) ("Scheduling Order"). That Order set June 30, 2014, as the deadline for the parties to amend their pleadings. Id . ¶ 3(b). On August 6, 2014, DMFI sought FDP's consent to allow DMFI to amend its counterclaims. When consent was not forthcoming, DMFI filed the instant motion for leave to amend its answer and counterclaims on August 20, 2014. See DMFI Mot.

At the time DMFI filed its motion for leave to amend, the parties had exchanged Rule 26 initial disclosures, FDP had produced discovery materials that had already been exchanged by the parties in prior litigation, and both sides had finalized their electronic search terms for document production. See Rudzin Decl. ¶¶ 5-6; Aguiar Decl. ¶ 8. FDP's attorneys were "well into the process of reviewing the documents" that had been yielded by the searches. See Aguiar Decl. ¶ 11. No document production resulting from the electronic searches had taken place, however. See id. Nor had the parties served interrogatories, noticed depositions, or served thirdparty subpoenas. See Rudzin Decl. ¶ 6. Fact discovery was not due to be concluded for six months. See Scheduling Order ¶ 3(e). Expert discovery was due to close approximately four months after that. See id. at ¶ 3(I).

At a telephone conference held on December 4, 2014, the Court learned that document production is now largely completed but that no depositions have ...


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