Friday, December 07, 2012

Precedential No. 36: TTAB Denies Another Motion to Re-Open Discovery

A motion to re-open discovery faces a high hurdle at the TTAB: the movant must show "excusable neglect." Good luck with that! The Board once again applied the Supreme Court's Pioneer factors in denying Applicant John M. Van Zandt's motion to re-open, concluding that Applicant Van Zandt's failure to seek an extension of time prior to the close of discovery "appears to have been a result of a strategic decision, which was entirely within his control." Luster Products, Inc. v. John M. Van Zandt d/b/a Vanza USA, 104 USPQ2d 1877 (TTAB 2012) [precedential].

Van Zandt filed his motion to re-open five weeks after the close of discovery. He had not taken any discovery, he said, because he thought that Opposer Luster had lost interest in the case. Van Zandt had twice asked Luster for its initial disclosures, but Luster did not provide them - until the last day of the discovery period (accompanied by its first interrogatories and document requests).

Luster pointed out that, during the discovery period, Van Zandt had refused its request to extend the closing date for discovery. Moreover, Van Zandt's claim that he thought Luster had lost interest in the case was belied by the fact that the parties engaged in settlement discussions during the month in which discovery closed.

The Board applied the Supreme Court's Pioneer analysis to determine whether Van Zandt's failure to seek an extension of time prior to the close of the discovery period was the result of "excusable neglect." [See Rule 6(b)(1)(B), Fed. R. Civ. P.].

[A]t bottom [the decision is] an equitable one, taking account of all relevant circumstances surrounding the party's omission. These include. . . [1] the danger of prejudice to the [nonmovant], [2] the length of the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was within the reasonable control of the movant, and [4] whether the movant acted in good faith.(quoting Pioneer).

Several courts have stated that the third Pioneer factor, the reason for the delay and whether it was in the control of the moving party, might be the most important factor.

Here, the third factor weighed strongly against a finding of excusable neglect. If Van Zandt had been concerned about Luster's failure to timely serve initial disclosures, he should have filed a motion to compel. The Board observed that "[a] party that does not receive initial disclosures and does not file a motion to compel such disclosures risks their being served late in the discovery period concurrently with discovery requests, as illustrated by the instant case." [And as permitted by Rule 2.120(a)(3)].

To the extent that applicant made a calculated strategic decision not to take discovery in the hope that opposer had lost interest in the proceeding, the events in this case illustrate the danger of such a decision.

Although Van Zandt contended that he needed the initial disclosure in order to prepare his own discovery requests, the Board again noted his failure to move to compel. Moreover, he could have prepared discovery requests based on Luster's pleaded claim [just as would have been done prior to 2007, when the initial disclosure rule came into being].

Turning to the second Pioneer factor, the Board found that the delay caused by the failure of Van Zandt to act in a timely fashion was significant. Both the Board and the parties have an interest in minimizing the amount of time spent on matters like that raised in the instant motion, which "comes before the Board solely as a result of one party's strategic decision to allow the discovery period to close and subsequent change of position." Therefore, this factor also weighed against Van Zandt.

As to the first factor, the Board found no evidence of significant prejudice to Luster, and as to the fourth, there was no evidence of bad faith by Van Zandt.

Balancing the Pioneer factors, the Board ruled that Van Zandt's failure to timely act prior to the close of discovery was not the result of excusable neglect, and so it denied the motion to re-open.

TTABlog comment: Maybe Van Zandt didn't think Luster lost interest in the case, but instead he thought that Luster had no interest in taking any discovery. Wrong.

Text Copyright John L. Welch 2012.


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