Richards Layton & Finger
 

Chief Judge Stark Denies Defendant's Motion to Dismiss Based on Discovery Violations

March 7, 2017

In Robert Bosch LLC v. Alberee Products, Inc., C.A. No. 12-574-LPS (D. Del. Jan. 24, 2017), Chief Judge Stark denied defendant Costco Wholesale Corporation’s (“Costco”) motion to dismiss under Federal Rule of Civil Procedure 37(b)(2), but granted Costco alternative relief by way of attorneys’ fees, additional discovery and evidentiary relief. In opposition to Costco’s motion, Robert Bosch LLC (“BLCC”) argued that its parent company refused to produce documents despite the Court’s order for BLLC to do so. Applying the Poulis factors, Chief Judge Stark held that BLLC had “effective control” over the production of its parent’s documents, which it appeared to have been able to acquire earlier in the litigation when helpful to BLLC’s position. Additionally, the Court found the close relationship between BLLC and its parent supported a finding that they acted in concert in connection with the patents-in-suit and in connection with the litigation. Chief Judge Stark also found that prejudice to Costco and BLLC’s history of dilatoriness and willful violation of Court orders weighed in favor of dismissal. In the end, however, the Court determined that alternative sanctions would remedy the prejudice.

Key Points:  The Court may hold a subsidiary has possession, custody or control of documents in the possession of its parent where the two have an interest in the outcome of the litigation and act in concert with respect to the patents-at-issue.