GLASTON CORPORATION v. HHH EQUIPMENT RESOURCES

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

GLASTON CORPORATION and )

UNIGLASS ENGINEERING OY, )

)

Plaintiffs, )

)

v. ) 1:21cv942

)

SALEM FABRICATION TECHNOLOGIES )

GROUP, INC., )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

This case comes before the Court on (i) “Salem’s Motion for

Discovery Sanctions Pursuant to FRCP 37(b) & 37(c)” (Docket Entry

81) (the “Discovery Sanctions Motion”), (ii) “Plaintiffs’ Motion to

Compel Discovery” (Docket Entry 112) (the “Motion to Compel”),

(iii) the “Unopposed Motion to Seal” (Docket Entry 111) (the

“Sanctions’ Sealing Motion”) filed by Glaston Corporation and

Uniglass Engineering Oy (collectively, the “Plaintiffs”), and

(iv) “Defendant Salem Fabrication Technologies Group, Inc.’s

Unopposed Motion to Seal” (Docket Entry 122) (the “MTC Sealing

Motion,” and collectively with the Sanctions’ Sealing Motion, the

“Sealing Motions”). For the reasons that follow, the Court will

deny the Discovery Sanctions Motion and the Motion to Compel

(collectively, the “Discovery Motions”) and will deny as moot the

Sealing Motions.

BACKGROUND

“This is a civil action for [alleged] patent infringement”

(Docket Entry 14 (the “Complaint”), □ 1) of two United States

patents (at times, the “Asserted Patents”) related to “[t]hermally

tempering glass” (id., J 18; see, e.g., id., TT 19-21). (See

generally Docket Entry 14.)? Plaintiffs, Finnish companies

involved in the manufacture of glass tempering machinery (see id.,

2-4), assert that Salem Fabrication Technologies Group, Inc.

(the “Defendant” or “Salem”) infringed these patents through its

sale, importation, distribution, and servicing of certain “glass

tempering furnace[s] manufactured by Luoyang North Glass Technology

Co., Ltd. (‘Northglass’[ or ‘North Glass’])” (id., JI 1) (the

“Accused Products”). (See generally Docket Entry 14.) Defendant

disputes Plaintiffs’ allegations and seeks declaratory judgments of

non-infringement and invalidity of the patents. (See Docket Entry

24 at 1-24.)* On April 18, 2024, the Court (per United States

District Judge Thomas D. Schroeder) issued its Claim Construction

Order, “adopt[ing] all of Plaintiffs’ proposed constructions”

(Docket Entry 98 at 1). (See id. at 55-56.) The Court has not yet

1 According to the Complaint, “[each] Patent is Assigned to

Uniglass” (id., 44 12, 13) and exclusively licensed to Glaston (see

id., 7 14).

2 Docket Entry page citations utilize the CM/ECF footer’s

pagination.

scheduled a trial in this matter. (See Docket Entries dated Dec.

9, 2021, to present.)

As relevant here, on February 23, 2023 (see Docket Entry 28 at

12), Plaintiffs and Defendant submitted the “Parties’ Joint Rule

26(f) Report” (id. at 1), in which they “agree[d] that fact

discovery ends December 13, 2023, and expert discovery begins and

ends based on the date that the Court issues a Claim Construction

Order” (id. at 5). The Court (per the undersigned United States

Magistrate Judge) promptly adopted that proposal, establishing the

fact discovery deadline as December 13, 2023. (See Text Order

dated Feb. 24, 2023 (the “Scheduling Order”).) In August 2023,

Defendant moved to compel discovery, specifically seeking responses

to certain interrogatories and production of material responsive to

its requests for production of documents by a specific date. (See

Docket Entry 35.) The Court scheduled a hearing on that motion,

directing the parties to confer beforehand to “attempt again to

reach a resolution of all remaining disputed issues.” (Text Order

dated Sept. 14, 2023.) The parties thereafter resolved their

dispute regarding certain of the interrogatories (see Docket Entry

50 at 1-2) and the Court granted the motion to compel as to the

remaining matters, ordering Plaintiffs to complete their document

3

production and provide their interrogatory responses by October 2,

2023 (see Minute Entry dated Sept. 25, 2023).3

On December 13, 2023, the parties filed a “Stipulation

Regarding Depositions” (Docket Entry 56 at 1) that

waive[s] any objection to the validity of any deposition

noticed before December 13, 2023 taking place after that

date and instead during the month of January 2024[] based

on the dates set forth in the Scheduling Order. The

parties expressly agree that any deposition taken

pursuant to this Stipulation shall be usable in this

action as if the deposition had been taken within the

United States on or before December 13, 2023, and that

all objections lodged during depositions pursuant to this

Stipulation shall be preserved, as though the deposition

was taken in the United States on or before December 13,

2023.

(Id. at 2.)

On February 2, 2024, Plaintiffs filed a motion to compel

“discovery that has been withheld by Defendant on the basis of the

alleged common interest privilege.” (Docket Entry 69 at 1; see id.

at 2.) Defendant objected to that motion on the grounds that the

parties had not properly conferred before its filing and that such

conferral could resolve or at least narrow the parties’ dispute.

(See Docket Entry 121-9 at 2-3.) Plaintiffs accordingly withdrew

the motion (see Docket Entry 77 at 1) and, after the parties

conferred and reached certain agreements, Defendant produced

twenty-two “documents that were previously withheld on the basis of

3 The parties subsequently agreed to extend this deadline to

October 6, 2023. (See Docket Entry 52 at 1.)

4

common interest privilege with Northglass” (Docket Entry 121-11 at

2). (See Docket Entry 121-10 at 2; Docket Entry 121-11 at 2-4.)

On February 29, 2024, Defendant filed the Discovery Sanctions

Motion (see Docket Entry 81 at 3), seeking “to obtain discovery

sanctions against Plaintiffs for failure to obey the orders of this

Court and failure to supplement their response to Salem’s requests

for inspection” (id. at 1). Notwithstanding its explicit request

for “discovery sanctions” (id.), the Discovery Sanctions Motion

lacks any good-faith conferral certification (see id. at 1-4).

Instead, Defendant maintains that “Rule 37 [of the Federal Rules of

Civil Procedure (the ‘Rules’)] does not impose any requirement on

the parties to confer prior to the filing of th[e Discovery

Sanctions] Motion.” (Docket Entry 97 at 18 n.4.) The Discovery

Sanctions Motion seeks expense-shifting and “an order sanctioning

Plaintiffs as follows” (Docket Entry 81 at 1):

A. Plaintiffs are precluded from arguing or seeking to

admit into evidence that any product Plaintiffs made,

sold, offered for sale, or used is covered by any claim

of the Asserted Patents;

B. Plaintiffs may not argue or seek to introduce into

evidence at trial that Plaintiffs aggressively enforce

their patent rights anywhere in the world, and Plaintiffs

may not rely upon any evidence of Plaintiffs’ patent

litigation in the world regarding the Asserted Patents or

related patents in support of any part of Plaintiffs’

affirmative case-in-chief, including at least Plaintiffs’

claims for damages;

C. Plaintiffs are precluded from presenting any arguments

regarding the price or profit margins of Plaintiffs’

sales in the U.S. and from seeking to admit into evidence

5

that the Accused Products are priced to be less expensive

than Plaintiffs’ practicing products;

D. Plaintiffs are precluded from arguing that any lost

sales of Plaintiffs’ practicing products are due

exclusively to sales of the Accused Product; it be taken

as a designated fact for purposes of this action that

every competing furnace identified in Mr. Rantala’s

spreadsheet is a commercially acceptable non-infringing

alternative to the Accused Products; and Plaintiffs are

precluded from arguing or seeking to admit as evidence

comparisons or characterizations of the efficiency,

quality, and performance of any practicing product,

including at least the FC 500 and 700 series of furnaces;

E. Plaintiffs are precluded from relying upon any service

agreements between either Plaintiffs or Salem and any

third party for any purpose at trial; and it shall be

taken as a designated fact that all of Plaintiffs’

profits for practicing products are derived from service

agreements for furnaces, rather than sales of furnaces.

(Id. at 1-2.)

Plaintiffs oppose the Discovery Sanctions Motion. (See Docket

Entry 107.) In particular, Plaintiffs argue that

Defendant’s motion is based on a litany of imagined

failures to respond to either requests that Defendant

never propounded or which Plaintiffs fully responded to.

Further, most of the documents [the Discovery Sanctions

Motion references] were identified for the first time at

depositions taken after the close of fact discovery, and

Defendant neither followed up with Plaintiffs to seek

their production [as promised (see id. at 10-11)], nor

met and conferred with Plaintiffs before filing the

instant motion.

(Id. at 7.) Plaintiffs also filed the Sanctions Sealing Motion,

seeking an order sealing unredacted versions of certain materials

submitted in connection with briefing arising from Defendant’s

Discovery Sanctions Motion. (See Docket Entry 111 at 1-8.)

“Defendant does not oppose th[at] motion.” (Id. at 2.)

6

On April 23, 2024, Plaintiffs filed the instant Motion to

Compel, seeking “documents, testimony, and information” that

Defendant withheld based on its asserted “common interest privilege

with Northglass” (Docket Entry 112 at 2). (See id. at 1-4.)

Through the Motion to Compel, “Plaintiffs contend that no common

interest privilege exists between Defendant and Northglass and

that, even if a privilege did exist, Defendant waived the right to

assert it.” (Id. at 2.) They therefore seek expense-shifting (see

id. at 3) and “an order directing Defendant to do the following”

(id. at 2):

1) Produce the 5 documents identified in Defendant’s

February 2024 Privilege Log as being withheld (in whole

or in part) pursuant to the common-interest privilege;

2) To the extent not already produced or otherwise

identified on Defendant’s 2023 and 2024 Privilege Logs,

produce all communications between Defendant and

Northglass regarding the Asserted Patents and this suit;

3) Produce the “indemnification agreements, cooperation

agreements, common interest agreements” with Northglass,

any other such agreement involving the cooperation of

Northglass, and any other documents concerning “any

obligation by Northglass to indemnity or hold harmless”

Defendant; and

4) Reopen discovery for the limited purpose of obtaining

deposition testimony related to documents and information

previously withheld pursuant to the alleged common

interest privilege between Defendant and Northglass,

including complete responses to Topics 4 and 13 listed in

Plaintiffs’ Rule 30(b)(6) Notice of Deposition to

Defendant.

(Id. at 2-3 (emphasis in original).)

7

Defendant opposes the Motion to Compel, contending, inter

alia, that “Plaintiffs did not properly meet and confer” before

filing their motion (Docket Entry 120 at 7) and that the “Motion to

Compel is untimely” (id. at 27). (See id. at 7-31.) Defendant

also filed the MTC Sealing Motion, seeking to seal certain

unredacted materials filed in connection with briefing arising from

the Motion to Compel. (See Docket Entry 122 at 1-10.) “Plaintiffs

do not oppose [the requested] sealing.” (Id. at 3.)

DISCUSSION

I. Discovery Sanctions Motion

As it explicitly acknowledges, Defendant brought the Discovery

Sanctions Motion pursuant to Rule 37 “to obtain discovery sanctions

against Plaintiffs.” (Docket Entry 81 at 1 (emphasis added); see

also id. (bearing title “Salem’s Motion for Discovery Sanctions

Pursuant to [Rules] 37(b) & 37(C)” (emphasis added)).) Under this

Court’s Local Rules, “[t]he Court will not consider motions .. .

relating to discovery unless moving counsel files a certificate

that after personal consultation and diligent attempts to resolve

differences the parties are unable to reach an accord.” M.D.N.C.

LR 37.1(a) (emphasis added). The Discovery Sanctions Motion seeks

sanctions based on alleged discovery failures. (See Docket Entry

81 at 1; see also, e.g., Docket Entry 97 at 6-28 (detailing alleged

discovery failures and contending such failures warrant requested

sanctions) .) Accordingly, the Discovery Sanctions Motion

“relat[es] to discovery,” M.D.N.C. LR 37.1(a), triggering

Defendant’s conferral obligations, see, e.g., Packrite, LLC v.

Graphic Packaging Int’l, LLC, No. 1:17cv1019, 2020 WL 7133806, at

*2 n.2 (M.D.N.C. Dec. 4, 2020) (discussing Local Rule 37.1

conferral obligation for sanctions motion), recommendation adopted,

No. 1:17evl1019, 2021 WL 9681472 (M.D.N.C. Jan. 6, 2021); Carolina

Coupon Clearing, Inc. v. Cardinal Health Managed Care Servs., LLC,

No. 1:16cv412, 2018 WL 11424681, at *1 (M.D.N.C. July 2, 2018)

(same) .*

4 Notably, although Plaintiffs’ opposition to the Discovery

Sanctions Motion argues for denial of the Discovery Sanctions

Motions on the grounds that Defendant violated Local Rule 37.1 (see

Docket Entry 107 at 8-12), Defendant did not address the actual

text of this Court’s Local Rules in its reply thereto (see Docket

Entry 101 at 19-20 (arguing that “No Meet-and-Confer Is Required”

(emphasis omitted))). Instead, Defendant maintained:

Contrary to Plaintiffs’ suggestion, motions for

sanctions under Rules 37(b) and 37(c) do not seek

discovery — but seek adverse evidentiary inferences.

Thus, motions for sanctions are not governed by local

meet-and-confer rules concerning discovery motions. As

stated in Salem’s Opening Brief, Motions for Sanctions

under Rules 37(b) & (c) do not impose a requirement to

meet and confer. Motion at 13 n.4. Indeed, such motions

can be made orally, in the moment, during a hearing.

Snead v. Automation Indus., Inc., 102 F.R.D. 823, 828-29

(D. Md. 1984).

(Id. at 19 (emphasis in original).)

This argument misses the mark. To begin, the Discovery

Sanctions Motion indisputably “relat[es] to discovery,” M.D.N.C. LR

37.1(a), bringing it within the ambit of Local Rule 37.1. Further,

independent of any obligations Rule 37 imposes, Local Rule 37.1’s

conferral requirements “have the force of law,” Hollingsworth v.

Perry, 558 U.S. 183, 191 (2010) (internal quotation marks omitted).

In addition, Snead does not support the proposition that litigants

Defendant does not dispute that it failed to confer with

Plaintiffs before pursuing the Discovery Sanctions Motion. (See

Docket Entries 81, 97, 101.) This failure alone warrants denial of

the Discovery Sanctions Motion. See M.D.N.C. LR 37.1(a) (mandating

that “[t]he Court will not consider motions . . . relating to

discovery” absent certification of proper consultation); see also

M.D.N.C. LR 83.4(a) (explaining that, if “a party fails to comply

with a [L]ocal [R]ule . . ., the Court may impose sanctions against

the . . . party” and “may make such orders as are just under the

circumstances,” including “striking [a filing]”).

Moreover, even if the Court overlooked this failure, it would

still deny the Discovery Sanctions Motion. Under Rule 37(b), if a

party “fails to obey an order to provide or permit discovery,” the

Court may issue any “just order[,]” including seven enumerated

sanctions ranging from “staying further proceedings until the order

is obeyed” to entering a default judgment and treating the failure

as contempt of court. Fed. R. Civ. P. 37(b)(2). In turn, Rule

37(c) establishes a “general rule excluding evidence that a party

seeks to offer but has failed to properly disclose,” subject to

may move for sanctions under Rule 37 orally, without prior

conferral; rather, Snead instructs that litigants can incur Rule

37(b) sanctions for failing to obey an oral order. See id., 102

F.R.D. at 828-29 (“While sanctions imposed pursuant to Rule 37(b)

must be in response to a failure to comply with a court order, such

order may be oral and need not be in writing.”). Finally, even if

Snead supported Defendant’s contention regarding Rule 37 motions,

that decision from the District of Maryland does not define the

obligations that this Court’s Local Rules impose.

10

“two exceptions . . .: (1) when the failure to disclose is

‘substantially justified,’ and (2) when the nondisclosure is

‘harmless.’” Southern States Rack & Fixture, Inc. v.

Sherwin-Williams Co., 318 F.3d 592, 596 (4th Cir. 2003) (brackets

omitted). The Court possesses “wide discretion” in imposing these

sanctions. Mutual Fed. Sav. & Loan Ass’n v. Richards & Assocs.,

Inc., 872 F.2d 88, 92 (4th Cir. 1989) (explaining that Rule 37

“gives the district court wide discretion to impose sanctions for

a party’s failure to comply with its discovery orders”); see also

Southern States, 318 F.3d at 597 (noting district court’s “broad

discretion to determine whether a nondisclosure of evidence is

substantially justified or harmless for purposes of a Rule 37(c)(1)

exclusion analysis”); Hathcock v. Navistar Int’l Transp. Corp., 53

F.3d 36, 40 (4th Cir. 1995) (observing that “the imposition of

sanctions under Rule 37(b) lies within the trial court’s

discretion”).5 Nevertheless, in the context of more severe

sanctions, the “[C]ourt’s range of discretion is more narrow

because” it must account for a “party’s rights to a trial by jury

and a fair day in court.” Mutual Fed., 872 F.2d at 92 (internal

quotation marks omitted).

5 “A decision to sanction a litigant pursuant to [Rule] 37 is

one that is not unique to patent law, and [courts handling patent

cases] therefore apply regional circuit law to that issue.”

Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1370

(Fed. Cir. 2002) (citation omitted).

11

Thus, in evaluating whether to impose Rule 37(b)(2) sanctions,

the Court should consider “(1) whether the non-complying party

acted in bad faith, (2) the amount of prejudice that noncompliance

caused the adversary, (3) the need for deterrence of the particular

sort of non-compliance, and (4) whether less drastic sanctions

would have been effective.” Southern States, 318 F.3d at 597

(internal quotation marks omitted). Further, in evaluating

whether a nondisclosure of evidence is substantially

justified or harmless for purposes of a Rule 37(c)(1)

exclusion analysis, a district court should be guided by

the following factors: (1) the surprise to the party

against whom the evidence would be offered; (2) the

ability of that party to cure the surprise; (3) the

extent to which allowing the evidence would disrupt the

trial; (4) the importance of the evidence; and (5) the

nondisclosing party’s explanation for its failure to

disclose the evidence.

Id. (explaining that “[f]our of these factors — surprise to the

opposing party, ability to cure that surprise, disruption of the

trial, and importance of the evidence — relate mainly to the

harmlessness exception, while the remaining factor — explanation

for the nondisclosure — relates primarily to the substantial

justification exception”). In deciding whether to impose Rule

37(c) sanctions, however, “the district court [i]s not required to

tick through each of the Southern States factors.” Wilkins v.

Montgomery, 751 F.3d 214, 222 (4th Cir. 2014) (emphasis omitted).

Defendant bases its contention that Plaintiffs failed to

properly produce items largely on testimony from depositions

conducted in January 2024, after fact discovery closed. (See,

12

e.g., Docket Entry 97 at 6 (“During corporate and personal

depositions of key Plaintiff witnesses, which were taken out of

time to accommodate the witnesses’ schedules, Salem learned that

Plaintiffs had withheld from production multiple categories of

highly relevant and non-privileged documents in direct violation of

this Court’s order to produce discovery.”); Docket Entry 108,

¶¶ 29-34 (discussing requests and deposition).) Despite agreeing

to request such material in writing post-deposition, Defendant

failed to do so. (See, e.g., Docket Entry 108, ¶¶ 29-34.) Indeed,

“Defendant’s counsel never sought to meet and confer regarding any

of the documents referenced in its brief.” (Id., ¶ 32.)

Moreover, these depositions occurred three months prior to the

issuance of the Claim Construction Order (see Docket Entry 98 at

56) — and thus prior to commencement of the expert discovery period

(see Docket Entry 28 at 5) — and, as noted, the trial date remains

unset (see Docket Entries dated Dec. 9, 2021, to present). (See

Docket Entry 108, ¶ 29; Docket Entry 108-13 at 2.) In addition,

the parties have informally continued voluntary exchanges of

information after the official close of fact discovery. (See,

e.g., Docket Entry 56 at 2 (reflecting parties’ agreement to take

depositions out of time); Docket Entry 102-2 at 2-3 (reflecting

defense counsel’s agreement to “defer the inspection and

deposition” of a third party “until after [Plaintiffs’ FC] furnace

has been installed,” anticipated to occur around “late January

13

202[46] (if not later)”); Docket Entry 121-11 at 2 (reflecting

supplemental production by Defendant on February 28, 2024,

“[f]urther to the parties’ conference on February 16, 2024 and the

agreements reached therein”).)

Accordingly, the record does not support characterization of

the requested sanctions as necessary to cure any prejudice that

Defendant may have suffered from any improperly withheld material.

See, e.g., Koppers Performance Chems., Inc. v. Travelers Indem.

Co., 593 F. Supp. 3d 247, 251-52 (D.S.C. 2022) (“agree[ing] with

[the defendant] that the failure [to disclose a declaration] was

not justified but ultimately find[ing] the failure harmless [due

to] possib[ility of] cure”); see also Southern States, 318 F.3d at

597 (directing consideration of “whether less drastic sanctions

would have been effective” (internal quotation marks omitted)).

Additionally, Plaintiffs’ counsel avers that certain of the

requested material does not qualify as responsive to Defendant’s

discovery requests. (See Docket Entry 108, ¶¶ 34-38.) And

Plaintiffs’ arguments regarding relevance, responsiveness, and

significance appear facially plausible (see Docket Entry 107),

6 The relevant document contains a scrivener’s error as to

the year. (See id. (explaining in email sent on November 22, 2023,

that, despite subpoena’s schedule of December 8, 2023, for

“inspection/deposition,” subpoenaed company’s “furnace has not yet

been delivered . . . and will not be operational until late January

2023 [sic] (if not later)[, and, a]s such, [the third party]

request[s] that the inspection/deposition currently scheduled for

December 8th be postponed”).)

14

undercutting any argument that Plaintiffs acted in bad faith or

that Defendant suffered notable prejudice. Yet, Defendant seeks

“draconian” sanctions, which may well “be[] case determinative,”

Thompson v. United States Dep’t of Hous. & Urb. Dev., 219 F.R.D.

93, 102 (D. Md. 2003). (See, e.g., Docket Entry 81 at 1-2

(requesting that “Plaintiffs [be] precluded from arguing or seeking

to admit into evidence that any product Plaintiffs made, sold,

offered for sale, or used is covered by any claim of the Asserted

Patents” and that “[it] be taken as a designated fact that all of

Plaintiffs’ profits for practicing products are derived from

service agreements for furnaces, rather than sales of furnaces”).)

Further, many of Defendant’s requested sanctions lack

proportionality to the alleged discovery failure. For instance,

Defendant maintains that Plaintiffs improperly failed to disclose

an employee’s “heat transfer coefficient analysis spreadsheet

comparing Plaintiffs’ FC 500 furnace (an allegedly practicing

product) against competitors’ furnaces — including the accused

Northglass product.” (Docket Entry 97 at 25.) To remedy the

failure to produce this spreadsheet — which Plaintiffs maintain “is

not responsive to Defendant’s requests for several reasons” (Docket

Entry 107 at 27), including that “heat transfer coefficients are

unclaimed and have nothing to do with whether a furnace is

infringing or not” (id. at 31) — Defendant

requests that this Court order that (1) Plaintiffs are

precluded from arguing that any lost sales of Plaintiffs’

15

practicing products are due exclusively to sales of the

Accused Product; (2) it be taken as a designated fact for

purposes of this action that every competing furnace

identified in [the] spreadsheet is a commercially

acceptable non-infringing alternative to the Accused

Products; and (3) preclude Plaintiffs from arguing or

seeking to admit as evidence comparisons or

characterizations of the efficiency, quality, and

performance of any practicing product, including at least

the FC 500 and 700 series of furnaces.

(Docket Entry 97 at 26 (footnote omitted).)

Similarly, Defendant faults Plaintiffs — Finnish companies —

for producing certain financial information in euros rather than

United States dollars. (See id. at 23-25; Docket Entry 101 at 12-

16.) According to Defendant, although Plaintiffs did produce some

of the requested information in dollars (see, e.g., Docket Entry

101 at 13-15),7 “Salem has been prejudiced by Plaintiffs’

production of profit and cost in Euros — rather than the currency

of the transaction” (id. at 16) because, “[n]ow that discovery is

closed, Salem cannot confirm the accuracy of Plaintiffs’ U.S. sales

data or the exchange rates that may have been used to generate it”

(Docket Entry 97 at 24-25). Thus, Defendant maintains, “the Court

should grant Salem’s requested evidentiary sanctions” (Docket Entry

101 at 16 (citing Docket Entry 97 at 25)), namely “that this Court

preclude Plaintiffs from presenting any arguments regarding the

price or profit margins of Plaintiffs’ sales in the U.S. and from

7 Notably, Defendant did not acknowledge this fact until its

reply memorandum, instead implying in its opening memorandum that

Plaintiffs had not provided any information in dollars. (See

Docket Entries 97, 101.)

16

seeking to admit into evidence that the Accused Products are priced

to be less expensive than Plaintiffs’ practicing products” (Docket

Entry 97 at 25).8

Under the circumstances, even absent Defendant’s failure to

comply with Local Rule 37.1(a), the Court would decline to impose

the extreme sanctions that the Discovery Sanctions Motion seeks.

Put simply, particularly given the questionable nature of many of

the purported deficiencies and the likelihood that Defendant could

have cured any significant prejudice by addressing these asserted

deficiencies with Plaintiffs following the January depositions, the

record does not warrant such drastic measures, which “would deprive

[Plaintiffs] of the opportunity to [advocate for] themselves in

such a significant way, that it could prove fatal to their ability

to prove their [claims],” Thompson, 219 F.R.D. at 104.

II. Motion to Compel

“Generally, a party must file a motion to compel before the

close of discovery in order for that motion to be deemed timely.”

8 For their part, Plaintiffs assert that, prior to filing the

Discovery Sanctions Motion, Defendant never challenged the currency

associated with their provided sales and profit information,

despite “be[ing] aware for over two years that Plaintiffs are

Finnish companies that sell products in the U.S.” (Docket Entry 107

at 21), and that, in any event, they have produced sales

information in dollars. (See id. at 20-24; see also Docket Entry

108, ¶ 33.) Plaintiffs further maintain that “Defendant’s

discovery requests never sought documents or information containing

‘exchange rates,’” but that “all exchange rate information, if

available, is ascertainable from Plaintiffs’ produced documents.”

(Docket Entry 107 at 22.)

17

Lane v. Lucent Techs., Inc., No. 1:04cv789, 2007 WL 2079879, at *3

(M.D.N.C. July 13, 2007) (collecting cases); see, e.g., Sager v.

Standard Ins. Co., No. 5:08-cv-628, 2010 WL 2772433, at *1

(E.D.N.C. July 12, 2010) (denying motion to compel as “fatally

defective,” noting that “[i]t is also significant that the motion

appears to be untimely, as it was filed after the close of fact

discovery”); In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 331,

332 (N.D. Ill. 2005) (observing that “motions to compel filed after

the close of discovery are almost always deemed untimely”).

Nevertheless, the “[C]ourt has discretion to consider an untimely

motion to compel if the movant offers an acceptable explanation for

the motion’s tardiness.” United States ex rel. Becker v.

Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002)

(brackets and internal quotation marks omitted).

Plaintiffs filed their initial motion to compel on February 2,

2024 (see Docket Entry 69 at 2), and the instant Motion to Compel

on April 23, 2024 (see Docket Entry 112 at 4), rendering each

motion untimely given the close of fact discovery on December 13,

2023 (see Text Order dated Feb. 24, 2023). Defendant maintains

that this untimeliness warrants denial of the Motion to Compel.

(See Docket Entry 120 at 27.) More specifically, Defendant argues

that the “Motion to Compel is untimely” because “[f]lact discovery

closed December 13, 2023, two months before Plaintiffs filed their

original motion” and the Motion to Compel “was filed more than four

18

months after [the] close of fact discovery.” (Id.) Defendant

further argues that “even the [M]otion [to Compel] acknowledges

that Plaintiffs knew documents were withheld months before bringing

the [M]otion [to Compel].” (Id. (citing “Motion at 3”).)9 Per

Defendant, the “Motion [to Compel] should thus be denied as

untimely.” (Id.)

In response, Plaintiffs do not directly address the

untimeliness of the Motion to Compel due to its post-discovery-

deadline filing; instead, they argue:

After concealing the existence of a written common

interest agreement for almost a year, changing positions

on the basis for a common interest agreement and

privilege, and producing 22 documents previously withheld

as privileged only after Plaintiffs moved to compel,

Defendant’s claim that [the] Motion [to Compel] was

untimely is poorly taken.

Defendant’s designee, Mr. Synon, was made available

for deposition on January 9, 2024, weeks after the close

of fact discovery. Plaintiffs took his deposition on

January 9 and 11, received the transcript from the

reporting service on January 15, and filed their original

[m]otion to [c]ompel on February 2 — two and a half weeks

thereafter. (Dkt. 69).

After a dozen correspondences and a third phone

conference on this subject on February 16, Defendant

produced previously withheld documents, identified new

9 The cited page does not support Defendant’s contention, but

the Motion to Compel does suggest Plaintiffs’ awareness of

potentially withheld material “[i]n November 2023” (Docket Entry

112 at 1; see id. at 2), and the third numbered page of Plaintiffs’

memorandum in support of the Motion to Compel does concede this

point (see Docket Entry 126 at 9 (“On December 10, 2023, Defendant

asserted that ‘emails with North Glass relating to this lawsuit or

the Patents-in-Suit . . . will be withheld from production.’”

(ellipsis in original))).

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documents not previously identified, supplemented its

2023 Log with the 2024 Log on February 28, and produced

another Sales and Distribution Agreement on March 26.

Plaintiffs narrowed the scope of its [sic] original

motion to account for Salem’s concessions, new

production, and 2024 Log, and filed the instant Motion

[to Compel] on March [sic] 23, several weeks later.

Neither its [sic] original February 2 motion nor the

instant Motion [to Compel] were untimely, especially

given the actions of Defendant preceding each motion.

(Docket Entry 128 at 16-17 (footnote omitted) (emphasis in

original); see also id. at 16 n.5 (“Salem’s causal conduct cannot

be gainsaid. Checkpoint Sys., Inc. v. United States Int’l Trade

Comm’n, 54 F.3d 756, 763 n.7 (Fed. Cir. 1995) (noting that

‘chutzpah’ describes ‘the behavior of a person who kills his

parents and pleads for the court’s mercy on the ground of being an

orphan’).”).)

As Plaintiffs argue (see, e.g., Docket Entry 126 at 20-23),

Defendant’s initial discovery responses, produced May 17, 2023,

suffered from serious defects, including assertion of impermissible

general and boilerplate objections, provision of answers “subject

to and without waiving” said objections, and failures to “state

whether any responsive materials [was] being withheld on the basis

of [any] objection,” Fed. R. Civ. P. 34(b)(2)(C). (See Docket

Entry 126-2.) As this Court has previously explained, “[g]eneral

or ‘boilerplate’ objections to discovery requests are invalid.

Similarly, promising to provide . . . documents ‘subject to’

objections . . . is improper.” Dillon v. BMO Harris Bank, N.A.,

No. 1:13cv897, 2015 WL 6619972, at *2 (M.D.N.C. Oct. 30, 2015)

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(citation omitted); see also Brown v. Experian Info. Sols., Inc.,

No. 3:16cv670, 2017 WL 11632852, at *2 (E.D. Va. Apr. 17, 2017)

(explaining that “the practice of providing answers ‘subject to’

objections is confusing and misleading” and “amounts to no answer

at all, for it says, essentially, ‘here is some information, but

there could be more that you are not getting’” (certain internal

quotation marks omitted)).

Nonetheless, on November 22, 2023 (see Docket Entry 126-16 at

50), Defendant explicitly objected to requested discovery “as

protected from disclosure by . . . the common interest doctrine”

(id. at 8, 18; accord id. at 17). Then, at 5:26 p.m. on December

1, 2023, defense counsel sent an email to Plaintiffs’ counsel

noting that, at “the conference today,” the parties “discussed

Salem’s position that communications with North[g]lass are

protected by attorney-client privilege / attorney work product via

the common interest privilege.” (Docket Entry 126-9 at 2.) Less

than five hours later, with full knowledge of Defendant’s expressed

position that the common interest privilege protected requested

information from disclosure, “Plaintiffs propose[d] to exchange

privilege logs on December 15” (Docket Entry 121-15 at 2), i.e.,

two days after the fact discovery deadline. Five days later, on

December 6, 2023, Plaintiffs’ counsel responded to defense

counsel’s email, disputing the existence of a common interest

privilege. (See Docket Entry 126-10 at 2-3.) On December 10,

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2023, Defendant’s counsel responded thereto, reiterating

Defendant’s position that it would withhold documents on the basis

of the common interest privilege and “will log such emails in

accordance with the requirements of paragraph 14 of the ESI Order

in this litigation.” (Docket Entry 126-11 at 2 (citing Docket

Entry 44).)10

On December 11, 2023, Plaintiffs conducted a Rule 30(b)(6)

deposition of Defendant, during which defense counsel “object[ed]

and caution[ed] the witness not to disclose the substance of any

attorney-client communication or communication with North Glass

related to defense.” (Docket Entry 121-6 at 4.) On December 13,

2023, Plaintiffs conducted another Rule 30(b)(6) deposition of

Defendant, during which defense counsel again objected on privilege

grounds and “instruct[ed] the witness not to answer” questions

regarding Northglass and its involvement in or control over the

litigation. (Docket Entry 121-8 at 7.) That same day (the fact

discovery deadline), the parties filed a stipulation reflecting

their agreement to take certain depositions in January 2024. (See

Docket Entry 56 at 1-2.) On January 9 and 11, 2024, Plaintiffs

conducted another Rule 30(b)(6) deposition of Defendant. (See

Docket Entry 126-14 at 2-15.) At the deposition on January 11,

10 Pursuant to this Order, “[d]ocuments dated after December

9, 2021 containing privileged and/or work product material relating

to the lawsuit do not need to be logged.” (Docket Entry 44,

¶ 14(d).)

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2024, defense counsel again repeatedly objected on privilege

grounds and “instruct[ed] the witness not to reveal anything that

he may have learned from his attorneys or North[g]llass.” (Id. at

11.)

Notwithstanding the foregoing, Plaintiffs waited until early

February to move to compel material that Defendant withheld on the

basis of the common interest doctrine. (See Docket Entry 69 at 1-

2.) After Defendant objected to that motion for failure to confer

beforehand (see Docket Entry 121-9 at 2-3), Plaintiffs withdrew

that motion (see Docket Entry 77 at 1). On February 28, 2024,

Defendants produced supplemental material (see Docket Entry 121-11

at 2-4), and, on March 19, 2024, Plaintiffs’ counsel sent an email

seeking further clarification and information (see Docket Entry

121-12 at 2-5), which Defendant’s counsel provided on March 26,

2024 (see id. at 2; see also Docket Entry 128 at 16 (asserting that

Defendant “produced another Sales and Distribution Agreement on

March 26”)). Plaintiffs waited almost another month, however, to

file the Motion to Compel. (See Docket Entry 112 at 4.)

Under these circumstances, including particularly the explicit

and repeated indications within the fact discovery period that

Defendant refused to produce certain material on the basis of the

common interest privilege, the Court finds that Plaintiffs have not

“offer[ed] an acceptable explanation for the [M]otion[ to Compel]’s

tardiness,” Becker, 305 F.3d at 290 (brackets and internal

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quotation marks omitted). The Court will therefore deny the Motion

to Compel as untimely. See, e.g., Lane, 2007 WL 2079879, at *4

(denying motion as untimely where “[the p]laintiff filed his motion

to compel well after the close of discovery”).

III. Sealing Motions

The parties filed Sealing Motions that seek to seal myriad

documents involved in briefing the Discovery Motions. (See Docket

Entries 111, 122.) “Sealed documents should not be filed unless

necessary for determination of the matter before the Court.”

M.D.N.C. LR 5.4(a)(3); see also id. (“If only non-confidential

portions of a document are necessary, only those portions should be

filed, immaterial portions should be redacted, and no motion to

seal should be filed.”). As reflected in the foregoing discussion,

the Court did not need the materials that the parties seek to seal

to resolve the Discovery Motions. Accordingly, the Court will deny

the Sealing Motions as moot and will direct the Clerk to strike the

materials (Docket Entries 103 to 106-5, 109 to 110-20, 123 to 125-

15, 127 to 127-26, 129) that the parties sought to file under seal.

See M.D.N.C. LR 5.4(c)(3) (“No motion to seal will be granted

without a sufficient showing by the party claiming confidentiality

as to why sealing is necessary.”); M.D.N.C. LR 83.4(a) (explaining

that, if “a party fails to comply with a [L]ocal [R]ule,” the Court

“may make such orders as are just under the circumstances,”

including “striking [a filing]”); see also, e.g., Hartzman v. Wells

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Fargo & Co., No. 1:14cv808, 2015 WL 1268267, at *8 (M.D.N.C. Mar.

19, 2015) (“[T]he Court concludes that [the p]laintiff has failed

to show why the Report’s filing at this moment does not qualify as

unnecessary. Therefore, the Court will direct the Clerk to strike

the unredacted version of the [relevant] Report and will deny [the]

Motion to Seal as moot.” (citation omitted)).

IV. Final Matters

The parties all seek expense-shifting for the Discovery

Motions. (See, e.g., Docket Entry 81 at 1; Docket Entry 112 at 3.)

Given the denial of both Discovery Motions and the course of

conduct leading to the Discovery Motions, the Court declines to

order such expense-shifting. See, e.g., Fed. R. Civ. P.

37(a)(5)(B) (“[T]he [C]ourt must not order [expense-shifting] if

the motion was substantially justified or other circumstances make

an award of expenses unjust.”).

CONCLUSION

The Discovery Sanctions Motion violates Local Rule 37.1(a)

(and seeks unwarranted sanctions), and Motion to Compel qualifies

as untimely. In addition, resolution of the Discovery Sanctions

Motions moots the Sealing Motions by rendering unnecessary the

materials they sought to seal.

IT IS THEREFORE ORDERED that the Discovery Sanctions Motion

(Docket Entry 81) and the Motion to Compel (Docket Entry 112) are

DENIED.

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IT IS FURTHER ORDERED that the Sealing Motions (Docket Entries

111, 122) are DENIED AS MOOT. The Clerk shall STRIKE the

associated materials (Docket Entries 103 to 106-5, 109 to 110-20,

123 to 125-15, 127 to 127-26, 129) filed under temporary seal.

This 25th day of June, 2024.

/s/ L. Patrick Auld

L. Patrick Auld

United States Magistrate Judge

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