LATERAL LINK GROUP, LLC, a California Limited Liability Company, Plaintiff, v. HABEAS CORP., a Delaware corporation doing business as LATERAL.LY; MICAH SPRINGUT, an individual doing business as LATERAL.LY; and DOES 1-10, inclusive Defendants CASE NO. CV-14-05695-JAK (JEMx) United States District Court, C.D. California Filed January 05, 2017 Counsel GAIL MIGDAL TITLE, ESQ., ADR SERVICES, INC., 1900 Avenue of the Stars, Suite 250, Los Angeles, California 90067, 310.201.0010, gtitle@adrservices.org Title, Gail Migdal, Discovery Referee ORDER DENYING DEFENDANTS' REQUEST FOR AN ORDER REQUIRING PLAINTIFF TO PROVIDE FULL SUPPLEMENTAL INITIAL DISCLOSURES PURSUANT TO FRCP 26(a) AND REQUEST FOR ATTORNEYS' FEES INTRODUCTION *1 Before the Referee is a request from Defendants, in correspondence from defense counsel Springut Law PC dated December 6, 2016, that the Referee issue an order requiring Plaintiff to provide full supplemental initial disclosures by a date certain. Defendants contend that Plaintiff's initial and subsequent disclosures are insufficient and incomplete due to Plaintiff's recent addition of two new sets of claims. The Referee is also in receipt of Plaintiff's opposition in correspondence dated December 12, 2016, as well as Defendants' reply in correspondence dated December 18, 2016. Having considered the parties' arguments and briefing, as well as District Court Judge John A. Kronstadt's recent order dated December 27, 2016, the Referee now issues the following ruling. FACTUAL AND PROCEDURAL BACKGROUND On or about January 9, 2014, Plaintiff served its Initial Disclosures pursuant to Federal Rules of Civil Procedure (“FRCP”) 26(a)(1). Although discovery relating to Plaintiff's primary claims and Defendants' counterclaims closed some time ago, Judge Kronstadt, on October 11, 2016, granted Plaintiff leave to add two new sets of claims: (1) false advertising under California law; and (2) contributory trademark infringement against four new defendants. (Dkt. 236.) Plaintiff filed a Second Amended Complaint containing the new claims on October 18, 2016. (First Attachment to Defendants' 12/6/16 Letter.) Additional discovery proceeded as to the new claims. As a first step, Defendants asked Plaintiff to agree to exchange supplemental initial disclosures under Rule 26(a). Plaintiff agreed and provided supplemental disclosures on or about November 30, 2016. (Second Attachment to Defendants' 12/6/16 Letter.) Defendants now request that the Referee order Plaintiff to provide further disclosures arguing that Plaintiff's supplemental disclosures “consist only of identifying individuals with knowledge of consumer confusion, presumably relevant to its trademark claims. But nothing in the disclosures even touches on the false advertising claim: no witnesses nor [sic] documents are identified, nor is any calculation of damages provided.” (Defendants' 12/6/16 Letter at p. 2.) In its opposition letter, Plaintiff argues that Defendants' request is harassing and manufactures a dispute where none exists because the supplemental disclosures relate to all of Lateral Link's amended claims, including unfair competition, which satisfies its obligations under Rule 26. However, to avoid additional unnecessary conflict, Plaintiff further amended its supplemental disclosures, which are attached to the opposition letter. Plaintiff contends that it has, again, met its responsibilities under Rule 26 and no further action on the matter is necessary. In response to Plaintiff's opposition, Defendants state that Plaintiff's amendment of its supplemental disclosures remains inadequate, particularly as to the computation of damages. Defendants request an order that Plaintiff provide proper disclosures which comport with their duties under Rule 26(a), as well as assess attorneys' fees against Plaintiff for requiring Defendants to twice write about the discovery deficiency. DISCUSSION *2 Each party is required to disclose, without the necessity of any formal discovery request, certain information relating to witnesses, documents, damages and insurance. (FRCP 26(a)(1)(A).) All disclosures must be based on information “reasonably available” to the party at the time of such disclosures. (FRCP 26(a)(1)(E).) Failure to comply may result in preclusion of the evidence at trial. (FRCP 37(c)(1); Hoffman Constr. Protective Services, Inc. (9th Cir. 2008) 541 F.2d 1175, 1179.) Defendants seek an order compelling Plaintiff to make additional disclosures and requiring Plaintiff to pay Defendants' attorneys' fees in seeking this relief. Defendants' requests are denied. First, Defendants' request was presented through a letter to the Referee without citation to supporting authority for the relief sought (see 12/6/16 letter). Second, Plaintiff's amended supplemental disclosures properly identify the supporting witnesses for the new claims. Third, as held in Judge Kronstadt's ruling dated December 27, 2016, FRCP 37(c) provides the remedy for failure to make proper disclosures - i.e., Defendants can move to exclude at trial any evidence not properly disclosed by Plaintiff. Finally, as further held in Judge Kronstadt's ruling, Plaintiff may establish the necessary element of damages by relying on profits purportedly obtained by Defendants through the alleged infringement. Given that Defendants' reply focuses heavily on the propriety of Plaintiff's disclosures regarding damages, which were not supplemented in Plaintiff's amended disclosures, further discussion on this issue is warranted. The parties are required to disclose “a computation of each category of damages” claimed and to make available for copying any nonprivileged documents or evidentiary materials on which the damage calculation is based. (FRCP 26(a)(1)(A)(iii); see Hoffman v. Construction Protective Services, Inc. (9th Cir. 2008) 541 F.3d 1175, 1179.) In addition to the damages categories, the “computation” of damages contemplates some analysis into how they were calculated. (See City & County of San Francisco v. Tutor-Saliba Corp. (N.D. Cal. 2003) 218 F.R.D. 219, 221; Frontline Medical Assocs., Inc. v. Coventry Health Care (C.D. Cal. 2009) 263 F.R.D. 567, 570 [in a claim for lost profits, reasonably available information as to gross revenues and expenses].) Plaintiff should provide its assessment of damages in light of the information currently available to it in sufficient detail to enable each defendant to understand its potential exposure and make informed decisions as to settlement and discovery. (City & County of San Francisco v. Tutor-Saliba Corp., supra, 218 F.R.D. at 221.) A party who has complied with early disclosure requirements or who has responded to discovery demands from opposing parties is under a duty to supplement or correct the disclosure or discovery response where “additional or corrective information” is not otherwise known to the other parties. (FRCP 26(e).) The duty to supplement or correct prior disclosures or discovery responses arises “if the party learns that in some material respect the disclosure or response is incomplete or incorrect.” (FRCP 26(e)(1)(A).) The parties are expected to supplement and/or correct their disclosures promptly when required under Rule 26(e)(1) “without the need for a request from opposing counsel or an order from the court.” (Jones v. Travelers Cas. Ins. Co. of America (N.D. Cal. 2015) 304 F.R.D. 677, 679.) *3 In this case, there is no basis for the Referee to find that Plaintiff's disclosures are incomplete or incorrect, particularly as to claimed damages. The subject of Plaintiff's damages, identified in the initial disclosures as ranging from $50,000 to $1,000,000, was recently addressed by the District Court Judge in a ruling dated December 27, 2016. That ruling addressed, among other things, Defendants' motion for summary judgment on remedies (Dkt. 182). Defendants argued that it was entitled to summary judgment because Plaintiff's proffered evidence of damages was “totally speculative” and did not support either injury in fact or quantifiable, resulting damages caused by the claimed trademark infringement. (12/27/16 Order at p. 32.) Judge Kronstadt disagreed and denied Defendants' motion. While Plaintiff had failed to make a prima facie showing under the lost profits method, the District Court Judge held, the evidence was sufficient to create a triable issue of fact as to whether Defendants' alleged trademark infringement has been willful, which would support a disgorgement remedy. (Id. at pp. 33-34.) Further, plaintiffs who bring Lanham Act claims may recover under the theory of unjust enrichment. As cited by Judge Kronstadt, “When parties are direct competitors, ‘the defendant's profits are often treated as an approximation of the plaintiff's lost profits.’ (Oculu, LLC v. Oculus VR, Inc., No. SACV 14-0196 DOC, 2015 WL 3619204 at *22 (C.D. Cal. June 8, 2015).” As Plaintiff can seek to use Defendants' profits as a measure of Plaintiff s own lost profits, there is no basis to compel additional disclosures of evidence or information that is not in Plaintiff's possession. For these reasons, Defendants' request is DENIED in its entirety. IT IS SO ORDERED. PROOF OF SERVICE State of California County of Los Angeles I certify that I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 1900 Avenue of the Stars, Suite 250, Los Angeles, California 90067. On January 5, 2017, I served the foregoing document described as the ORDER DENYING DEFENDANTS' REQUEST FOR AN ORDER REQUIRING PLAINTIFF TO PROVIDE FULL SUPPLEMENTAL INITIAL DISCLOSURES PURSUANT TO FRCP 26(a) AND REQUEST FOR ATTORNEYS' FEES on the interested parties in this action as follows: Robert Tauler, Esq. TAULER SMITH LLP 11111 Santa Monica Boulevard, Suite 500 Los Angeles, California 90025 rtauler@taulersmith.com Hon. John A. Kronstadt First Street Courthouse 350 W. First Street, Courtroom 10B Los Angeles, CA 90012 U.S. Mail Only Karin G. Pagnanelli, Esq. Elaine Kim, Esq. Alexa L. Lewis, Esq. MITCHELL SILBERBERG & KNUPP 11377 West Olympic Boulevard Los Angeles, California 90064 kgp@msk.com ekk@msk.com all@msk.com Milton Springut, Esq. Tai S. Benschar, Esq. SPRINGUT LAW 45 Rockefeller Plaza, 20th Floor New York, New York 10111 ms@springutlaw.com benschar@springutlaw.com X BY U.S. MAIL, I placed a true copy of the document described above in a sealed envelope and caused such envelope with postage thereon to be placed in the United States mail at Los Angeles, California. X BY E-MAIL OR ELECTRONIC TRANSMISSION: I caused a copy of the document(s) to be sent from e-mail address patricia(q),adrservices. org to the persons at the e-mail addresses listed in the Service List. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. X STATE I declare under penalty of perjury under the laws of the State of California that the above is true and correct. ___ FEDERAL I declare under penalty of perjury under the laws of the United States that the above is true and correct. Executed on January 5, 2017 at Los Angeles, California Patricia Taylor