Liqwd, Inc. et al v. L'Oreal USA, Inc. et al

RESPONSE TO OBJECTIONS

D. Del.February 1, 2019

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE LIQWD, INC. and OLAPLEX LLC, Plaintiffs, v. L’ORÉAL USA, INC., L’ORÉAL USA PRODUCTS, INC., L’ORÉAL USA S/D, INC., and REDKEN 5TH AVENUE NYC, LLC, Defendants. ) ) ) ) ) ) ) ) ) ) ) C.A. No. 17-14-JFB-SRF DEFENDANTS’ RESPONSE TO PLAINTIFFS’ OBJECTIONS TO MAGISTRATE JUDGE’S JANUARY 14, 2019 MEMORANDUM ORDER Of Counsel: Dennis S. Ellis Katherine F. Murray Adam M. Reich Paul Hastings LLP 515 South Flower Street, 25th Floor Los Angeles, CA 90071 (213) 683-6000 Naveen Modi Joseph E. Palys Daniel Zeilberger Paul Hastings LLP 875 15th Street, N.W. Washington, D.C. 20005 (202) 551-1990 Scott F. Peachman Paul Hastings LLP 200 Park Avenue New York, NY 10166 (212) 318-6000 Dated: February 1, 2019 Frederick L. Cottrell, III (#2555) Jeffrey L. Moyer (#3309) Katharine L. Mowery (#5629) Richards, Layton & Finger, P.A. One Rodney Square 920 N. King Street Wilmington, Delaware 19801 (302) 651-7700 cottrell@rlf.com moyer@rlf.com mowery@rlf.com Attorneys for Defendants L’Oréal USA, Inc., L’Oréal USA Products, Inc., L’Oréal USA S/D, Inc. and Redken 5th Avenue NYC, LLC Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 1 of 6 PageID #: 33791 1 I. INTRODUCTION This Court should overrule Plaintiffs Liqwd, Inc. and Olaplex LLC’s (together, “Olaplex”) Objections to the Magistrate Judge’s January 14, 2019 Memorandum Order (the “Order”) in their entirety. In granting, in part, Defendants L’Oréal USA, Inc., L’Oréal USA Products, Inc., L’Oréal USA S/D, Inc., and Redken 5th Avenue NYC, LLC’s (together, “L’Oréal USA”) request to modify the case schedule, the Magistrate Judge correctly applied the good cause standard, and made modest adjustments to the existing case schedule. This decision is entitled to great deference, and should not be disturbed. See, e.g., St. Jude Med. v. Volcano Corp., No. 10-631-RGA, 2012 WL 1999865, at *2 (D. Del. June 5, 2012) (holding that a Magistrate Judge’s decision regarding matters involving case scheduling are subject to a deferential “abuse of discretion” standard of review). Olaplex has failed to show otherwise. Olaplex devotes much of its Objections to arguing that any bottlenecking in the schedule was somehow L’Oréal USA’s own doing. This argument did not work with the Magistrate Judge, and it cannot work now. As the record amply shows, and as the Magistrate Judge found, any delay complained of is “Olaplex’s own making,” and a product of its own “ambivalence.” (D.I. 610, ¶¶ 6-7.) Furthermore, the minor adjustments made to the case schedule have in no way prejudiced Olaplex. As such, Olaplex’s Objections to the Order should be overruled. II. LEGAL STANDARD A Magistrate Judge’s ruling on a non-dispositive pretrial matter can only be overturned to the extent it is “clearly erroneous or [] contrary to law.” Fed. R. Civ. P. 72(a). “Under the clearly erroneous standard, the reviewing court will not reverse the magistrate judge’s determination even if the court might have decided the matter differently.” Salamone v. Carter's Retail, Inc., No. 09-5856 FLW, 2012 WL 821494, at *3 (D.N.J. Mar. 9, 2012). Moreover, “[w]here an appeal seeks review of a matter within the purview of the Magistrate Judge . . . an even more deferential standard, the ‘abuse of discretion standard[,]’ must be applied.” Id. This includes “case management matters, including scheduling deadlines.” Pressley v. E. Dist. Precinct, No. 09-3215 (WJM), 2015 WL 6445750, at *2 (D.N.J. Oct. 23, 2015). As such, to Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 2 of 6 PageID #: 33792 2 prevail, Olaplex must show that the Order was “arbitrary, fanciful or unreasonable”—i.e., that “no reasonable man would take the view adopted [therein].” Lindy Bros. Builders, Inc. of Philadelphia v. Am. Radiator & Standard Sanitary Corp., 540 F.2d 102, 115 (3d Cir. 1976). III. ARGUMENT As explained below, the Magistrate Judge correctly held that L’Oréal USA demonstrated good cause warranting slight modification of the case schedule, as it showed that, despite its own diligence, it could not have reasonably adhered to the then-existing deadlines. See Venetec Int’l, Inc. v. Nexus Med., LLC, 541 F. Supp. 2d 612, 618 (D. Del. 2010). Moreover, while “[t]he good cause standard under Rule 16(b) hinges on diligence of the movant, and not on prejudice to the non-moving party[,]” Olaplex has not, and cannot, demonstrate that it was prejudiced by the minute changes to the case schedule. Id. A. The Magistrate Judge Correctly Found That Olaplex Caused The Delay It Complained Of. L’Oréal USA’s request to modify the case schedule stemmed in part from the fact that it needed additional time to conduct third-party discovery, and needed additional time to file opening expert reports in support of its counterclaims. (See D.I. 603 at 2-4.) In opposing this request, Olaplex asserted, as it does in its Objections, that the existing schedule was a product of L’Oréal USA’s own doing, and that any time-crunch was a result of L’Oréal USA’s lack of diligence. The Magistrate Judge correctly overruled this argument, and found that L’Oréal USA exercised diligence in both pursuing third-party discovery, and filing its counterclaims. (See D.I. 610, ¶¶ 6-7.) Moreover, the Magistrate Judge correctly found that any bottlenecking in the schedule was a product of Olaplex’s delays. (Id.) With respect to third-party discovery, the record is replete with evidence demonstrating Olaplex’s delay. After Olaplex failed to produce documents relating to the manufacture, prior use, and sale of its products, L’Oréal USA was forced to subpoena third parties for this information. Although Olaplex retained counsel for some of these third parties, the third parties nonetheless took the position that they were unavailable for deposition prior to the December 21, Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 3 of 6 PageID #: 33793 3 2018 discovery cutoff. (See D.I. 603 at 2, id. at Ex. C.) L’Oréal USA raised this issue with the Court during a December 12, 2018 hearing, and the Court indicated that, if third parties were using the discovery cutoff as a sword, “it was willing to consider an extension to allow for third- party depositions noticed prior to the discovery cutoff if the parties could not resolve the issue through the meet and confer process.” (D.I. 610, ¶ 6 (emphasis added); see also D.I. 603, Ex. D at 141:16-142:7, 165:22-166:2.) Thus, Olaplex’s contention that it “was not up to Olaplex to facilitate the [third-party] discovery sought by L’Oréal” is baseless. (D.I. 615 at 2.) Olaplex was empowered to either stipulate to an extension, or be upfront about the fact that it would not agree to one. It did neither. Rather, on December 21, 2018, the day after L’Oréal USA sent Olaplex a draft stipulation extending third-party discovery deadlines, Olaplex told L’Oréal USA that it wanted to get on a call to discuss this matter, indicating that it may be amenable to extending third-party discovery deadlines. But Olaplex refused to engage in any such discussion about third-party discovery until January 7, 2019, at which time it flipped its position, and refused to agree to any extension. (See D.I. 603 at 3, D.I. 609 at 1.) Had Olaplex been upfront about its position, L’Oréal USA could have raised this issue with the Court sooner. Thus, the Magistrate Judge correctly concluded that “L’Oréal made multiple attempts to reach agreement and obtain the requested discovery promptly, but Olaplex’s ambivalence resulted in delays.” (D.I. 610, ¶ 6.) This ambivalence was plainly good cause to extend the third-party discovery deadline. See Bessman v. Travelers Prop. Cas. Co. of Am., No. 3:09-CV-123/MCR/MD, 2010 WL 1712701, at *1 (N.D. Fla. Apr. 26, 2010) (“A party shows good cause for modification where the opposing party caused a delay . . . .”); Wasdin v. Cheetah Transp., LLC, No. 5:05 CV 340 DF, 2006 WL 3534969, at *2 (M.D. Ga. Dec. 7, 2006) (granting plaintiff’s request to modify case schedule because the delay in filing an amended complaint “would not have occurred had Defendant been candid at the outset of discovery”). Similarly, the Court correctly extended the deadline for L’Oréal USA to file opening expert reports in support of its counterclaims, as Olaplex’s dilatory tactics prevented L’Oréal USA from filing its counterclaims any earlier. As explained more fully in Defendants’ Second Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 4 of 6 PageID #: 33794 4 Motion to Reopen and Supplement the Record on Plaintiffs Renewed PI Motion (D.I. 605), many of L’Oréal USA’s counterclaims are predicated on evidence belatedly disclosed by Olaplex in December 2018, despite being served with discovery requesting the same as early as March 2018. There is ample evidence supporting the Court’s finding that L’Oréal USA’s counterclaims “stem from facts revealed during depositions following Olaplex’s delayed production of over 20,000 pages of document discovery on December 3, 2018, nearly a month after the deadline for document production on November 5, 2018.” (D.I. 610, ¶ 7 (citing D.I. 603 at 4; D.I. 609 at 3).) Thus, the Court properly concluded that L’Oréal USA “exercised reasonable diligence in filing its counterclaims following a delay of Olaplex’s own making.” (Id., ¶ 7.) B. The Order Does Not Prejudice Olaplex. Finally, Olaplex’s assertion that it is prejudiced by the modified case schedule is baseless. Olaplex contends that it was prejudiced because the Order did not grant it additional time to conduct fact discovery relating to L’Oréal USA’s counterclaims, which supposedly have “little to no relationship to Olaplex’s affirmative claims.” (D.I. 615 at 4.) As L’Oréal USA explained in its Opposition to Olaplex’s Motion to Bifurcate, this is plainly incorrect. (D.I. 625) Indeed, the Magistrate Judge held that “the evidence relating to L’Oréal’s counterclaims overlaps with the evidence L’Oréal intends to present as a defense to Olaplex’s affirmative claims.” (D.I. 633, ¶ 8.) Moreover, “Olaplex’s assertion that it requires additional discovery on L’Oreal’s counterclaims is belied by the fact that Olaplex is in possession of most of the evidence forming the basis for those counterclaims, and the record reflects that Olaplex took deposition discovery on topics relating to the counterclaims.” (Id. (citing D.I. 617 at 6 n.7; D.I. 626 ¶ 10, Ex. E.) Further, Olaplex did not ask for additional fact discovery. As such, the Magistrate Judge did not abuse its discretion by ordering minor modifications to the case schedule. IV. CONCLUSION L’Oréal USA respectfully requests that the Court overrule Olaplex’s Objections. Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 5 of 6 PageID #: 33795 5 Of Counsel: Dennis S. Ellis Katherine F. Murray Adam M. Reich Paul Hastings LLP 515 South Flower Street, 25th Floor Los Angeles, CA, 90071 (213) 683-6000 Naveen Modi Joseph E. Palys Daniel Zeilberger Paul Hastings LLP 875 15th Street, N.W. Washington, D.C., 20005 (202) 551-1990 Scott F. Peachman Paul Hastings LLP 200 Park Avenue New York, NY 10166 (212) 318-6000 Dated: February 1, 2019 /s/ Frederick L. Cottrell, III Frederick L. Cottrell, III (#2555) Jeffrey L. Moyer (#3309) Katharine L. Mowery (#5629) Richards, Layton & Finger, P.A. One Rodney Square 920 N. King Street Wilmington, Delaware 19801 (302) 651-7700 cottrell@rlf.com moyer@rlf.com mowery@rlf.com Attorneys for Defendants L’Oréal USA, Inc., L’Oréal USA Products, Inc., L’Oréal USA S/D, Inc., and Redken 5th Avenue NYC, LLC Case 1:17-cv-00014-JFB-SRF Document 637 Filed 02/01/19 Page 6 of 6 PageID #: 33796