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U.S. District Court Issues Massive Sanction Order in Trademark Infringement Case

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May 21, 2018

In ongoing trademark infringement litigation initiated by Strategic Partners, Inc. (SPI) against Koi Design, LLC (Koi), the Honorable Terry J. Hatter, Jr., Judge of the United States District Court for the Central District of California, ordered Koi and its attorney, Albert Douglas Mastroianni of the Mastroianni Law Firm, to pay a massive $250,000 in sanctions for their failure to participate in discovery in the case, and in so doing, Judge Hatter also issued a stern warning.

The dispute between SPI – represented by Michelman & Robinson, LLP (M&R) – and Koi arises out of Koi’s launch of a line of medical scrubs called Koi Sapphire targeted to healthcare workers. In its U.S. District Court case, SPI contends, among other things, that Koi’s sale of Koi Sapphire scrubs infringes upon SPI’s registered trademark – Sapphire Scrubs – which is associated with a competing collection of scrubs also marketed to medical personnel.

In prosecuting SPI’s action, M&R propounded comprehensive discovery upon Koi, which Koi neglected to respond to. Consequently, M&R filed a motion to compel discovery responses, which was granted by the Honorable Gail J. Standish. Nevertheless, Koi failed to abide by Magistrate Judge Standish’s order to provide answers to interrogatories and produce documents, leading M&R to move for terminating sanctions on behalf of SPI.

After considering Magistrate Judge Standish’s Report and Recommendations, Judge Hatter, on May 17, 2018, issued the mammoth quarter-million dollar sanction order, and made clear that the failure of Koi or Mr. Mastoianni to comply with court orders going forward will result in a judgment for SPI. In the meantime, M&R continues to aggressively litigate the case, with a hearing on SPI’s motion for summary judgment currently pending.

Said Mike Singer, CEO of SPI, “I’ve always believed in our judicial system, the mindfulness of our judges, and the attention they pay not only to the cases before them, but also to the way in which parties and attorneys conduct themselves during litigation. Michelman & Robinson’s representation continues to be extraordinary.”

Added Todd Stitt, M&R’s lead counsel on the case, “as a rule, we keep our foot on the pedal during litigation and expect to be provided the information requested during discovery. Here, Koi has been nothing but unresponsive or otherwise evasive, which is why motions to compel and for terminating sanctions were pursued. Judges Standish and Hatter made the right decisions in this instance, and we’ll continue to zealously move forward in this matter, as is our practice.”

Along with Mr. Stitt, Taylor Foss, Robert Estrin and Jennifer Mauri are the M&R lawyers handling the case for SPI. The $250,000 in sanctions must be deposited with the Court’s clerk by mid-July.