United States v. Greenlight Organic, Inc.

Slip Op. 21-34
UNITED STATES COURT OF INTERNATIONAL TRADE
UNITED STATES,
Plaintiff,
v.
GREENLIGHT ORGANIC, INC.
and PARAMBIR SINGH AULAKH,
Defendants.
Before: Jennifer Choe-Groves, Judge
Court No. 17-00031
OPINION AND ORDER
[Granting Defendants’ motion for a protective order, granting in part and denying
in part Defendants’ motion to compel, and granting in part Defendants’ motion to
amend the scheduling order.]
Dated: March 30, 2021
William Kanellis and Kelly Krystyniak, Trial Attorneys, Commercial Litigation
Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for
Plaintiff United States. With them on the brief were Brian M. Boynton, Acting
Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M.
McCarthy, Assistant Director.
Robert B. Silverman and Joseph M. Spraragen, Grunfeld Desiderio Lebowitz
Silverman & Klestadt LLP, of New York, N.Y., for Defendants Greenlight
Organic, Inc. and Parambir Singh Aulakh.
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Choe-Groves, Judge: This matter involves a discovery dispute in a claim
brought under 19 U.S.C. § 1592. Plaintiff United States (“Plaintiff” or “the
Government”) brings this 19 U.S.C. § 1592 civil enforcement action seeking to
recover unpaid duties and fees and to affix penalties, alleging that Greenlight
Organic, Inc. (“Greenlight”) and Parambir Singh “Sonny” Aulakh (“Aulakh”)
(collectively, “Defendants”) imported wearing apparel into the United States
fraudulently. Second Am. Compl. ¶ 1, ECF No. 124 (“Second Am. Compl.” or
“Second Amended Complaint”). Section 1592 prohibits false statements or the
omission of material information in the course of importing merchandise into the
United States through fraud, gross negligence, or negligence. 19 U.S.C.
§ 1592(a)(1). Plaintiff alleges that Greenlight misclassified and undervalued its
entries of subject merchandise fraudulently in violation of 19 U.S.C. § 1592(a)(1).
Second Am. Compl. ¶ 1.
Before the court are three motions filed by Defendants.
The first motion is Defendants’ Motion for Protective Order Precluding the
Government from Requiring the Deposition Locations of Monika Gill, Neel-Kamal
Aulakh, Apramjeet Singh, and Parambir Aulakh to be the U.S. Custom House in
San Francisco, ECF No. 145 (“Motion for Protective Order” or “Mot. Protective
Order”). Defendants requested that the court prohibit the Government from
requiring Monika Gill, Neel-Kamal Aulakh, Apramjeet Singh, and Defendant
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Aulakh to travel to the U.S. Customs House in San Francisco in the midst of the
COVID-19 pandemic to appear in person for depositions, and requested instead
that the court order the depositions to take place remotely via videoconference at
the witnesses’ respective residences or other agreed-upon locations. Mot.
Protective Order at 1.
The second motion is Defendants’ Expedited Motion for an Order
Compelling Plaintiff for Production of a Properly Produced Privilege Log; and a
Complete Production Response, ECF No. 146 (“Motion to Compel” or “Mot. to
Compel”). Defendants requested that the court order Plaintiff to produce five
categories of documents, namely: (1) documents regarding entry-specific loss of
revenue calculations and domestic value calculations; (2) an updated privilege log
regarding documents cited as “3-01;” (3) government instructive manuals; (4)
previously produced documents; and (5) other critical documents. Mot. to Compel
at 8, 10, 11, 15, 17–18.
The third motion is Defendants’ Motion to Amend the Scheduling Order,
ECF No. 144 (“Motion to Amend Scheduling Order” or “Mot. to Amend”).
Defendants requested “additional time to resolve discovery disputes; to complete
the review of voluminous documents that have been exchanged in this case; to
exchange additional outstanding production in preparing for depositions; and to
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afford the [P]arties time to narrow the issues through requests for admission[].”
Mot. to Amend at 1–2.
Plaintiff opposed all three motions. See Pl.’s Consol. Resp. Defs.’ Filings
Mar. 18, 2021, ECF No. 147 (“Pl. Consol. Resp.”). Defendants filed a reply to
Plaintiff’s opposition. See Defs.’ Proposed Reply Pl.’s Consol. Resp. Defs.’
Filings Mar. 18, 2021, ECF No. 152. The court held a videoconference with the
Parties regarding the three motions on March 23, 2021. See Status Conference,
ECF No. 153 (“March 2021 Status Conference” or “Mar. Status Conf.”). The
court will address each motion in turn.
DISCUSSION
I. 	Legal Standard
District courts have broad discretion in deciding discovery matters.
See generally Accent Packaging, Inc. v. Leggett & Platt, Inc., 707 F.3d 1318, 1329
(Fed. Cir. 2013) (acknowledging the court’s discretion in denying additional
discovery); Florsheim Shoe Co. v. United States, 744 F.2d 787, 797 (Fed. Cir.
1984) (stating that “[q]uestions of the scope and conduct of discovery are, of
course, committed to the discretion of the trial court”). Discovery must be relevant
to the issues in the case, including any party’s claim or defense, or reasonably
calculated to lead to the discovery of admissible evidence. See USCIT R. 26(b)(1).
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II. 	Motion for Protective Order
Defendants requested a protective order to prevent Monika Gill, Neel-Kamal
Aulakh, Apramjeet Singh, and Defendant Aulakh from being deposed in person,
and instead to allow these witnesses to be deposed remotely via videoconference
due to the health risks associated with travel and appearing in person during the
COVID-19 pandemic. Mot. Protective Order at 1, 5–7. The Government objected
to this request and claimed that there was no credible reason why the witnesses
“could not attend a deposition at the U.S. Customs [H]ouse following COVID
protocols.” Pl. Consol. Resp. at 15.
At the March 2021 Status Conference, the Government stated that counsel
was willing to conduct depositions that the court characterizes as “semi-remote,” in
which counsel for the Government and Defendants would appear remotely by
videoconference from Washington, D.C. and New York, N.Y. respectively, while
three of the witnesses would be present in person for their depositions at the U.S.
Customs House in San Francisco. See Mar. Status Conf. at 3:35–4:20; 10:37–46.
Notably, the Government agreed to allow one witness who is eighty years old to
appear via videoconference rather than travel to the U.S. Customs House in San
Francisco to testify in person. Id. at 3:12–27. The Government argued that it is
necessary to have the witnesses appear in person so they could be shown
documents during their depositions. See id. at 4:35–5:50. The court advised
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counsel that videoconference technology allows for electronic document sharing
and screen sharing, which would eliminate the need for the witnesses to appear in
person in order to review any documents. Id. at 10:50–12:10. Defendants objected
to having the witnesses appear in person due to health risks associated with travel
and staying indoors for an extended period of time with others during the
depositions in light of the current COVID-19 pandemic. Mot. Protective Order at
5–7; see also id. at 5:58–7:25.
USCIT Rule 26(c)(1) stipulates that the court may “issue an order to protect
a party or person from annoyance, embarrassment, oppression, or undue burden or
expense” during discovery proceedings. USCIT R. 26(c)(1). The moving party
must confer with the other affected parties to resolve the dispute and show good
cause for a protective order. See id.
The court takes judicial notice that travel and remaining indoors for
extended periods of time with other people during the COVID-19 pandemic poses
personal health risks. See generally Covid-19, CTR. D ISEASE CONTROL &
PREVENTION , available at https://www.cdc.gov/coronavirus/2019-ncov/index.html
(last visited Mar. 30, 2021). The Government’s proposal for depositions, even
following the Government’s suggested “COVID protocols,” would require each
witness to travel to be deposed in person, to interact with other people indoors, and
to spend at least several hours, if not several days each, in an enclosed office space
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during the depositions. Counsel for Defendants identified numerous health-related
reasons why the individual witnesses object to appearing in person at their
depositions, offering that all of the witnesses are willing to appear instead remotely
by videoconference. The court notes that the attorneys under this proposed
arrangement would not undertake travel themselves but would appear remotely by
video.
The court concludes that prioritizing in-person depositions over potential
health risks would pose an undue burden on the witnesses during the COVID-19
pandemic. See USCIT R. 26(c)(1). It would be highly burdensome to require the
witnesses to appear in person due to their concerns over the potential health risks
involved, while it would be much less burdensome and far safer for the witnesses
to testify remotely via videoconference. In either case, the same result would
ensue because the witnesses are willing to provide deposition testimony under oath
and be cross-examined by the Government. In a remote videoconference, the main
differences would be that the witnesses would be shown electronic documents
through screen sharing and would not need to wear a face mask while speaking.
In addition, the Government expressed concerns that Defendant Aulakh
might “[cut] off communication [via videoconference] to avoid responding to a
question.” Pl. Consol. Resp. at 15. The court observes that there is no evidence to
suggest that Defendants would engage in such behavior, and any appropriate
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motions may be filed if depositions cannot be completed. The court will not order
in person depositions to prevent disruptive behavior that is purely speculative.
The court will not compel the witnesses to travel and undertake health risks
against their will to appear in person for depositions, particularly when
videoconference court proceedings have become second nature in this Court over
the past year during the COVID-19 pandemic. Defendants have shown good cause
and the court grants the Motion for Protective Order.
III. 	Motion to Compel
A. 	Documents Regarding Entry-Specific Loss of Revenue and
Domestic Value Calculations
Defendants requested loss of revenue and domestic value calculations for
each entry that Plaintiff alleged were entered fraudulently. Mot. to Compel at 9.
During the March 2021 Status Conference, the Government explained that
an alternative loss of revenue and domestic value methodology was employed in
lieu of the entry-by-entry appraisal method due to gaps within the record caused by
Defendants’ alleged destruction or loss of evidence. See Mar. Status Conf. at
22:35–23:17; Pl. Consol. Resp. at 12.
Defendants stated that they were in the process of creating the entry-by-entry
analyses themselves. Id. at 31:50–32:16. Defendants asserted that they were
entitled to the requested information and reiterated their demand for the
Government to produce an entry-by-entry appraisal that would reflect “all the
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details, loss of revenue, and domestic value for all the goods of every entry.” Id. at
32:16–20, 32:36–45.
The issue of whether the Government is required to provide an entry-by-
entry analysis, or whether the Government is permitted by regulation to use an
alternative sampling methodology to calculate Defendants’ duty and penalty
amounts, is a legal matter that will be resolved in this litigation during either the
dispositive motion phase or at trial. See generally Pl. Consol. Resp. at 12; 19
C.F.R. § 163.11(c)(3)(i) (providing that the Government may use statistical
sampling techniques when “[r]eview of 100 percent of the transactions is
impossible or impractical”). If the case proceeds to trial, the jury will be instructed
as to the appropriate law that applies. At this stage of discovery, therefore, the
court concludes that Defendants’ requests for entry-by-entry calculations are
relevant to the issues in the case, but are outside the scope of the Government’s
relative access to relevant information under USCIT Rule 26(b)(1). The court will
not compel Plaintiff to produce documents that it does not have in its possession,
nor will the court compel Plaintiff to create documents based on documents that it
does not have in its possession. The Motion to Compel is denied in part regarding
entry-specific loss of revenue and domestic value calculations.
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B. 	Privilege Log For Documents Cited as “3-01”
Defendants requested an updated privilege log regarding documents cited as
“3-01,” over which the Government had asserted privilege. See Mot. to Compel at
11. During the March 2021 Status Conference, however, the Government clarified
that it had mistakenly identified documents cited as “3-01” as privileged. See Mar.
Status Conf. at 44:35–45:45. The Government clarified further that documents
cited as “3-01” had been produced to Defendants earlier in discovery. Id. at
43:20–40; see also Mot. to Compel Ex. 6. Upon this representation, Defendants
withdrew their request for an updated privilege log for documents cited as “3-01.”
Id. at 46:46–56.
C. 	Government Instructive Manuals
Defendants requested any government instructive manuals regarding the
“processes for fraud investigations, including process for the identification and
recordation of fraud.” Mot. to Compel at 11. The Government asserted that it was
unaware of any such manuals. Pl. Consol. Resp. at 13. At the March 2021 Status
Conference, the Government confirmed that it was still unaware of such manuals
after inquiring within the Government about the existence of any fraud
investigation instructive manuals. Mar. Status Conf. at 59:05–1:00:17, 1:09:00–
05. Defendants’ counsel claimed that it had received government instructive
manuals previously in other litigations. Id. at 1:03:00–19. The court has not seen
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any such evidence provided by any parties in this case. Counsel for the
Government reiterated that any such documents do not exist to the best of
counsel’s knowledge and argued in the alternative that, if such manuals did exist,
Plaintiff would assert privilege over them. Id. at 1:09:00–28.
The Government represented in court filings and at the March 2021 Status
Conference on the record that it did not have knowledge of or possession of
government instructive manuals regarding fraud investigations responsive to
Defendants’ request. Because the court has not seen any evidence of the existence
of government instructive manuals presented by either Plaintiff or Defendants, and
the Government’s counsel confirmed on the record that it does not have any such
documents, the court has no reason to doubt the veracity of the Government’s
assertion that it does not have knowledge of or possession of any government
instructive manuals regarding fraud, absent evidence to the contrary. The court
concludes that while Defendants’ request may be relevant to the issues in the case,
discovery of government fraud instructive manuals is outside the scope of the
Government’s relative access to the information under USCIT Rule 26(b)(1). The
court will not compel Plaintiff to produce documents that counsel has explained do
not exist. The Motion to Compel is denied in part regarding government
instructive manuals.
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D. 	Previously Produced Documents
Defendants stated that Plaintiff objected to Defendants’ interrogatories “on
the basis that [D]efendants [were] already in possession of the requested
evidence.” Mot. to Compel at 15. During the March 2021 Status Conference, the
Government explained that it had produced all non-privileged requested documents
previously to Defendants. Mar. Status Conf. at 1:13:12–14:45, 1:15:20–17:17; see
also Pl. Consol. Resp. Ex. 7. Upon this representation, Defendants withdrew their
request for previously produced documents. Mar. Status Conf. at 1:14:50–15:08.
E. 	Other Critical Documents
Defendants requested “other critical documents” related to customs brokers
and “native format.” Mot. to Compel at 17. Plaintiff stated that it produced all
non-privileged, responsive documents to Defendants. Pl. Consol. Resp. at 10.
1. 	Documents Related to Customs Brokers
During the March 2021 Status Conference, Defendants stated initially that
Plaintiff did not respond to their request for documents related to customs brokers;
upon further discussion, Defendants clarified that the Government had identified
too many responsive documents, and instead Defendants requested that the
Government identify a subset of the most relevant information related to customs
brokers within the range of responsive documents. Id. at 1:17:36–18:15, 1:30:47–
31:24. Plaintiff cited correspondence with Defendants’ counsel that identified a
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range of responsive documents and asserted that each document related directly to
Defendants’ requests. Id. at 1:21:10–22:20, 1:31:30–32:40; see also Pl. Consol.
Resp. Ex. 7.
The court will limit discovery if it determines that the discovery sought can
be obtained from some other source that is less burdensome. USCIT R.
26(b)(2)(C)(i). Upon review of Plaintiff’s response to Defendants, the court
observes that the Government identified approximately 3,100 pages of responsive
documents that relate to customs brokers, which does not appear to be
unreasonable considering that this is a customs fraud case involving potential
duties, fees, and penalties of nearly $3.5 million. Pl. Consol. Resp. Ex. 7; see also
Second Am. Compl. ¶ 1. The universe of approximately 3,100 pages of responsive
documents is not too burdensome for Defendants’ law firm to review without
further assistance from the Government. Indeed, that is the nature of litigation.
Balancing whether the court should compel the Government to identify which of
the approximately 3,100 pages of documents contain the most relevant information
about customs brokers, as opposed to requiring Defendants’ law firm to review
those responsive documents already produced, the court concludes that it is less
burdensome for Defendants’ counsel to review the responsive document
production on its own. The court will not compel the Government to assist
Defendants’ counsel by choosing a subset of the most relevant documents related
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to customs brokers from among the responsive documents already produced to
Defendants. The Motion to Compel is denied in part regarding documents related
to customs brokers.
2. 	Documents in “Native Format”
Defendants requested that Plaintiff produce replacement copies of illegible
documents that were marked as “native format,” and Plaintiff clarified that a
technological error caused these documents to be illegible. Plaintiff offered to cure
the problem by producing correctly formatted, legible replacement documents to
Defendants. See Mar. Status Conf. at 1:32:57–33:44; see also Mot. to Compel at
18 (requesting new versions of US0004044, US0004047, and US0004105). The
Motion to Compel is granted in part with respect to “native format” documents.
IV. 	Motion to Amend Scheduling Order
Defendants requested a five-month extension to produce and review
additional documents, prepare for and complete fact and expert depositions, and
propound requests for admission. Defs. Mot. to Amend at 1–2. Plaintiff objected
to an extension and sought to maintain the expedited deadlines set forth in
Scheduling Order, ECF No. 142. Pl. Consol. Resp. at 8–9. Plaintiff asserted that
requests for admission were submitted in 2017. Mar. Status Conf. at 1:44:32–50.
The court notes that Defendants’ current counsel first appeared in this case nearly
two years ago in April of 2019, after replacing several former counsel for
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Defendants. See Form 11 Notice of Appearance, ECF Nos. 114, 125. Defendants’
current counsel is certainly not new to the case and has had nearly two years to
become familiar with the facts, but the court recognizes that Defendants have not
had an opportunity to submit requests for admission after the Second Amended
Complaint was filed in January 2020. In the alternative, Plaintiff requested that an
extension of no more than three additional weeks be granted. Mar. Status Conf. at
1:43:47–44:03.
USCIT Rule 16(b)(4) states that a schedule may be modified only for good
cause and with the court’s consent. USCIT R. 16(b)(4). This case has been
pending before the court since 2017, with the alleged fraudulent activity taking
place between 2007 and 2011, beginning more than fourteen years ago. The court
is committed to expediting this matter as quickly as possible to reach a resolution.
The court will provide the Parties with an opportunity to produce additional
documents, depose fact and expert witnesses, and submit requests for admission,
but will not delay the schedule by an additional five months as requested by
Defendants. The court will grant an extension of approximately two and a half
months for additional discovery. USCIT Rule 36(a)(3) provides broad discretion
to the court to manage its docket and issue scheduling orders accordingly. See
USCIT R. 36(a)(3); see also Murata Mach. USA v. Daifuku Co., 830 F.3d 1357,
1362 (Fed. Cir. 2016) (“The Supreme Court has long recognized that district courts
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have broad discretion to manage their dockets . . . .”); Amado v. Microsoft Corp.,
517 F.3d 1353, 1358 (Fed. Cir. 2008) (recognizing the broad discretion given to
district courts to manage their dockets). The Motion to Amend Scheduling Order
is granted in part.
Upon consideration of the Motion for Protective Order, Motion to Compel,
and Motion to Amend Scheduling Order, all other papers and proceedings in this
action, and pursuant to USCIT Rules 16, 26, and 36, it is hereby
ORDERED that Defendants’ Motion for Protective Order is granted; and it
is further
ORDERED that Defendants’ Motion to Compel is granted in part and
denied in part; and it is further
ORDERED that Plaintiff shall produce legible versions of the “native
format” documents to Defendants on or before April 2, 2021; and it is further
ORDERED that Defendants shall produce any additional documents to
Plaintiff on or before April 2, 2021; and it is further
ORDERED that Defendants’ Motion to Amend Scheduling Order is granted
in part, and it is further
ORDERED that Scheduling Order, Sept. 28, 2020, ECF No. 142, is
superseded by this order; and it is further
ORDERED that this case will proceed according to the following schedule:
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1. 	Discovery shall be completed on or before June 18, 2021;
a. 	Any remaining documents shall be produced on or before April
2, 2021;
b. 	Depositions of fact witnesses shall occur remotely via
videoconference and shall be completed on or before April 23,
2021;
c. 	Designation of experts, exchange of expert reports, and remote
depositions of expert witnesses via videoconference shall be
completed on or before May 21, 2021;
d. 	Any requests for admission shall be served on opposing counsel
on or before June 4, 2021;
e. 	Responses to any requests for admission shall be served on
opposing counsel on or before June 18, 2021;
2. 	Dispositive motions, if any, shall be filed on or before August 6,
2021; and
3. 	Briefs in response to dispositive motions shall be filed on or before
August 20, 2021, and a brief in response to a dispositive motion may
include a dispositive cross-motion;
4. 	Reply briefs and briefs in response to a dispositive cross-motion shall
be filed on or before August 27, 2021; and
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5. 	If no dispositive motions are filed, a request for trial, if any,
accompanied by a proposed order governing preparation for trial, shall
be filed on or before August 6, 2021.
No further extensions regarding discovery will be granted unless there is a
need to address unexpected conflicts. The Parties should seek to limit such
extension requests for unexpected conflicts to short periods of time.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: March 30, 2021
New York, New York
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