Free Declaration - District Court of Delaware - Delaware

Case 1:04-cv-01371-JJF Document 132-11 Filed 11/11/2005 Page 1 014
Exhibit J
PCI Parfums et C osmetiques International v. Perfumania, 93 Civ. 9009, 1998 WL 646635
(S.D.N.Y. Sept. 21, 1998)

Case 1:04-cv-01371-JJF Document 132-11 Filed 11/11/2005 Page 2 of 4
Westlaw
Not Reported in F.Supp.2d Page 1
Not Reported in F.Supp.2d, 1998 WL 646635 (S.D.N.Y.)
(Cite as: 1998 WL 646635 (S.D.N.Y.))
Perfumania seeks testimony and documents from
Motions, Pleadings and Filings DGI that purport to show that Desgrippes Gobe is the
actual designer of the bottles encompassed by the
Only the Westlaw citation is currently available. patents that are the subject of this action. Perfumania
asserts that the sought testimony and documents
would dispute PCI Parf`ums' claims that their
United States District Court, S.D. New York. predecessor, Alain Boucheron, designed the bottles
PCI PARFUMS ET COSMETIQUES INT‘L, etal., as claimed in the patents.
Plaintiffs,
v. Perfumania points to a number of documents which
PERFUMANIA, INC., Defendant. it says are evidence that DGI and Desgrippes &
No. 93 Civ. 9009 (KMWRLE). Associes are the same company. Perfumania cites
language in the DGI marketing brochure (attached
Sept. 21, 1998. hereto as Exhibit A) and the DGI web page on the
internet (a copy of the internet page is attached hereto
MEMORANDUM OPH\lION AND ORDER as Exhibit B). The brochure states, in pertinent part,
that "Desgrippes Gobe was founded in Paris in 1971
ELLIS. Magistrate J. by Joel Desgrippes under the name of Desgrippes &
Associes." In reference to the opening of offices in
*1 This action was referred ro me by the Honorable different cities around the world, the brochure states
Kimba M. Wood, United States District Judge, for that "[w]ith offices in Europe, North America and
discovery motions on September 27, 1996. Before the Asia, the firm is now definitely global ." The
court is defendant Perfumania's request for an order brochure further states that:
compelling a nonparty witness, Desgrippes Gobe, In 1995 all the offices changed their name to
lnc. d/b/a Desgrippes Gobé&Associates ("DGI"), to Desgrippes Gobe & Associates. This transition
respond to Perfumania's discovery requests pursuant formalized the long-standing relationship between
to Rule 3-4tc) ofthe Federal Rules of Civil Procedure the various offices and ensures a strong unified
("Fed. R. Civ.P.") by producing documents in the presence as the group moves ahead in a rapidly
possession of a nonparty French corporation named changing marketplace.
Desgrippes & Associes. Perfumania alleges that DGI The web page refers to New York and Paris offices
and Desgrippes & Associes are interlocking of DGI as "our company."
companies for the purposes of Fed.R.Civ.P. 34(cl.
Desgrippes & Gobe disputes that they are In October, 1997, pursuant to a Subpoena Duces
interlocking companies and maintains that they only Tecum, Perfumania deposed Carolyn Berke. Carolyn
share a marketing relationship. For the reasons Berke is the Vice President of Finance and
discussed below, defendant's motionis DENIED. Administration of DGI. Berke Aff. at p. l._[§I;l_Ll
Berke stated in her deposition |FN2| that DGI and
1.FACTUAL BACKGROUND Desgrippes & Associes share only a "marketing
Plaintiff PCI Parfums alleges patent infringement relationship" and "while Joel Desgrippes owns a
against Perfumania stemming from the sale of minority interest in DGI and is an outside director of
Boucheron fragrance products. PCI Parfums alleges DGI. he is neither an officer nor an employee of
that it is the manufacturer of Boucheron fragrance DGI." Berke Aff. at p. 2. Berke further stated mat
products. Plaintiff Campbell & Thiselton alleges that Joel Desgrippes currently owns 19.7% of DGI stock
it is the exclusive distributor of PC] Parfums' but "does not participate in the day-to·day running of
fragrance products and the exclusive licensee of PCI DGI. Berke Supp. Aff at p. 2._[E_Ij§] Berke states that
Parfums' United States design patents. PCI Parfums while she cannot provide the court with a detailed
and Campbell & Thiselton claim that Boucheron financial history of Desgrippes & Associes, she has
fragrance products were imported into the United been informed that Joel Desgrippes owns 75% of the
States without the consent or authorization of either stock of that company. ld. at p3.
PC] Parfums or plaintiff Campbell & Thiselton.
y "Berke Aff. at ___" refers to the
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Case 1:04-cv-01371-JJF Document 132-11 Filed 11/11/2005 Page 3 of 4
Not Reported in F.Supp.2d Page 2
Not Reported in F.Supp.2d, 1998 WL 646635 (S.D.N.Y.)
(Cite as: 1998 WL 646635 (S.D.N.Y.))
Affidavit of Carolyn Berke, July 27, 1998, parent; (6) in the contract of sale for the airplane in
in opposition to defendant's application to question, subsidiary described itself as an "affiliated
compel the production of documents. company" of the British parent; and (7) the
documents plaintiff sought related to the airplanes
@ The court and counsel for DGI have that the subsidiary "work[ed] with everyday." ld. at
yet to receive a copy of that deposition 919.
@ "Berke Supp. Aff. at ___" refers to In cases involving sister corporations under common
Supplemental Affidavit of Carolyn Berke, control, the requisite "possession or control" has
September 10, 1998, in opposition to been found only where the sister corporation was
defendant`s application to compel the found to be the alter ego of the litigating entity, see,
production of documents. e.g., Perini American Inc. v. Paper Converting
Machine Co., 559 F.Supp. 552 (E.D.Wis.l983)
*2 Marc Gobe is the President and Chairman of the (where defendant owned 100% of one corporation
Board of Directors of DGI owning 80.3% of the and 99.5% of the other), or where the litigating
stock. Id. at 2. Gobe also owns 18% of the stock in corporation has acted with its sister in effecting the
Desgrippes & Associes. Id. at 3. However, "[w]hilc transaction giving rise to the lawsuit and is litigating
Marc Gobe is an outside director of Desgrippes & on its sister's behalf. See, e.g., Alimenza (U.S.A.l v.
Associes, he is not an officer of and does not Anheuser—Busch Companies, 99 F.R.D. 309
participate in the day·to-day affairs of Desgrippes & gN.D.Ga.1983).
Associes." ld.
In Gerling Intem. Ins. Co. v. C.l.R., 839 F.2d 13l
II. DISCUSSION {3d Cir.l988), the court held that, in sanctioning the
The main question presented here is whether DGI, a defendant Delaware corporation for failing to
nonparty New York corporation can be compelled to produce documents in possession of a foreign
respond to discovery demands relative to documents corporation, the Tax Court regarded the two entities
allegedly possessed by Desgrippes & Associes, a as sister corporations under common control, but did
nonparty corporation based in Paris, France. When so without sufficient evidence. In Gerling the
determining the sufficiency of "custody and control" procedural rule governing the production of
of material for purposes of Fed.R.Civ.P. 34, the documents is Tax Court Rule 72(a)g1). which was
nature of the relationship between the party and modeled after Fed.R.Civ.P. 34(a). Moreover, the
nonparty corporations is the key. Afrox S.P.A v. court continued, even if these corporations had
Krauss-Majei Corporation, 113 F.R.D. 127. 129-30 properly been presumed to be under common control,
§D.Del.. 1986). there was no record to support any finding that their
corporate entities had been disregarded by
The courts have held that documents in the themselves or the stockholder in the course of their
possession of a nonparty parent corporation were businesses or that the domestic corporation had acted
subject to production by a litigating corporate for the benefit ofthe foreign corporation either in the
subsidiary under Fed.R.Civ.P. 34 where the transactions giving rise to the cause of action or in
corporations share an exclusive principal-agent conducting the litigation. 839 F.2d at 141.
relationship. Cooper Industries, Inc. v. British
Aerospace, Inc., 102 F.R.D. 918 (S.D.N.Y.1984). In *3 Here, none of the factors articulated in Cooper
Cooper Industries, the court found that documents in Industries, Perini or Alimenta are met. Other than the
actual possession of non-party foreign parent were brochure and web pages references, Perfumania has
within the litigating subsidiary's custody or control shown no proof of a sufficiently close business
where: (1) the subsidiary sold and serviced airplanes relationship between DGI and Desgrippes &
to which the documents mostly service manuals and Associes. The coun is mindful that occasionally DGI
blueprints. related; (2) the British parent was the and Desgrippes & Associes work together on a
manufacturer of those airplanes; (3) the subsidiary common project where "they negotiate an ad hoc
was wholly owned by the British parent; (4) the arrangement and separately account for their
subsidiary was essentially the distributor and servicer services." lFN4l It must be noted, however. that
of the British airplanes in the United States; (5) in Berke has apparently testified in her deposition that
response to an earlier document request. counsel for DG] did not work on the Boucheron account. the
the subsidiary instructed plaintiff to make all inquires subject matter of this litigation, and has no records or
through him because he represented the British information in connection therewith. DG1 concedes
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Case 1:04-cv-01371-JJF Document 132-11 Filed 11/11/2005 Page 4 of 4
Not Reported in F.Supp.2d Page 3
Not Reported in F.Supp.2d, 1998 WL 646635 (S.D.N.Y.)
(Cite as: 1998 WL 646635 (S.D.N.Y.))
that it lists Boucheron as a client as pafl of its cross-
marketing materials with Desgrippes & Associes.
The documentation before this court shows that Joel
Desgrippes is a 75% stockholder in the foreign
company, but is only a 19.7% stockholder in DGI.
Similarly Marc Gobe is 80.3% stockholder in DGI
but only an 18% stockholder in Desgrippes &
Associes. Accordingly, there is no foundation for the
court to conclude that DGI has sufficient control over
Desgrippes & Associes to require the production of
the latter company's officers and records in the
United States. Additionally, the record before this
court does not demonstrate that the two companies
had identical boards of directors, or that their
respective business operations were so intertwined as
to render meaningless their corporate identities.
Pemtwalt Cory. v. Plough, Inc., 85 F.R.D. 257
(D.Del.1979).
FN4. Counsel for DGI's Letter to the Court,
dated September 16, 1998, at pl.
Not Reported in F.Supp.2d, 1998 WL 646635
(S.D.N.Y.)
Motions, Pleadings and Filings (Back to togl
· 1 :93cv09009 (Docket)
(Dec, 30, 1993)
END OF DOCUMENT
© 2005 Thomson/W est. No Claim to Orig. U.S. Govt. Works.