Crain's AutoWeek Sanctioned for Discovery Abuses in Litigation Against Independent Magazines Sales Agents

MEDFORD, Ore. January 26, 2009: The United States District Court in Oregon sanctioned Crain Communications, Inc. for discovery abuses in an action against independent magazine sales agents pending in Michigan.

Crain’s AutoWeek magazine brought an action for fraud and trademark infringement against certain independent magazine sales agents and certain of their vendors, including a data processing company. (Crain Communications, Inc. v. Magazine Billing Services, Inc., Case No. 2:06-CV-12335 E.D. Mich.)

Even though the Michigan court dismissed the action against all of the vendors, Crain sought aggressive discovery against the vendors. Crain issued third party subpoenas which the court found to be over broad and burdensome. Crain then served additional subpoenas to the same vendors seeking some of the same information which the court had already ruled Crain was not entitled and also moved to have the vendors held in criminal and civil contempt.

The Oregon Court denied Crain’s motion to have the vendors held in contempt and quashed the subsequent subpoenas. The court found Crain’s use of discovery to be improper and sanctioned Crain. The court awarded the vendors their attorneys’ fees. (Crain Communications, Inc. v. Tracy Cave, Case No. 08-8011-CL D. Or.)

The Oregon Court directed the parties to submit further briefs on the amount of attorneys’ fees to be awarded. The vendors stated that they incurred over $70,000 in legal fees and expenses in defending against Crain’s unreasonable discovery tactics.

The vendors were represented by the New York law firm of Lennon & Klein, P.C. and Powers, McCulloch & Bennett, LLP in Oregon.