“Ultimate Sanction” Achieved Against Gree for Discovery Failures

Judge with GavelIn a matter still pending, my clients recently achieved default judgment as a sanction for egregious discovery conduct against Gree USA, Inc., Gree Zhuhai, Hong Kong Gree, and MJC America. Default judgment as a sanction is rare, which is probably why Bloomberg authored a piece on the decision, which can be found HERE.

Nonetheless, it is a sanction explicitly enumerated as a tool available to a court under Rule 37(b)(2)(A)(vi).

In this case, the Court had previously granted two motions to compel, ordering the Defendants to provide “complete and unequivocal” responses by a date certain. They failed to do so and we moved for sanctions after efforts aimed to gain cooperation without a motion went nowhere, this time asking the Court for default judgment or serious monetary penalties. Magistrate Judge Dinsmore recommended the former in a 20-page report and recommendation. None of the five defendants filed any objection to the report and recommendation (you read that correctly), acquiescing to it being adopted by Judge Hanlon, which quickly happened.

Overall, the case is a play-by-play dismantling of the improper tactics for which Gree is famous, at least to date. We still must prove up damages and continue trying to wrestle the full truth from unwilling Defendants.

The case is an undeniable example of how to confront and defeat the improper tactics Gree utilizes. So many times, I have been asked “is it worth it” to put in the work on these cases when you can readily settle for ~60%, though even then Gree will slow-pedal and delay as much as possible and almost never pays on time. The Avenattis think it has been worth our effort, I trust. And here’s a better question the community should be asking: if these Defendants chose not to even object to a federal court order recommending default judgment in a case inclusive of fraud claims, Mag-Moss claims, and claims for punitive damages, rather than to participate fairly in discovery, how bad is the truth for them, and if your lawyers are not willing or able to at least try to hold them fully accountable, who will?

Almost weekly now I get a call or an email, even from experienced dehumidifier litigators, asking how we address a particular dehumidifier issue. (Some of these questions are well formed, while others reveal, unfortunately, real concerns about whether the file is in the right hands.) The Avenatti docket answers almost all those questions for those willing to review it.

For our part and the community’s benefit, we are hosting the briefing that led to the recent default judgment, along with Judge Dinsmore’s report and recommendation, which can be viewed HERE.

If you have a loss involving a dehumidifier, please do me the honor of being involved to ensure those responsible are held fully to account by contacting me, Rich Schuster, at [email protected].

Richard A. Schuster

Richard A. Schuster 蘇世達, a Wisconsin native, is a partner at Matthiesen, Wickert & Lehrer, S.C. Richard joined the firm after years in Asia helping the industry’s leading international manufacturers with product liability and other business challenges. Richard is a trial attorney and a national and international speaker and lecturer on product liability defense and insurance litigation-related topics.