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Lacoste Can Subpoena Costco in ‘John Doe’ Suit

In this first-impression case, an Arlington Circuit Court says it has jurisdiction over a “John Doe” defendant in this suit filed by Lacoste for breach of contract and trademark infringement based on sale of its branded merchandise in club stores such as Costco, and the court grants Lacoste’s motion to compel discovery, with a protective order for Costco.

Plaintiff is the owner of U.S. trademark registrations for “LACOSTE” and Lacoste’s distinctive crocodile logo. Lacoste granted co-plaintiff Devanlay US Inc., a Delaware corporation, the exclusive right to distribute Lacoste-branded goods in the U.S. Devanlay entered into contractual agreements with defendant John Doe that limited the retail channels of trade through which John Doe may sell Lacoste-branded goods.

Plaintiffs sue for breach of contract, trademark infringement, unfair competition and violation of the Virginia Consumer Protection Act arising out of the sale of Lacoste-branded goods in club stores such as Costco. Plaintiffs served a subpoena duces tecum on Costco Wholesale Corporation by hand delivery on Costco’s registered agent in Virginia, and have since filed a motion to compel.

Costco objects to the subpoena on three grounds: the court lacks personal jurisdiction to enforce the subpoena, the subpoena seeks protectable trade secrets and the subpoena is overly broad and unduly burdensome.

Costco argues the court lacks jurisdiction because plaintiffs have employed an invalid form of action that is not recognized by Virginia law and does not provide sufficient information to establish the court’s personal jurisdiction over the John Doe defendant. Virginia law requires a plaintiff to plead jurisdictional facts to satisfy both the statutory and constitutional bases for personal jurisdiction.

Plaintiffs sufficiently plead facts satisfying the Virginia long-arm statute and established minimum contacts within Virginia.

The court finds no controlling authority to conclude that plaintiffs’ “John Doe” cause of action is invalid. The Virginia Supreme Court has recognized it is not uncommon for a plaintiff to use the “John Doe” pleading style to initiate a lawsuit against the defendant whose identity is unknown at the time the lawsuit is filed for the purpose of subsequently using discovery to learn the identity of the defendant so that proper service of process on the defendant can be obtained. Costco argues that “John Doe” actions in Virginia are only valid in the case of uninsured motorist actions and cybersmear claims. However, there is no legislation or case law prohibiting “John Doe” claims in other types of actions. Costco’s first objection is overruled.

The court also overrules the second objection. There is little question the discovery plaintiffs seek is relevant, and that it alone may be, or it may lead to admissible evidence and the trade secret can be adequately protected by a protective order.

The court is aware that plaintiffs seek commercially sensitive information that is confidential and has great value to Costco’s business, and therefore the court will limit the scope of the subpoena by permitting only information relating to suppliers providing Lacoste-branded goods purchased by Costco and offered for sale in Virginia stores from Jan. 1, 2007 through the present.

The court will enter a protective order to prevent disclosure of Costco’s trade secrets. The protective order will limit discovery solely to the issue of determining John Doe’s identity. The order will prohibit plaintiffs from using the discovery produced to file a claim or suit against any Costco supplier identified in response to the subpoena. Plaintiffs also will be prohibited from threatening, harassing or contacting any Costco supplier identified in response to the subpoena. Review of the information and documents provided in response to the subpoena will be restricted to plaintiffs’ counsel of record.

Lacoste Alligator S.A. v. John Doe (Alper) No. 10-1389, Dec. 17, 2010; Arlington County Cir.Ct.; Savalle C. Sims, Sean F. Murphy, Norman H. Levine for the parties. VLW 011-8-032, 4 pp.

VLW 011-8-032

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