United States District Court, D. Massachusetts
XIAO WEI CATERING LINKAGE IN INNER MONGOLIA CO. LTD., AND FEI XIE, Plaintiffs, and Defendants-in-Counterclaim,
INNER MONGOLIA XIAO WEI YANG USA, INC., d/b/a XIAO WEI YANG AND/OR LITTLE LAMB RESTAURANT, CHENG XU, AND YONGHUA QIN, Defendants, and Plaintiffs-in-Counterclaim.
ORDER ON DEFENDANTS' MOTION FOR SANCTIONS
Page Kelley United States Magistrate Judge.
case involves an agreement gone awry between a hot-pot
restaurant chain headquartered in China, and the owners of a
restaurant in Boston, Massachusetts, who tried to become a
franchisee of the Chinese company. The suit has been marked
by frequent, acrimonious discovery disputes, which in large
part have been caused by plaintiffs' failure to follow
the rules of discovery. In this Order, the court finds that
under 28 U.S.C. § 1927, plaintiffs' counsel,
Attorney Frank Xu, admitted to this court pro hac
vice from New York, should pay reasonable attorneys'
fees and costs to defendants' counsel for their work on a
motion for a protective order and to quash subpoenas issued
by plaintiffs. The court further orders under its inherent
authority that Attorney Xu should be formally sanctioned for
gratuitously accusing defendant's counsel, Attorney
Elizabeth Brady Murillo, of fabricating documents.
facts of this case are described in detail in Judge
Casper's Order on defendants' motion for summary
judgment, in which she dismissed counts I-IV of the
nine-count complaint. (#81 at 2-4, 15.) The facts are
repeated here in abbreviated form. Plaintiffs, Xiao Wei
Catering Linkage in Inner Mongolia Co., Ltd. (Linkage), and
Fei Xie, a chef employed by Linkage, brought suit against
defendants Inner Mongolia Xiao Wei Yang USA, Inc. (Inner
Mongolia), and two individuals, Cheng Xu and Yonghua Qin.
(#1.) Plaintiff Linkage is a large, well-known restaurant
chain in China; defendant Inner Mongolia is a Massachusetts
corporation that operated a restaurant in Boston,
Massachusetts called the “Little Lamb
Restaurant.” (#1 ¶¶ 1-3; #90 at 10.)
Defendants Xu and Qin are married, live in Massachusetts, and
are president and treasurer of Inner Mongolia, respectively.
Id. ¶¶ 4-6.
2011, Xu and Qin traveled to China and negotiated a
Cooperation Agreement with Linkage so that they could become
Linkage's first franchisee in the United States.
Id. ¶¶ 11-12. The complaint alleges that
Xu and Qin fraudulently represented themselves to Linkage,
concealed material facts, and so induced Linkage to enter
into the Cooperation Agreement, which Linkage would not have
done but for Xu and Qin's
misrepresentations. Id. ¶¶ 13-15. Xu and
Qin are also alleged to have misappropriated Linkage's
brand-name and confidential knowledge, and are said to have
violated Linkage's federal trademark registration and
other intellectual property rights. Id. ¶¶
allege that defendants breached the Cooperation Agreement by
withdrawing visa sponsorship for Xie, the chef Linkage sent
to work with Xu and Qin, and exploited Xie's specialized
knowledge and trade secrets while refusing to pay for his
expenses as the Cooperation Agreement required them to do.
Id. ¶ 19.
plaintiffs claim that defendants gained business revenues as
a franchisee, but did not pay franchise fees as the
Cooperation Agreement provided. Id. ¶¶ 18,
22. Pursuant to the Agreement, Linkage transferred capital
and money to defendants, including loans totaling
approximately $66, 000. Id. ¶ 20.
in this case have repeatedly failed to comply with the rules
of discovery. When defendants object to plaintiffs'
actions in motions filed with the court, counsel for
plaintiffs responds by filing counter-motions accusing
defendants of wrongdoing and asking the court to impose
sanctions on the defendants. See, e.g., ##94-95
(defendants' motion to dismiss for plaintiff's
flagrant disregard for rules of discovery); #98
(plaintiffs' opposition); ##101-103 (plaintiffs'
motion to compel and for sanctions against defendants). While
the court will not detail every instance of this history,
brief descriptions of two prior discovery disputes in the
case are instructive and provide a backdrop for the
court's decision on this matter.
The Discovery Dispute of March 2016.
in the case, Judge Casper gave the parties sixty days in
which to conduct discovery as to whether the forum selection
clause in the Cooperation Agreement had been triggered.
(#26.) In March 2016, the parties had a discovery dispute
during the limited discovery period. In their motion to compel,
defendants complained that plaintiffs had produced unsigned,
incomplete, and inadequate responses to defendants'
discovery requests, which was particularly prejudicial given
the fast-approaching deadline. (#32, #33 at 3, 5.) In
addition, plaintiffs had refused to produce a corporate
designee for a Rule 30(b)(6) deposition notice sent to
plaintiffs. (#32 at 2.) Defendants' counsel had attempted
to confer with Attorney Xu, but he did not respond.
Id. at 3.
response, plaintiffs filed a motion for protective order to
prevent defendants from noticing a deposition of the Rule
30(b)(6) witness who needed to travel to Boston from China
for the deposition (##34-35), and also filed an opposition to
defendants' motion to compel discovery, stating that
because discovery at that stage of the case was confined to
the jurisdictional question, they had “no relevant and
responsive materials to produce” to defendants. (#37 at
responded that with regard to the Rule 30(b)(6) witness,
since plaintiffs elected to sue in Massachusetts, the
deposition should take place here. (#39 at 2.) Defendants
also described in detail their attempts to engage in
discovery practice and plaintiffs' repeated dilatory and
conflicting responses to defendants' efforts, see
Id. at 2-5.
hearing on defendants' motion in April 2016, plaintiffs
abandoned their argument that they need not engage in
discovery practice and agreed to give defendants discovery.
(#52.) The court found that defendants had properly noticed
the deposition of the Rule 30(b)(6) witness to take place in