In Casablanca Design Ctr., Inc. v. Closets by Design, Inc., 2025 WL 2817647 (C.D. Cal. Sept. 24, 2025), Magistrate Judge Patricia Donahue issued a Report and Recommendation addressing defendants’ motion for terminating or alternative sanctions based on plaintiffs’ repeated failures to comply with discovery orders. The case involves competing claims of false advertising and unfair competition under the Lanham Act and California law.
Defendants sought terminating sanctions after Casablanca Design Center and affiliated One Day entities repeatedly failed to provide timely written discovery responses, complete document production, and comply with court-ordered deadlines, including ESI production. The record reflected multiple missed deadlines, inadequate productions, failure to conduct ESI searches, and noncompliance despite informal discovery conferences and express court warnings regarding potential Rule 37 sanctions.
Judge Donahue found that Casablanca and One Day willfully violated several discovery orders, particularly with respect to written discovery and document production, including ESI. Applying the Ninth Circuit’s five-factor test, the court concluded that while terminating sanctions were not warranted, significant prejudice to defendants justified alternative sanctions. The court recommended denying dismissal but granting evidentiary preclusion sanctions, including barring Casablanca from pursuing monetary damages, limiting its ability to introduce evidence not produced in discovery, and restricting the defense of counterclaims to materials actually produced.
The court further recommended issue and evidence preclusion related to discovery failures and indicated that monetary sanctions, including attorney’s fees, would be addressed separately. The ruling underscores courts’ increasing intolerance for discovery noncompliance, emphasizes the importance of timely ESI searches and production, and reinforces that repeated violations, even absent dismissal, can severely limit a party’s ability to prove claims or defenses at trial.
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