United States v. Tenacious Holdings, Inc.

6 F. Supp. 3d 1374 (2014)

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Nature of the Case

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Facts

The United States (P) brought this penalty case against D seeking penalties for negligent misclassification of work gloves. D had already brought an action challenging the proper classification of the same work gloves at issue in this case. D's case is also pending before the Court. Before the court is the present motion for referral to mediation and several other motions. Three of these motions seek to resolve discovery conflicts between the parties. D claims that penalty actions are inherently suited to mediation because they often settle, that the approximately $50,000 amount sought by P in penalties and unpaid duties could be exceeded by litigation expenses, that P claims that the relevant provision of the tariff schedule is so ambiguous as to make it unlikely that the negligence penalty would be found appropriate. D also notes that the classification provision expired in 2009, so the parties have no interest in a court judgment to guide its future application. D also contends that the confidential forum of mediation may permit resolution without the waiver of attorney-client privilege. D notes that 'referral to mediation may likely enhance communication between the parties because there will be no risk that evidentiary privileges will be waived in the process' given the strict confidentiality of mediation discussions. D contends mediation will promote the goal of 'just, speedy, and inexpensive' resolution embodied in the Court's rules. P opposes mediation in that D filed the present motion in hopes of avoiding its obligation to answer the P's outstanding discovery requests. P contends it would be 'a waste of time' to enter mediation before D produces discovery.