A federal judge in Newark has ordered a snack food maker to pay a $33,000 sanction to a rival company after it produced a newly amended report moments before a scheduled deposition.

The sanction was imposed on Lotte International America Corp. for improperly supplementing an expert's report just moments before the deposition was supposed to start. The Oct. 10 sanction from U.S. Magistrate Judge Leda Dunn Wettre follows a Sept. 9 final judgment by U.S. District Judge Madeline Cox Arleo, who dismissed the underlying claims and counterclaims for attorney fees for filing a frivolous lawsuit.

Arleo's opinion stating reasons for granting summary judgment in the trademark infringement lawsuit was issued under seal, and cross-notices of appeal were filed by both parties.

The amount of the sanction represents work performed by attorneys for plaintiff Ezaki Glico USA that was obviated when the deposition of defense damages expert Ambreen Salters was rescheduled. Costs related to the aborted deposition are also included.

Ezaki Glico and its Japanese parent company claimed in the lawsuit that Lotte International makes a cookie stick called Pepero that is confusingly similar to its own product, called Pocky. The suit accused Lotte of trademark infringement, and unfair competition under the Lanham Act and New Jersey common law.

The litigation in New Jersey follows an intense rivalry between the companies in Asia.

Ezaki Glico said in the suit that its Pocky sticks have been sold in Japan since 1966 and the U.S. starting in 1978. The product's U.S. sales exceed $15 million annually.

The conduct that prompted the sanctions occurred after Ezaki Glico issued an expert report estimating Lotte's sales revenue tied to the alleged infringing conduct. Salters offered a rebuttal report on May 14, 2018, that estimated Lotte's profits by deducting cost of goods sold and operating expenses from total revenues for Pepero. But the operating expense data was produced after fact discovery, so Ezaki Glico's expert was not able to consider it in his own report.

To mitigate potential prejudice from the untimely production of its financial information, Lotte agreed to make accounting manager Joanne Joo Hee Lee, who had provided the data to Salters, available for a deposition. The companies also agreed to permit Ezaki Glico's economic expert, John Hansen, to issue a supplemental report on July 2 addressing the newly produced information.

On July 12, 2018, just minutes before Salters was scheduled to be deposed, attorneys for Lotte handed lawyers for Ezaki Glico a supplement to her previous report. Defense counsel said revisions to her report were made in light of Lee's deposition and Hansen's latest report. But Salters' latest report was dramatically different than her previous effort, and relied on different methodology.

Ezaki Glico objected to the supplemental report being presented, and asked for the report to be stricken or for monetary sanctions based on the cost of their efforts to investigate the original report.

Ezaki Glico sought a total of 49.6 hours for the three lawyers on the case. For Steven Levitan of Hogan Lovells, the plaintiffs sought an hourly rate of $825; for Roy Wepner of Lerner, David, Littenberg, Krumholz & Mentlik in Westfield, the hourly rate sought was $795; and for Aaron Oakley of Hogan Lovells, the hourly rate was $630. After Lotte's lawyers said the rates were too high, Wettre trimmed the rates for Levitan and Wepner to $656 an hour but left Oakley's at $630.

John Dabney of McDermott Will & Emery in Washington, who represented Lotte International, declined to comment on the case. Levitan, Wepner and Oakley, the lawyers for Ezaki Glico, did not return calls about the case.