DHL Lawsuit

A DLR Complaint

On October 3, 2021 in San Diego, the plaintiffs in a Costco Wholesale Liability Litigation filed a class action suit against the Company and named their personal injury attorneys as defendants. At the time of filing this suit, the plaintiffs had no evidence of these defendants’ guilt; however, the defendants, through their counsel, moved to intervene and on October 4, the plaintiffs moved to intervene and request a trial date. The defendants did not advance any reasonable argument to the plaintiffs that there was liability. Instead, they merely indicated they would file documents and wait to see what the plaintiffs would do. This conduct violated the defendant’s duty of timely discovery.

DHL Lawsuit

On October 4, the plaintiffs filed a complaint against the defendants in the county court of San Diego County naming the Costco Wholesale Liability as a defendant. Pursuant to their discovery process, the plaintiffs’ attorneys discovered that the defendants were in breach of their duty of timely discovery. Accordingly, on October 5, the District Court issued an order granting the plaintiffs’ motion to intervene in the current case.

On the same date filed, the plaintiffs filed their answer in the current the lawsuit challenging the defendants’ claim that they had a duty of prompt discovery. In support of their claim, they submitted a declaration by Newlead Castellano, a lawyer with the Office of the Attorney General, stating that the Costco Wholesale Policy, dated March 1, 2021, provided the company with a general duty of prompt discovery. The declaration further noted that Newlead Castellano was a licensed attorney with the responsibility of acting on behalf of the company when it was in violation of its duty of prompt discovery. The declaration further stated that the policy was intended to protect the company from potential liability in the future for failing to take reasonable and timely measures to disclose information.

The plaintiffs were required to file their answer by November 3, however, on the day the suit was filed, Newlead Castellano suddenly withdraws his request to intervene.

He stated in his withdrawal request that he “spent significant time reviewing the Complaint and its attachments” and, “After careful review, I have determined that the complaint is legally defective as a matter of law.” He went on to state, “Based upon this analysis, I am unable to enter into a scheduling agreement with the defendants.” At this point, according to the plaintiffs, Newlead Castellano was legally barred from ever serving the present case.

According to plaintiffs counsel, it is apparent from this example that Newlead Castellano, a lawyer who apparently has no legal experience whatsoever, is attempting to use the Memorandum of Understanding (MOI) between the two litigants, Costco Wholesale Corp. and defendants Costco Wholesale Inc., to avoid complying with the discovery deadlines set forth in the complaint.

The MOI was drafted by Newlead Castellano and placed as the single document that would define and clarify the duty of each party to each other in this case. It is also noted that in a separate document submitted to the court, he disclosed that he is an outside attorney hired by Costco Wholesale to “provide legal support to Costco Wholesale in this action.” This admission reveals that Castellano is either an inexperienced or unprofessional litigator, not someone that would be expected to be acting in an attorney’s capacity when he states, in a supposed “memorandum of understanding,” that he will provide “legal support” to Costco Wholesale.

If the plaintiff were to file their complaint against Costco Wholesale, they would be able to obtain discovery from Newlead Castellano regarding any and all matters relating to the breach of their duty of loyalty, fraud, deceptive trade practices, and negligence.

It should be noted that if this situation were to occur, which would result in a default judgment against Costco Wholesale, the costs of having the case tried in the United States District Court would exceed the benefits of the negotiated plea bargain. It is widely acknowledged that healthcare providers often have a financial interest in allowing lawsuits to be tried in district court. The costs to healthcare entities of allowing a lawsuit to proceed can be quite large.

It should be noted that a default judgment requires the courts to award the plaintiff’s requested damages.

A Costco Wholesale employee could be ordered to repay all Costco expenses that were awarded to him as part of his compensation package. Costco would also be ordered to reimburse all past and future costs associated with that employee’s employment. In addition, the employee could be assessed with substantial past and future medical costs that are directly related to the time he was employed at Costco. The complaint asserts that such a penalty would violate the due process and equal protection provisions of the Fifth Amendment.

Costco vigorously denied the allegations contained within the complaint and requested a meeting with the legal counsel for the parties. The parties met on a date scheduled for one week from the date of the filing of the complaint. Costco’s counsel then provided a detailed answer to many of the claims contained in the complaint and also stated that Costco would not be forced into doing anything that is not authorized by its corporate policies. Costco also requested that a written agreement be submitted to the court and that a discovery plan is agreed upon by the two parties.

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