Mizer v Nexstar
Filing
46
OPINION AND ORDER entered by U.S. Magistrate Judge Tom Schanzle-Haskins. Plaintiff David Mizer Enterprises, Inc.'s Motion for Sanctions 39 is ALLOWED in part. Defendant Nexstar Broadcasting, Inc. is ORDERED to pay the sum of $8,771.25 within thirty (30) days of the entry of this Opinion and Order. See written order. (LB, ilcd)
E-FILED
Wednesday, 31 August, 2016 01:46:01 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS, SPRINGFIELD DIVISION
DAVID MIZER ENTERPRISES, INC.,
Plaintiff,
-vsNEXSTAR BROADCASTING, INC.,
Defendant.
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) No. 14-cv-2192
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OPINION AND ORDER
THOMAS P. SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:
Before the Court is Plaintiff David Mizer Enterprises, Inc.’s (Plaintiff)
Motion for Sanctions (d/e 39) against Nexstar Broadcasting, Inc.
(Defendant). For the reasons stated below, Plaintiff’s Motion is allowed in
part and denied in part.
BACKGROUND
Plaintiff filed its Complaint (d/e 1) in this case on August 11, 2014.
The Plaintiff’s Complaint alleges that Plaintiff entered into a contract with
the Defendant which operates television stations throughout the country.
The contract provided that the Defendant would utilize Plaintiff’s proprietary
software and business model for car locating for a period of three years in
exchange for certain fees as outlined in Appendix A of the contract (d/e 1,
pg 3). The Plaintiff alleges that Plaintiff allowed Defendant to host
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proprietary copyrighted pages owned by Plaintiff on Defendant’s server,
giving Defendant the ability and autonomy to add and remove the software
from its station websites as it so desired (d/e 1, pg 3). The contract did not
specify an automatic extension beyond the termination date of December
31, 2010. The Plaintiff alleges, however, that Defendant continued to use
Plaintiff’s product after the term expired from January 1, 2011 until early
February, 2013, and failed to pay Plaintiff for its usage of the car locating
software and business model (d/e 1, pg 4).
Based upon these facts, the Plaintiff asserts claims of Breach of
Contract (Count I) (d/e 1, pg 5); Conversion (Count II) (d/e 1, pg 7);
Quantum Meruit (Count III) (d/e 1, pg 9); and, Copyright Infringement
(Count IV) (d/e 1, pg 10).
Defendant filed a Motion to Dismiss Counts I and II (d/e 6). The
motion to dismiss was granted in part and denied in part, with the Court
striking the request for punitive damages in Count I (d/e 15). Defendant
has answered all counts of the Complaint (d/es 10, 19).
On January 21, 2015, Plaintiff filed a Motion to Compel Initial
Disclosures and Discovery Responses (d/e 14). The Court ruled on the
motion to compel on February 4, 2015, ordering the Defendant to respond
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to discovery in accordance with Federal Rules of Civil Procedure by
February 28, 2015, and finding that no award of fees was appropriate.
On February 12, 2015, the Court entered a Scheduling Order (d/e 18)
governing discovery and trial settings.
On September 16, 2015, Plaintiff filed a Motion to Compel (d/e 24)
and a Motion for Sanctions Due to Spoliation of Evidence (d/e 25).
Plaintiff’s motion for sanctions due to spoliation of evidence was based
upon the “reimaging” of a hard drive on the computer of Todd Hartsell (a
potential witness in this case) after the Plaintiff had issued interrogatories
and requests to produce which specifically requested information that could
have existed on Hartsell’s hard drive (d/e 26, pg 5). The Defendant had
responded to one of Plaintiff’s interrogatories stating “Mr. Hartsell’s
computer was reimaged in November or December of 2014 and Mr.
Hartsell lost all documents and data saved by him to his computer’s hard
drive during the reimaging” (d/e 30-3, pg 17).
On October 7, 2015, Plaintiff’s Motion to Compel (d/e 24) was denied
as moot because the Defendant indicated it was providing the requested
discovery. On November 20, 2015, the Court denied Plaintiff’s Motion for
Sanctions Due to Spoliation of Evidence (d/e 25) without prejudice with
leave to re-file.
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On November 25, 2015, Plaintiff filed another Motion to Compel
(d/e 30). Defendant responded (d/e 31) to this motion to compel. The
Court set an evidentiary hearing on this motion to compel on March 9,
2016. The Defendant filed a motion to continue (d/e 36) the hearing on the
motion to compel in order to present live testimony at the hearing. On
March 3, 2016, the Court allowed the motion to continue the hearing and
set the hearing for March 30, 2016. During a telephone conference with
the parties regarding the nature of evidence to be presented at the
evidentiary hearing, an oral motion to continue the hearing was allowed
and the hearing was reset for April 26, 2016 in open court.
The Court conducted the evidentiary hearing in open court on April
26, 2016. At the conclusion, the Court ruled upon the objections and
granted in part and denied in part Plaintiff’s Motion to Compel (d/e 30). The
Court found that most of the discovery responses which Plaintiff questioned
in the Motion to Compel were either insufficient or non-responsive and
ordered the Defendant to search for documents and provide proper
responses. The Court’s ruling on Plaintiff’s motion to compel was
transcribed and filed of record (d/e 37). The specific rulings of the Court
will be discussed in the analysis of the Court’s ruling on the instant motion.
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On June 10, 2016, the Plaintiff filed the Motion for Sanctions (d/e 39)
currently before the Court. On June 27, 2016, Defendant filed its
Memorandum in Opposition to the Plaintiff’s Motion for Sanctions (d/e 42).
On July 12, 2016, the Court entered a revised scheduling order.
ANALYSIS
As noted above, the Plaintiff filed a Third Motion to Compel (d/e 30)
on November 25, 2015. On April 26, 2016, the Court ruled on the pending
motion to compel. The pending Motion for Sanctions (d/e 39) is filed under
Rule 37 of the Federal Rules of Civil Procedure based upon the Court’s
granting in part the motion to compel on April 26, 2016.
Plaintiff seeks sanctions under Rule 37 of the Federal Rules of Civil
Procedure. Rule 37(a)(5) provides that the Court must assess, against the
party whose conduct necessitated the motion to compel, the movant’s
reasonable expenses incurred in making the motion, including attorney’s
fees, unless the opposing party’s response was substantially justified. If
the motion is granted in part and denied in part, the court may apportion
reasonable expenses of the motion between the parties.
At the April 26, 2016, hearing, the Court ruled that the submissions of
the parties showed sufficient good-faith attempts to confer regarding
discovery compliance to satisfy the certification provisions of Rule 37(a)(1)
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(d/e 37, pg 3). At the hearing, the Court reviewed with the parties the
requirements for compliance concerning Rules 33 and 34 of the Federal
Rules of Civil Procedure regarding responding to interrogatories and
requests for production.
The Court stated that the party responding to a Request for
Production must state in writing, for each category requested, that
inspection will be permitted as requested, or if the responding party rejects
the request, the basis of the objection to the request. The Court noted that
objections are valid only if they specifically apprise the opposing party and
the Court about the nature of the otherwise non-responsive documents the
responding party will not produce and that general objections made without
elaboration, whether placed in a separate section or repeated by rote, are
not objections at all.
The Court indicated that a party has the obligation to seek
appropriate extensions from the Court if it can’t conduct a careful and
thorough search for responsive documents. The Court noted that a party
responding to a Rule 34 production request is under an affirmative duty to
seek the information reasonably available to it from its employees or agents
or subject to their control to satisfactorily answer the interrogatories or
requests to produce. The requirements noted by the Court were set forth in
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Novelty, Inc. v. Mountain View Marketing, Inc., 265 F.R.D. 370, 375-376
(S.D.Ind. 2009).
The requirements for searches for information sufficient to answer
interrogatories are substantially the same as the requirements for
responding to requests for production. The answers to interrogatories must
be responsive, full, complete, and unevasive. The answering party cannot
limit answers to matters within his or her own knowledge and ignore
information available to the individual answering the interrogatory or to
persons or sources under that individual’s control. If an appropriate
interrogatory is propounded, the answering party is required to give
information available to the answering party, if any, through his attorney,
investigators employed by him, or on his behalf or other agents or
representative, whether personally known, to the answering party or not. If
the answering party lacks the necessary information to make a full and
specific answer to the interrogatory, the individual answering the
interrogatory should state under oath the reason for the lack of information
and should set forth in detail efforts made to obtain the information. Miller
v. Doctor’s General Hospital, 76 F.R.D. 136, 140 (W.D.Okla. 1977)
The court in Fautek v. Montgomery Ward & Co., Inc., 96 F.R.D. 141
(N.D.Ill. 1982) summarized the duty of a party responding to discovery and
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the standard for imposing sanctions. The court noted as follows: . . .
[A] culpable failure to produce documents in response to a
request to produce can be the basis for sanctions under
Fed.R.Civ.P. 37(d). Parties are required to respond to
requests to produce in a complete and accurate fashion.
(citations omitted) This in turn requires that parties take
reasonable steps to ensure that their responses to requests
to produce are complete and accurate. (citations omitted)
Ultimate production of the material in question does not
absolve a party where it has failed to produce the material in
a timely fashion. (citations omitted) Once a failure to
comply with the discovery rules is established, sanctions are
appropriate; the degree of culpability is only a factor in
determining the severity of the sanctions to be applied.
(citations omitted) Thus, a failure to make discovery, even if
occasioned by simple negligence, may justify the imposition
of sanctions. (citations omitted)
Id. at pg. 145, 146.
The record before the Court clearly shows that the Defendant either
made little or no attempt to find the information or documents responsive to
the Plaintiff’s discovery requests or was aware of responsive information
and did not want to disclose it.
Defendant Nexstar is a large publicly traded corporation whose
primary business is owning and operating television stations in mid-size
markets throughout the United States. Nexstar owns, operates, and
programs sales and other services to over 100 separate television stations
in 62 market districts in the United States. While Nexstar has a corporate
headquarters, most of its actual business activities take place in television
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stations it owns, operates, or services. During the time at issue in this
lawsuit, individual mail service at the stations that form Nexstar were not
linked to the corporate servers (d/e 31, pgs 2-3).
In Plaintiff’s Requests for Production, which were the subject of the
Motion to Compel for which sanctions are sought, Plaintiff asked for
information concerning the formation and operation of the limited liability
corporation, Performance Team, LLC, by any personnel of Nexstar
Broadcasting, Inc. In its Request for Production 15 (d/e 30-4, pg 14) and
Request for Production 20 (d/e 30-4, pg 17), Plaintiff asked for any
documents relating or reflecting any business dealerships, or relationship
between Nexstar Broadcasting, Inc. and any of the affiliate stations or
personnel with or about Performance Team, LLC. The answer to both
requests for production was the same. The answer given was as follows:
Performance Team, LLC was not formed and is not
associated with, affiliated with, controlled by or under the
control of Defendant and prior to Plaintiff’s Complaint,
Defendant had no knowledge of this entity whatsoever.
Therefore, Defendant does not have any documents which
respond to this request.
In an attempt to resolve the discovery disputes regarding the
responses to its requests for production set forth above, counsel for the
Plaintiff wrote a detailed letter to defense counsel seeking additional
responses to the interrogatories and requests to produce (d/e 30-5).
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Plaintiff’s counsel requested responses to Requests for Production 15 and
20, and indicated that there were at least four high level Nexstar employees
with knowledge of Performance Team, LLC. Plaintiff again requested the
documents described in Requests for Production 15 and 20 (d/e 30-5,
pgs 6, 7).
Defense counsel sent a letter replying to each of the requests of
Plaintiff’s counsel for additional information which were not provided in the
responses to the interrogatories and requests to produce at issue in the
Motion to Compel. The response to the request for additional information
concerning knowledge of Performance Team, LLC was the same for both
production requests 15 and 20. The response given by the Defendant was
as follows:
THERE WERE NO HIGH LEVEL NEXSTAR EMPLOYEES
THAT HAD ANY DEALINGS WITH PERFORMANCE
TEAM, LLC AND NONE THAT HAVE ANY ABILITY TO
BIND THE CORPORATION. (capitalization and bold type
in original letter) (d/e 30-6, pgs 13, 14)
The responses set forth above both share the same deficiency. They
are bare factual and legal conclusions and give no indication that any
attempt was made to determine whether the documents existed or were in
the possession of the Defendant. Simply because the Performance Team,
LLC was not formed by, or associated with, or controlled by, the Defendant
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does not mean the Defendant does not have documents responsive to the
request for production. Likewise, the factual assertion that no “HIGH
LEVEL EMPLOYEES” had dealings with Performance Team, LLC and the
legal conclusion that employees dealing with Performance Team, LLC do
not have the ability to bind the corporation, does not excuse the duty to
inquire whether documents dealing with Performance Team, LLC are in the
possession of the corporate Defendant. No assertion was made that the
requests were unduly burdensome or overbroad.
While the non-involvement of the corporation with Performance
Team, LLC or the ability of Nexstar employees involved with Performance
Team, LLC to bind Nexstar may be issues which could be asserted in a
summary judgment motion or as a defense at trial, they are not issues
which may be asserted to avoid valid discovery requests.
In Defendant’s response to the Plaintiff’s Motion for Sanctions, the
Defendant asserts that the “proportionality” requirements in the recent
amendments to Rule 26 instruct the Court to take into consideration the
importance of the issues at stake in the action, the amount in controversy,
the parties relative access to relevant information, the parties resources,
and the importance of the discovery, in resolving the issues in the case,
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and whether the burden or expense of the proposed discovery outweighs
its likely benefit (d/e 42, pg 3).
The Defendant then argues that “this case is in essence a relatively
simple breach of contract case”. The Court disagrees.
First, the Plaintiff’s Complaint asserts claims for conversion, quantum
meruit, and a copyright infringement, in addition to the breach of contract
claim contained in Count I of the Complaint. Second, there was no hint of
the issue of proportionality of discovery raised by the Defendant’s response
to Requests for Production 15 and 20. In Defendant’s brief in opposition to
Plaintiff’s Motion for Sanctions, the Defendant argues that the activities of
two Springfield, Missouri, employees of the Defendant, Helen Agnew and
Stacy Boysen-Krauck, who had dealings with the Plaintiff through the entity
of Performance Team, LLC, had nothing at all to do with Nexstar
Broadcasting, Inc., which neither ratified or authorized any conduct by
these employees (d/e 42, pg 4). Defendant claims that discovery regarding
these two employees is not necessary because this is a “relatively straightforward breach of contract case” and the Plaintiff should not insist on
discovery which seems to be based on the contention that some dealings it
had with employees of Nexstar Broadcasting station in Springfield,
Missouri, is somehow the action of Nexstar Broadcasting, Inc.
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These assertions differ greatly from the position taken by Defendant
when opposing the Motion to Compel which was granted by the Court. In
the Defendant’s response to the Plaintiff’s Motion to Compel (d/e 31),
Defendant’s counsel asserted, with regard to the employees of the Nexstar
station in Springfield, Missouri, that the legal authority of those employees
had nothing to do with discovery, but was an issue to be determined when
ruling on the merits of the case. Specifically, with regard to the authority of
the Nexstar employees to bind the corporation, Defendant’s counsel stated
as follows: “While this may be an issue the Court will have to determine at
some point during the course of this litigation, it is inappropriate to ask for
that determination to be made in the context of the Motion to Compel. The
corporate employees’ ability to bind the corporation that employs them can
be a complex issue, both from a factual and legal standpoint.” (d/e 31,
pg 4). The Court agrees, in the context of this litigation, that determination
regarding the apparent authority of the employees of the Defendant can be
a complex issue. The purpose of discovery is not to determine that issue,
but to permit the parties to obtain facts which are necessary to make the
determination. Defendant’s objections to Requests for Production 15 and
20 stated above are based clearly upon only the legal theory asserted in
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the Defendant’s defense on the merits and not the inquiry for evidence
which is necessary to determine that legal issue on the merits.
The Defendant’s answer to paragraph 21 of Plaintiff’s Request to
Produce shows a continuation of the same type of answer. Request for
Production 21 requested all documents relating to or reflecting all dealings
of the Defendant, and any affiliate stations or personnel, with Blue Host and
Red Crow Marketing. Defendant’s response was as follows:
Defendant has no knowledge of these entities; therefore,
Defendant does not have any documents with which to
respond to this request.
Again, the answer reflects no search for documents, only the bald assertion
that because the Defendant does not know of the entity, it has no
documents mentioning Blue Host or Red Crow Marketing.
Based upon the exhibits to the Motion for Sanctions and the
Memorandum in Opposition to the Plaintiff’s Motion for Sanctions, it is
apparent that Defendant had in its possession documents responsive to
Plaintiff’s Request for Production of Documents requested above at the
time that it made the non-responsive assertions of fact and legal theory to
Requests for Production 15, 20, and 21 discussed above.
A review of the exhibits mentioned above show the Defendant had in
its possession emails of its former employee Helen Agnew which indicated
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that she received the Certificate of Organization and Articles of
Incorporation for Performance Team, LLC, as well as a draft operating
agreement for that entity (d/e 42, pg 13) (d/e 42-17, pg 1). Likewise, it is
obvious from documents produced after the Motion to Compel was granted
that Defendant had other documents which were responsive to the
requests to produce discussed above.
As noted in the factual summary above, the responses to the
interrogatories and requests for production at issue in the Motion to Compel
and this Motion for Sanctions were served on the Defendant on August 14,
2015 (d/e 23). The discovery responses were signed by Nexstar employee
Brian Jones.
After the Court granted the Motion to Compel, Defendant produced,
among other responsive documents, an eight-page Incident Investigation
Report dated July 23, 2014 dealing with the termination of Nexstar
employee Helen Agnew (d/e 40-18, pgs 2-10). The Incident Investigation
Report was sent with an email from Nexstar’s then Associate Counsel and
Human Resources Director (d/e 40-18, pg 11). Brian Jones, the Nexstar
employee who signed both the answers to interrogatories and the response
to request for production at issue in this case, was copied on the email
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which transmitted the Incident Investigation Report. The report is clearly
responsive to the document production requests cited above.
The report notes that Nexstar employee Helen Agnew used her
Nexstar email to communicate with the Plaintiff regarding her private
business project and in numerous communications seemed to imply that
Nexstar corporate sanctioned her joint venture and would be rolling out
Agnew’s product company-wide (d/e 40-18, pg 2). The report indicates that
it appears Agnew engaged in development and promotion of her business
during Nexstar’s normal business hours (d/e 40-18, pg 2).
The report also concludes that a Power Point presentation developed
by Agnew to promote her business gives the impression that her business
is a Nexstar project (d/e 40-18, pg 4). The report noted that another
document also gives the impression that Agnew’s business is a Nexstar
project (d/e 40-18, pg 4). The report also indicates that Agnew disclosed to
Nexstar her interest in Performance Team, LLC and another business in
2011, and represented that her activities were not in conflict with Nexstar.
Station General Manager Mark Gordon acknowledged there was no conflict
(d/e 40-18, pg 8). The report also gives details regarding Nexstar’s
employee’s dealings with Red Crow Marketing and the introduction of Red
Crow Marketing representatives to the Plaintiff. These communications
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with the Plaintiff were made using Nexstar email accounts (d/e 40-18,
pg 2). This information was responsive to the request for production.
The Incident Investigation Report had been prepared almost a year
before Brian Jones signed the answers to interrogatories and the
responses to requests for production, and a copy of the Incident
Investigation Report appears to have been sent to Jones at that time (d/e
40-18, pg 1). These facts clearly support the inference that no search was
done for materials which were responsive to the requests for production of
documents or that the Defendant did not want to produce the documents
which contained information which did not support its factual and legal
assertions in the answers to Requests for Production 15, 20, and 21.
These facts clearly show, at least, that the responses to the requests for
production discussed above were negligent and could support an inference
that the failure to properly respond to the discovery requests or conduct a
search may have been done in bad faith. Either inference is sufficient to
warrant sanctions.
The Defendant urges that the Court apply the formulation developed
by the Sixth Circuit in Freeland v. Amigo, 103 F.3d 1271, 1277 (6th Cir.
1997), to determine whether sanctions are warranted. The four factor test
applied in Freeland involved a review of a court administering a sanction
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which resulted in dismissal of the case. In Freeland, the court imposed a
discovery sanction precluding the use of the plaintiff’s expert witness which
resulted in dismissal with prejudice of the case for failure to comply with the
discovery cut-off date, even though the defendant had agreed to depose
two of the plaintiff’s experts after discovery cut off. This case does not
involve the draconian sanction of dismissal with prejudice. The Plaintiff
does not request such a sanction and requests only the attorney’s fees
incurred by the necessity of filing the motion to compel to assure proper
discovery responses. In the decision in Maynard v. Nygren, 332 F.3d 462
(7th Cir. 2003), the Seventh Circuit noted that it reviews discovery sanctions
for abuse of discretion standard. The Seventh Circuit held that there must
be clear and convincing evidence before a court invokes the “draconian”
sanction of dismissal of the case. Id. at 467. The court went on to note
that there must be clear and convincing evidence of willfulness, bad faith,
or fault before dismissing the case as a discovery sanction. Id. at 468. The
court also noted that other non-dismissal sanctions are generally
permissible even without clear and convincing evidence. Id. at 469.
The deficiencies with Defendant’s responses to interrogatories and
Requests for Production 15, 20, and 21, stated above also apply to other
answers to the discovery requested by the Plaintiff. For instance, Plaintiff’s
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Interrogatory 21 requested that the Defendant identify any documents
relevant to any aspects of the lawsuit which had been lost, misplaced, or
destroyed and requests identification of the document, describe how it was
lost, misplaced, or destroyed. The Defendant’s answer was as follows:
As a matter of practice, Defendant does not require
employees (corporate or station level) to save files and data
to a central location. Each Individual corporate employee
may determine whether to save information to the corporate
servers or their individual computer hard drive. At the station
level, no local file servers are connected to the corporate
servers and station level employees may determine whether
to save information to a local server or their individual
computer hard drive. All individual computers are wiped and
repurposed upon the departure of any employee. With
respect to electronic communications, Defendant's online
email mailboxes are configured to retain deleted information
for fourteen days (unless subject to a litigation hold). In
addition, each user has the ability to remove or delete any of
his or her own emails from the system. Defendant does not
save electronic data created by former employees. Due to
the passage of time between the termination date of the
contract with plaintiff and the present date, the Defendant
has undergone numerous changes to its information
technology systems which renders older data inaccessible.
The form of the answer indicates that Defendant’s answer is based
upon “a matter of practice” and did not involve any effort to ascertain a
specific answer to the interrogatory. The answer discloses no attempt to
find out if any relevant documents had been lost, misplaced, or destroyed.
Substantially the same answer was made to Requests for Production
5, 6, 12, 17, and 24. Some of those responses, in addition to the answer
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stated above, added conclusory allegations about burden or cost. Again,
the answers to the specific requests for production were non-responsive in
that there was no indication any search was made to determine whether
responsive documents existed. The fact that the Defendant may have
been inconvenienced by making individual inquiries for specific radio
stations does not excuse the use of a boilerplate answer which discloses
no attempt to determine whether the information exists and only recites
things that are done “as a matter of practice”. The documents described
above with regard to Requests for Production 15, 20, and 21 indicate that a
search made after the Court granted the Motion to Compel yielded
documents which were not previously produced.
The Plaintiff indicates that 238 Word documents, spreadsheets,
emails, image files, and Power Point presentations were submitted along
with supplemental answers and responses to discovery requests after the
Court granted the Motion to Compel (d/e 40, pg 5).
The Court finds that the responses and objections made by the
Defendant to the interrogatories and requests to produce before the Court
at the Motion to Compel hearing were not justified for requests to compel
discovery which the Court granted in total or in part.
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PREPARATION OF PRIVILEGE LOG
In its Motion for Sanctions, the Plaintiff requests sanctions because
the Defendant did not provide a “discovery log” (d/e 40, pg 14). From the
text of Plaintiff’s motion, it is apparent that Plaintiff is referring to the
submission of a privilege log for information withheld by the Defendant on
the basis of attorney client privilege, or attorney client work product, or
both. In its response to Plaintiff’s Request for Production 3, the Defendant
asserted attorney client privilege and attorney work product privilege (d/e
30-4, pg 6). In its response to Request for Production 4, the Defendant
asserted attorney client privilege (d/e 30-4, pg 7).
In its response to Plaintiff’s motion, Defendant asserts that “if a
privilege log is an essential element in discovery, the Defendant is still
awaiting a privilege log from the Plaintiff, who never provided one either”.
Defendant does not specify whether the Plaintiff has asserted attorney
client privilege in response to discovery sought by the Defendant. If no
attorney client privilege or other privilege is asserted, there is no
requirement for production of a privilege log.
The Defendant argues that a privilege log is not required by Rule
26(b)(5)(A)(ii). That Rule requires that, upon the assertion of privilege, a
party withholding information based on privilege, must describe the nature
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of the documents, communications, or tangible things not produced, and do
so in a manner that, without revealing the privileged information, enables
the other parties to assess the claim. While Rule 26 does not specifically
refer to a privilege log, compliance with Rule 26 is normally done through
the submission of a privilege log.
When ruling on the Plaintiff’s Motion to Compel regarding its Request
for Production 4, the Court ordered that a log should be kept if there are
any documents withheld on the basis of attorney client privilege and made
the same ruling with respect to Request for Production 4, with the
exception of communication between the existing counsel and the
Defendant. The Court twice ordered the Defendant to prepare privilege
logs for materials withheld on the basis of attorney client privilege (d/e 37,
pgs 10, 11).
Rather than preparing a privilege log as ordered by the Court, the
Defendant transmitted to the Plaintiff redacted emails containing the date of
the email, the person sending the email, and the names of the recipients of
the email and the “In re:” line generally describing the subject matter of the
email.
The assertion of attorney client privilege or attorney work product
privilege is typically met through the creation of a privilege log that
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“particularly and clearly sets forth the specific grounds for asserting
privilege or protection” as to each item. Cunningham v. Smithkline
Beecham, 255 F.R.D. 474, 480 (N.D.Ind. 2009). An attorney asserting
privilege must timely support that claim with a “privilege log” which
describes the nature of each document being withheld. Hobley v. Burge,
433 F.3d 946, 947 (7th Cir. 2006). It is necessary that the privilege log
specifically state the privilege which is asserted. Here, the Defendant has
asserted both attorney client privilege and attorney work product privilege.
It is impossible for the Court to tell whether the redacted emails
contain sufficient information for the Plaintiff to assess the validity of the
claim of privilege.
The Court ordered the Defendant to prepare a privilege log in order to
ensure that the Plaintiff would have sufficient information to assess any
assertion of privilege made by the Defendant. The Defendant is ordered to
produce privilege logs as ordered by the Court, for each document withheld
on the basis of attorney client privilege or attorney work product privilege,
with an exception for communication with counsel of record, stating the
following:
1)
The privilege asserted;
2)
A general description of the document by type (e.g. letter,
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memorandum, report);
3)
The date of the document;
4)
A general of the subject matter of the document;
5)
The name and job title of the author or originator of the
document; and,
6)
The name of the person who received a copy of the document
and their affiliation with the Defendant.
These privilege logs must be submitted to the Plaintiff within twentyone (21) days of the entry of this Opinion and Order.
SPOLIATION OF EVIDENCE LOCATED ON
TODD HARTSELL’S COMPUTER
The Plaintiff previously filed a Motion for Sanctions Due to Spoliation
of Evidence (d/e 25) and Brief in Support of that motion (d/e 26). The
Plaintiff in its interrogatories to Defendant asked Defendant to identify each
communication between Defendant’s employee, Todd Hartsell, and any
other employees in the Monroe, Louisiana, market from January 3, 2013 to
February 28, 2013, which regarded a specific product and/or the Plaintiff.
(Plaintiff’s Interrogatory 22, d/e 30-3, pg 17). In response to that
interrogatory, the Defendant indicated that Hartsell’s computer was reimaged in November or December 2014 and Hartsell lost all documents
and data saved by him on his computer’s hard drive during the re-imaging.
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The Plaintiff asserted in the spoliation motion that the re-imaging of
the computer constituted spoliation of evidence. In its memorandum in
support of the spoliation motion, the Plaintiff contended that on December
31, 2012, the Plaintiff contacted the Defendant to pursue a financial
settlement of the dispute which led to this lawsuit. The Plaintiff asserted
that in emails sent in February, April, and May of 2013, Mr. Hartsell
indicated to the Plaintiff that his legal department was involved. The
Plaintiff then stated that the Defendant received a copy of the Complaint
from the Plaintiff on May 21, 2014. This litigation was filed on August 11,
2014. Finally, the Plaintiff indicated that on October 22, 2014, discovery
requests were sent to the Defendant which specifically requested
information that could have reasonably existed on Hartsell’s computer.
Based upon the prior notice given to the Defendant and Mr. Hartsell
of the litigation, the Plaintiff urged that Defendant should be sanctioned for
spoliation of evidence. In its response to the Plaintiff’s spoliation motion,
the Defendant noted that the Plaintiff had not deposed either Hartsell or
any of Defendant’s information technology personnel to inquire about the
facts or circumstances regarding the re-imaging of the hard drive.
On November 20, 2015, the Court denied Plaintiff’s Motion for
Sanctions Due to Spoliation of Evidence without prejudice with leave to rePage 25 of 35
file. Plaintiff has elected not to re-file the spoliation motion dealing with the
re-imaging of Mr. Hartsell’s computer, but has raised the issue in its Motion
for Sanctions currently before the Court.
After this Court granted the Plaintiff’s Motion to Compel, the
Defendant filed supplemental discovery responses (d/e 40-19). In the
supplemental response to Interrogatory 22 filed by the Defendant,
Defendant indicated that subsequent investigation had determined that
Hartsell’s computer crashed in the Spring of 2013, not in November of 2014
as originally stated and Mr. Hartsell’s computer was upgraded in April of
2015.
In the pending Motion for Sanctions, the Plaintiff asserts that
Defendant’s “attempt to backdate Hartsell’s computer crash” seems
“suspicious and ingenuine (sic)”. Plaintiff’s suspicions, however, do not
provide evidence that the explanation given under oath in the interrogatory
answer is not true. The supplemental answer does indicate an incomplete
or insufficient inquiry was made by the Defendant in responding to
Plaintiff’s initial discovery requests.
Based on the Defendant’s supplemental discovery response,
Hartsell’s computer crashed prior to the filing of this lawsuit and prior to the
service of the discovery requests on the Defendant. As noted, the Plaintiff
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did not renew their original motion for sanctions for spoliation regarding
Hartsell’s computer. Consequently, the Court declines to rule that
sanctions be imposed for the actions described in the supplemental
discovery response to Plaintiff’s Interrogatory 22.
PRODUCTION OF MARKET PACKS
At the hearing on the Motion to Compel, the Court ordered the
Defendant to provide market packs for inspection and copying (d/e 37, pg
12). This ruling was made over the Defendant’s objection that the Plaintiff
already had the market packs. The Court noted that just because the
Plaintiff had the market packs doesn’t mean there wasn’t some alteration or
notation made on the market packs that were transferred from the Plaintiff
to the Defendant.
In its Memorandum in Support of the Motion for Sanctions, which is
currently before the Court, the Plaintiff asserts that “even after the Court
ordered them to return the market packs at the April 26, 2016 hearing, the
Defendant still refuses to do so” (d/e 40, pg 16). The Plaintiff indicates that
although the Defendant states in its supplemental discovery response that
it is turning over a copy of the original market packs, the document was not
found in discovery provided to the Plaintiff and there is no reasonable
explanation for the Defendant’s refusal to provide the information. The
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Defendant responds that Defendant uploaded market packs to a secure
server and then emailed Plaintiff’s counsel a link to allow him to download
the market packs (d/e 42, pg 17). Accompanying the Defendant’s
response is a copy of an email providing the link to the market packs
(d/e 42-19, pg 1). In reviewing the email, it is not clear from the face of the
email that this email was directed to the Plaintiff. The email indicates that
no annotations were made to the market packs, but, as the Defendant was
ordered to produce them, they can be retrieved at the link provided in the
email. If the email link was specifically sent to the Plaintiff with the
unannotated market packs, this is sufficient compliance with the Court’s
order. If the link was not provided to Plaintiff, Defendant is directed to
provide the link which gives access to the market packs to Plaintiff’s
counsel. Based on the representation made by defense counsel that the
link was emailed to Plaintiff’s counsel, the Court declines to impose any
sanction for failure to provide the market packs pursuant to the Court’s
order.
AWARD OF SANCTIONS FOR DISCOVERY VIOLATIONS
In its Motion for Sanctions, the Plaintiff requests that the Court order
the payment of its attorney’s fees as set forth in the Motion. The Motion
requests payment of three separate and distinct sets of attorney’s fees (d/e
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39, pg 2). The Plaintiff requests that the Court order the following
attorney’s fees to be paid as a discovery sanction:
1)
$2,655 in attorney’s fees for hours billed on Plaintiff’s Second
Motion to Compel dated September 16, 2016;
2)
$4,620 in attorney’s fees for hours billed on Plaintiff’s Motion for
Sanctions for Spoliation of Evidence dated September 16, 2015;
3)
$13,090 in attorney’s fees for hours billed on Plaintiff’s Third
Motion to Compel dated November 25, 2015, and for hours billed in
preparation for, and attendance at, the April 26, 2016 hearing on the Motion
to Compel.
The Plaintiff attached detailed hourly billings to its Motion for
Sanctions (d/e 39) as Exhibits A, B, and C. In its Memorandum in
Opposition to the Motion for Sanctions (d/e 42), Defendant first objects to
the award of any attorney’s fees. Defendant then makes specific
arguments supporting their contention that the attorney’s fees which the
Plaintiff seeks are grossly overstated and not in compliance with “the rules”.
Magistrate Judges are authorized to rule on any pretrial matter,
except for eight specific matters listed in enabling statute generally referred
to as “dispositive matters”. The award of sanctions against a party for
discovery violations is a non-dispositive matter over which a Magistrate
Page 29 of 35
Judge has jurisdiction. It is within the Magistrate Judge’s authority and
discretion to award sanctions for discovery violations. Gardendance, Inc. v.
Woodstock Copperworks, Ltd., 230 F.R.D. 438, 447-448 (M.D.NC 2005)
(affirming Magistrate’s award of discovery sanctions of $8,909.79 for failure
of party to appear at depositions).
The Defendant makes several specific objections to the Plaintiff’s
fees sought to be awarded as a sanction. The first objection argues that
Rule 37(a)(5)(A) only allows the award of reasonable expenses, including
attorney’s fees, related to filing and presentation of the motion upon which
the court granted relief.
Exhibit A to Plaintiff’s Motion for Sanctions (d/e 39-1) seeks attorney’s
fees for the hours billed on Plaintiff’s Second Motion to Compel dated
September 16, 2016 (d/e 39-1, pg 2). The Court finds no Second Motion to
Compel filed on September 16, 2016. The Plaintiff’s Second Motion to
Compel appears to have been filed on September 16, 2015 (d/e 24). The
Court assumes this is the motion to which the Plaintiff refers. That motion
to compel was denied as moot by the Court in its Text Order of October 7,
2015. Consequently, no fees will be awarded for the Motion (d/e 24).
Plaintiff next seeks award of attorney’s fees for Plaintiff’s Motion for
Sanctions Due to Spoliation of Evidence dated September 16, 2015. It
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appears the Plaintiff is referring to Plaintiff’s Motion for Sanctions Due to
Spoliation of Evidence filed on September 16, 2015 (d/e 25). That motion
was denied by the Court’s Minute Entry of November 20, 2015. No fees
will be awarded for that Motion (d/e 25).
Defendant objects that the Plaintiff’s Motion to Compel was
“unnecessarily lengthy and detailed”. This was caused, in part, due to the
number of objections and non-responsive answers made by the Defendant.
As noted below, the Court granted the vast majority of the requests to
compel discovery presented by the Plaintiff in its Motion to Compel. The
attorney’s fees awarded are apportioned below to reflect the denial, in
whole and in part, of some of the Plaintiff’s requests to compel discovery.
Moreover, the Defendant made no attempt to strike a portion of the Motion
to Compel for failure to comply with the Local Rules of the Central District
of Illinois based upon page limitations.
The Court has reviewed the billings submitted by the Plaintiff seeking
attorney’s fees for the preparation of the Motion to Compel (d/e 30). The
billing is attached to the Motion for Sanctions (d/e 39) as Exhibit C (d/e 393). The billing appears to charge a rate of $150 per hour. Defendant
raises no objection to the billing rate and the Court finds that the billing rate
is reasonable. In reviewing the billing, it appears that 9.3 hours of the time
Page 31 of 35
billed either does not specifically relate to the Motion to Compel or is
insufficiently documented to allow the Court to award fees for the time
represented by the billing entry.1 Exclusion of the 9.3 hours, when
multiplied by the hourly rate charged results in a reduction of $1,395.
Defendant also objects because the claim for attorney’s fees makes
no attempt to apportion the attorney fees based on degree of success
obtained by the Plaintiff. The Defendant asserts that such a reduction is
required by Rule 37(a)(5)(C). The Defendant is correct. If a motion is
granted in part and denied in part, the Court is directed to apportion the
reasonable expenses for the motion. The Court ruled on 24 requests to
compel discovery. The Court granted 19 of the Plaintiff’s requests. The
Court granted 17 requests to compel in total, two requests to compel in
part, and denied five of the Plaintiff’s requests (d/e 37). The Court denied
approximately one-fourth of Plaintiff’s requests to compel. The Court
determines that the award of attorney’s fees should be reduced by twenty1
Specifically, the Court makes the following reduction for hours billed on the following dates: 1) 11/11/2015
discounted by 1.5 hours for telephone discussion with Plaintiff – there is no indication that the telephone discussion
relates to the Motion to Compel; 2) 12/15/2015, .4 hour – the billing does not specify what portion of the time was
related to “other email exchanges . . . about depositions”; 3) 2/9/2016, .7 hour – billing relates to Motion to
Continue Scheduling Order dates; 4) 2/11/2016, .2 hour – no specification that the reviewed email relates to Motion
to Compel; 5) 2/17/2016, .1 hour – no specification that emails relate to Motion to Compel; 6) 2/22/2016, 1.1 hours
– billing has no specification as to the nature of “internal discussion”; 7) 2/23/2016, .8 hour – billing deals with
Motion to Continue Scheduling Order; 8) 3/11/2016, .1 hour – no specification that the emails relate to Motion to
Compel; 9) 3/26/2016, .2 hour – no specification that the emails relate to Motion to Compel; 10) 3/28/2016,
discounted by .2 hour for telephone call related to settlement negotiations and depositions; 11) 4/6/2016, .4 hour –
no detail as to emails reviewed; 12) 4/15/2016, 2.0 hours – no specification of relation to Motion to Compel; 13)
4/19/2016, 1.4 hours – no specification as to nature of documents reviewed and relation to Motion to Compel; 14)
5/16/2016, .2 hours – does not relate to presentation of Motion to Compel.
Page 32 of 35
five percent as reasonable apportionment for the success of the Plaintiff in
its Motion to Compel.
Defendant argues that Plaintiff is attempting to overreach on its claim
for attorney’s fees under Rule 37. Defendant cites Criterion 508 Solutions,
Inc. v. Lockheed Martin Services, Inc., 255 F.R.D. 489 (S.D.Iowa 2008). In
Criterion, the court refused to award over $12,000 in attorney’s fees on a
motion to compel a deposition. The court in Criterion was faced with a
situation where the plaintiff had refused to appear at his own deposition.
The court refused to award $12,000 in fees on a motion to compel a
deposition which the defendant knew would not occur as scheduled. Id. at
496. Failure to attend a deposition is a single discreet factual situation
which requires little analysis or explanation. In contrast, the Motion to
Compel herein required the detailing of multiple responses to discovery and
an explanation of the factual basis surrounding those responses, including
efforts to clarify the responses in detailed letters exchanged by Plaintiff and
defense counsel. As noted above, however, the court in Gardendance, Inc.
v. Woodstock Copperworks, Ltd., 230 F.R.D. 438 (M.D.NC 2005) affirmed
the magistrate’s award of discovery sanctions of nearly $9,000 for a failure
of a party to appear at a deposition. The amount of sanctions depends
Page 33 of 35
upon the factual situation involved in the discovery and on the factual
circumstances of the discovery dispute involved.
Defendant also argues that a clearly outrageous fee claim is sufficient
grounds for the court to summarily deny any fees as a sanction for
attempting to clearly claim more than is justified. Defendant cites Brown v.
Stackler, 612 F.2d 1057 (7th Cir. 1980). The court in Brown declined to
grant a fee request of a plaintiff where the attorney’s work consisted mostly
of motions for extension of time, as the six-page complaint filed by plaintiff’s
counsel raised an issue which everyone knew would be controlled by the
results of litigation pending in other courts and plaintiff was simply awaiting
the outcome of a Supreme Court case. Counsel in that case attempted to
bill 800 hours for their work. That fact pattern is clearly distinguishable
from the situation before the Court in this case.
Plaintiff requests $13,090.00 in fees be awarded as a sanction. After
deduction of the $1,395 for the time entries disallowed by the Court, the
amount of the fee request is reduced to $11,695. Reduction of that amount
by twenty-five percent ($2,923.75) results in a reduction of the fees
requested to $8,771.25. Plaintiff is awarded that amount as a sanction
against the Defendant for the Defendant’s non-disclosure and improper
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responses, and objections to the Plaintiff’s discovery requests which were
made without substantial justification.
CONCLUSION
THEREFORE, IT IS ORDERED that Plaintiff David Mizer Enterprises,
Inc.’s Motion for Sanctions (d/e 39) is ALLOWED in part. Defendant
Nexstar Broadcasting, Inc. is ORDERED to pay the sum of $8,771.25, as
set forth in detail above, within thirty (30) days of the entry of this Opinion
and Order.
ENTERED: August 31, 2016
__s/ Tom Schanzle-Haskins_______
TOM SCHANZLE-HASKINS
UNITED STATES MAGISTRATE JUDGE
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