Widmar v. Sun Chemical Corporation et al
Filing
117
MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 5/16/2012:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
GEORGE WIDMAR,
Plaintiff,
Case No. 11 C 1818
v.
SUN CHEMICAL CORPORATION,
CHARLES RAMSEY, and THEODORE
KNOTT,
Hon. Harry D. Leinenweber
Defendants.
MEMORANDUM OPINION AND ORDER
Before
the
Court
are
Plaintiff’s
Motions
to
Compel
and
Defendants’ various Motions for Contempt, Sanctions, Fees, and Costs.
As
motion
practice
drags
on
this
case,
this
Court
remains
disappointed that counsel on both sides refuse to grant each other
basic
professional
courtesies.
Nonetheless,
for
the
reasons
contained herein, the Court denies former Defendant Peter Klug’s
Motion for Fees and Costs, grants in part and denies in part
Defendants’ Motion for Sanctions, grants in part and denies in part
Plaintiff’s Motion to Compel, and denies Sun Chemical’s Motion for
Civil Contempt and Sanctions.
Discovery is extended for thirty (30)
days from the date that this order is entered.
I.
KLUG’S MOTION FOR FEES AND COSTS
Former Defendant Peter Klug (“Klug”) has filed a Motion for Fees
and Costs pursuant to 28 U.S.C. § 1927.
That statute makes any
attorney or other person admitted to practice “who so multiplies the
proceedings in any case unreasonably and vexatiously” potentially
liable
“to
satisfy
personally
the
excess
costs,
expenses,
and
attorneys’ fees reasonably incurred because of such conduct.” In the
Seventh Circuit, such sanctions are appropriate if the movant can
show subjective or objective bad faith – that is, actual ill will or
conduct
that
is
objectively
on
par
with
indifference to the law, rules, or facts.
at
least
reckless
Dal Pozzo v. Basic Mach.
Co., Inc., 463 F.3d 609, 614 (7th Cir. 2006). Maintaining a claim
that is “without a plausible legal or factual basis and lacking in
justification” can justify sanctions.
427, 433-34 (7th Cir. 1988).
Walter v. Fiorenzo, 840 F.2d
Mere negligence will not suffice, but
extreme or extraordinary negligence may.
Kotsilieris v. Chalmers,
966 F.2d 1181, 1184-85 (7th Cir. 1992).
Essentially, Klug argues that Plaintiff and his counsel knew
before the original complaint was filed that Klug had not made the
alleged defamatory statements, but merely witnessed them.
Klug
points out that in his deposition, Plaintiff stated that before the
complaint was filed, he learned from Ron Petzel (“Petzel”) that Ted
Knott (“Knott”) had made the alleged statements, and that Klug had
merely been present. Accordingly, Klug argues, when Plaintiff’s
counsel led this Court to believe that they dismissed Klug as soon as
they understood his role, they misled the Court.
Plaintiff’s
counsel’s
behavior
was
Klug argues that
reckless,
careless,
and
unconscionable. (Klug also argues that Plaintiff provided false
interrogatory
responses
regarding
- 2 -
the
defamatory
statements.
However, read as a whole, the interrogatory responses clearly set out
Plaintiff’s understanding that Knott made the alleged statements in
Klug’s presence.)
Klug claims to have been harmed by the stress of
the suit, having to retain and meet with counsel, having a tarnished
reputation, and by having to disclose henceforth that he has been
sued.
Plaintiff, through counsel and his own affidavit, explains that
he told his counsel the information he first learned – that Klug and
Knott had both made defamatory statements. When he learned otherwise
shortly thereafter, he failed to convey that information to his
attorneys because
he
misunderstood
the
law of
defamation
—
he
believed that Klug would still be liable, for being indirectly
responsible for the false information.
argue
that
when
the
Plaintiff and his counsel
misunderstanding
became
apparent
during
discovery, they promptly endeavored to dismiss Klug from the suit.
Such a miscommunication should not be sanctionable, Plaintiff argues,
noting that defense counsel evidently failed to inform Klug for
several months that Plaintiff was trying to drop him from the suit.
The Court agrees that to the extent that the Motion is directed
at Plaintiff himself, it is improper.
The statute clearly directs
itself toward attorneys, not clients.
Further, the Court concludes
that Klug has done nothing to demonstrate that this was anything more
than an inadvertent failure of communication between Plaintiff and
his counsel, which was promptly remedied when counsel became aware of
it.
The Court sees no “extreme negligence” on the facts here.
- 3 -
Accordingly,
the
Court
declines
to
impose
fees
and
costs
on
Plaintiff’s counsel under § 1927.
II.
DEFENDANTS’ MOTION FOR SANCTIONS
Defendants ask the Court, pursuant to its inherent powers and
FED. R. CIV. P. 37 to “dismiss Plaintiff’s claims with prejudice as a
sanction for his numerous and repeated discovery violations and
perjurious statements, and order Plaintiff to pay Defendants all fees
and costs incurred as a result of Plaintiff’s misconduct.” Defendants
primarily object that Plaintiff: (a) destroyed evidence by deleting
the personal e-mail account he had used during his employment and
destroying documents showing his post-termination income; (b) stole
confidential and/or proprietary documents from Sun Chemical; and (c)
perjured himself in his sworn answers to interrogatories.
If a party fails to follow discovery rules or a court order,
they become subject to a variety of possible sanctions, ranging from
being unable to use non-disclosed evidence up to dismissal of the
case.
FED. R. CIV. P. 37(b, c).
However, the Seventh Circuit calls
dismissal an “extreme” sanction “that should be used only as a last
resort
in
situations
where
the
non-complying
willfulness, bad faith, or fault.”
party
displayed
Robinson v. Champaign Unit 4
School Dist., 412 Fed.Appx. 873, 877 (7th Cir. 2011).
Before
dismissing a case for discovery violations, courts should assess
whether
lesser
discovery
sanctions
would
suffice
to
cure
any
prejudice. Id. Even with potential perjury, the punishment should be
proportional to the offense and harm done, and dismissal can be
- 4 -
excessive.
Allen v. Chicago Transit Auth., 317 F.3d 696, 702-
703 (7th Cir. 2003).
Willfulness is a question of fact.
890, 892 (7th Cir. 2004).
resolved,
however,
Maynard v. Nygren, 372 F.3d
The Seventh Circuit has not definitively
whether
willfulness
must
be
found
by
a
preponderance of the evidence, or by clear and convincing evidence.
Watkins v. Nielsen, 405 Fed.Appx. 42, 44-45 (7th Cir. 2010).
A.
Destruction of Evidence
Regarding the alleged destruction of evidence, Defendants object
that Plaintiff deleted his old e-mail address, and cannot produce
certain income records from after his termination.
case
was
not
commenced
until
2011,
Defendants
Although this
point
out
that
Plaintiff was copied on litigation hold letters sent to Sun Chemical
in January 2010, placing him on notice of his obligation to retain
documents. Nonetheless, he deleted his old e-mail address two months
later, and lost certain pay stubs.
Plaintiff argues that he changed his e-mail address for innocent
reasons relating to his job search, and did not understand that the
records would be destroyed until he subsequently tried to obtain them
from Yahoo.
He points out that, at deposition, Defendants only
brought this up in the context of his alleged failure to mitigate his
unemployment, and identify no other specific prejudice they have
suffered from the loss.
As to the lost income documents, he calls
the loss merely accidental, in that they were misplaced somewhere in
his home.
However, he argues that Defendants suffer no prejudice,
- 5 -
because he has produced his tax returns for the years in question
along with all relevant records that he could find.
A sanction of dismissal is disproportionate to these discovery
failures.
Defendants have not demonstrated, even by a preponderance
of evidence, that there was anything approaching intentional, bad
faith destruction of evidence.
Where a party breaches a duty to
preserve documents, courts should consider whether the other party is
prejudiced, and whether the breach was willful or the result of bad
faith or fault.
See Bryden v. Boys and Girls Club of Rockford, No.
09 C 50290, 2011 WL 843907, at *2 (N.D. Ill. Mar. 8, 2011) citing
Faas v. Sears, Roebuck, & Co., 532 F.3d 633, 644 (7th Cir. 2008).
Fault is a function of the reasonableness of the challenged conduct,
and may be attributed for gross negligence, but not mere mistake or
ordinary negligence. Id.
The Court finds nothing above ordinary negligence here.
Cf.
Rhodes v. LaSalle Bank, No. 02 C 2059, 2005 WL 281221, at *3-4
(sanctioning Plaintiff who destroyed relevant, discoverable notes
during discovery).
prejudiced
at
least
That being said, however, Defendants will be
in
their
ability
to
present
mitigation and to refute Plaintiff’s damages evidence.
evidence
of
Accordingly,
Plaintiff will not be allowed to testify or present evidence of any
job applications or related activity before March 2010, unless he has
produced evidence of a specific job application to the Defendants.
- 6 -
B.
Stolen Documents
Defendants argue that between the summer of 2009 and his firing,
Plaintiff took home stolen documents in order to prove that the
product problems at Sun Chemical were not his fault.
Defendants
object that these documents were not timely turned over in response
to discovery, and that even when they were, Plaintiff refused to mark
them as confidential.
Plaintiff claims that he stole nothing, but instead brought some
documents home as part of his job over the years, and was never asked
to return or destroy them.
Plaintiff argues that the rolling
production is a function of counsel’s growing understanding of the
chemical processes at issue – the more counsel understands, more
documents are deemed relevant and turned over.
notes
that
copies
of
the
documents
have
Finally, Plaintiff
always
been
within
Defendants’ control, and adds that it is a good thing that Plaintiff
kept
them,
because
Defendants
have
failed
to
disclose
those
documents, even when they are relevant to Plaintiff’s discovery
requests.
Plaintiff seeks fees and costs for having to respond to
this motion.
Defendants have not presented evidence that Plaintiff retains
documents he should not have had access to, nor have they alleged
that Plaintiff was ever told to return any documents.
Cf. Rhodes,
2005 WL 281221, at *4-5 (Plaintiff stole confidential documents from
her
supervisor’s
Nonetheless,
desk).
Plaintiff
has
Dismissal
not
is
not
justified
addressed
the
failure
- 7 -
to
here.
mark
documents as confidential and has taken a leisurely pace in turning
over the documents he possesses.
to
mark
all
requested
Accordingly, Plaintiff is ordered
documents
confidential,
and
to
provide
Defendants with a list of all documents in his possession relating to
Sun Chemical (other than those turned over by Defendants in this
matter).
The Court has received too few details on these documents,
and so reserves ruling on whether Plaintiff may use any latedisclosed documents.
Each side will bear their own costs on this
motion.
C.
False Answers to Interrogatories
Defendants also argue that Plaintiff has given several false
answers to interrogatories. First, Defendants argue that Plaintiff’s
Complaint pleads a written contract, but that at deposition Plaintiff
admitted
that
he
never
saw
the
Complaint’s
Exhibit
E
(which
purportedly set out Rycoline’s severance policy) before he was
terminated.
Second, Defendants argue that Plaintiff’s interrogatory
responses are false in that they claim that Angel Ruiz (“Ruiz”) gave
Plaintiff a list of people who assumed Plaintiff’s former work
duties, whereas at deposition Plaintiff testified only that Ruiz told
him that several people were now handling his old duties, without
giving names.
Third, Defendants again argue that the interrogatory
responses regarding Klug’s involvement were false.
Finally, they
argue that Plaintiff lied in stating that his only employment since
leaving Sun Chemical was to work for Core Components, given that he
testified
in
deposition
that
he
is
- 8 -
self-employed
by
Universal
Merchandising and Logistics, and has done work for Core Components
and Cattie Adhesives.
Plaintiff first responds that he never claimed that Exhibit E
was the actual written contract with Rycoline/Sun Chemical.
Second,
as to the conversation with Ruiz, Plaintiff argues that Defendants
misrepresent the record, as he stated in deposition that he did not
remember
his
conversations
interrogatory responses.
as
clearly
as
when
he
drafted
the
Third, Plaintiff incorporates his previous
responses regarding Klug’s participation.
Finally, Plaintiff seeks
sanctions for Defendants’ manipulation of the record in this motion.
Regarding Exhibit E to the Complaint, it has been unclear to
date whether that Exhibit was claimed to be the written contract, or
only to document one of its terms.
However, that lack of clarity is
hardly perjurious, and Defendants’ Motion is denied to that extent.
Regarding the conversation with Ruiz, Plaintiff testified at
deposition that Ruiz gave him no names; Plaintiff only expressed a
poor
recollection
(“DiDomenico”).
of
the
conversation
with
Vicki
DiDomenico
Plaintiff’s identifying Ruiz in his interrogatory
responses as the person who explained how Plaintiff’s former duties
were
distributed
deposition
is
testimony.
therefore
somewhat
Nonetheless,
the
inconsistent
Court
finds
with
that
his
this
inconsistency (which may well be a sloppy conflation of DiDomenico
and Ruiz in the interrogatory response) is a far cry from the sort of
deliberate perjury that would warrant dismissal.
Cf. Targin Sign
Systems, Inc. v. Preferred Chiropractic Center, Ltd., 679 F.Supp.2d
- 9 -
894, 895-96 (N.D. Ill. 2010) (describing the sort of perjury that
this Court believes would merit such sanctions).
This is “the sort
of discrepancy that juries routinely sort out.” Wallace v. McGlothan,
606 F.3d 410, 427 (7th Cir. 2010).
It does not merit sanctions.
The Court has already rejected Defendants’ arguments about the
Klug interrogatory responses.
Although some parts of the response
were not drafted as precisely as they could have been, read as a
whole, there is no basis for finding that Plaintiff deliberately
falsified his discovery responses.
Plaintiff does not respond to the claim that he failed to
disclose
his
self-employment
with
Universal
Logistics and his work with Cattie Adhesives.
Merchandising
and
The Court takes this
as a concession that the information was not provided.
Plaintiff is
ordered to turn over a complete listing of his post-termination
employers within fourteen (14) days of the entry of this order, and
to pay Defendants 1/6 of their reasonable fees and costs in bringing
this motion.
III.
FED. R. CIV. P. 37 (c)(1)(A).
SUN CHEMICAL’S MOTION FOR CONTEMPT AND SANCTIONS
Sun Chemical moves for a finding of civil contempt and sanctions
against Plaintiff and his counsel for alleged violations of the
protective order in this case, as well as an order barring Plaintiff
from contacting any Sun Chemical customer and requiring him to turn
over information on any such contacts that have already occurred.
Sun Chemical also seeks fees, expenses, and damages from the alleged
violations.
- 10 -
In 2009, Sun Chemical employees circulated a confidential e-mail
describing a problem with a particular product (a defect which
Plaintiff argues was wrongfully attributed to him and which triggered
his firing).
The e-mail listed customers who may have purchased a
compromised batch of product, and asked that quiet inquiries be made
with each customer.
That e-mail was turned over in discovery.
Recently, Plaintiff’s counsel contacted several customers on that
list, asking if they had issues with the product, who their sales
representative was in 2009, and what, if anything, the customer was
told about the product problem.
Sun Chemical alleges that these
phone calls violated the protective order in this case, but does not
specify what impermissible information was disclosed or what harm it
has
suffered.
It
insists,
however,
that
the
inquiries
were
irrelevant and meant solely to harm Sun Chemical.
Plaintiff and his counsel argue that no improper information was
disclosed, noting that the e-mail itself directed employees to
quietly
notify
therefore,
the
Plaintiff
customers
argues,
of
the
asking
problem.
whether
By
the
definition,
customer
had
experienced any problems could not disclose confidential information.
Plaintiff’s counsel provided an affidavit swearing that she shared no
documents in these interviews, which lasted roughly five minutes by
phone.
The only mention of Plaintiff in that process, she says, was
to explain her role in this litigation and to ask whether any
comments were made about Mr. Widmar in communications stemming from
the 2009 product problems.
- 11 -
The protective order in this case provides that the parties will
ensure that any information marked confidential will be used only for
specified purposes and disclosed only to authorized individuals.
As
relevant here, any confidential documents or information may be
disclosed to potential witnesses only as provided in Paragraph 11.
Paragraph 11 provides: “[m]aterial designated as CONFIDENTIAL may be
shown to witness during, or in preparation for, the examination of
such witness at deposition or pre-trial hearing,” but only if the
witness is employed by the party producing information, privy to the
confidential document, or agrees to be bound by the protective order.
A litigant should not be held in contempt unless it has violated
an unambiguous command.
Abbott Labs. v. Baxter Intern., Inc., 218
Fed.Appx. 523, 525 (7th Cir. 2007).
Sun Chemical argues that by
calling the customers listed in the e-mail, Plaintiff’s counsel
disclosed confidential information.
It has pointed to no provision
of the protective order, however, that prohibits Plaintiff’s counsel
from contacting potential witnesses identified through discovery, at
least so long as counsel does not convey confidential information to
those potential witnesses in violation of Paragraph 11.
Despite the
fact that defense counsel has evidently spoken with at least one such
customer, Sun Chemical has not identified any sensitive information
that was actually disclosed.
The Court agrees with Plaintiff that his counsel did not violate
an unambiguous provision of the protective order.
This Court has
before it the sworn affidavit of an officer of the court stating that
- 12 -
no confidential information was shared in these brief interviews, and
absent actual evidence to the contrary, the Court will not find
contempt.
Defendant’s
Motion
is
denied.
To
the
extent
that
Plaintiff intends to use any of those customers or their statements,
however, Plaintiff is directed to amend his discovery disclosures
within five (5) days of the entry of this order.
IV.
PLAINTIFF’S MOTIONS TO COMPEL
Plaintiff has filed a second Motion to Compel, as well as a
supplement to his original Motion to Compel.
Defendants object to
both filings as untimely, as they were filed on April 18, two days
after discovery was set to close in this case.
As to the Second Motion to Compel, the Court would ordinarily
agree with Defendants and deny the motion.
However, when this Court
issued its first ruling on Plaintiff’s first Motion to Compel on
April 19, 2012, it did so with the common sense understanding that
the parties were continuing discovery until that production was
complete.
Furthermore, to the extent that, as Plaintiff alleges,
Defendants agreed but then failed to produce certain documents, the
Court finds good cause for the late motion. Accordingly, it will
consider the Motion on the merits.
To prevent this problem from
recurring, the Court extends the discovery deadline until thirty (30)
days from the entry of this order, for the limited purpose of
completing discovery consistent with this ruling.
With regard to the supplement to the original Motion to Compel,
Defendants add the objection that Plaintiff makes new demands but
- 13 -
failed to meet and confer with Defendants as required by Local Rule
37.2.
Defendants’ point is nearly self-defeating, however, as they
proceed to note that the vast majority of Plaintiff’s requests had
been raised in the original Motion; the fact that these issues remain
outstanding is a good argument that additional conferences may have
been futile.
See generally, In re Sulfuric Acid Antitrust Lit., 231
F.R.D. 351, 356 (N.D. Ill. 2005). However, given that the Court is
extending discovery, and that several of Plaintiff’s requests are
mooted in part by this Court’s April ruling, the Court will deny
Plaintiff’s Supplemental Motion to Compel without prejudice until
counsel
have
met
and
conferred
regarding
outstanding
issues.
Accordingly, only Plaintiff’s Second Motion to Compel is considered
below.
A.
Interrogatory No. 1: Sun Chemical Reports
Plaintiff asks Defendants to identify and list any reports made
regarding manufacturing, product quality and/or formula testing of
Sun Chemical products, from 2009 to the present.
In addition to the
contents of each report, Plaintiff wishes to know who prepared it,
how often, on what software, and for whom. Plaintiff argues that this
information
Plaintiff
would
to
drastically
selectively
simplify
request
only
discovery
the
by
relevant
allowing
individual
reports.
The Court agrees with Defendants that the April 19 order already
obliges them to turn over product quality and testing reports from
2008-2010.
As for manufacturing reports, Defendants should produce
- 14 -
a list of the types of reports that Sun Chemical routinely produces
regarding product manufacturing, and their frequency and general
coverage.
Plaintiff may then seek copies of relevant reports from
that list, limited to the 2008-2010 time frame.
B.
Interrogatory No. 2: Communications with Ron Petzel
Plaintiff notes that after Ron Petzel told Plaintiff that
Defendant Ted Knott had made defamatory statements about him, Petzel
signed an affidavit to the contrary.
was
prepared
by
defense
counsel,
Believing that the affidavit
Plaintiff
seeks
a
list
and
description of all contacts with Petzel, either by Defendants or
their attorneys.
Plaintiff asserts that the request is not overly
burdensome, and is critical to this case.
Defendants object that Plaintiff has not offered a sufficient
reason to grant discovery from opposing counsel, and could have
obtained this information by deposing Petzel.
The Court agrees and
denies the Motion, but gives Plaintiff leave to depose Petzel within
thirty (30) days.
C. Information Regarding the Relationship
Between Ed Toliopoulos and Debbie Schalke
In deposition, Plaintiff’s counsel inquired into whether Ed
Toliopoulos
(“Toliopoulos”)
Plaintiff’s
duties)
and
one
relationship outside of work.
(who
allegedly
Debbie
Schalke
took
over
(“Schalke”)
some
have
of
a
Schalke allegedly reports directly to
Toliopoulos, and Plaintiff considers her a potential witness as to
both the product quality issues and as to how Plaintiff’s duties were
- 15 -
distributed after he was fired.
will
be
called
as
a
rebuttal
Plaintiff anticipates that Schalke
witness
to
support
Toliopoulos’
testimony, and argues that the fact finder should be made aware of
any relationship between the two if she testifies.
Defendants are
correct, however, that although he was instructed not to, Toliopoulos
answered the question (in the negative). Although he refused to
answer follow-up questions, the Court will deny the Motion to Compel
Additional Disclosures regarding any relationship to Schalke.
V.
CONCLUSION
For the reasons stated herein, the Court rules as follows:
1.
Denies Peter Klug’s Motion for Fees and Costs [DKT 74];
2.
Grants in part and denies in part Defendants’ Motion for
Sanctions [DKT 80];
3.
Grants in part and denies in part Plaintiff’s Motion to
Compel [DKT 83];
4.
Denies Plaintiff’s Supplemental Motion to Compel without
prejudice; and
5.
Denies
Sun
Chemical’s
Motion
for
Civil
Contempt
Sanctions [DKT 87].
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
DATE:5/16/2012
- 16 -
and
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?