Murphy v. The Allen Company, Inc.
Filing
154
MEMORANDUM OPINION & ORDER: 126 Objections to 6/24/2011 Order of Judge Wier OVERRULED; 117 MOTION for Sanctions by The Allen Company, Inc. GRANTED IN PART and DENIED IN PART; w/in 20 days, Plt's counsel SHALL tender to dft counsel Sheller check for $5,465.62; to extent mtn construed as mtn for further Rule 37 and Rule 11 sanctions, motion DENIED. Signed by Judge Jennifer B Coffman on 11/10/2011.(STB)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CIVIL ACTION NO. 09-69-JBC
MARY MURPHY,
V.
PLAINTIFF,
MEMORANDUM OPINION AND ORDER
THE ALLEN COMPANY, INC., ET AL.,
DEFENDANTS.
**********
This matter is before the court on Magistrate Judge Robert E. Wier’s order of
June 24, 2011, (R. 115) and the Allen Company’s objections to that order (R.
126), as well as the Allen Company’s motion to enter monetary sanctions (R. 117).
The court, having considered the Allen Company’s objections and having
conducted a de novo review of Judge Wier’s order and the record, will overrule the
Allen Company’s objections for the reasons stated below. Having further
considered the motion to enter monetary sanctions, the court will grant the motion
in part and deny it in part.
The Allen Company objects to two aspects of Judge Wier’s June 24, 2011,
order. First, it objects to the imposed discovery deadlines. As those deadlines
have since been extended, see R. 138, the court will overrule this objection as
moot. Second, the Allen Company objects to Judge Wier’s requirement that it
pursue Rule 11 sanctions pursuant to the mechanics of FRCP 11(c)(2) for Murphy’s
non-production of KBA documents ordered produced.
Judge Wier’s ruling granting the Allen Company leave to pursue Rule 11
sanctions pursuant to the mechanics of FRCP 11(c)(2) is neither erroneous nor
contrary to law. See FED. R. CIV. P. 72(a). Rather, Judge Wier is attempting to
gracefully correct this court’s error. In the order issued May 12, 2011, this court
stated that “[i]f Judge Wier denies Murphy’s motion [R. 103], he should consider
whether Rule 11 sanctions are appropriate.” R. 106 at 3. In the referenced
motion, Murphy requested the court to reconsider a prior order to turn over two bar
complaints. As this dispute arises out of a discovery-related motion, Rule 11
sanctions are inapplicable. See FED. R. CIV. P. 11(d). Sanctions for failure to
comply with a court order in discovery are appropriately addressed under Rule
37(b). By explicitly requiring the Allen Company to comply with the mechanics of
Rule 11 and Rule 37 sanctions, Judge Wier was attempting to bring this
discrepancy to the Allen Company’s attention without explicitly contradicting this
court’s order. Sanctions cannot be levied against Murphy’s attorney for his failure
to produce the KBA documents under Rule 11, either by motion of a party or by
the court acting sua sponte. Accordingly, the court will overrule the Allen
Company’s objections.
The Allen Company has also moved the court to liquidate the monetary
sanction previously imposed to an award of $5,465.62. This sanction was
imposed because Murphy violated the court’s order to bring certain documents to a
deposition, see R. 106; FED. R. CIV. P. 37(b)(2)(C), and it represents the amount of
time spent by Mr. Calabrese and Mr. Sheller preparing for and attending the
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resulting June 23, 2011, privilege log hearing and status conference, as well as
incidental travel, meal, and parking costs. The amount requested is reasonable
under the circumstances and in compliance with the court’s order. Murphy’s
argument that the court’s order contemplates costs for only one attorney is
groundless, as the court’s order states that “[b]ecause The Allen Company’s
counsel must travel to the hearing from Louisville, they may include their travel
time and mileage in their fees and costs.” This sanction, which is not the first
levied against Murphy in this case, is intended to reimburse the Allen Company for
the actual costs incurred because of Murphy’s non-compliance with the court’s
order. Because the costs asserted by the Allen Company are reasonable under the
circumstances, the court will grant this part of the motion.
The liquidated monetary sanctions will be payable within 20 days of the date
of this order. Murphy has requested the court hold in abeyance the imposition of
sanctions until the case is finalized, because discovery sanctions are not a final
decision subject to immediate appeal. Such a delay would frustrate the deterrent
purpose of the sanction. See Rentz v. Dynasty Apparel Industries, Inc., 556 F.3d
389, 401-402 (6th Cir. 2009).
The motion to enter monetary sanctions also includes a request for additional
monetary sanctions of $2,629.15 as reimbursement for time spent preparing a
response to Murphy’s bar complaint motion (R. 110) which it characterizes as
“meritless and unjustified” and for time spent analyzing Murphy’s status report (R.
109) which it characterizes as “factually and legally erroneous.” The court
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construes the request for reimbursement for dealing with the bar complaint motion
as a Rule 37(b) motion for sanctions and the request for reimbursement for dealing
with the status report as a Rule 11 motion for sanctions, and will deny both.
Rule 37 sanctions are not warranted regarding the bar complaint motion.
Murphy had already been specifically ordered to turn over the bar complaints in
Judge Wier’s order of January 7, 2011. See R. 97. This order was stayed
pending review, but was reinstated when the stay was lifted by Judge Wier’s order
of June 1, 2011. See R. 107. Despite this, the bar review motion centered around
a good faith argument for withholding the complaints based on a recent Kentucky
case, handed down after Judge Wier’s initial order, holding that a bar complaint is
absolutely privileged. See Morgan & Pottinger, Attorneys, P.S.C. v. Botts, Nos.
2009-SC-000515-TG, 2009-SC-000751-TG, 2009-SC-00818-TG, 2011 WL
1620591, at *6 (Ky. Apr. 21, 2011). Though the case cited is not binding on this
court and Judge Wier denied the motion, the argument it presented substantially
justifies Murphy’s further withholding of the bar complaints in question. See FED.
R. CIV. P. 37(a)(5)(A)(ii). Furthermore, once Judge Wier denied the motion and
ordered the bar complaints produced, Murphy immediately complied. Finally, the
costs incurred by the Allen Company while its attorneys prepared a response to the
bar review motion would not have been incurred but for its doggedly pursuing
discovery that is far afield from the facts at the center of this dispute. Under these
circumstances, and cognizant of the substantial sanction already levied against
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Murphy in this order, the court will not further sanction Murphy for the bar
complaint motion.
The court will likewise not sua sponte sanction Murphy for her June 16,
2011, status report. While the particular status report in question deals with
discovery issues, a status report is not among the discovery materials excluded by
Rule 11; therefore, it is considered a representation to the court and sanctions, if
appropriate, are properly addressed under Rule 11. The Allen Company has
requested reimbursement for time spent allegedly addressing considerable legal and
factual errors, but has failed to argue why sanctions are justified and to comply
with the procedural requirements of Rule 11. Under these circumstances, Rule 11
sanctions are not appropriate.
Accordingly,
IT IS ORDERED that the objections to Judge Wier’s June 24, 2011, order (R.
126) are OVERRULED.
IT IS FURTHER ORDERED that the motion to enter monetary sanctions (R.
117) is GRANTED IN PART and DENIED IN PART. Within 20 days from the entry of
this order, and in full satisfaction of the sanction imposed, Plaintiff’s counsel
SHALL tender to defense counsel, Mr. Sheller, a check for $5,465.62. To the
extent that the motion is construed as a motion for further Rule 37 and Rule 11
sanctions, the motion is DENIED.
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Signed on November 10, 2011
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