Global Technology, Incorporated v. Ningbo Swell Industry Co., Ltd.
OPINION and ORDER Denying Plaintiff's 97 MOTION for Reconsideration re 92 Order, Set Deadlines/Hearings, Set Scheduling Order Deadlines, Granting Defendant's 93 MOTION to Compel Production of Documents and for Attorney' ;s Fees and Costs and Appointing Special Discovery Master Pursuant to Fed. R. Civ. P. 53(a)(1)(C), (Status Conference set for 6/16/2021 at 9:30 AM before District Judge Gershwin A. Drain) Signed by District Judge Gershwin A. Drain. (TMcg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
GLOBAL TECHNOLOGY, INC.,
Case No. 19-cv-10934
UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN
NINGBO SWELL INDUSTRY CO., LTD.,
OPINION AND ORDER DENYING PLAINTIFF’S MOTION FOR
RECONSIDERATION [#97], GRANTING DEFENDANT’S MOTION TO
COMPEL PRODUCTION OF DOCUMENTS AND FOR ATTORNEY’S
FEES AND COSTS [#93] AND APPOINTING SPECIAL DISCOVERY
MASTER PURSUANT TO FED. R. CIV. P. 53(a)(1)(C)
On April 27, 2021, this Court issued an Order Granting in Part and Holding
in Abeyance in Part Plaintiff Global Technology Inc.’s (Global) Motion to Compel
Discovery, Granting in Part and Denying in Part Defendant Ningbo Swell Industry
Co. Ltd.’s (Swell) Motion to Quash Subpoenas and/or for Protective Order,
Extending Discovery for 45 Days, Requiring Certain Depositions within 30 Days,
and Requiring Briefing on the Appointment of a Special Discovery Master. ECF
Now before the Court is Global’s Motion for Reconsideration, filed on May
11, 2021. The Court ordered Swell to respond to Global’s Motion, and Swell filed
its Response on May 26, 2021, and Global filed its Reply on May 27, 2021. Also,
before the Court is Swell’s Motion to Compel Production of Documents and for
Attorney’s Fees and Costs, filed on May 5, 2021. Global filed a Response to
Swell’s Motion to Compel and for Attorney’s Fees on May 13, 2021. Swell filed
its Reply on May 18, 2021.
Additionally, both parties have filed their
supplemental briefs concerning the appointment of a special discovery master for
this action. A hearing on the pending motions was held on June 4, 2021.
For the reasons that follow, the Court will deny Global’s Motion for
Reconsideration and grant Swell’s Motion to Compel Production of Documents
and for Attorney’s Fees and Costs. Additionally, the Court concludes a Special
Discovery Master should be appointed to resolve the parties’ remaining discovery
disputes and any additional disputes that may arise in the future.
II. LAW & ANALYSIS
A. Defendant’s Motion to Compel and for Attorney’s Fees and Costs
In its Motion to Compel, Swell argues Global has only produced roughly
177 documents in response to Swell’s Five Requests for Production (RFP).
However, in the Reply, Swell indicates Global made a recent production on May
17, 2021, and argues this production contains documents Magistrate Judge David
R. Grand ordered Global to produce by March 17, 2021, after a lengthy hearing on
February 22, 2021 concerning Swell’s first Motion to Compel. See ECF Nos. 85,
87. Swell seeks its attorney fees and costs incurred as a result of Global’s failure
to produce documents and noncompliance with Magistrate Judge Grand’s order.
Swell also seeks attorney fees and costs incurred as a result of Global’s failure to
produce a (1) Rule 30(b)(6) witness, (2) its President, Dale Hadel, and (3) Account
Representative, Paula Cicilian, for properly noticed depositions.
Finally, Swell argues the Court should find Global is not entitled to any
post-termination commissions on “disputed products” because Global has failed to
provide any documents to support its claim to post-termination commissions on
“disputed products.” Swell relies on Rule 37(b)(2)(A)(v), which empowers the
Court to dismiss an action in whole, or in part, when a party fails to comply with
the Federal Rules of Civil Procedure and Court orders. See Fed. R. Civ. P.
1. Swell’s Fifth RFP, Nos. 2 through 7
Swell’s Fifth RFP, No. 2 relates to Swell’s Fourth RFP, Nos. 8-9. All of
these requests seek documents relating to Global’s procurement of business for
Swell. Specifically, Swell’s Fifth RFP, No. 2 seeks:
All documents and communications related to any program procured
by or through Plaintiff during the term of the Sales Representative
Agreement, including any request for quotation, quotation, or
ECF 93-2, PageID.2085. Global objected to this request based on relevance,
proportionality, annoyance, and harassment grounds. Additionally, Global noted
“the Products known to be produced for the customer prior to the effective date of
termination are identified in the list provided by James Cameron of Dykema
Next, Swell’s Fifth RFP, No. 6, like Swell’s Fourth RFP, No. 3, seeks all
documents and communications relating to “Global’s entitlement to posttermination commissions.” Global again objected to this request using the same
relevance, proportionality, annoyance, and harassment language.
claimed to have already produced responsive documents to parts (a) and (b) of the
request, and noted the documents falling under parts (c) and (d) were in the
possession of the Defendants.
Finally, NSI’s Fifth RFP Nos. 3-5 and 7, like NSI’s Fourth RFP Nos. 6 and
7, seek the supporting documents on which Global bases its invoices and
spreadsheets. Global’s responses to NSI’s Fifth RFP Nos. 3-5 and 7 likewise
include objections based on relevance, proportionality, annoyance and undue
burden without stating whether Global has responsive documents to the requests.
Here, Magistrate Judge Grand ordered Global to produce the same
documents at issue in Global’s present Motion to Compel in his February 24, 2021
order granting Swell’s first Motion to Compel.
Global’s responses to Swell’s
Fifth RFP, Nos. 2-7 are deficient and fail to comply with Magistrate Judge Grand’s
February 24, 2021 order because they do not state whether Global has any
responsive documents in its possession. ECF No. 87, PageID.1961 Global’s
responses also raise the same relevance objection already rejected by Magistrate
Judge Grand at the February 22, 2021 hearing and in his February 24, 2021 order.
Therefore, Global’s responses to Swell’s Fifth RFP, Nos. 2-7 must be
supplemented consistent with Magistrate Judge Grand’s February 24, 2021 order
and the instant order.
Additionally, Swell is entitled to its reasonable attorney’s fees and costs
incurred as a result of preparing the present Motion to Compel, the Reply and for
oral argument taken on June 4, 2021. When a party fails to comply with a court’s
order compelling discovery, Fed. R. Civ. P. 37(b)(2)(C) requires the district court
where the action is pending to “order the disobedient party, the attorney advising
that party, or both to pay the reasonable expenses, including attorney’s fees, caused
by the failure, unless the failure was substantially justified or other circumstances
make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).
Here, Global’s May 17, 2021 production includes files containing sales
reports, invoices and other documents with payment details from 2012 through
2018 that are relevant to the Amended Complaint’s spreadsheets. All of these
documents are directly responsive to RFP Nos. 2 through 7 from Swell’s Fifth
RFP, which seek the same documents Magistrate Judge Grand ordered Global to
produce by March 17, 2021.
Global’s recent production should have been
produced long ago. Global provides no justification let alone a substantial one for
failing to produce records it was ordered to produce and that Global relied upon to
prepare the Amended Complaint’s spreadsheets, including invoices, sales reports
and documents with payment details and communications related to the same, at
this stage of the proceedings. Accordingly, Swell is entitled to its reasonable
attorney’s fees and costs incurred for drafting and filing the present Motion to
Compel and the Reply brief, as well as for oral argument taken on June 4, 2021.
Failure to Produce Rule 30(b)(6) Witness and Employee
On March 5, 2021, Swell served Global with a Notice of Taking 30(b)(6)
Deposition Duces Tecum for April 14, 2021. On March 26, 2021, Swell served
Notices of Taking Depositions of Global’s President Dale Hadel and Global’s
Account Representative, Paula Cicillian. However, Global did not produce a Rule
30(b)(6) witness on April 14, 2021. Cicillian and Hadel also failed to appear for
their noticed depositions.
The Federal Rules of Civil Procedure obligate the district court where the
action is pending to award, on motion, sanctions in the form of attorney’s fees
caused by a party’s or a party’s officer’s, director’s, or managing agent’s failure to
attend his or her own deposition, after proper notice, unless that failure is
substantially justified, or other circumstances make an award of expenses unjust.
See Fed. R. Civ. P. 37(d)(1)(A)(3). The Court “must require the party failing to
act, the attorney advising that party, or both to pay the reasonable expenses,
including attorney’s fees, caused by the failure[,]” unless substantial justification
for the failure is demonstrated. Id.
Plaintiff has failed to demonstrate its failure to produce a corporate
representative or its President was substantially justified. Substantial justification
is not established on the ground that the discovery sought was objectional, unless
the party failing to act has a pending motion for a protective order under Rule
26(c). Plaintiff never objected to producing these witnesses, nor moved for a
Swell is entitled to its reasonable attorney’s fees and costs
incurred as a result of Global’s failure to produce a corporate representative and its
President for noticed depositions.
For all of these reasons, the Court grants Swell’s Motion to Compel
Production of Documents and for Attorney’s Fees and Costs. In so doing, the
Court declines to impose the most severe sanction – dismissal of Plaintiff’s claims
under Rule 37(d)(2)(A)(v) at this stage of the proceedings. However, the Court
will admonish Plaintiff’s counsel that additional failures to comply with the
Federal Rules of Civil Procedure or this Court’s orders will lead to the imposition
of more severe sanctions up to and including dismissal of Plaintiff’s claims.
B. Global’s Motion for Reconsideration
In its present motion, Global requests that the Court reconsider its April 27,
2021 decision concluding Global’s requests for production are disproportional and
seek duplicative materials Global already has in its possession. Global argues the
Court ignored the affidavit of Paula Cicilian wherein she explained that, even with
the data from the e-supplier portals and NSI’s Shipment History Reports, Global
still did not have enough information to prepare the invoices for Swell. Global
also requests that the Court reconsider its April 27, 2021 decision limiting the
topics for the depositions of GM and FCA corporate representatives to “functional
use” of the products, as well as the limitation that the depositions be taken by
Local Rule 7.1(h)(3) of the Local Rules of the United States District Court
for the Eastern District of Michigan provides:
Generally, and without restricting the Court’s discretion, the Court
will not grant motions for rehearing or reconsideration that merely
present the same issues ruled upon by the Court, either expressly or by
reasonable implication. The movant must not only demonstrate a
palpable defect by which the Court and the parties and other persons
entitled to be heard on the motion have been misled but also show that
correcting the defect will result in a different disposition of the case.
E.D. Mich. L.R. 7.1(h)(3). “A ‘palpable defect’ is ‘a defect that is obvious, clear,
unmistakable, manifest, or plain.’” United States v. Lockett, 328 F. Supp. 2d 682,
684 (E.D. Mich. 2004) (citing United States v. Cican, 156 F. Supp. 2d 661, 668
(E.D. Mich. 2001)). “[A] motion for reconsideration is not properly used as a
vehicle to re-hash old arguments or to advance positions that could have been
argued earlier but were not.” Smith ex rel. Smith v. Mount Pleasant Pub. Sch., 298
F. Supp. 2d 636, 637 (E.D. Mich. 2003) (citing Sault Ste. Marie Tribe of Chippewa
Indians v. Engler, 146 F.3d 367, 374 (6th Cir.1998)).
Global first argues this Court erred in concluding Global already had access
to the relevant information, and thus its requests are disproportional and
duplicative. Global maintains the information from the e-supplier portals is
insufficient to confirm Global is being paid for all of the Products for which it is
owed post-termination commissions under the SRA.
Global has not demonstrated a palpable defect with this Court’s conclusions.
In the Court’s April 27, 2021 order, the Court relied on counsel’s admissions that
Global already possessed some of the information sought by the motion to compel
and confirmed by Global’s spreadsheets. The Court also relied on the fact Swell
had produced 43,000 pages of responsive documents to Global’s nine RFPs. The
Court’s failure to rely on the affidavit of Paula Cicilian, Global’s Account
Representative, was not a palpable defect. The affidavit was improperly filed with
the reply brief, rather than the motion to compel. See Fed. R. Civ. P. 6(c)(2)(“Any
affidavit supporting a motion must be served with the motion.”) In any event, the
Court did not find Cicilian’s affidavit particularly helpful to the resolution of
Global’s Motion to Compel.
Global also requests that the Court reconsider its ruling regarding GM’s and
FCA’s corporate representatives’ depositions and permitted testimony topics.
First, Global argues GM and FCA did not timely object to the subpoenas. Global
also complains that no oral argument concerning depositions by written questions
was heard. Finally, Global maintains depositions by written questions are more
burdensome than questions by oral examination. Plaintiff asserts it will be
prejudiced if it is not permitted to question these witnesses about payments made
to Swell for shipments of nameplates, badges, and emblems, as well as the
identification of the same.
Here, the record reflects that GM and FCA objected to the subpoenas. See
ECF Nos. 82-1; 83-1.
Global’s complaint that the Court failed to hear oral
argument on the issue of depositions by written questions does not show a palpable
defect with this Court’s decision. The Court’s decision resolved Swell’s Motion for
Protective Order under Rule 26(c)(1), and this Court has the discretion to limit
discovery under Rule 26(c)(1)(D). For all of these reasons, the Court denies
Global’s Motion for Reconsideration.
C. Appointment of a Special Discovery Master
The purpose of a special master is “to aid judges in the performance of
specific judicial duties, as they may arise in the progress of a cause.” La Buy v.
Howes Leather Co., 352 U.S. 249, 256 (1957). To this end, Rule 53(a)(1)(C)
authorizes appointment of a master to “address pretrial and posttrial matters that
cannot be effectively and timely addressed by an available district judge or
magistrate judge of the district.” Fed. R. Civ. P. 53(a)(1)(C). “[R]eference should
be the exception and not the rule in juridical administration, the Court may, in its
discretion, make appointment of a Master to assist in any of the incidents of a
proceeding before it, whether civil or criminal, so long as there is no infringement
upon the right of trial by jury or any prejudice to other substantive right.” First
Iowa Hydro Electric Cooperative v. Iowa-Illinois Gas & Electric Co., 245 F.2d
613, 627 (8th Cir. 1957).
Appointment of a special discovery master has been approved in situations
where one party’s attorney is recalcitrant in obeying the rules of procedure. See
Shapiro v. Freeman, 38 F.R.D. 308 (S.D.N.Y. Oct. 18, 1965) (appointing a special
discovery master, based on the history of the discovery proceedings, to preside
over all future depositions in order to prevent additional obstructive tactics, delay
and “more needless burdens cast on this congested court.”); see also Glover v.
Wells Fargo Home Mortg., 629 F. App’x 331 (3d Cir. 2015) (approving
appointment of special master concerning a pretrial matter that could not be timely
and effectively addressed by the magistrate judge or district judge and “the record
shows the parties’ clear inability to promptly or effectively resolve their discovery
disputes.”); see also Nat’l Ass’n of Radiation Survivors v. Turnage, 115 F.R.D.
543, 56-61 (N.D. Cal. Apr. 29, 1987)(noting numerous courts after LaBuy have
approved the appointment of special masters where parties have failed to comply
with court orders, displayed intransigence in the litigation, or required close
supervision.). Id. (collecting cases).
Plaintiff maintains there are four outstanding issues in this matter including
identification of Products that fall within Paragraph 4.3, and records related to
Products falling within Paragraph 4.2, and the dollar amount of paid invoices for
the Products at issue in this litigation. Global further indicates it is dissatisfied
with Swell’s responses to its Eighth and Ninth Requests for Discovery and may be
filing a motion in the future. Finally, Global’s request to depose Swell’s Rule
30(b)(6) witnesses in China remains outstanding.
This more than two year old case has already engendered significant
discovery related motion practice with at least four discovery disputes outstanding
and more disputes likely to arise as discussed by Global in its brief concerning the
appointment of a special master. The parties have shown an inability to efficiently
and effectively work through their discovery disputes in this matter. Appointment
of a Special Master for the remaining discovery disputes and for any future
discovery disputes is therefore warranted under Fed. R. Civ. P. 53(a)(1)(C). The
costs shall be divided equally between the parties.
Accordingly, for the reasons articulated above, Global’s Motion for
Reconsideration [#97] is DENIED.
Swell’s Motion to Compel Production and for Attorney’s Fees and Costs
[#93] is GRANTED. Global shall supplement its responses to Swell’s Fifth RFP
Nos. 2-7 no later than June 11, 2021. Swell shall produce its billing statements and
other proofs, along with a 3-page brief, in support of its reasonable attorney’s fees
and costs incurred as a result of (1) drafting and filing its present Motion to
Compel Production of Documents, the Reply, and oral argument on June 4, 2021,
and (2) preparing for, and attending, the properly noticed depositions of Global’s
corporate representative and its President no later than June 11, 2021. Global shall
file a 3-page response no later than June 18, 2021. Swell may file a reply no later
than June 25, 2021.
The Court will Appoint a Special Discovery Master for all outstanding and
future discovery disputes between the parties.
The parties shall prepare a Joint Statement of Unresolved Issues no later
than June 11, 2021.
A status conference will be held on June 16, 2021 at 9:30 a.m. to further
discuss the responsibilities and parameters of the Special Master’s Appointment.
Counsel for the parties SHALL contact Ed Pappas of Dickenson Wright to
ascertain whether Mr. Pappas is available and willing to serve as a Special
Discovery Master in this matter. The parties SHALL also obtain detail concerning
the amount Mr. Pappas charges for serving in the capacity as a Special Discovery
Master. Finally, counsel for the parties SHALL be prepared to discuss Mr.
Pappas’s availability, anticipated fees, and willingness to serve as a Special
Discovery Master at the June 16, 2021 status conference.
Dated: June 4, 2021
/s/Gershwin A. Drain
GERSHWIN A. DRAIN
United States District Judge
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
June 4, 2021, by electronic and/or ordinary mail.
/s/ Teresa McGovern
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