The General Retirement System of the City of Detroit et al v. Alamerica Bank et al

Filing 63

ORDER Denying 60 Motion for Reconsideration; Denying 62 Motion for Reconsideration. Signed by District Judge Judith E. Levy. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
The General Retirement System of
the City of Detroit and the Police
and Fire Retirement System of the
City of Detroit,

Case No. 14-cv-10032
Hon. Judith E. Levy
Mag. Judge Mona K. Majzoub

Plaintiffs,
v.
Alamerica Bank, Alamerica
Bancorp, and Lawrence Tate,
Defendants.
________________________________/

OPINION AND ORDER DENYING DEFENDANTS’ MOTION FOR
RECONSIDERATION AND FOR RELIEF FROM ORDER [60; 62]
Plaintiffs filed a motion for sanctions on September 23, 2015,
(Dkt. 50), defendants filed their response in opposition on September
30, 2015, (Dkt. 51), and plaintiffs filed their reply on October 7, 2015.
(Dkt. 53.) The Court granted in part plaintiffs’ motion on March 7,
2016, and awarded plaintiffs $25,000 against defendants and their
counsel, jointly and severally. (Dkt. 58.) Defendants filed a motion for
reconsideration and for relief from order on March 21, 2016, (Dkt. 60),

as amended by motion on April 12, 2016, (Dkt. 62), which is the subject
of this opinion and order.
The core of defendants’ argument is that “[s]ubsequent to the
Court’s hearing, in investigating matters regarding [p]laintiffs’ claim
regarding [d]efendants [sic] failure to comply with discovery, it became
known to [d]efendants that [p]laintiffs have misrepresented to this
Court the significance of the discovery sought, and their need for these
documents.” (Dkt. 60 at 7.) Defendants argue that the Court premised
its opinion “on its belief, relying solely on [p]laintiffs’ counsel’s
assertion, that discovery had not been provided.” (Dkt. 60 at 11.)
Defendants also argue that “many of the deficiencies alleged” in
plaintiffs’ reply brief to defendants’ response in opposition to the motion
for sanctions “did not exist.” (Id. at 12.)
Specifically, defendants assert that a privilege log “was included
within the first set of documents produced,” and “with respect to the
documents regarding stock transfers, those documents were all
provided in an earlier production.” (Id. at 12.) And defendants initially
provided affidavits and emails to support their assertion that plaintiffs
failed to download documents from links provided by defendants’
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counsel on September 9 and 11, 2015. (Id. at 10-11.) But in defendants’
amended motion, they assert that plaintiffs did download the
documents produced to them on September 9, 2015, and therefore
“withdraw any comments about or inferences drawn from any alleged
failure on the part of [p]laintiff’s [sic] counsel to download documents
related to this production of September 9, 2015.” (Dkt. 62 at 2.)
To prevail on a motion for reconsideration under Local Rule 7.1, a
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. LR 7.1(h)(3). “A
palpable defect is a defect that is obvious, clear, unmistakable, manifest
or plain.” Witzke v. Hiller, 972 F. Supp. 426, 427 (E.D. Mich. 1997).
The “palpable defect” standard is consistent with the standard for
amending or altering a judgment under Rule 59(e) of the Federal Rules
of Civil Procedure. Henderson v. Walled Lake Consol. Schs., 469 F.3d
479, 496 (6th Cir. 2006).

Motions for reconsideration should not be

granted if they “merely present the same issues ruled upon by the court,
either expressly or by reasonable implication.” E.D. Mich. LR 7.1(h)(3).
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But “parties cannot use a motion for reconsideration to raise new legal
arguments that could have been raised before a judgment was issued.”
Roger Miller Music, Inc. v. Sony/ATV Publ’g, 477 F.3d 383, 395 (6th
Cir. 2007).
Defendants misunderstand the standard regarding motions for
reconsideration. Not once in their motion or brief do defendants use the
word “palpable” or “obvious,” “clear,” “unmistakable,” “manifest,”
“plain,” or even “defect.” Instead, defendants cite a Northern District of
Ohio case for the proposition that “[r]econsideration should be granted
when the court has overlooked a matter that would be material in the
Court’s decision on the matter.” (Dkt. 60 at 9 (citing Davie v. Mitchell,
291 F. Supp. 2d 573, 634 (N.D. Ohio 2003).)
Here, defendants “merely present the same issues ruled upon by
the court,” E.D. Mich. LR 7.1(h)(3), or that “could have been raised
before a judgment was issued.” Roger Miller Music, Inc., 477 F.3d at
395. In their response in opposition to plaintiffs’ motion for sanctions,
defendants provided the Court with “a copy of the two privilege logs
which have been served by defendants.”

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(Dkt. 51 at 9.)

Thus

defendants’ arguments regarding the privilege logs have already been
presented and considered by the Court.
And as to the September 11, 2015 links that defendants’ counsel
provided to plaintiffs’ counsel, defendants have known since at least
October 27, 2015, that plaintiffs’ counsel had allegedly failed to utilize
the links. (Dkt. 60 at 18 (“As to the September 11, 2015 production,
these documents were not accessed during the initial 30 day time
period, but were accessed sometime after [defendants’ counsel] was
asked to and did in fact re-open the hyperlink on October 27, 2015).)
The Court’s order granting in part plaintiffs’ motion for sanctions was
not entered until March 7, 2016. Defendants did not attempt to raise
this issue before the sanctions order was entered. Because defendants
already raised these issues or could have raised them before the Court’s
order was entered, the motion for reconsideration will not be granted.
Defendants request in the alternative that the Court exercise its
discretion to grant relief from the sanction order under Rule 60(b) of the
Federal Rules of Civil Procedure. (Dkt. 60 at 1.) Under Rule 60(b), the
Court may in its discretion grant relief from judgment for, among other
things, mistake, inadvertence, surprise, or excusable neglect; newly
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discovered evidence that, with reasonable diligence, could not have been
discovered in time to move for a new trial under Rule 59(b); and fraud,
misrepresentation, or misconduct by an opposing party. Fed. R. Civ. P.
60(b)(1)–(3); Bank of Montreal v. Olafsson, 648 F.2d 1078, 1079 (6th Cir.
1981) (“The grant of motions made under rule 60(b) is a matter of
discretion for the district court.”).

Defendant argues that the Court

should grant relief for each of these reasons.

(See Dkt. 60 at 2.)

Because Rule 60(b)(2) is inapplicable here, the Court only considers
Rules (b)(1) and (b)(3).
As noted in the March 7, 2016 sanction order, “the Court has
extensively engaged with counsel and observed their behavior regarding
discovery issues.” (Dkt. 58 at 10.) “In addition to several telephonic
conferences on the record” to address the many discovery issues that
have arisen since discovery commenced, “in which the Court ordered
defendants to produce certain documents and other information, the
Court twice had to enter a written order to compel, to no avail.” (Id.)
Nothing in defendants’ motion for relief from order persuades the Court
that it was mistaken or misled to find “that there [were] likely
documents in defendants’ control that were responsive but not produced
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and which came to light when plaintiffs obtained discovery from nonparty sources.” (Id.) Even taking defendants at their word that the
Court was mistaken or misled as to “many of the deficiencies” regarding
privilege logs and documents produced pursuant to this Court’s several
discovery orders, the Court still finds that defendants failed to produce
others.
The Court previously declined to exercise its discretion to order
harsher sanctions against defendants for their conduct. Instead, the
Court ordered monetary sanctions that the Court “must order the
disobedient party, the attorney advising that party, or both to pay,”
given that defendants’ failure was not “substantially justified” nor such
“award of expenses unjust.” See Fed. R. Civ. P. 37(b)(2)(C) (emphasis
added). The Court still finds this to be true.
Accordingly, defendants’ motion for reconsideration or relief from
order (Dkt. 60), as amended (Dkt 62), is denied.
IT IS SO ORDERED.
Dated: May 3, 2016
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge

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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on May 3, 2016.

s/Felicia M. Moses
FELICIA M. MOSES
Case Manager

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