MPD Accessories B.V. v. Urban Outfitters, Inc. et al
Filing
123
MEMORANDUM AND ORDER granting in part and denying in part 99 Motion for Sanctions. For the foregoing reasons, the defendants' motion, Docket Entry No. 99, is granted, in part, and denied, in part. The plaintiff is directed to produce Kamp fo r deposition in New York, on August 27, 2013, and the following conditions apply: (1) no request for another adjournment, change of date, or alternate method of deposition will be entertained; and (2) in light of the record history concerning Kamp 39;s deposition and numerous opportunities to be heard in the past as well as the judicial and parties' resources already consumed unnecessarily, the plaintiff is cautioned that any failure to obey this order will be considered unjustified, prejudicial and in bad faith and will result in a report to the assigned district judge, recommending dismissal of the complaint. (Signed by Magistrate Judge Kevin Nathaniel Fox on 8/13/2013) (rsh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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MPD ACCESSORIES, B.V.,
:
Plaintiff,
:
-against-
:
URBAN OUTFITTERS, INC.,
GMA ACCESSORIES INC. d/b/a/ CAPELLI
NEW YORK, and ABC CORPS 1-5,
:
MEMORANDUM AND ORDER
12 Civ. 6501 (LTS) (KNF)
:
Defendants.
:
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KEVIN NATHANIEL FOX
UNITED STATES MAGISTRATE JUDGE
Introduction
Before the Court is the defendants’ motion,1 for an order: (1) “to preclude the plaintiff
from introducing evidence in support of her [sic] claim that the subject design was original
and/or created by Plaintiff,” pursuant to Rule 37(b)(2)(A)(ii); (2) “to compel the plaintiff to
produce the 30(b)(6) witness, Joris Drontmann” (“Drontmann”), pursuant to Rule
37(a)(3)(B)(2),2 or, alternatively, “to compel Corine Kamp [“Kamp”] and Joris Drontmann to
comply with the prior Court’s orders with Court Ordered deposition dates by way of a
Conditional Preclusion Order”; and (3) “for attorneys’ fees and related expenses,” pursuant to
1
The notice of motion, Docket Entry No. 99, is signed by “The Bostany Law Firm,
PLLC . .. Charen Kim, Esq. [“Kim”]. . . . Attorneys for Plaintiff.” This is not the first time Kim
signed a paper submitted to the court representing that she is counsel to the plaintiff. See Docket
Entry No. 67. The Bostany Law Firm PLLC and Kim represent the defendants in this action, not
the plaintiff.
2
Although the defendants’ notice of motion indicates that it is made pursuant to “Rule
37(a)(3)(B)(2),” no such rule exists. The Court assumes this part of the defendants’ motion is
made pursuant to Rule 37(a)(3)(B)(ii).
1
Rule 37(a)(5)(A) and Rule 37(b)(2)(C), “and for such other relief as this Court deems just and
proper.” The plaintiff opposes the motion.
Relevant Procedural History
On December 20, 2012, the defendants served the plaintiff’s law firm “Gusy Van der
Zandt LLP,” in New York, New York, notices of deposition for Kamp,3 to be held on January
28, 2013, and “one or more” of the plaintiff’s “officers, directors, managing agents, or other
persons,” pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, to be held on
January 25, 2013. On February 13, 2013, the assigned district judge ordered the plaintiff to
respond to the defendants’ outstanding discovery requests by March 15, 2013.
By a letter, dated February 25, 2013, the plaintiff requested that “the depositions of
Menno Menke [“Menke”] and Corine Kamp be permitted to be taken via video-conference, or in
the alternative that at least the deposition of Corine Kamp be permitted to be taken via videoconference.” Menke is the plaintiff’s owner and chief executive officer. On March 6, 2013, the
Court conducted a conference to address the plaintiff’s request. During the conference, the
defendants’ counsel explained that the plaintiff’s counsel chose March 11, 2013, as a convenient
deposition date for Menke and Kamp. The plaintiff’s counsel stated:
Well that date was suggested with the possibility in mind, and I had asked
defendant’s [sic] counsel to do at least some of these depositions via
videoconference. . . . The designer, she’s traveling in the Far East and in India and
she won’t be back until April, and so the earliest she could appear would be in New
York that is, would be April 15th.
The Court reminded the plaintiff’s counsel that all discovery obligations had to be met by March
3
The defendants’ deposition notice seeks to depose Corine Camp. However, the plaintiff
identifies that person as its employee and spells her name: “Corine Kamp,” which is how the
Court will refer to her here.
2
15, 2013, and that, “if the client elects to do other than that, there are potentially consequences to
the client.” The plaintiff’s counsel then raised with the Court, for the first time, the issue of
whether new deposition notices needed to issue by the defendants. He stated: “Part of the
problem with scheduling [the depositions] was I asked for new notices of deposition that state
particular times for the plaintiffs [sic] . . . . I repeatedly asked for specific times and for . . .
notices of depositions to be issued.” Since the parties had a different view of whether the
December 20, 2013 deposition notices were valid, the Court directed them to brief the issue.
On March 14, 2013, the Court determined that no new deposition notices needed to issue
and directed the plaintiff to “produce for deposition in New York City Corine Camp, Menno
Menke and a witness who will testify pursuant to Fed. R. Civ. P. 30(b)(6); the deposition must
be completed on or before April 1, 2013.”
On March 26, 2013, the plaintiff stated in a letter sent to the assigned district judge:
With regard to Corine Kamp, there have been very difficult circumstances with
regard to scheduling her deposition as well, and Plaintiff has requested on numerous
occasions that no plans should be made by Defendant [sic] with regard to her
deposition so that they do not incur any unnecessary expense. During mid-March,
in connection with Plaintiff’s request to video-conference Ms. Kamp’s deposition,
which Defendants opposed, an issue with regard to deposition notices arose, and
Judge Fox then set the date by which depositions must be completed to April 1,
2013. Ms. Kamp is currently in the Far East on an entire month long business trip
upon which she takes care of various seasonal issues for the Plaintiff. Because
Defendants will not agree to a short extension for Ms. Kamp to be deposed, Plaintiff
is currently preparing a request for an extension of time for her deposition until after
she returns to Amsterdam on April 13, 2013.
Docket Entry No. 63.
On March 27, 2013, the assigned district judge ordered that “Plaintiff must produce Ms.
Kamp for deposition by April 1, 2013. The deposition can be conducted by Skype if she is in
Asia. The parties can agree on an alternate date if Defendant [sic] does not wish to conduct the
3
deposition by Skype.” On March 27, 2013, the defendants sent a letter to the assigned district
judge, informing her that they did not wish to proceed with Kamp’s deposition via Skype and
they “will agree to any other date on or before April 1.” (Docket Entry No. 65). The plaintiff
responded by a letter on the same date, contending “there is good cause to extend the April 1,
2013 deadline for the deposition of Corine Kamp to be completed.” (Docket Entry No. 66). On
March 28, 2013, the defendants sent a letter to the assigned district judge, seeking to “clarify that
the March 27 memo endorsed order did not approve MPD’s decision to violate the Court’s
February 13 and March 14 orders and did not vacate Magistrate Fox’s March 14 order, but
simply gave the parties the option to agree upon another date if they chose to.” (Docket Entry
No. 64).
On March 29, 2013, the Court held a telephonic conference to address certain issues that
arouse during Menke’s deposition, which was conducted on that day. At the end of the
conference, the defendants’ counsel stated that the parties had “a dispute over the import of the
Judge Swain memo endorsed order on March 27th. It’s our view that Judge Swain did not disturb
. . . Your Honor’s March 14th ruling” and that she “at no time extended [the] April 1st date. . . . I
would respectfully asked that Your Honor clarify that our understanding, the defendant’s [sic]
understanding of the order is correct.” The plaintiff’s counsel contended that “there is some
ambiguity here.” The Court stated:
I’m not clear that the defendant [sic] is unhappy with the endorsement that Judge
Swain made, it advised that April 1st is the date by which these depositions are to
occur. I think Judge Swain was trying, in her reference to using Skype, to provide a
means for the parties if you wish to pursue it, although we had talked, I think, at the
conference about maybe remote deposition, but in any event, to provide a means that
might accommodate the parties’ desire to capture testimony from the employee who
is in Asia, traveling in Asia on business, within the deadline, without necessarily
having her travel to New York. That seems to be an accommodation that may not
4
work for the parties, but in any event, the April 1st date is memorialized in that
endorsement as the date to complete the depositions. So there’s an avenue for you to,
if you want to pursue it, enable her testimony to be captured while she’s traveling on
business via Skype or perhaps some other means, if you wish, but by April 1st, she has
to give testimony.
Docket Entry No. 86, p.12.
The plaintiff’s counsel asked the Court for permission to submit an “affidavit showing good
cause why we should, . . . perhaps we would request an amendment of that order solely for
Corine Kamp.” The Court stated:
Yes, but she’s known since we had the conference earlier in March that her
deposition had to be taken by April 1st because you’ve been in, I’m hopeful you’ve
been in communication with your client to let her know of the Court’s directive. So
the fact that it’s March 29th is of little import since you’ve known for several weeks
and so has the potential deponent that her testimony had to be captured by April 1st.
Docket Entry No. 86, p.13.
On April 2, 2013, the plaintiff requested an informal conference, pursuant to Local Civil
Rule 37.2, concerning “a protective order from the Court and/or an extension of time for Corine
Kamp’s deposition.” The plaintiff’s April 2, 2013 letter stated:
[T]here have been significant logistical issues presented to the Plaintiff with getting
Corine Kamp to New York for her deposition due to her long planned and long
lasting business trip to Asia. Fully aware and in due deference to Your Honor’s
Order dated March 14, 2013, Plaintiff has attempted to produce Ms. Kamp here in
New York – without success as of yet. Pursuant to Judge Swain’s Order dated
March 27, 2013, Plaintiff offered to Defendants to provide Corine Kamp via Skype
before April 1, 2013, but Defendants insisted on having the deposition conducted in
person here in New York. In further compliance with Your Honor’s March 14, 2013
Order and Judge Swain’s March 27, 2013 Order, Plaintiff also offered to Defendants
to make Corine Kamp available for her deposition to Defendants any day during the
week of April 15, 2013 (15th, 16th, 17th, 18th or 19th), which is the first possibility after
5
her return to Amsterdam on April 13, 2013 from Asia. Defendants have objected to
this arrangement.
Docket Entry No. 70.
On April 3, 2013, the Court denied the plaintiff’s April 2, 2013 request for an informal
conference. On June 19, 2013, the Court conducted a Local Civil Rule 37.2 conference and
granted leave to the defendants to file the instant motion.
On January 28, 2013, the plaintiff paid for Kamp’s business trip. Kamp departed from
Amsterdam, Netherlands, for Hangzhou, China, on March 16, 2013. She returned to
Amsterdam, Netherlands, from Kuala Lumpur, Malaysia, on April 13, 2013.
Defendants’ Contentions
The defendants contend that the plaintiff “was not unaware of the risk when it decided to
flout the Discovery Orders that plainly and clearly required Corine Kamp and its 30(b)(6)
witnesses to appear in New York by April 1.” According to the defendants, “discovery
violations were not without financial cost to Defendants who were required to file numerous
applications, both formal and informal to attempt to persuade Plaintiff to abide by the Orders.”
They assert that their Rule “30(b)(6) notice sought witnesses on the alleged creation of the
designs in question,” but the “witness produced by Plaintiff had no knowledge in this regard and
pointed to Joris Drontmann as the company officer that not only had this knowledge but who
himself allegedly participated in the creation of the design.” However, the defendants contend,
Drontmann “failed to appear by the April 1 deadline.” The defendants maintain that they placed
the plaintiff on notice that they were seeking sanctions prior to this motion, and the Court
afforded numerous opportunities to the plaintiff “to be heard concerning the violation of the
6
orders and Defendants’ request for sanctions.” Since “the instant Orders came with definite
dates for compliance . . . the Court need not determine whether the time it took Plaintiff to
comply was reasonable.”
Plaintiff’s Contentions
The plaintiff contends that the defendants “are seeking to take a second bite of the apple
with regard to penalties relating to Plaintiff’s failure to arrange Corine Kamp’s deposition by
April 1, 2013, which should not be permitted.” According to the plaintiff, the “Defendants have
made no effort to take the deposition of Corine Kamp or anyone else and have not followed Rule
37 or Local Civil Rule 37.2,” in connection with the relief they seek that is beyond the relief
sought in their previous motion. The plaintiff asserts that it “has been prejudiced by having to
defend against this motion for a second time, the second motion having benefitted from
addressing Plaintiff’s opposition to the motion the first time around.” It contends that the
defendants’ request for “an order to compel,” namely “in subsection (2) and (3)” of the Notice of
Motion, must be denied because the defendants did not comply with “either Rule 37 or Local
Civil Rule 37.2.”
Concerning the defendants’ request for preclusion of evidence, it is “extreme and
unwarranted,” the “Defendants have made no effort to obtain the deposition of Corine Kamp,”
and
it would not be just to preclude Defendants4 from arguing that it created the designs
in question merely because Corine Kamp was unable to be pulled from her long
prearranged trip due to the business consequences that MPD would face. In addition,
4
It appears that the plaintiff meant to say “to preclude Plaintiff from arguing that it
created the designs in question,” since that is what the defendants seek in their motion; the
defendants do not seek to preclude themselves from introducing evidence.
7
it would be unjust to preclude Plaintiff from arguing that the designs in question are
original. That is a question of law.
According to the plaintiff, the defendants offered “no conceivable prejudice,” and the
“Defendants appear to not realize that Plaintiff was trying to arrange the deposition of Corine
Kamp for the Defendants’ benefit,” because Kamp “is a low-level employee of MPD, and is a
Dutch citizen residing in Amsterdam, the Netherlands,” which would require the defendants to
subpoena her testimony. The plaintiff contends that “a corporation generally cannot be
sanctioned when its low-level employees fail to appear for their depositions,” and
[n]one of the cases cited by Defendants deal with a low-level employee not being
able to be produced in New York for a deposition within a two-week span due to a
vital seasonal business trip to Asia, when volumes of discovery has [sic] already
been produced . . . and where other individuals have been able to be deposed
pursuant to the Court’s order.
The plaintiff asserts that all the cases cited by the defendants involve “extreme situations where a
party itself has gone many months, and in most of the cases around a year, and still refused
and/or failed to comply with the Court’s orders despite multiple specific warnings that their case
would be dismissed or that other serious sanctions would be issued by the Court against them if
the discovery at issue was not made,” and they “do not apply at the case at hand” because Kamp
is not a party. According to the plaintiff, “specific warning that certain sanctions will be
imposed is a necessary precondition to the issuance of sanctions,” and “[t]here has been no such
warning to Plaintiff in this case.” Furthermore, the defendants’ request “for relief that Plaintiff
be forbidden from even arguing that the designs in question are original” is “misguided in the
extreme and should be summarily denied.”
8
The plaintiff contends that the defendants’ request to preclude the evidence “is
tantamount to a request that the Court simply strike Plaintiff’s pleadings in order to kill the
case.” The defendants’ request should be denied for the reasons that follow. First, two of the
plaintiff’s three noticed depositions were completed on April 1, 2013, as directed by the order,
and “the reasons for the noncompliance [related to Kamp’s deposition] are genuine and valid,”
since she “was in Asia on a business trip, [and] she was not able to appear for a deposition
because of the substantial risk to MPD’s business operations.” Moreover, the plaintiff
believed that by offering to capture Corine Kamp’s testimony via Skype, and in the
alternative to suggest other dates to agree upon, [it] was in compliance with the
Court’s Order dated March 27, 2013. Indeed, MPD believes that it was going above
and beyond . . . what it was required to do under controlling law relating to the
deposition of [a] low-level employee in order to help move this case along.
Moreover, the “Defendants have chosen (elected) their remedy for seeking sanctions and may
not back-pedal in order to now further prolong discovery and burden the Plaintiff with more
depositions.”
Second, preclusion of evidence is an extreme remedy and, since the plaintiff “produced
volumes of discovery and already had depositions completed for Menno Menke and for its
30(b)(6) witness,” the defendants’ “bizarre requests for preclusion” should be denied “as both
unwarranted and contrary to controlling law.” Third, the “Defendants could have taken the
deposition of Corine Kamp since the middle of April 2013, but chose not to,” and “[a]ny
noncompliance as of April 15, 2013 cannot be to the account of Plaintiff, as it is the Defendants
who requested her deposition but then refused to take it.” As the plaintiff proposed that Kamp’s
deposition be taken by Skype, which it believed was in compliance with the March 27, 2013
order, “[a]t most, Corine Kamp could only be considered to have been in noncompliance for two
9
weeks with the Court’s order.” Fourth, no warning has been given to the plaintiff by the Court
that its claims would be dismissed if the deadline given by the Court was not met.
With respect to the defendants’ request related to Drontmann, the plaintiff contends, he
“was never noticed for a deposition,” and the defendants failed to meet and confer concerning
this issue and request an informal conference, pursuant to Local Civil Rule 37.2. Moreover, the
defendants “do not supply any support for their claim that Joris Drontmann was a ‘co-creator’ of
the design,” and Menke already testified that Kamp created both designs at issue in this action.
The plaintiff contends that the defendants’ request for attorney’s fees should be denied
since awarding them would be unjust for the following reasons: (1) the defendants’ motion “is an
improper attempt to take a second bite of the apple”; (2) the defendants’ first motion for
sanctions “was denied with prejudice” and “Plaintiff was not awarded its attorneys’ fees in
successfully defeating that motion”; (3) the defendants failed to meet and confer with the
plaintiff prior to filing the motion and did not comply with Local Civil Rule 37.2; (4) the
defendants’ position is owed “to their own refusal to take the deposition of Corine Kamp”; (5)
the plaintiff “has substantially complied with the Court’s orders by providing copious document
production, responses to interrogatories, responses to requests to admit and produced Menno
Menke and a Rule 30(b)(6) witness for depositions all by April 1, 2013” and its “inability to
produce Corine Kamp by April 1, 2013 was substantially justified given her business trip to
Asia”; and (6) the March 27, 2013 order was disputed by the parties, and that order could “be
reasonably read to provide the parties flexibility to agree upon another date for the deposition of
Corine Kamp after April 1, 2013.” The plaintiff contends that it should be awarded attorney’s
fees for defending the instant motion, given that the motion is improper.
10
Defendants’ Reply
The defendants contend that the plaintiff argues, for the first time, “that this Court lacks
authority to sanction MPD based upon its failure to produce Corine Kamp for deposition as
ordered.” According to the defendants, “[a]t no time has MPD argued that the Court’s orders
were unclear or that it did not understand that there would be consequences to its decision to
violate” them. Moreover, in response to the March 14, 2013 order, the “plaintiff only produced
one witness, not two.” According to the defendants, the plaintiff knew that “offering dates after
April 1” and “appearing by video instead of in person” would not be in compliance “with the
plain language of the Court’s orders.” The defendants contend that the plaintiff also “makes the
remarkable argument that MPD did not have to comply with the Order directing it to produce its
Ms. Kamp,” even though: (a) “MPD acknowledged that Ms. Kamp was a proper witness and
would and should be produced”; and (b) “[t]here is no dispute that Ms. Kamp had exclusive
knowledge of MPD’s claim that she created the designs.” The defendants contend that no
indication exists that the plaintiff “had any intention of ever complying with the Court’s orders
in this case and has made it clear that it put its business prospects and opportunity to profit
financially over time consuming and carefully considered orders.” In support of its reply, the
defendants submitted their attorney’s declaration, in which the attorney states that he did meet
and confer with the plaintiff’s attorney, on March 27, 2013, concerning Kamp’s deposition that
had to be conducted by April 1, 2013, and, on March 29, 2013, “concerning Drontmann.”
Legal Standard: Rule 37(b)(2)(A)(ii)
Rule 37(b)(2)(A) of the Federal Rules of Civil Procedure provides, in pertinent part:
If a party or a party’s officer, director, or managing agent—or a witness designated
under Rule 30(b)(6) or 31(a)(4)—fails to obey an order to provide or permit
11
discovery, including an order under Rule 26(f), 35, or 37(a), the court where the
action is pending may issue further just orders. They may include . . .(ii) prohibiting
the disobedient party from supporting or opposing designated claims or defenses, or
from introducing designated matters in evidence.
Fed. R. Civ. P. 37(b)(2)(A)(ii).
A district court has wide discretion in imposing sanctions, including severe
sanctions, under Rule 37(b)(2) . . . . The discovery provisions of the Federal Rules
of Civil Procedure are “designed to achieve disclosure of all the evidence relevant
to the merits of a controversy.” It is intended that this disclosure of evidence
proceed at the initiative of the parties, free from the time-consuming and costly
process of court intervention. When a party seeks to frustrate this design by
disobeying discovery orders, thereby preventing disclosure of facts essential to an
adjudication on the merits, severe sanctions are appropriate.
Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1365 (2d Cir. 1991) (citations
omitted).
Sanctions imposed pursuant to Rule 37(b)(2) must: (1) be just; and (2) “relate to the particular
claim to which the discovery order was addressed.” Id. at 1366. “No sanction should be
imposed without giving the disobedient party notice of the particular sanction sought and an
opportunity to be heard in opposition to its imposition.” SEC v. Razmilovic, __ F.3d __, No.
12-0357, 2013 WL 3779339, at *7 (2d Cir. 2013). “[I]n the Rule 37 context,” in this Circuit, no
“rigid requirements on either the timing or the form of the notice afforded to a sanctioned party,”
are imposed. Reilly v. NatWest Markets Group Inc., 181 F.3d 253, 270 (2d Cir. 1999).
Preclusionary orders ensure that a party will not be able to profit from its own failure
to comply. Rule 37 strictures are also specific deterrents and, like civil contempt,
they seek to secure compliance with the particular order at hand. Finally, although
the most drastic sanctions may not be imposed as ‘mere penalties,’ courts are free to
consider the general deterrent effect their orders may have on the instant case and on
other litigation, provided that the party on whom they are imposed is, in some sense,
at fault.
Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d
1062, 1066 (2d Cir. 1979) (internal citations omitted).
12
Although an order precluding evidence “is strong medicine, such orders are necessary on
appropriate occasion to enforce compliance with the discovery rules and maintain a credible
deterrent to potential violators.” Daval Steel Prods., 951 F.2d at 1367. In determining whether
precluding witness testimony is an appropriate sanction, courts consider the following factors:
(1) “the party’s explanation for the failure to comply with the discovery order”; (2) “the
importance of the testimony of the precluded witness”; (3) the prejudice suffered by the
opposing party”; and (4) “the possibility of a continuance.” Reilly, 181 F.3d at 269 (citation
omitted).
The most severe sanction “for a disobedient plaintiff is the dismissal of his action,” and it
“should be ordered only when the district judge has considered lesser alternatives.” Razmilovic,
__3d at __, 2013 WL 3779339, at *7. Dismissal of a complaint is authorized when it is
established that the failure to comply with a court order is due, not to inability, but to
“willfulness, bad faith, or any fault of ” the noncompliant party. Cine Forty-Second Street
Theatre Corp., 602 F.2d at 1066. When determining whether dismissal is an appropriate
sanction, courts consider various factors, including: (i) “the willfulness of the non-compliant
party or the reason for noncompliance”; (ii) “the efficacy of lesser sanctions”; (iii) “the duration
of the period of noncompliance”; and (iv) “whether the non-compliant party had been warned of
the consequences of . . . non-compliance.” Id.; see Agiwal v. Mid Island Mortg. Corp. 555 F.3d
298, 302 (2d Cir. 2009) (citation omitted). “[T]hese factors are not exclusive, and they need not
each be resolved against the party” to be sanctioned. Southern New England Tel. Co. v. Global
Naps Inc., 624 F.3d 123, 144 (2d Cir. 2010). Moreover, the court “is free to consider the full
record in the case in order to select the appropriate sanction.” Id. (citation omitted).
13
“Although formal warnings often precede the imposition of serious sanctions, [the
Second Circuit] has never considered warnings an absolute condition precedent. On the
contrary, [the district court would examine] the record to ascertain if the party’s disregard of
court ordered discovery justif[ies] the sanctions [intended to be] imposed by the district court.”
Daval Steel Prods., 951 F.2d at 1366. The Second Circuit “decline[d] to hobble the . . .
discretion of district courts to control discovery by imposing a further requirement of formal and
specific warnings before imposing Rule 37(b)(2) sanctions, bearing in mind that . . . such
sanctions can only be imposed for violation of a specific, previously entered court order.” Id.
Application of Legal Standard: Rule 37(b)(2)(A)(ii)
Whether the Motion Is “Impermissible”
Although the plaintiff contends, in its letters dated July 8, 2013, (Docket Entry No. 103)
and July 11, 2013, (Docket Entry No. 107), that the defendants’ motion for sanctions was denied
“with prejudice,” on “May 28, 2013,” neither contention is true. The Court denied the
defendants’ Rule 37 motion to preclude, on May 24, 2013, based on a procedural ground,
namely, the defendants’ failure to comply with Local Civil Rule 37.2 of this court (Docket Entry
No. 92). Thus, the Court’s May 24, 2013 denial of the motion was not “with prejudice,” as the
plaintiff maintains, since the defendants’ motion was denied on a procedural ground without
consideration of its merits, and the Court did not use the word “prejudice” in its May 24, 2013
denial of the motion. Accordingly, the defendants were not barred by the Court’s May 24, 2013
order from complying with Local Civil Rule 37.2 and filing the instant motion.
14
Whether A Corporation May Be Sanctioned When Its Low-level Employees Fails to
Appear for Their Depositions
The plaintiff contends, for the first time, that the defendants were “required to subpoena”
Kamp, pursuant to Rule 45 of the Federal Rules of Civil Procedure, because she is a “low-level
employee” of the plaintiff and not a party to this action. The plaintiff waived this argument
when its attorney, inter alia: (a) requested that Kamp’s deposition be rescheduled (see Docket
Entry No. 53); (b) requested that her deposition be conducted by video-conference (see Docket
Entry No. 53); (c) argued that new deposition notices needed to issue (see Docket Entry No.
114); (d) sought an extension of time to submit the plaintiff’s affidavit concerning Kamp’s
schedule and to extend the time for her deposition, “until after she returns to Amsterdam on
April 13, 2013” (see Docket Entry No. 63); and (e) requested a conference with the Court to
address Kamp’s deposition and “if need be, seek a protective order from the Court and/or
extension of time for Corine Kamp’s deposition to be taken” (see Docket Entry No. 70). The
plaintiff appeared to be acting on Kamp’s behalf and did not argue that Kamp is not a party and
not associated with the plaintiff, thus forfeiting its argument that the defendants were required to
issue a subpoena for Kamp’s deposition.
The plaintiff contends that it cannot be sanctioned “when its low-level employees fail to
appear for their depositions,” but does not provide any binding authority in support of that
contention. Moreover, the defendants do not seek to have the Court sanction the plaintiff for
failing to attend its deposition, pursuant to Rule 37(d) of the Federal Rules of Civil Procedure,
but for failing to comply with the discovery orders, pursuant to Rule 37(b)(2)(A)(ii). Thus, the
15
plaintiff’s argument that it cannot be sanctioned for Kamp’s conduct, because she is its low-level
employee, is meritless.
Whether Due Process Requirements Have Been Satisfied
The plaintiff’s contention that “specific warning that certain sanctions will be imposed is
a necessary precondition to the issuance of sanctions,” and that it cannot be “overcome by
Defendants’ argument that Plaintiff knew that they would be seeking sanctions against Plaintiff,”
is erroneous. That is so because the plaintiff confuses “specific warning that certain sanctions
will be imposed” by the Court and the notice of sanctions sought by the defendants. A warning
by the Court that certain sanctions will be imposed is not a precondition for imposing sanctions
pursuant to Rule 37(b), where a specific, previously entered order, alleged to be violated, exists.
See Daval Steel Prods., 951 F.2d at 1366. Here, specific, previously entered orders exist, namely
the: (1) March 14, 2013 order; and (2) March 27, 2013 order. The March 14, 2013 order directs
that the Kamp, Menke and Rule 30(b)(6) witness depositions be completed by April 1, 2013.
The March 27, 2013 order directs that the: (a) plaintiff produce Kamp for deposition by April 1,
2013; (b) deposition can be conducted by Skype, if she is in Asia; and (c) parties can agree to an
alternate date, if the defendants do not wish to conduct her deposition by Skype.
Due process requires that the disobedient party receive “notice of the particular sanction
sought and an opportunity to be heard in opposition to its imposition.” Razmilovic,
__ F.3d __, 2013 WL 3779339, at *7. Both requirements are satisfied here. The plaintiff was
served with a notice of motion indicating the sanctions sought by the defendants and it had an
opportunity to be heard in opposition to the motion, because it filed its opposition to it.
16
Accordingly, the plaintiff has received all the process that was due in connection with the
imposition of sanctions, if any.
Whether the Plaintiff Failed To Comply with Court Orders
The defendants contend that the plaintiff failed to comply with “the Discovery Orders
that plainly and clearly required Corine Kamp and its 30(b)(6) witnesses to appear in New York
by April 1,” and “[t]he dates to comply were specified and were not unclear.” In their
memorandum of law in support of the motion, the defendants refer to the plaintiff’s violation of:
(a) “the Order” (Docket Entry No. 101, p. 2); (b) “the Discovery Orders” (Docket Entry No. 101,
p. 2); (c) “a Court’s Scheduling Order and repeated rulings to comply with certain critical
Discovery Orders” (Docket Entry No. 101, p. 4); (d) “the Orders” (Docket Entry No. 101., p. 4);
(e) “Judge Fox’s orders” (Docket Entry No. 101, p. 6); (f) “the instant Orders” (Docket Entry
No. 101, p. 8); and (g) “the March 14 written Order” (Docket Entry No. 101, p. 8). However,
nowhere in their memorandum of law in support of the motion or in their reply do the defendants
specify, either by date or docket entry number, the order(s) they believe the plaintiff violated.
Notwithstanding the defendants’ failure to identify separately each order alleged to have been
violated and discuss separately each alleged violation, the Court assumes that the defendants
allege noncompliance with the two orders directing that Kamp’s deposition be taken by April 1,
2013, the: (1) March 14, 2013 order by the Court (Docket Entry No. 55); and (2) March 27, 2013
order by the assigned district judge (Docket Entry No. 63).
Whether the March 14, 2013 Order Was Clear and Unambiguous
The March 14, 2013 order was clear and unambiguous because it directed the plaintiff to
“produce for deposition in New York Corine Camp, Menno Menke and a witness who will
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testify pursuant to Fed. R. Civ. P. 30(b)(6),” and that “the depositions must be completed on or
before April 1, 2013. Both the plaintiff and the defendants understood the meaning of the order,
which is apparent from the parties’ volley of letters that followed the plaintiff’s “request that
Corine Kamp be permitted to appear for a deposition no later than April 19, 2013 in New York
as well as to accommodate her business trip to the Far East” (Plaintiff’s letter to the Court, dated
March 20, 2013), and the defendants’ response, contending that the plaintiff’s request is an
“effort to reargue the Court’s ruling regarding the deadline by which Corine Kamp must appear
for her deposition in New York” (Defendants’ letter to the Court, dated March 21).
Whether the March 27, 2013 Order Was Clear and Unambiguous
The March 27, 2013 order was not clear and unambiguous because the parties understood
it differently, which is evident from the parties’ subsequent correspondence, as well as their
arguments during the March 29, 2013 telephonic conference with the Court. Moreover, the
March 27, 2013 order’s effect on the March 14, 2013 order was understood differently by the
parties.
The defendants’ counsel sought clarification of the March 27, 2013 order, through a letter
to the assigned district judge dated March 28, 2013, stating: “[C]ounsel for Plaintiff advised me
that he will not be complying with Magistrate Fox’s March 14 Order since it was his view that it
was vacated in part by your Honor’s March 27 memo endorsed order. We do not believe this to
be your Honor’s intention and respectfully ask for clarification.” The defendants’ counsel
contended, during the March 29, 2013 telephonic conference with the Court, that a dispute
existed with the plaintiff’s counsel “over the import of the Judge Swain memo endorsed order on
March 27th,” and that the defendants believed “that Judge Swain did not disturb Your Honor’s
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March 14th ruling.” The defendants’ counsel asked the Court to clarify whether that
understanding was correct. The plaintiff’s counsel contended that “there is some ambiguity
here.”
The March 27, 2013 order modified the March 14, 2013 order in more than one way.
Although the March 27 order repeated the March 14th order’s direction that the plaintiff must
produce Kamp for deposition by April 1, 2013, it modified the part of the March 14 order
directing that Kamp be produced in New York by permitting that “[t]he deposition can be
conducted by Skype if she is in Asia.” The March 27, 2013 order also allowed for “an alternate
date,” i.e., an extension of time, to depose Kamp, in case the defendants do not wish to conduct
the deposition by Skype, a directive that was not contained in the March 14th order. Although
the March 27 order used permissive language (i.e., “The deposition can be conducted by Skype
if she is in Asia”) allowing deposition by Skype if Kamp was in Asia, in essence, it mandated
that Kamp’s deposition be taken by Skype, if it was to be taken by April 1, 2013, since she was
in Asia between March 27 and April 1, 2013. However, the part of the March 27th order
permitting the parties to agree on an alternate date, if the defendants do not wish to depose Kamp
by Skype, is confusing because it appears to provide an opportunity for the defendants to reject
deposition by Skype and the parties to extend the deposition date, which seems to contradict the
order’s mandate that the “Plaintiff must produce Ms. Kamp for deposition by April 1, 2013.”
If the March 27 order permitted, as it did, (i) the defendants to reject Kamp’s deposition
by Skype, and (ii) the parties to agree on an alternate date for Kamp’s deposition, then the
defendants were free to reject Kamp’s deposition by Skype at any time, including “by April 1,
2013,” which they did. It would be illogical to require the defendants to conduct Kamp’s
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deposition by April 1 and by Skype, while at the same time allowing them to reject Kamp’s
deposition by Skype, but only if it is to be conducted after April 1. The March 27 order was
unclear inasmuch as it mandated that Kamp’s deposition be conducted by April 1 by Skype
(although permissive language was used, the effect was mandatory), while permitting the
defendants, at the same time, to reject Kamp’s deposition by Skype and allowing for an
extension of time beyond April 1 in that case.
The Court finds that the: (a) March 27, 2013 order was not clear and unambiguous
because it appeared internally contradictory and the parties understood it differently; and (2)
March 27, 2013 order modified the March 14, 2013 order to the extent explained above. Given
that the March 27, 2013 order was not clear and unambiguous and that it modified the March 14,
2013 order, the Court is unable to conclude that the plaintiff violated the March 14 and March
27, 2013 orders when it failed to produce Kamp for deposition by April 1, 2013. Therefore,
sanctioning the plaintiff for failing to comply with court orders, pursuant to Rule 37(b)(2)(A)(ii),
is not warranted.
Legal Standard: Rule 37(a)(3)(B)(ii)
“A party seeking discovery may move for an order compelling [a] designation, if . . . a
corporation . . . fails to make a designation under Rule 30(b)(6).” Fed. R. Civ. P. 37(a)(3)(B)(ii).
“To satisfy Rule 30(b)(6), the corporate deponent has an affirmative duty to make available
‘such number of persons as will’ be able ‘to give complete, knowledgeable and binding answers’
on its behalf.” Reilly, 181 F.3d at 268 (citation omitted).
Application of Legal Standard: Rule 37(a)(3)(B)(ii)
The defendants do not contest that Menke was designated and produced for deposition by
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the plaintiff, as a Rule 30(b)(6) witness, and that they deposed him on March 29, 2013. Instead,
they contend that Menke “had no knowledge” about “paragraphs 6 and 9 of the 30(b)(6) Notice,”
namely, “[t]he alleged creation of the Stripe Design” and “[t]he alleged creation of the Star
Design.” Accordingly, they seek an order compelling the plaintiff to produce Drontmann, as a
Rule 30(b)(6) witness. However, the defendants do not point to any binding authority permitting
the court to compel a corporation deponent to designate a specific person to be its Rule 30(b)(6)
witness, and the Court finds none.
Moreover, the defendants point to page Nos. 206 and 207 of Menke’s deposition
transcript to support of their contention that “Menke disclosed for the first time, that Joris
Drontmann was also a designer of the star and stripe design and coauthor of the designs with Ms.
Kamp.” However, Menke’s deposition testimony on page Nos. 206 and 207 does not support the
defendants’ contentions concerning Drontmann’s role in the designs at issue. Menke testified
that Drontmann is the creative director for the designers, “responsible for the creation, creativity
in MPD,” and he assisted Kamp “in preparing” one of the two designs at issue, namely “helped
thinking about creating this design,” but Menke did not know whether Drontmann assisted Kemp
“in designing” the other of the two designs at issue. The defendants did not submit the entire
transcript of Menke’s deposition nor explain how Menke’s knowledge was lacking with respect
to “paragraphs 6 and 9 of the 30(b)(6) Notice.” Therefore, they failed to show that Menke was
not a knowledgeable Rule 30(6)(b) witness. The Court finds that compelling the plaintiff to
produce Drontmann, as a Rule 30(b)(6) witness, is not warranted.
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Legal Standard: Compelling Kamp and Drontmann to Comply with Prior Court Ordered
Depositions
“On notice to other parties and all affected persons, a party may move for an order
compelling disclosure or discovery.” Fed. R. Civ. P. 37(a)(1). The Federal Rules of Civil
Procedure “should be construed and administered to secure the just, speedy, and inexpensive
determination of every action and proceeding.” Fed. R. Civ. P. 1.
Application of Legal Standard
No court order directing Drontmann’s deposition or other basis exists to compel the
plaintiff to produce Drontmann as its Rule 30(b)(6) witness, as explained above. However, the
Court finds that compelling Kamp’s deposition on a date certain and by way of a conditional
order of preclusion is warranted, for the reasons that follow.
On February 13, 2013, the assigned district judge ordered the plaintiff to respond to the
outstanding discovery demands by March 15, 2013, which included producing Kamp for
deposition. At that time, the plaintiff knew that Kamp would be on a business trip to Asia from
March 16 to April 13, 2013, because it paid for that trip on January 28, 2013. The parties’ e-mail
correspondence demonstrates that the plaintiff agreed that “March 11, 2013 will work for our
client; and as discussed, this will cover all the depositions.”
On March 6, 2013, the plaintiff’s counsel represented to the Court that: (a) March 11,
2013, as a deposition date for Kamp, “was suggested with the possibility in mind . . . to do at least
some of these depositions via videoconference”; and (b) Kamp was “traveling in the Far East and
in India and she won’t be back until April, and so the earliest she could appear would be in New
York that is, would be April 15th.” However, at the time this representation was made to the
Court, Kamp was not traveling in Asia, since she did not depart Amsterdam for her trip to Asia
22
until March 16, 2013, ten days after the March 6, 2013 conference. Despite the March 6, 2013
denial of the plaintiff’s request for a video-conference and the March 14, 2013 order that Kamp
be deposed in New York by April 1, 2013, the plaintiff continued resisting Kamp’s production in
New York by April 1, 2013, by persisting with its request for an adjournment of the time for
Kamp’s deposition “until after she returns to Amsterdam on April 13, 2013.” See Docket Entry
Nos. 63 & 70. As Menke explained in his affidavit in support of the plaintiff’s opposition to the
motion, the meetings scheduled during Kamp’s trip to Asia were “extremely important for MPD’s
business” and, had she missed them, the plaintiff “would have faced a substantial risk of
disruption of its business.” It is apparent from the evidence in the record that the plaintiff placed
its business priorities above its discovery obligations in this action by attempting to postpone,
continuously, Kamp’s deposition. By electing to do so, the plaintiff acted in contravention of
Rule 1 of the Federal Rules of Civil Procedure, impeding the defendants’ efforts to defend the
action and wasting, unnecessarily, the parties’ and judicial resources. Accordingly, the Court
finds that not deposing Kamp would be extremely prejudicial to the defendants and compelling
Kamp’s deposition on a date certain by way of a conditional order of preclusion is warranted.
Legal Standard: Attorney’s Fees under Rule 37(a)(5)(A) and Rule 37(b)(2)(C)
If the motion [to compel] is granted—or if the disclosure or requested discovery is
provided after the motion was filed—the court must, after giving an opportunity to
be heard, require the party or deponent whose conduct necessitated the motion, the
party or attorney advising that conduct, or both to pay the movant’s reasonable
expenses incurred in making the motion, including attorney’s fees. But the court must
not order this payment if . . . the opposing party’s nondisclosure, response, or
objection was substantially justified; or . . . other circumstances make an award of
expenses unjust.
Fed. R. Civ. P. 37(a)(5)(A)(ii).
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Where a court finds that a failure to comply with a discovery order has occuned, "the court must
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).
Application ofLegal Standard: Attorney's Fees under Rule 37(a)(5)(A) and Rule 37(b)(2)(C)
Rule 37(a)(5)(A) does not apply because the defendants' motion is granted only in part
and denied in part and discovery was not provided after the motion was filed. Since the Court did
not find that the plaintiff failed to comply with a court order(s), Rule 37(b)(2)(C) does not apply.
The defendants did not seek attorney's fees pursuant to any other authority. Therefore, granting
the defendants' request for attorney's fees is not wananted.
Conclusion
For the foregoing reasons, the defendants' motion, Docket Entry No. 99, is granted, in
part, and denied, in part. The plaintiff is directed to produce Kamp for deposition in New York,
on August 27, 2013, and the following conditions apply: (I) no request for another adjournment,
change of date, or alternate method of deposition will be
entertained~
and (2) in light of the record
history concerning Kamp's deposition and numerous opportunities to be heard in the past as well
as the judicial and parties' resources already consumed unnecessarily, the plaintiff is cautioned
that any failure to obey this order will be considered unjustified, prejudicial and in bad faith and
will result in a report to the assigned district judge, recommending dismissal of the complaint.
Dated: New York, New York
August 13,2013
SO ORDERED:
KEVIN NATHANIEL FOX
UNITED STATES MAGISTRATE JUDGE
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