Lightbox Ventures, LLC v. 3rd Home Limited

Filing 152

MEMORANDUM OPINION & ORDER.....Reimbursement of costs and attorneys fees is appropriate in this case. As described above, the defendants failed to produce documents that are relevant to this litigation. A substantial number of the 91 documents list ed in the spreadsheet concern the defendants dealings with Exclusive Brokers, which are central to Lightboxs breach of contract and breach of fiduciary duty claims. The defendants do not submit evidence that the 91 documents had been previously prod uced to Lightbox, or that any failure to produce the documents was justified. Accordingly, it is hereby ORDERED that Lightboxs request for reimbursement of its costs and expenses incurred in connection with the forensic examination is granted. Ligh tbox shall submit evidence of its costs and expenses, including attorneys fees, by December 1.IT IS FURTHER ORDERED that any argument that the requested amount should not be awarded is due December 15; any reply is due December 22. (Signed by Judge Denise L. Cote on 11/15/2017) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
:
LIGHTBOX VENTURES, LLC,
:
:
Plaintiff,
:
:
-v:
:
3RD HOME LIMITED and WADE SHEALY,
:
:
Defendants.
:
:
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16cv2379(DLC)
MEMORANDUM OPINION
& ORDER

APPEARANCES
For Lightbox Ventures, LLC and Andrew Ellner:
Brem Moldovsky
Brem Moldovsky, LLC
411 Lafayette Street, 6th Floor
New York, New York 10003
For 3RD Home Limited and Wade Shealy:
Phillip Byron Jones
Evans, Jones & Reynolds, P.C.
401 Commerce Street, Suite 710
Nashville, TN 37219
DENISE COTE, District Judge:
Based on a showing that the defendants failed to comply
with the Court’s October 21, 2016 directive ordering Phillip
Jones or another attorney at Evans, Jones & Reynolds, P.C. to
personally review Wade Shealy’s email server, on November 1,
2016, the Court ordered an independent forensic examination of
the defendants’ electronic servers and personal devices to
identify whether electronic documents responsive to Lightbox
Ventures, LLC’s (“Lightbox”) discovery requests had “been

withheld, concealed or deleted.”

The Court further ordered that

the costs of the examination shall be initially borne by
Lightbox, subject to a later determination that the costs “be
shifted to defendants if the investigation reveals material
document spoliation or a material failure to produce documents
that could have and should have reasonably been produced.”
On November 15, 2016, the Court ordered that the
examination take place according to a protocol agreed to by the
parties.

Under the protocol, the parties agreed that a list of

over 100 keyword searches could be used to search the collected
data.

A substantial number of these keyword searches, such as

“exclusive w/2 broker*”, relate to 3RD Home Limited’s (“Third
Home”) dealings with brokers other than Lightbox (“Exclusive
Brokers”).
On September 15, 2017, Lightbox filed a letter requesting
reimbursement of costs and attorneys’ fees incurred in
According to Lightbox, the

connection with the examination.

examination resulted in delivery to the parties in December 2016
of approximately 26,500 unique documents responsive to the
forensic protocol.

Lightbox’s letter attaches a spreadsheet

listing 91 documents that were responsive to discovery demands
and that the defendants failed to produce.1

The spreadsheet also lists 6 documents that Lightbox contends
were destroyed by the defendants prior to the examination.
1

2

The documents described in the spreadsheet are relevant to
this litigation.

A substantial number of the 91 documents

relate to the defendants’ arrangements with the Exclusive
Brokers.

For instance, these documents include communications

between Third Home and Exclusive Brokers concerning fees and
other agreement terms.
The defendants opposed Lightbox’s request for reimbursement
on September 29.

The defendants do not argue that the 91

documents fell outside the scope of Lightbox’s permitted
discovery requests.

Lightbox replied on October 18.

Under Federal Rule of Civil Procedure 37, courts may impose
“a wide range of sanctions for . . . discovery abuses.”
Federal Ins. Co., 720 F.3d 387, 392 (2d Cir. 2013).

Mali v.

Under Rule

37(b)(2)(C), if a party fails to obey an order to provide or
permit discovery 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).
Reimbursement of costs and attorneys’ fees is appropriate
in this case.

As described above, the defendants failed to

Lightbox concedes that neither it nor its vendor systematically
searched for evidence of spoliation.
3

produce documents that are relevant to this litigation.

A

substantial number of the 91 documents listed in the spreadsheet
concern the defendants’ dealings with Exclusive Brokers, which
are central to Lightbox’s breach of contract and breach of
fiduciary duty claims.

The defendants do not submit evidence

that the 91 documents had been previously produced to Lightbox,
or that any failure to produce the documents was justified.
Accordingly, it is hereby
ORDERED that Lightbox’s request for reimbursement of its
costs and expenses incurred in connection with the forensic
examination is granted.

Lightbox shall submit evidence of its

costs and expenses, including attorneys’ fees, by December 1.
IT IS FURTHER ORDERED that any argument that the requested
amount should not be awarded is due December 15; any reply is
due December 22.
Dated:

New York, New York
November 15, 2017
__________________________________
DENISE COTE
United States District Judge

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