The Inspirational Network, Inc. v. TMH Telemedia Services Limited et al

Filing 52

Memorandum and ORDER granting in part and denying in part 45 Motion to Compel. Signed by Magistrate Judge David S. Cayer on 5/23/11. (com)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:10CV110-RJC-DSC

THE INSPIRATIONAL NETWORK, INC.,
Plaintiff,
v.
TMH TELEMEDIA SERVICES LIMITED
and TMH TELEMEDIA SERVICES, INC.,
Defendants.

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MEMORANDUM AND
ORDER

THIS MATTER is before the Court on “Plaintiff’s Motion to Compel Defendant TMH
Telemedia Services, Inc.” (doc. 45) filed April 15, 2011, and the parties’ associated briefs and
exhibits. Docs. 46, 47, 48 and 51. This Motion has been referred to the undersigned pursuant to 28
U.S.C. §636(b), and is now ripe for the Court’s consideration.
Relevant to the Motion to Compel, Plaintiff The Inspirational Network, Inc. (“Inspiration”)
operates various television networks airing programming in the United States and abroad.
Defendants serve as agents for various ministries that seek to purchase air time on Inspiration’s
networks. Inspiration alleges that TMH Telemedia Services Limited (“TMH UK”) breached its
contract with Inspiration by failing to remit payments. Additionally, Inspiration alleges that TMH
Telemedia Services, Inc. (“TMH US”) is liable for TMH UK’s breaches of contract as the alter ego
of TMH UK. On July 23, 2010, the Honorable Robert J. Conrad, Jr. entered a Pretrial Order and
Case Management Plan which required the completion of fact discovery by January 15, 2011.
On July 23, 2010, Inspiration served TMH US with its First Set of Interrogatories and
Requests for Production of Documents. TMH US responded initially on August 23, 2010. Over the

next nine months of the case, including two extensions of the discovery deadline, the Court entering
a default judgment against TMH UK, and TMH US’s initial counsel withdrawing from the case,
TMH US gradually addressed the deficiencies of its initial responses.

Inspiration’s Reply

acknowledges that it “is satisfied that TMH US is finally conducting a diligent search of its email
files and will eventually produce all responsive emails to Inspiration.” Doc. 51 at 3. However,
Inspiration contends that TMH US has still failed to produce the full range of responsive documents.
Because of the looming discovery deadline, the mediation scheduled for June 7, 2011 and
depositions that have been kept open to address any issues that arise from the production of the
requested documents, Inspiration filed the subject Motion to Compel, seeking an order compelling
TMH US to provide the long overdue responses and to pay monetary sanctions.
In its Response, TMH US states that since its new counsel made their appearances in the last
week of January 2011, counsel for both parties have worked cooperatively to adjust discovery
deadlines and TMH US has produced over 500 pages of discovery including its general ledgers for
2008, 2009 and 2010, showing in detail every financial transaction of the company. Doc. 47 at 3.
Additionally, TMH US states that it is continuing to diligently search for additional documents
responsive to the discovery requests and does not believe that an order is necessary. Id. at 6.
Rule 26(b)(1) of the Federal Rules of Civil Procedure provides that:
Parties may obtain discovery regarding any matter, not privileged, which is relevant
to the subject matter involved in the pending action, whether it relates to the claim
or defense of the party seeking discovery or to the claim or defense of any other
party, including the existence, description, nature, custody, condition, and location
of any books, documents, or other tangible things and the identity and location of
persons having knowledge of any discoverable matter. The information sought need
not be admissible at the trial if the information sought appears reasonably calculated
to lead to the discovery of admissible evidence.
The rules of discovery are to be accorded broad and liberal construction. See Herbert v. Lando, 441
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U.S. 153, 177 (1979); Hickman v. Taylor, 329 U.S. 495, 507 (1947). However, a litigant is not
entitled to conduct discovery that is intended to harass, annoy, embarrass, or oppress the opposing
party. See Fed. R. Civ. P. 26(c)
Whether to grant or deny a motion to compel discovery is generally left within the District
Court’s broad discretion. See, e.g., Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43
F.3d 922, 929 (4th Cir. 1995) (denial of motions to compel reviewed on appeal for abuse of
discretion); Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988) (noting District
Court’s substantial discretion in resolving discovery issues); LaRouche v. National Broadcasting
Co., 780 F.2d 1134, 1139 (4th Cir. 1986) (same).
The Fourth Circuit has emphasized the significance of establishing a history of dilatory
action and warning to the offending party of what may follow prior to imposing discovery sanctions
or dismissing the action for failure to comply with discovery obligations. See, e.g., Hathcock v.
Navistar Int’l Transp. Corp., 55 F.3d 36, 40 (4th Cir. 1995); Choice Hotels Int’l v. Goodwin &
Boone, 11 F.3d 469, 473 (4th Cir. 1993); Lolatchy v. Arthur Murray, Inc., 816 F.2d 951, 953 (4th
Cir. 1987).
Applying those legal principles to this case, the Court concludes that Inspiration is entitled
to the responsive documents sought in its First Set of Interrogatories and Requests for Production
of Documents with regard to Interrogatory No. 4, and Document Request Nos. 1, 13, 15, and 22.
The information Inspiration seeks is reasonably calculated to lead to the discovery of admissible
evidence as to its breach of contract and alter ego claims. However, with regard to Document
Request No. 43, the Court finds that this request is overly broad and without reasonable limitation
in its scope. Therefore, the Court will narrow the disclosure to the list of search terms for use in
an email search provided by Inspiration’s counsel at Exhibit D of Inspiration’s Memorandum in
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Support of this Motion and any documents related to those emails. Doc. 46 at Ex. D.
While the Court recognizes that TMH US continues to be more responsive since the
appearance of its new counsel in January 2011, the Court also recognizes that mediation is
approaching and discovery must be completed. Therefore, the Court will grant Inspiration’s Motion
to Compel but recognizing that TMH US has not been warned previously of the likely consequences
of its failure to perform its responsibilities as a litigant, the Court will withhold recommending the
imposition of discovery sanctions pending TMH US’s compliance with this Order.
Accordingly, the Court warns TMH US and its counsel that any failure to respond to
Inspiration’s First Set of Interrogatories and Request for Production of Documents, or to otherwise
comply fully with any of the Court’s Orders, the Local Rules, or the Rules of Civil Procedure may
result in the imposition of sanctions. Sanctions can include Defendant and/or their counsel being
required to pay Plaintiff’s costs, including reasonable attorneys’ fees, and may also include
dismissal of the Complaint with prejudice.
NOW THEREFORE, IT IS ORDERED:
1. Inspiration.’s “Motion to Compel” (document #47) is GRANTED IN PART and
DENIED IN PART, that is: TMH US is ORDERED to serve complete responses to Inspiration’s
First Set of Interrogatories and First Request for Production of Documents on or before June 3, 2011
with the exception that Document Request No. 43 is narrowed in scope as detailed above.

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2. The Clerk is directed to send copies of this Memorandum and Order to counsel for the
parties; and to the Honorable Robert J. Conrad, Jr.
SO ORDERED.

Signed: May 23, 2011

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