Neuroscience, Inc. et al v. Forrest, Richard et al

Filing 84

ORDER granting in part and denying in part 71 Motion for Sanctions and Denying 79 Motion for Default Motion. Signed by District Judge Barbara B. Crabb on 2/14/2014. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NEUROSCIENCE, INC.
and PHARMASAN LABS, INC.,
ORDER
Plaintiffs,
12-cv-813-bbc
v.
RICHARD T. FORREST and
CERULEAN INVESTMENTS, INCORPORATED,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Plaintiffs Neuroscience, Inc. and Pharmasan Labs, Inc. are suing defendants Richard
Forrest and Cerulean Investments, Incorporated, for submitting false insurance claims in
plaintiffs’ name, among other things. Plaintiffs assert claims under the Racketeer Influenced
and Corrupt Organizations Act, 18 U.S.C. §§ 1961-88, and various state laws. Defendant
Forrest is proceeding without counsel and defendant Cerulean has not made an appearance.
As noted in previous orders, “[c]orporations unlike human beings are not permitted to
litigate pro se,” In re IFC Credit Corp., 663 F.3d 315, 318-19 (7th Cir. 2011), which means
that Forrest cannot represent Cerulean and that Cerulean has not yet filed an answer or
otherwise participated in the lawsuit.
Now plaintiffs have filed a motion for sanctions in which they allege that defendant
Forrest has failed to comply with various discovery demands and court orders. Dkt. #71.

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(Although plaintiffs seek relief as to both defendants, Forrest’s litigation conduct cannot be
imputed to Cerulean for the reason discussed above, so I am limiting the scope of plaintiffs’
motion to Forrest. If plaintiffs want judgment as to Cerulean, they will have to move for
default under Fed. R. Civ. P. 55.). As remedies for Forrest’s misconduct, plaintiffs request
that the court (1) enter default judgment against Forrest for failing to appear for his noticed
depositions, Fed. R. Civ. P. 37(b)(2)(A)(vi) and (d) (court may “rende[r] a default judgment
against the disobedient party” if he “fails, after being served with proper notice, to appear
for that person’s deposition”); (2) enter default judgment and find Forrest in contempt for
refusing to comply with Magistrate Judge Crocker’s December 3, 2013 order to produce
electronically stored information, Fed. R. Civ. P. 37(b)(2)(A)(vii) (court may “trea[t] as
contempt of court the failure to obey any order”); (3) award attorney fees and costs for
preparing for Forrest’s scheduled depositions and preparing their motion for sanctions; Fed.
R. Civ. P. 37(d)(3) (court “must require party failing to act . . . 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”); and (4) compel Forrest
to appear for a deposition “so plaintiffs may learn the true extent of [Forrest’s] misdeeds.”
Plaintiffs’ second request is moot because the magistrate judge concluded in his
January 24, 2014 order that “Forrest had valid, good faith reasons for not producing to
defendant all of the devices containing Forrest's ESI as ordered by the court on December
3, 2013.” Dkt. #76. Accordingly, I am denying that aspect of plaintiffs’ motion.
I am granting plaintiffs’ first and third requests as unopposed.

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Defendant Forrest

does not deny that he failed to attend multiple, noticed depositions and he does not attempt
to provide an excuse for these failures. Further, it is unnecessary to consider whether a lesser
sanction is appropriate because Forrest is consenting to judgment as to liability. In a letter
to the court dated February 3, 2014, Forrest says that he “can no longer participate in this
litigation” and he has “no choice but to capitulate and succumb to a default judgment in this
lawsuit.” Dkt. #79. Although Forrest says he is giving up for various reasons unrelated to
the merits of the case, he does not ask for court assistance or otherwise suggest that his
concerns provide any grounds for his failure to appear at his noticed depositions. Forrest
requests a hearing to determine damages, but I will deny that motion as unnecessary because
the court will schedule a hearing to allow plaintiffs to prove their damages regardless whether
Forrest requests such a hearing.
This leaves plaintiffs’ request to compel defendant Forrest’s deposition. I am denying
that motion without prejudice in light of my conclusion that plaintiffs are entitled to default
judgment. In addition, I will hold a telephone conference to schedule a default hearing. If
plaintiffs believe that they still need discovery to prove their damages, they may renew their
motion at that time.

ORDER
IT IS ORDERED that the
1. The motion for sanctions filed by plaintiffs Neuroscience, Inc. and Pharmasan
Labs, Inc. against defendant Richard T. Forrest, dkt. #71, is GRANTED with respect to

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their request for default judgment and their request for attorney fees and costs. The motion
is DENIED with respect to their request to find defendant Forrest in contempt and to
compel him to sit for a deposition.
2.

Defendant Forrest’s motion for a default hearing, dkt. #79, is DENIED as

unnecessary.
3. The clerk of court is directed to set a telephone conference for March 7, 2014, at
1:00 pm to determine a date for the default hearing and to address any other matters the
parties wish to raise.
4. Plaintiffs may have until March 7, 2014, to submit an itemization of their fees and
expenses related to (1) defendant Forrest’s failure to appear at his noticed depositions and
(2) preparing plaintiffs’ motion for sanctions. Defendant Forrest may have until March 14,
2014 to file a response. Plaintiffs may have until March 19, 2014 to file a reply.
5. If plaintiffs wish to renew their motion to compel defendant Forrest to sit for a
deposition, they should do so no later than March 7, 2014, and they should take care to
explain the proposed scope of the deposition and what they hope to accomplish with it. In
addition, they should cite relevant authority for compelling a party to sit for a deposition
after entry of default. Defendant Forrest may have until March 14, 2014, to file a response.
Entered this 21st day of February, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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