The opinion of the court was delivered by: Karen E. Schreier Chief Judge
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' REQUEST FOR ATTORNEY'S FEES
Plaintiffs, Sylvia Kirschenman and Leo Kirschenman, filed property damage claims with defendant, Auto-Owners Insurance, after a May 5, 2007, storm near Yankton, South Dakota, caused damage to their property. Auto-Owners did not pay the claims in full. Kirschenmans brought suit against Auto-Owners alleging breach of contract, bad faith, and unfair trade practices causes of action. Kirschenmans moved to compel certain discovery from Auto-Owners, which this court referred to Magistrate Judge Veronica Duffy for resolution pursuant to 28 U.S.C. § 636(b)(1)(A). Magistrate Judge Duffy ordered that Kirschenmans' motion to compel be granted in part and denied in part. Auto-Owners objected to portions of the order. The court overruled Auto-Owners' objections and adopted Magistrate Judge Duffy's order in full.
The court found that Kirschenmans were entitled to attorney's fees for bringing their motion to compel. Kirschenmans move to approve their request for attorney's fees. Docket 44. Auto-Owners objects to awarding any attorney's fees and, in the alternative, contends that Kirschenmans' attorney's fees request be reduced. The motion is granted in part and denied in part.
Federal Rule of Civil Procedure 37 governs when sanctions are appropriate for a party's failure to make disclosures in discovery. Rule 37(a)(5)(C) provides that if a Rule 37 discovery motion "is granted in part and denied in part, the court . . . may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion." Rule 37 further provides that an award of attorney's fees should not be ordered if, among other reasons, objections to complying with the motion were substantially justified. Fed. R. Civ. P. 37(a)(5)(A)(ii). District courts have wide latitude in discovery, including ordering a Rule 37 monetary award. Sentis Group, Inc. v. Shell Oil Co., 559 F.3d 888, 899 (8th Cir. 2009) (citations omitted).
In awarding Rule 37 expenses, "[t]he fault concept . . . remains central." 8B Charles Alan Wright et al., Federal Practice and Procedure, § 2284 (3d ed. 2010). Rule 37 allows for expenses as a sanction for improper conduct in discovery "to encourage extra-judicial discovery with a minimum of court intervention." Id. at § 2288. When the court overrules most of the objections to a motion to compel and those objections were not substantially justified, then sanctions in the form of expenses and fees are appropriate. DIRECTV, Inc. v. Puccinelli, 224 F.R.D. 677, 692-93 (D. Kan. 2004). "[T]hus is placed directly on attorneys a somewhat unique sanction to refrain from the frivolous, to weigh carefully considerations of relevancy and privilege, and to advise in accordance with their best judgment." Wright et al., § 2288 (quotation omitted).
Auto-Owners, citing Oyen v. Land O'Lakes, Inc., No. Civ. 07-4112, 2009 WL 536606 (D.S.D. Mar. 3, 2009), argues that its objections to complying with Kirschenmans' motion to compel were substantially justified. In Oyen, the court reasoned that substantial justification means that "reasonable minds could differ as to whether [the party] was justified in resisting the discovery sought[.]" Id. at *3. Because "there was plenty of law" on whether the information sought was discoverable, substantial justification did not exist in Oyen for refusing to comply with the discovery requests. Id.
Auto-Owners maintains that it was substantially justified in resisting Kirschenmans' request number four, which sought upper-level personnel files. But according to established law in this district, upper-level personnel files are discoverable in a case alleging bad faith. See Docket 53 at 4 (citing Fair v. Royal & Sun Alliance, 278 F.R.D. 465 (D.S.D. 2012); Torres v. Travelers Ins. Co., Civ. 01-5056-KES, Docket 327 at 29-31 (D.S.D. Sept. 30, 2004)). Auto-Owners was not substantially justified in refusing to respond to request number four.
Regarding request number 14, Auto-Owners was substantially justified in opposing Kirschenmans' request that it not only make the information sought available but also pay for the costs associated with producing the information. The court split the cost to comply with request number 14 by ordering Auto-Owners to produce the information free-of-charge and requiring Kirschenmans to pay the copying and shipping costs.
Auto-Owners also asserts that it was substantially justified in opposing Kirschenmans' requests number 17 and 18, which sought information about similar litigation and requested all materials pertaining to those cases. The court ordered Auto-Owners to produce some documents for the other cases, including the complaint, answer, and any dispositive motion, and, if Kirschenmans believed that a case was relevant to their claims, they could then request the entire litigation file. Because the court agreed in part with Auto-Owners that it did not need to produce the entire litigation file unless the file proved to be relevant, Auto-Owners was substantially justified in refusing to fully comply with requests number 17 and 18.
Auto-Owners further contends that it had to review Kirschenmans' motion to compel before it understood the full extent of what Kirschenmans sought in discovery. For example, regarding requests numbered six, seven, and eight, Kirschenmans did not identify the REACH, CST, and or Strive for Five programs by name. Docket 50 at 5 (citing Docket 32 at 18). Requests number six, seven, and eight sought information "related to cost containment programs or efforts to lower costs[,]" "documents related to efforts to increase profitability[,]" and "documents related to efforts to reduce loss ratios or claims" in regard to Auto-Owners' handling of property claims. Docket 43 at 17. Auto-Owners does not argue that it was substantially justified in refusing to comply with these requests after it received Kirschenmans' motion to compel.
Because Kirschenmans do not work for Auto-Owners, it is unreasonable to expect Kirschenmans to list every cost-containment program in their discovery requests. Auto-Owners was not substantially justified in refusing to provide the information sought in requests number six, seven, and eight.
Auto-Owners makes no argument as to how it was substantially justified in refusing to answer requests number 9, 10, 13, 16, 19, 20, 22, and 23, which Magistrate Judge Duffy granted in part or in whole. Of the 15 discovery requests in Kirschenmans' motion to compel (requests number 4, 6, 7, 8, 9, 10, 13, 14, 16, 17, 18, 19, 20, 22, and 23), the court finds that Auto-Owners was only substantially justified in refusing to answer 3 requests (requests number 14, 17, and 18). Because Auto-Owners has not shown ...