United States District Court, D. South Dakota, Western Division
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO COMPEL [DOCKET NO. 127]
VERONICA L. DUFFY, Magistrate Judge.
This matter is before the court on plaintiff Atmosphere Hospitality Management, LLC's complaint, filed pursuant to the court's diversity jurisdiction, 28 U.S.C. § 1332. Now pending is a motion to compel, Docket No. 127, also filed by Atmosphere. The district court, the Honorable Karen E. Schreier, referred this motion to this magistrate judge for decision. See Docket No. 165
Atmosphere brought this action against Shiba and Merali to litigate issues related to a licensing contract and management contract entered into by the parties on December 31, 2011. The agreements allowed Shiba to operate a Rapid City hotel it owns under Atmosphere's brand, "Adoba, " and gave management of the hotel to Atmosphere. Third-party defendant James Henderson is a managing partner of Atmosphere.
After operating under the licensing and management agreements for over one year, Shiba and Merali unilaterally canceled the contracts effective May 1, 2013, and claimed the right to continue using the "Adoba" brand. There were creditors of the hotel which had provided goods or services prior to May 1, 2013. Atmosphere contended that Shiba was responsible for these debts. Shiba contended the debts were Atmophere's responsibility.
Atmosphere filed a complaint on May 30, 2013 in this court alleging defendants breached the contracts, tortiously interfered with Atmosphere's business expectancy, defamed Atmosphere, fraudulently induced Atmosphere to enter into the contracts, committed deceit, misappropriated Atmosphere's trade secrets, and converted Atmosphere's property. See Docket Nos. 1, 37. Defendants Shiba and Merali filed a third-party complaint against James Henderson, alleging Henderson breached the contracts, converted defendants property for himself, and tortiously interfered with defendants' business expectancy. See Docket Nos. 8, 46 & 47.
Defendant Zeljka Curtullo began as an employee of Atmosphere, but who subsequently is alleged to have become an employee of Shiba. Atmosphere also alleges that Curtullo became the girlfriend of Merali's son, Sacha, who is also a part owner of Shiba. Atmosphere alleges that Curtullo breached a nondisclosure/confidentiality agreement she had signed in favor of Atmosphere by giving confidential information about Atmosphere to Shiba and Merali and that she misappropriated Atmosphere's trade secrets and converted Atmosphere's property.
To say that the history of this case has been litigious is to understate. Atmosphere filed a motion for a preliminary injunction asking the court to enjoin Shiba from using the Adoba brand during the pendency of this litigation and to require Shiba to pay the hotel's creditors for the debts incurred prior to May 1, 2013. See Docket No. 27. After taking evidence at a hearing that stretched over three days, the district court granted this motion in part and denied it in part, ordering Shiba to pay the debts incurred in operation of the hotel, but holding that Atmosphere had not shown an entitlement to preliminary injunctive relief as to the use of the Adoba brand. See Docket No. 53.
Shiba and Merali then filed a motion for summary judgment. The court denied the motion without prejudice to allow the parties time to conduct discovery and to serve defendant Zeljka Curtullo, who had not yet been served with the Atmosphere's amended complaint and summons. See Docket No. 88.
The record in this case has been riddled with discovery disputes. Atmosphere filed a motion to quash a subpoena defendants served for Atmosphere's bank records. See Docket No. 90. That issue was resolved by the court entering a protective order as to the bank records. See Docket No. 101. Atmosphere filed a motion to compel, Docket No. 98, which was resolved after the court held a hearing on the motion. See Docket No. 135. Currently two more motions related to the earlier motion to compel are pending, a motion for attorney's fees and a motion for sanctions. See Docket Nos. 147, 150. Defendant Merali then filed a motion to quash subpoenas served by Atmosphere. See Docket No. 107.
Now pending before this court are:
Atmosphere's Motion to Compel-Docket No. 127
Atmosphere's Motion to Compel Attendance, to Compel Compliance with Subpoena, and for Sanctions-Docket No. 131
Atmosphere and Henderson's Motion for Protective Order-Docket No. 141
This opinion deals with Docket No. 127 only, which relates to plaintiff's second set of discovery requests, consisting of interrogatories, requests for production of documents, and requests for admission.
Plaintiff served defendants with this second set of discovery requests on July 21, 2014. See Docket No. 129-1. Defendants filed initial responses to these discovery requests on August 1, 2014. See Docket No. 129-2. Plaintiff's counsel sent a letter to defendants' counsel on August 15, 2014, noting various deficiencies with those discovery requests. See Docket No. 129-3.
Counsel for both parties then met on August 28, 2014, to hold a meet-and-confer conference regarding plaintiff's disputes about defendants' discovery responses. See Docket No. 129-4. At the meet-and-confer, plaintiff's counsel explained in detail why she believed defendants' responses to the following discovery requests were inadequate and for which supplementation was requested: Interrogatory Nos. 2-4, 6-10; Request for Admission Nos. 3-4, 7-10, 13-14, 20; and Request for Production Nos. 2-10. Plaintiff's counsel sent a letter recapping the discussion held between counsel as to these discovery requests. See Docket No. 129-4. In general, defendants agreed to produce additional discovery responses on or before September 9, 2014. Id.
On September 9, 2014, defendants served plaintiff with unsigned and undated supplemental responses to plaintiff's second set of discovery requests. See Docket No. 129-5. On September 10, 2014, plaintiff's counsel sent a letter detailing further issues with defendants' supplemental responses. See Docket No. 129-6. The letter stated that a motion to compel would be filed if defendants did not further clarify, supplement, or otherwise produce discovery. Id . The instant motion was filed on September 15, 2014. See Docket No. 127.
On October 6, 2014, defendants responded to plaintiff's motion to compel. See Docket No. 140. Not until October 14, 2014, a month after plaintiff filed its motion to compel, did defendants provide plaintiff with signed and dated supplemental responses to plaintiff's second set of discovery requests. See Docket No. 167.
A. General Standards Applicable to Discovery
Federal Rule of Civil Procedure 26(b)(1) sets forth the scope of discovery in civil cases pending in federal court:
Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defenseBincluding the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).
See FED. R. CIV. P. 26(b)(1).
If a party fails to respond to a proper request for discovery, or if an evasive or incomplete response is made, the party requesting the discovery is entitled to move for a motion compelling disclosure after having made a good faith effort to resolve the dispute by conferring first with the other party. See FED. R. CIV. P. 37(a)(1).
The scope of discovery under Rule 26(b) is extremely broad. See 8 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2007, 36-37 (1970) (hereinafter "Wright & Miller"). The reason for the broad scope of discovery is that "[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession." 8 Wright & Miller, § 2007, 39 (quoting Hickman v. Taylor, 329 U.S. 495, 507-08, 67 S.Ct. 385, 392, 91 L.Ed.2d 451 (1947)). The Federal Rules distinguish between discoverability and admissibility of evidence. FED. R. CIV. P. 26(b)(1), 32, and 33(a)(2). Therefore, the rules of evidence assume the task of keeping out incompetent, unreliable, or prejudicial evidence at trial. These considerations are not inherent barriers to discovery, however.
Interrogatories, requests for the production of documents, and requests for admissions are to be signed by the party to whom the discovery request is directed; interrogatories must be signed under oath. See FED. R. CIV. P. 33(b); 34(b); and 36(a).
Requests to admit require a party to make reasonable inquiry to obtain any information which the party has or can readily obtain in order to admit or deny the request. See FED. R. CIV. P. 36(a)(4). The purpose of requests to admit pursuant to Rule 36 are to save parties from having to expend time and money proving facts which are readily ascertainable by the other party and not reasonably capable of dispute. Johnson Internat'l Co. v. Jackson Nat'l Life Ins. Co., 812 F.Supp. 966, 987-88 (D. Neb. 1993), aff'd in part and remanded on other grounds, 19 F.3d 431 (8th Cir. 1994). If a party unreasonably fails to admit a matter after being requested to do so, possible sanctions include the costs (including attorney's fees) of the party that served the request to admit in marshaling the evidence necessary to prove the matter. Id . See also FED. R. CIV. P. 37(c)(2). Sanctions can be assessed against not only the party, but his attorney as well. Johnson Internat'l Co., 19 F.3d at 438-49.
Rule 34 of the Federal Rules of Civil Procedure governs requests for the production of documents and provides that a party may ask another party to permit copying of documents "in the responding party's possession, custody, or control." See Fed.R.Civ.P. 34(a)(1). The concept of documents in a party's "possession" or "custody" is clear enough, but the concept of documents in a party's "control" is not obvious upon a reading of the rule.
The rule that has developed is that if a party "has the legal right to obtain the document, " then the document is within that party's "control" and, thus, subject to production under Rule 34. See 8A Charles A. Wright, Arthur R. Miller, & Richard L. Marcus, Fed. Practice & Procedure, §2210, at 397 (2d ed. 1994). "Because a client has the right, and the ready ability, to obtain copies of documents gathered or created by its attorneys pursuant to their representation of that client, such documents are clearly within the client's control." American Soc. for the Prevention of Cruelty to Animals v. Ringling Bros. & Barnum & Bailey Circus, 233 F.R.D. 209, 212 (D.D.C. 2006) (citing Poole ex rel. Elliott v. Textron, Inc., 192 F.R.D. 494, 501 (D. Md. 2000); and Poppino v. Jones Store Co., 1 F.R.D. 215, 219 (W.D. Mo. 1940)).
Merely because documents gathered by an attorney are subject to the client's control does not, however, automatically mean they are discoverable. The work product doctrine and the attorney-client privilege still apply and may be asserted in opposition to discovery, along with the appropriate privilege log. Ringling Bros., 233 F.R.D. at 211-213.
B. Plaintiff Has Satisfied the Meet-and-Confer Requirement
Rule 37(a)(1) requires the parties to meet and confer to attempt to resolve discovery disputes prior to filing a motion to compel. See FED. R. CIV. P. 37(a)(1). In addition, this court's local rules impose a similar requirement. See DSD LR 37.1. It appears as though plaintiff held a meet-and-confer with defendants after receiving defendants' initial responses to plaintiff's second set of discovery responses. See Docket No. 129-4. However, a second meet-and-confer appears not to have been convened once defendants served their supplemental responses.
Because many of the same issues identified by plaintiff following defendants' initial discovery responses were not rectified or were not addressed by defendants' supplemental responses, the court finds that the meet-and-confer held August 28, 2014, was sufficient to satisfy the condition precedent prior to filing the instant motion to compel.
C. Plaintiff's Motion to Compel Responses to Discovery (Second Set) Docket No. 127
In the motion filed at the court's Docket No. 127, plaintiff seeks an order compelling defendants to provide answers to various discovery requests as discussed below.
The court notes that, in the past, defendants have filed discovery responses to plaintiff's discovery requests that were not signed by the party defendant. The district court admonished defense counsel repeatedly at the hearing held on September 29, 2014, and explained that interrogatories, requests for production, and requests for admission are to be signed by the party itself or himself. At the September 29 hearing, the court ordered defense counsel to supply plaintiff with discovery responses that were appropriately signed by the party defendant.
Although the September 29 hearing before the district court did not concern plaintiff's second set of discovery requests, the rule that the court set forth for defendants applies to all discovery responses. Significantly, as of the date of the September 29 hearing, defendants had already served plaintiff with its September 9 supplemental responses to plaintiff's second set of discovery requests. Those supplemental responses were unsigned and undated, in derogation of the district court's admonishment.
It is incredible to this court that, following the hearing before the district court, defendants did not immediately rectify the problem with their supplemental discovery responses by serving signed and dated responses on plaintiff. Instead, defendants failed to serve signed discovery responses until October 14, 2014, a full month after plaintiff filed the instant motion to compel, six weeks after the initial unsigned responses were served, and two full weeks after the district court's admonishment about the need for signing discovery responses.
One theme that runs through plaintiff's motion to compel is the ambiguity created by defendants' supplemental discovery responses. Do those responses completely supplant defendants' initial discovery responses? Or are the supplemental discovery responses to be read together with the initial responses. Defendants evade answering this question in their response to plaintiff's motion to compel. It seems obvious to the court from reading both sets of responses that the supplemental responses are intended by defendants to completely supplant the initial responses given. Accordingly, the court so rules: defendants shall be bound by their supplemental responses to plaintiff's second set of discovery requests. Defendants' initial responses shall be deemed null and void.
1. Interrogatory No. 2
Plaintiff's Interrogatory No. 2 asks:
Interrogatory No. 2. Indicate when, in what manner, and from whom you received Atmosphere's proposed License Agreement and Property Management Agreement.
Defendants' response in their supplemental responses was:
Jim Henderson delivered the agreements by hand, initially and later, by email. I don't recall specifically when he handed me the agreements the first time, but believe that the documents were emailed in December 2011.
See Docket No. 129-5 at p. 2.
Plaintiff's objection to defendants' supplemental response is that the exact date of the email is capable of determination by referencing the email that contained the contracts attached to them. Plaintiff seeks an order from the court compelling defendants to look at the email and give a date certain.
As to the first part of defendants' answer, there would not appear to be a document that would reflect when James Henderson hand-delivered a copy of the agreements to defendant Karim Merali. To the extent plaintiff seeks an order to compel as to this portion of defendants' answer, that request is denied.
As to the second part of defendants' answer, plaintiff is correct. If the agreements were delivered by email, as defendants state, then that email would reflect a date certain. Defendants are ordered to consult the information in their custody and control and file a ...