Defendants Ordered to Supplement Discovery Responses after ESI Reveals Deficiencies
In Nachurs Alpine Solutions Corp. v. Banks et. al., Case No. 15-4015 (N.D. Iowa, June 22, 2017), Plaintiff sued Defendants Brian Banks, its former employee, and Nutra-Flo Company, Defendant’s current employer, for theft of proprietary, confidential, and trade secret information. During discovery, Plaintiff propounded multiple interrogatories and requests for production of documents upon Defendants to identify the stolen information. The parties stipulated that Defendants would return to Plaintiff any confidential or trade secret documents Defendant Banks had removed from Plaintiff’s custody.
Defendants produced tens of thousands of pages of electronic documents. Upon review, Plaintiff concluded that Defendants’ production was deficient based upon Defendants’ interrogatory answers. Plaintiff filed a Motion to Compel and for sanctions, arguing that Defendants had an obligation to supplement their answers with the information Plaintiff obtained. Defendants responded that the answers were not deficient, and that even if they were, sanctions were not appropriate because Plaintiff obtained the information through the ESI produced, and Defendants acted in good faith and exercised reasonable efforts to comply with the discovery requests.
The court reviewed Defendants’ answers to interrogatories and determined that the production was deficient and that the answers were somewhat misleading with respect to Banks’s involvement in R & D at Nutra-Flo. The court also found that evidence suggested Banks had downloaded files from Plaintiff’s computers to an external hard drive and then moved the documents to Dropbox, despite Defendants’ answers to interrogatories indicating that he had not done so.
Having made these findings, the court determined that Defendants’ discovery failures were not substantially justified. The court found it “inexcusable” that Defendants denied Banks’s involvement in research and development and found that Defendants could have discovered what Plaintiff asked for by using a simple word search. The court also found that the failure was not harmless, as Plaintiff incurred significant costs and expenses in finding the documents and will incur further expense deposing witnesses it had already deposed before finding the documents. The court ordered that Plaintiff could retake certain depositions and Defendants would bear the costs. The court also determined, however, that Plaintiff could not shift the fees for reviewing the ESI to Defendants, as Plaintiff would have reviewed the ESI regardless of Defendants’ failures. The court also ordered Defendant to pay Plaintiff’s attorney fees and costs for bringing the motion, and ordered Defendants to supplement discovery responses and provide a read-only version of Banks’s Dropbox for Plaintiff to review.