DC Court Admonishes Party for Flouting Discovery Deadline and Orders Attorney’s Fees Sanction

11 Jan 2017

Attorney Fees in Cell Phone Dispute In 3E Mobile, LLC v. Global Cellular, Inc., Case NO. 14-1975 (District of Columbia, Dec. 22, 2016), Plaintiff, a manufacturer of cell phone cases, sued Defendant, a provider of cell phone accessories, several years ago over an intellectual property dispute. The case was settled in 2013, and Defendant promised to make payments in return for Plaintiff’s agreement to manufacture or source products for Defendant. Defendant made its payments for six months, but Plaintiff did not produce any products for Defendant.  When Defendant alerted Plaintiff’s executives, they advised Defendant to stop paying on the settlement. When Defendant stopped payments, Plaintiff filed the instant suit, and Defendant filed counterclaims based upon the payments it already made and Plaintiff’s failure to provide products as agreed.

During discovery, Defendant served document requests and interrogatories upon Plaintiff. The discovery deadline was moved several times, as the case entered mediation, during which time Plaintiff changed lawyers. After repeated extensions, Plaintiff finally responded to Defendant’s discovery, producing only 115 pages of documents. Defendant sent numerous letters asking for supplemental documents, but Plaintiff ignored them. Defendant then filed a Motion to Compel, to which Plaintiff filed no opposition, and the court granted the Motion. Discovery closed on August 24, 2016, and more than a month later, Plaintiff produced over a thousand new pages of documents. Defendant asserted that Plaintiff failed to produce any email attachments, had withheld documents referred to specifically at depositions, and withheld documents as privileged that should have been produced under the protective order entered in the case. Plaintiff supplemented its response, which Defendant claimed was not sufficient.  Defendant then filed a Motion for Sanctions.

The court reviewed the difference between penal sanctions (such as terminating sanctions and attorney’s fees awards) and issue-related sanctionss(such as adverse inference instruction). In its review, it distinguished that penal sanctions require bad faith, while issue-related sanctions are applicable upon findings of negligence. However, in its sanction motion, Defendant sought both.

The court found that the issue-related sanctions were not appropriate, finding that the sanctions sought by Defendant would be the functional equivalent of a dismissal. The court instead ordered attorney’s fees be granted to Defendant.  The court admonished Plaintiff for “blatantly flouting” the scheduling order and for producing most of its documents after the discovery closing date. Plaintiff was ordered to pay Defendant’s attorney’s fees for both the Motion to Compel and the Motion for Sanctions.  The court also warned Plaintiff to comply moving forward.

ILS – Plaintiff ESI Discovery Experts