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Friedman v. Sthree PLC

United States District Court, D. Connecticut

October 24, 2016

STHREE PLC., et al.



         On October 7, 2016, this Court held an in-person Discovery Conference to address the issues raised by defendants regarding plaintiff Dan Friedman's (“plaintiff”) discovery responses. [Docs. ##182, 191]. Plaintiff and his counsel, and counsel for defendants participated in that conference. At the conference, defendants indicated that they were unsatisfied with the responses from plaintiff to their discovery requests. The Court thoroughly addressed each of defendants' discovery requests, and defendants' concerns regarding plaintiff's production. The Court also engaged in an ex parte conference with plaintiff and his counsel, with the consent of defendants' counsel, to discuss the scope of the searches conducted to date.

         Following the conference, the Court issued a Memorandum of Conference and Order requiring plaintiff “to perform additional searches; to review the results of each search; to provide a certification detailing the nature of each search; and to identify any records that have not been produced on the basis of privilege in a privilege log[.]” Doc. #182 at 2. The Court carefully detailed the requirements for the additional searches, the review process, and the certification. See generally, Id. The Court imposed a deadline of October 17, 2016, for the production of the additional disclosures and certification. To the extent defendants found deficiencies in plaintiff's additional production, the Court required defendants to file a notice with the Court by October 19, 2016, identifying said deficiencies. See Id. at 12.

         On October 13, 2016, the Court held a telephonic status conference, on the record, to ensure that plaintiff was prepared to meet the disclosure deadline of October 17, 2016. [Doc. #187]. At the October 13, 2016, conference, counsel for plaintiff requested a two day extension of the disclosure deadlines, which the Court denied, due to the lengthy delays that have already occurred in this case. See Id. The Court also reiterated that plaintiff was required to conduct the searches anew, and stressed the importance of disclosing the documents by the Court-ordered deadline. On October 17, 2016, as required, plaintiff filed a certification regarding discovery. [Doc. #190]. On October 19, 2016, counsel for the SThree defendants and counsel for the Palladyne defendants each filed a response to plaintiff's certification and disclosure. [Docs. ##193, 194]. Defendants' responses assert that there are numerous deficiencies with plaintiff's October 17, 2016, production. On October 21, 2016, plaintiff filed a response to defendants' notices. [Doc. #198].

         The Court held a telephonic status conference on the record on October 21, 2016, in which counsel for all parties participated to discuss the alleged deficiencies.

         After consideration of the plaintiff's certification, defendants' notices, plaintiff's response, and the statements made on the record on October 21, 2016, the Court has determined that plaintiff has failed to adequately respond to the defendants' discovery requests and to comply with the Court's orders, and that sanctions are therefore appropriate.

         I. Legal Standard

         Federal Rule of Civil Procedure 37 “provides a nonexclusive list of sanctions that may be imposed on a party for failing to obey an order to provide or permit discovery.” Martinelli v. Bridgeport Roman Catholic Diocesan Corp., 179 F.R.D. 77, 80 (D. Conn. 1998) (citing Werbungs Und Commerz Union Austalt v. Collectors' Guild, Ltd., 930 F.2d 1021, 1027 (2d Cir. 1991)); see also Fed.R.Civ.P. 37(b)(2)(A)(i)-(vii). “Provided that there is a clearly articulated order of the court requiring specified discovery, the district court has the authority to impose Rule 37(b) sanctions for noncompliance with that order.” Tucker v. Am. Int'l Grp., Inc., 936 F.Supp.2d 1, 26 (D. Conn. 2013) (quoting Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1363 (2d Cir. 1991)). “Monetary sanctions pursuant to Rule 37 for noncompliance with discovery orders usually are committed to the discretion of the magistrate, reviewable by the district court under the ‘clearly erroneous or contrary to law' standard.” Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990).

         Sanctions under Rule 37 are designed to effectuate three goals:

First, they ensure that a party will not benefit from its own failure to comply. Second, they are specific deterrents and seek to obtain compliance with the particular order issued. Third, they are intended to serve a general deterrent effect on the case at hand and on other litigation, provided that the party against whom they are imposed is in some sense at fault.

Update Art, Inc. v. Modiin Pub., Ltd., 843 F.2d 67, 71 (2d Cir. 1988) (citations omitted). “When parties and/or their counsel fail in their duty to conduct proper searches of ESI, sanctions may be appropriate, even where the misconduct involves late disclosure, as opposed to spoliation.” Nycomed U.S. Inc. v. Glenmark Generics Ltd., No. 08CV5023(CBA), 2010 WL 3173785, at *3 (E.D.N.Y. Aug. 11, 2010) (citation omitted).

         II. Discussion

         In the instant matter, plaintiff has repeatedly failed to meet his discovery obligations under the Federal and Local Rules of Civil Procedure. He has also failed to comply with the Court's Order of October 7, 2016. Among the deficiencies in production observed by the Court, plaintiff still has not clearly and unequivocally explained the scope of his search in response to defendants' requests; has not diligently and appropriately sought copies of documents in his control but in the physical custody of third parties; and has not timely provided all responsive materials to defendants. This case has been pending since March 25, 2014, and the parties are still conducting jurisdictional discovery, largely because of the plaintiff's failure to pursue the matter diligently[1] and to meet his obligations. It is against that background that the Court evaluates the current disputes.

         A. Electronic Production and Certification

         Plaintiff's certification indicates that after additional searches were conducted on the search terms ordered by the Court, “[a]ll of the documents reviewed and found to be responsive were produced before 5pm EDT on October 17. Those documents were the ones that were (1) located pursuant to the searches conducted as described in ¶¶2-4 and (2) not previously produced.” Doc. #190 at 2 [sic]. It appears to the Court that after conducting the Court-ordered searches, plaintiff disclosed only those records that plaintiff believes were not disclosed originally. The problem with this approach is that plaintiff's counsel has never been able to accurately describe the universe of documents already produced to defendants.[2] The Court intended to require the plaintiff to produce all documents identified during the new searches that are responsive to defendants' requests, because it was clear to the Court that plaintiff did not have a complete and accurate understanding of what had and had not been produced previously. The Court also intended for new searches to be conducted without limitation by any prior disclosures because it appeared that prior searches and reviews had been conducted solely by the plaintiff, rather than by counsel.

         Plaintiff's counsel has made contradictory representations about the discovery conducted to date, and his involvement therein. For example, at the October 7, 2016, conference, he stated that he “personally got involved in this this week in terms of finally going into the computer.” Doc. #191 at 10. Later in the conference counsel suggested that he had in fact only conducted a review of the documents the night before the conference. See Doc. #191 at 67 (“THE COURT: Okay, And when did you conduct those reviews of the emails? MR. KAUFMAN: That was -- those must have been -- would be last night.”). He further stated that “Mr. Friedman did numerous searches[]” and that “[h]e goes through, he produces them.” Id. at 14. See also Id. at 68 (“My client conducted numerous searches where I discussed with him what needed to be produced[.]”). These statements support the conclusion that counsel was uninvolved in the search process until shortly before the October 7, 2016, conference. Indeed, the Court asked counsel whether he or someone else with legal expertise had reviewed the emails returned by each search term, and counsel stated that he had not. Id. at 16.

         As the Court has repeatedly reminded counsel, he has an ongoing duty to oversee plaintiff's efforts to comply with discovery requests. See Doc. #191 at 14-15, 16.

A party's discovery obligations do not end with the implementation of a “litigation hold” - to the contrary, that's only the beginning. Counsel must oversee compliance with the litigation hold, monitoring the party's efforts to retain and produce the relevant documents. Proper communication between a party and her lawyer will ensure (1) that all relevant information (or at least all sources of relevant information) is discovered, (2) that relevant information is retained on a continuing basis; and (3) that relevant non-privileged material is produced to the opposing party.

Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004). “[F]or the current ‘good faith' discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and emails are maintained and to determine how best to locate, review, and produce responsive documents. Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search.” Richard Green (Fine Paintings) v. McClendon, 262 F.R.D. 284, 290 (S.D.N.Y. 2009) (citation omitted).

         Plaintiff's counsel also represented that shortly before the October 7, 2016, conference, a search was conducted of plaintiff's Gmail account on about 30 search words, which returned results of between two hundred and five hundred emails per search word. See Doc. #191 at 11. Once those results were obtained, counsel stated, “we have to go through them all to take out attorney-client, we have to literally do them one-by-one.” Id. In response to inquiry from the Court, counsel stated that a total of about 1, 500 documents had been produced. The Court then calculated that if 30 search terms produced between 200 and 500 results each, that would create a universe of 6, 000 to 15, 000 emails; the Court inquired, then, why so many of these emails had been withheld, particularly since no privilege log had been produced. Id. at 13-15. Counsel indicated that “Mr. Friedman has been able to -- has been able to siphon out the stuff that was attorney-client privilege.” Id. at 15. Counsel seemed to suggest that the emails had been found to be non-responsive, rather than responsive but privileged, but was unclear. It is thus not clear to the Court -- still -- whether the emails produced by searching particular terms were reviewed for responsiveness, for privilege, or both, and whether any person with legal training was involved in that review.

         Plaintiff's counsel further stated, definitively, that Mr. Friedman had no email accounts other than Gmail that he used during the relevant time frame. See Doc. #191 at 28. Defense counsel stated that they had reason to believe that ...

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