The opinion of the court was delivered by: Hon. Jane Magnus-Stinson, Judge United States District Court Southern District of Indiana
Presently before the Court is Defendants' Motion for Discovery Sanctions. [Dkt. 143.]
In this action, Plaintiff Loparex, LLC, sued the Defendants for alleged trade-secret misappropriation and related causes of action. The Court has recently granted Defendants summary judgment on Loparex's claims. [Dkt. 275.] The case isn't, however, over because two of the Defendants are pursuing a counterclaim against Loparex, for alleged violations of Indiana's anti-blacklisting statute, Ind. Code § 22-5-3-2.
The litigation has been heated, on both sides, with sanctions motions levied back and forth. A large portion of the present motion concerns allegations of misconduct during accelerated discovery necessitated by Loparex's motion for preliminary injunction, a motion that Loparex withdrew about two months into the case and before any hearing could be held on it. [See dkt. 72.] Essentially, the Defendants charge Loparex with gamesmanship in the content and timing of its responses to their discovery requests and with failing to keep the deposition schedule that the parties negotiated, [dkt. 49]. That gamesmanship, they say, also resulted in the non-production of documents that they were forced to obtain through non-party discovery, in Minne sota. Rather than detail the allegations of misconduct here, the Court will-given the wide-ranging nature of Defendants' allegations-discuss the specifics below, as they become relevant.
The Defendants lodge multiple accusations of discovery misconduct against Loparex, in connection with Loparex's responses to their document requests and interrogatories and in connection with deposition practice. Before discussing those accusations, however, the Court must first discuss the particular standards governing sanctions that the Defendants argue have been triggered here.
Defendants have directed the Court to two provisions of the Federal Rules of Civil Procedure that authorize sanctions. The first provision is Rule 26(g)(3). As is relevant here, no attorney may sign a discovery response that the attorney knows or reasonably should know is designed to "harass, cause unnecessary delay, or needlessly increase the cost of litigation." Fed. R. Civ. Pro. 26(g)(1)(B)(ii). If an attorney does so, Rule 26(g)(3) permits sanctions-"including attorney's fees"-against the attorney and/or the party. Fed. R. Civ. Pro. 26(g)(3). The second provision Defendants have cited is rule 37(d)(1)(A)(i), which permits sanctions if "a party or a party's officer, director, or managing agent-or a person designated under Rule 30(b)(6) or 31(a)(4)-fails, after being served with proper notice, to appear for that person's deposition."*fn1
B.Loparex's Document Productions
The Defendants complain about the Loparex's document production in several respects. First, they argue that Loparex produced voluminous, unresponsive documents in response to their document requests. [See dkt. 145 at 9.] Trying to overwhelm opposing counsel with irrelevant documents when preparing for depositions-especially in connection with an accelerated discovery schedule-is, of course, highly improper. See, e.g., Rothman v. Emory Univ., 123 F.3d 446, 455 (7th Cir. 1997) (approving award of sanctions where party had "blatantly (and repeatedly) rebuffed his obligation to sort through the documents and produce only those responsive to Emory's request"). Because Defendants haven't provided the Court with the allegedly irrelevant documents, however, the Court lacks any evidentiary basis to find that Loparex engaged in sanctionable overproduction rather than find, as Loparex contends, that overly broad discovery requests caused the voluminous production, [dkt. 156 at 12-14.]*fn2
Second, the Defendants accuse Loparex of gamesmanship with respect to the timing of its document productions. [See dkt. 145 at 12.] They say that Loparex withheld some documents until after the depositions were complete but before the hearing on the preliminary injunction. But assuming without deciding that the timing was improper-again, the Court can't tell whether the documents were actually responsive to a discovery request without examining the documents themselves-the Defendants suffered no prejudice. Loparex ultimately withdrew its motion for preliminary injunction, [dkt. 72]. At most, given the proportionality requirements, the Defendants would have been entitled to reopen the depositions. They have, however, prevailed on summary judgment, [dkt. 275], so it's a moot issue now.
Third, the Defendants complain that Loparex redacted potential trade-secret information from its document productions while "plann[ing] to give unredacted versions of these documents to the Court" at the preliminary injunction hearing. [Dkt. 145 at 12.] But the Court refused to consider any ex parte submissions, [dkt. 86], Loparex withdrew its motion for preliminary injunction, [dkt. 72], and the Defendants prevailed on summary judgment (which didn't involve any ex parte submissions either). The redaction issue is also moot.
Fourth, the Defendants object to having to undertake third-party discovery in Minnesota to obtain responsive documents that Loparex had produced in another action. [See dkt. 145 at 5-9.] Inasmuch as Loparex offers no defense of its non-production of those documents in this action, [see dkt. 156 at 13-15], the Court will find that Loparex's failure to produce them inexplicable and objectively unreasonable. To make the Defendants whole for having had to go obtain a court order for their production in Minnesota, the Court will permit the Defendants to ...