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Zimmer Inc. v. Beamalloy Reconstructive Medical Products, LLC

United States District Court, N.D. Indiana, Fort Wayne Division

June 27, 2019

ZIMMER, INC., Plaintiff,


          Susan Collins United States Magistrate Judge

         I. BACKGROUND

         Before the Court is a motion and attached exhibits filed by Plaintiff Zimmer, Inc. (“Zimmer”), seeking an award of $52, 689.49 in attorney's fees that it incurred litigating a motion to compel against Defendants Beamalloy Reconstructive Medical Products, LLC, and Beamalloy Technologies, LLC (together “Beamalloy”). (DE 133; see generally DE 131). On March 21, 2019, the Court granted Zimmer's motion to compel with respect to all but two documents and gave Zimmer leave to file a motion for an award of attorney's fees under Federal Rule of Civil Procedure 37(a)(5)(A).[1] (DE 131 at 31).

         Beamalloy filed a response to Zimmer's motion, and Zimmer filed a reply. (DE 135; DE 137). Thus, the motion is ripe for ruling. For the reasons discussed below, the Court will grant Zimmer's motion but reduce the award by $1, 317.98, for a total award of $51, 371.51.


         A. Legal Standard

         Rule 37(a)(5)(A) provides that “the court must . . . require the party or deponent whose conduct necessitated the motion . . . to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” The rule presumptively requires the loser “to make good the victor's costs.” Rackemann v. LISNR, Inc., No. 117CV00624MJDTWP, 2018 WL 3328140, at *2 (S.D. Ind. July 6, 2018) (citation and internal quotation marks omitted); see Rickels v. City of S. Bend, Ind., 33 F.3d 785, 786 (7th Cir. 1994). Yet, a court must not order fees if: “(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(a)(5)(A)(i)-(iii); see Steadfast Ins. Co. v. Auto Mktg. Network, Inc., No. 97 C 5696, 1999 WL 446691, at *1 (N.D. Ill. June 23, 1999). “The burden of persuasion is on the losing party to avoid assessment of expenses and fees, rather than on the winning party to obtain such an award.” Steadfast Ins. Co., 1999 WL 446691, at *1 (citation omitted); see also Lincoln Diagnostics, Inc. v. Panatrex, Inc., No. 07-CV-2077, 2008 WL 4330182, at *3 (C.D. Ill. Sept. 16, 2008).

         B. The Email Discovery

         1. Substantially Justified

         Under Rule 37(a)(5)(A)(ii), a party's resistance to discovery is “substantially justified” when there is “a genuine dispute.”[2] Rackemann, 2018 WL 3328140, at *3 (citing Fogel v. Bukovic, No. 11 C 1178, 2011 WL 2463528, at *3 (N.D. Ill. June 20, 2011)). Put another way, resistance is substantially justified if “reasonable people could differ as to the appropriateness of the contested action.” Pierce v. Underwood, 487 U.S. 552, 565 (1988) (citation omitted).

         In opposing Zimmer's motion to compel, Beamalloy argued that the burden of producing the Email Discovery outweighed any potential relevance. The Court disagreed and determined that Beamalloy: (1) was aware that the Email Discovery contained relevant information; (2) did not provide evidence that White or Lazear went through their email accounts or turned over all relevant documents contained therein; and (3) did not provide evidence that it would suffer any undue burden in producing the Email Discovery. (See DE 131 at 7-9). In short, Beamalloy failed to substantiate its proportionality argument.

         Here, Beamalloy contends that its proportionality argument substantially justified resisting Zimmer's motion to compel because the argument was made “in good faith” and was not “frivolous.” (DE 135 at 3). This argument is little more than a repackaged version of Beamalloy's proportionality argument.

         In opposing Zimmer's motion to compel, Beamalloy was aware or should have been aware that the Email Discovery contained relevant information and that it had not supported its undue-burden claim. Thus, Beamalloy's proportionality argument was “entirely without merit, ” for purposes of Rule 37(a)(5)(A)(ii). Watkins v. Trans Union, LLC, No. 214CV00135WTLMJD, 2019 WL 336674, at *2 (S.D. Ind. Jan. 28, 2019), R. & R. adopted, No. 2:14-CV-135-WTL-MJD, 2019 WL 653095 (S.D. Ind. Feb. 15, 2019) (finding the defendant's argument that certain documents did not exist was “entirely without merit” because one of the defendant's witnesses contradicted this point during a deposition). Consequently, the Court is not persuaded that “reasonable people could differ as to the appropriateness” of Beamalloy's withholding the Email Discovery. Pierce, 487 U.S. at 565 (citation omitted).

         2. Unjust Under the Circumstances

         Beamalloy's argument under Rule 37(a)(5)(A)(iii) fares no better. Rule 37(a)(5)(A)(iii) bars awarding attorney's fees if doing so would be unjust. See Rackemann, 2018 WL 3328140, at *3. This exception is a “rather flexible catch-all provision.” Slabaugh v. LG Elecs. USA, Inc., No. 1:12-CV-01020-RLY, 2014 WL 6453557, at *2 (S.D. Ind. Nov. 17, 2014).

         Beamalloy relies on Silicon Graphics, Inc. v. ATI Technologies, Inc., No. 06-C-611-C, 2008 WL 2857270, at *1 (W.D. Wis. Jan. 25, 2008), in arguing that “malfeasance or scienter” are required to find a fee award just. However, the court in Silicon Graphics, Inc., did not indicate that a fee award under Rule 37(a)(5)(A)(iii) requires the opposing party to act with malfeasance or scienter; rather, the court stated that the opposing party did not have malfeasance or scienter as one among other factual determinations. See id.

         Furthermore, Silicon Graphics, Inc., is distinguishable from this case. There, the court concluded that the party withholding discovery was “unaware that [the discovery] materials” were in its possession, creating a “genuine and legitimate difference of opinion” whether the material fell within the scope of the discovery request. Id. By contrast, Beamalloy knew that it could produce the Email Discovery and that White and Lazear used their third-party email accounts to conduct business relevant to the issues in this case. (See DE 62-14 at 3; DE 63). Therefore, the Court will grant Zimmer's award request with respect to the Email Discovery.

         C. The Equipment/IBED Discovery

         1. Substanti ...

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