Failure to Promptly File a Motion to Compel Waives Discovery Issue

This is a case where a party waited until after discovery closed to file a motion to compel. The court denied the motion on the basis of the unreasonable delay. It also denied a Rule 37 sanctions motion on the basis that the party did not timely move to compel. The lesson is obvious: where there are discovery disputes, you must get moving.

Unreasonable Delay:

First, Plaintiffs’ motion to compel and for sanctions is untimely. Coleman v. Starbucks, No. 6:14-cv-527-Orl-22TBS, 2015 WL 2449585, at *8 (M.D. Fla. May 22, 2015) (“While there is no local or federal rule setting a precise deadline for the filing of a motion to compel, it is clear that any such motion must be filed within a `reasonable’ time period.”) (citation omitted); Wane v. Loan Corp., 926 F. Supp. 2d 1312, 1319 (M.D. Fla. 2013) (denying Rule 37 sanctions of striking the affidavit partly because the plaintiffs did not file a motion to compel when they realized the information was missing). Here, Plaintiffs received Defendants’ responses to the First Request for Production on February 10, 2016 and the McCarthy affidavit was dated September 22, 2016, yet filed the present motion nearly one year later, and after the discovery deadline passed. Plaintiffs do not explain nor acknowledge the delay in their filing.

By virtue of failing to address a discovery violation when the movant first learns of the issue, a party risks waiving the issue. United States v. Stinson, No. 6:14-cv-1534-Orl-22TBS, 2016 WL 8488241, at *5 (M.D. Fla. Nov. 22, 2016); see also Coleman, 2015 WL 2449585, at *8 (“[W]aiver principles apply in the discovery context just as they do in other aspects of litigation.”) (citations omitted). “The court’s decision whether or not to find waiver is discretionary.” Stinson, 2016 WL 8488241, at *5 (citing Woods v. DeAngelo Marine Exhaust, Inc., 692 F.3d 1272, 1279 (Fed. Cir. 2012)). In considering the timeliness of a motion to compel or for sanctions, the Court considers “such factors as when the movant learned of the discovery violation, how long he waited before bringing it to the court’s attention, and whether discovery has been completed.” Id. at *5 (citing Long v. Howard Univ.,561 F. Supp. 2d 85, 91 (D.D.C. 2008)). Here, Plaintiffs received Defendants’ discovery responses on February 10, 2016, waited one year to file the instant motion, and filed the motion after the discovery deadline. Similarly, Plaintiffs received Defendants’ response related to their obligation under the Court’s FLSA Scheduling on October 21, 2015, yet waited over one year to file the instant motion.

Rule 37 Sanctions Were Also Denied

The court denied Rule 37 sanctions because no motion to compel was filed during the discovery period:

Here, Plaintiffs did not file a motion to compel prior to filing the instant motion. As noted, the entirety of Plaintiffs’ argument is dedicated to seeking sanctions, primarily the sanction of default judgment. See Doc. 121. To the extent Plaintiffs seek sanctions for Defendants’ deficient responses to Plaintiffs’ First Request for Production, sanctions would be improper in light of Plaintiffs’ failure to precede their request with a motion to compel. Indeed, Plaintiffs did not confer with Defendants or place Defendants on notice of their alleged deficient responses until they emailed a copy of the instant motion to Defendants’ counsel on February 9, 2017. Doc. 126-5.

In imposing sanctions under Rule 37, the court may consider “the unsuitability of another remedy, the intransigence of a party, and the absence of an excuse.” Watkis v. Payless ShoeSource, Inc., 174 F.R.D. 113, 116 (M.D. Fla. 1997). The Eleventh Circuit held, however, that “the severe sanction of a dismissal or default judgment is appropriate only as a last resort, when less drastic sanctions would not ensure compliance with the court’s orders.” Malautea v. Suzuki Motor Co., Ltd.,987 F.2d 1536, 1542 (11th Cir. 1993) (citations omitted). Hence, “[v]iolation of a discovery order caused by simple negligence, misunderstanding, or inability to comply will not justify a Rule 37 default judgment or dismissal.” Id. (citation omitted). In other words, “[d]ismissal will not be upheld if a party’s failure to comply is due to inability rather than willfulness, bad faith or disregard of responsibilities.” Aztec Steel Co. v. Florida Steel Corp., 691 F.2d 480, 481 (11th Cir. 1982) (citation omitted). “When a party demonstrates a flagrant disregard for the court and the discovery process, however, dismissal is not an abuse of discretion.” Id. (citation omitted).

To the extent Plaintiffs seek sanctions on Defendants’ failure to comply with the Court’s FLSA Scheduling Order, the Court finds sanctions are unwarranted.

Source: Goers v. LA ENTERTAINMENT GROUP, INC., Dist. Court, MD Florida 2017 – Google Scholar

Another Reminder That A Request For Sanctions Must Be Filed As its Own Motion

You cannot include a sanctions request in your brief on another issue. You have to file and serve a separate motion. That gives the other side time to comply with the safe harbor (21 days to withdraw the challenged pleading) and requires you to focus on relevant issues in your brief.

Source: GINGILOSKI v. COMMERCIAL RECOVERY SERVICES, Dist. Court, ED Michigan 2017 – Google Scholar

Lawyer Had A Factual Basis For His Arguments – Sanctions Denied

Plaintiffs won a verdict of $544,276.14 against a real estate promoter. Plaintiffs alleged that they were fraudulently induced to enter into a transaction. After the verdict, they sought sanctions against Defendants’ counsel, accusing him of making “blatant[ly] false statements regarding the bank accounts and real estate properties.” The court denied the sanctions motion on the ground that the lawyer had proceeded in good faith and had a reasonable basis for his arguments.

After the verdict, plaintiffs sought sanctions against Defendants’ counsel, accusing him of making “blatant[ly] false statements regarding the bank accounts and real estate properties.” The court denied the sanctions motion on the ground that the lawyer had proceeded in good faith and had a reasonable basis for his arguments.

Comment: I’m not a fan of this type of sanctions motion – when you win a verdict, you should have the sense to walk away gracefully.

Source: RUI HE v. ROM, Dist. Court, ND Ohio 2017 – Google Scholar

3rd Circuit Holds That District Court Erred By Failing to Consider Sanctions Motion

The Third Circuit, in an unpublished nonprecedential opinion, has held that the district court is required to resolve a sanctions motion filed while a case was pending. It must do so even though the underlying case was dismissed. In this particular case, the district court held that the sanctions motion was “moot” after it granted summary judgment. The Third Circuit disagreed:

We hold that the District Court’s refusal to reach the merits of the Rule 11 motion was in error. A district court “must resolve any issues about imposition of sanctions,” including Rule 11 sanctions, “prior to, or contemporaneously with, entering final judgment.Gary, 517 F.3d at 202. This obligation to resolve “collateral issues” is not mooted “after an action is no longer pending,” Willy v. Coastal Corp., 503 U.S. 131, 137-38 (1992) (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990)), for a district court retains jurisdiction to impose Rule 11 sanctions even when it lacks subject-matter jurisdiction over the claim giving rise to the sanctionable conduct, Lazorko v. Pa. Hosp., 237 F.3d 242, 247 (3d Cir. 2000). Here, therefore, the final judgment on the Brice’s claims against Bauer did not moot Bauer’s Rule 11 motion, and the District Court erred by declining to decide that motion on its merits.

Because we do not ordinarily consider issues not passed upon below, Goldenstein v. Repossessors Inc., 815 F.3d 142, 149 (3d Cir. 2016), and because “motions under Rule 11 must be decided in the first instance by the trial court absent extraordinary circumstances,” Gary, 517 F.3d at 202-03, we will not consider the parties’ arguments on the merits of Bauer’s Rule 11 motion and we will remand for the District Court to address the merits of Bauer’s Rule 11 motion in the first instance. While the Brices object that further proceedings in the District Court may duplicate a parallel sanctions determination in state court under Pennsylvania Rule of Civil Procedure 1023.2, we are persuaded that the proceedings will address—and may impose different sanctions for—different alleged misconduct. That is, the District Court’s Rule 11 determination will address whether the Brices’ earlier filings in federal court warrant sanctions, see Fed. R. Civ. P. 1, while any state court determination under Pennsylvania Rule of Civil Procedure 1023.2 will address whether the Brices’ subsequent filings in state court warrant sanctions, see Robinson v. State Emps.’ Ret. Bd., No. 1136 C.D. 2014, 2015 WL 5314660, at *5 (Pa. Commw. Ct. Mar. 10, 2015). Thus, we perceive no judicial economy concerns arising from the two sanctions determinations proceeding concurrently.

Source: Brice v. Bauer, Court of Appeals, 3rd Circuit 2017 – Google Scholar

Sanctions Denied Where Plaintiff Alleged Belongings In Her Vehicle Stolen by Towing Service

Another pro se case of interest. After a storm and serious flooding, the plaintiff had to abandon her vehicle. Her car was then towed by the defendants. Plaintiff sued them in federal court apparently because she believed the defendants stole her personal possessions out of her car.  The defendants claimed that they had been authorized to tow the car, but plaintiff challenged the veracity of their claims.

The case was eventually dismissed for lack of subject matter jurisdiction because the alleged damages did not exceed $75,000. The defendants moved for sanctions on the ground that the plaintiff maintained the litigation after she knew it was baseless.

The court denied the motion for sanctions on the ground that the plaintiff did not have a bad motive and that her claims had some basis. The court explained:

Plaintiff’s filings were not made solely for the purpose of harassing these Defendants and increasing the costs of this litigation and her factual contentions did not utterly lack evidentiary support. While some of Plaintiff’s claims were not warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law, the costs to Defendants based on those claims are unclear, and seemingly negligible. Therefore, Defendants’ request for attorneys’ fees and costs is denied

Source: PRIDDLE v. MALANIS, Dist. Court, ND Illinois 2017 – Google Scholar

The Third Lawsuit To Contest A Foreclosure Nets Substantial Sanctions Award

This is an opinion granting Capital One Bank’s motion for Rule 11 sanctions in the third of three lawsuits that challenged a foreclosure.

The legal doctrine res judicata prohibits the relitigation of claims that have already been litigated by other courts and reached final judgment. Here the plaintiff filed two separate lawsuits against Capital One and MERS (a mortgage recording service) to contest a foreclosure. Judgment was entered against him in both cases. He then filed a third case in federal court to again challenge the foreclosure. The court granted summary judgment to Capital One and dismissed MERS on the ground that the current case was identical to the previous two cases that were dismissed. The court was unpersuaded by the arguments of plaintiff’s counsel that his failure to complete the service of process was a defense to the action. It explained:

Defendants argue that Plaintiff’s counsel, J.J. Sandlin, violated Fed. R. Civ. P. 11 by filing this lawsuit when he knew, based on his involvement in Alexander II and communications with Defendants’ counsel, that the claims asserted in Plaintiff’s complaint were baseless and/or precluded. Defendants further allege that Mr. Sandlin and Plaintiff knowingly filed a baseless lawsuit in an effort to delay the Alexanders’ eviction. See Dkt. # 30, ¶ 4.

In response to Defendants’ motion for sanctions, Plaintiff does not refute Defendants’ claim that a competent inquiry would have revealed this lawsuit to be legally baseless. Rather, Plaintiff explains that it first filed this frivolous lawsuit, then deliberately waited to serve process while Mr. Sandlin investigated whether the suit had any merit. In Plaintiff’s own words: “the efforts of [Plaintiff] and its attorney reflect the essence of good faith. . . . In its conservative position, [Plaintiff] purposefully declined to perfect original service of process, relying upon Rule 4(m) to cause the potential lawsuit to expire by operation of law. . . . As the plaintiff continued to test its position it ultimately determined the action should not be commenced, and deliberately failed to perfect original service of process.” Dkt. # 34 at 11-12. Because service never occurred, Plaintiff argues, this case must be dismissed and the “motion for sanctions should not proceed to judgment.” Dkt. # 34 at 7 n.2.[2]

Plaintiff and Mr. Sandlin have essentially conceded that they intentionally wasted the Court’s time by filing — and then litigating rather than voluntarily dismissing — a frivolous lawsuit. Such conduct is hardly “the essence of good faith.” An award of attorneys’ fees under RCW 4.84.185 and sanctions under Fed. R. Civ. P. 11 are entirely appropriate under the circumstances.

The court awarded sanctions against both the plaintiff and the attorney.

Source: INTEGRITY TRUST v. CAPITAL ONE, NA, Dist. Court, WD Washington 2017 – Google Scholar

For the amount of the award ($55,175) see this link:

A Reminder that Legal Malpractice Claims Are Creatures of State law and Do Not Confer Federal Jurisdiction

If you sue your lawyer for failing to prosecute your ADA (American’s with Disabilities Act) claim, you do not have federal question jurisdiction. Instead, the claim arises under state law. The explanation:

And, the court explained, plaintiff’s legal malpractice claims arise under state law, not federal law, even though she attempts to invoke the Americans with Disabilities Act (“ADA”). See id. (citing Creamer v. Gen. Motors, Nos. 16-4045-SAC, et al., 2016 WL 3197379, at *5 (D. Kan. May 18, 2016) (concluding that plaintiff failed to allege federal question jurisdiction because her citation to the ADA “has no plausible application to plaintiff’s claims that defendant committed legal malpractice” and “absent diversity of citizenship and an amount in controversy over $75,000—which do not exist here—plaintiff’s state law claims of legal malpractice, assuming of course they have any merit, belong in state court”)).

Plaintiff submitted a response to the Show Cause Order. Doc. 5. But, like her Complaint, her response failed to provide any colorable basis for this court to invoke its limited subject matter jurisdiction. Instead, plaintiff reiterated that she was asserting legal malpractice claims against defendants. Id. at 1-4. She provided no basis for the court to exercise federal question or diversity jurisdictAnd, the court explained, plaintiff’s legal malpractice claims arise under state law, not federal law, even though she attempts to invoke the Americans with Disabilities Act (“ADA”). Sion. See generally id. So, the court dismissed her lawsuit without prejudice for lack of subject matter jurisdiction. Doc. 6.

Source: Creamer v. Martin, Dist. Court, D. Kansas 2017 – Google Scholar