Opinion
Case No. 3:18-CV-1017-NJR-GCS
03-17-2020
JO LAIR, as Special Administrator, For the Estate of Jon L. Lair, Plaintiff, v. SANTIAGO REYES and COMBINED TRANSPORT, INC. Defendants.
REPORT AND RECOMMENDATION SISON, Magistrate Judge :
Pending before the Court is Plaintiff Jo Lair's ("Lair") Motion for Sanctions (Doc. 82). Defendants oppose the motion. (Doc. 84). The matter is now ripe for consideration. This matter has been referred to United States Magistrate Judge Gilbert C. Sison by United States Chief District Judge Nancy J. Rosenstengel pursuant to 28 U.S.C. §§ 636(b)(1)(B) and (c), Federal Rule of Civil Procedure 72(b) and Local Rule 72.1(a). Based on the following, the undersigned recommends that the District Court GRANT IN PART and DENY IN PART Plaintiff's Motion for Sanctions.
INTRODUCTION AND BACKGROUND
On December 2, 2016, at approximately 11:57 a.m., Jon Lair was operating a 2016 Toyota Tundra pickup and died as a result of an accident which occurred on Eastbound Hwy. 64 near Hoyleton Township, Illinois. Defendant Santiago Reyes ("Reyes") was a driver for Defendant Combined Transport, Inc. ("Combined"). On the day in question, Reyes was operating a 2015 Freightliner Cascadia pulling a 2016 Western semi-trailer, both of which were owned by Combined. The vehicle operated by Reyes collided with the driver's side of the decedent's vehicle causing his death.
Plaintiff's claim that the Defendants' negligent maintenance and operation of the 2015 Freightliner Cascadia and the 2016 Western semi-trailer, caused the fatal crash on December 2, 2016. Defendants, however, contend that the decedent lost control of his vehicle and crashed through a guardrail separating the east and westbound lanes of Hwy. 64. The decedent ultimately came to a stop in oncoming traffic. Reyes attempted to stop his vehicle, but unfortunately collided with the decedent's vehicle.
Prior to the filing of the instant motion, Lair propounded various interrogatories and requests for production to Combined and Reyes seeking the precise documents and information that are at issue. According to Lair, Combined and Reyes responded to such requests initially stating that there were no such responsive documents or they would produce a few responsive documents. Lair further contends that some of these discovery responses were later found to be inaccurate through the depositions taken of Reyes and Combined's corporate representative, Laura Castro. Based on those depositions and the limited documents produced by the Defendants, Lair suspected that there were more documents in the Defendants' possession that had not been produced. Through these depositions, Lair also discovered that certain interrogatory answers made by Combined and Reyes were inaccurate. In addition, Lair discovered that Combined had purportedly destroyed certain records in the normal course of its business that were arguably the subject of a preservation letter sent by Lair's attorneys to Combined two months after the accident occurred.
As a result of these issues, a discovery dispute conference was held by the Court on June 24, 2019. At the conference, the Court ordered Combined to produce and/or supplement its discovery responses to Lair. Obviously, dissatisfied with the responses received, on September 16, 2019, Lair filed her Motion for Sanctions against Combined, Reyes, and their counsel, Mr. Joseph R. Swift, for failure to obey a prior discovery order of the Court and for various discovery related violations.
Specifically, Lair seeks sanctions for the following conduct:
• Against Combined for ignoring the discovery order to supplement certain discovery responses and for failing to produce all maintenance, repair and inspections records for the subject tractor/trailer (Doc. 82, ¶¶ 23-30);As a result, Lair seeks the following relief: (1) prohibiting Defendants from opposing Plaintiff's claims in the First Amended Complaint; (2) striking Defendants' pleadings; (3) Ordering Defendants and/or Defendants' counsel to pay reasonable attorney's fees and expenses for depositions and in bringing motions before the Court for discovery compliance; and (4) such other orders as the Court deems appropriate.
• Against Combined for ignoring the Court's order to produce credit card receipts showing purchases made by Mr. Reyes on the day of the collision and 7 days prior (Doc. 82, ¶¶ 31-33);
• Against Combined for destroying dispatch records (Doc. 82, ¶¶ 34-35);
• Against Combined and Reyes for failing to correct interrogatory answers that deny any restriction on Mr. Reyes's driver's license and for failing to supplement document production with a copy of the license showing a restriction on Mr. Reyes's license and a medical certificate issued in August 2017 (Doc. 82, ¶¶ 36-40); and
• Against Combined's and Reyes's counsel for engaging in misconduct during the deposition of Combined's designated 30(b)(6) witness, Laura Castro. (Doc. 82, ¶ 41).
On October 18, 2019, the Court held a hearing on Lair's Motion for Sanctions. (Doc. 90). Of particular interest to the Court was the representation made by Combined's counsel that Combined did not have any more maintenance records for the trailer in question other than what was already produced to Lair; the production only consisted of a handful of documents. The Court informed Combined's counsel that it thought it was "odd" and "highly unusual" that more documents did not exist given the Court's suspicion that a trucking company such as Combined probably needed to maintain such documents pursuant to federal regulations. (Doc. 90, p. 54). The Court also expressed concern over what the proper standard of proof was regarding the spoliation issue raised by Lair as to the loss of dispatch records. As such, the Court requested post-hearing supplemental briefs from both sides to focus on the spoliation standard of proof and the appropriate sanction to issue. Id. The Court also instructed Combined's counsel to consult with his clients to make sure it did not have any more responsive documents to produce. Id. at p. 55.
Lair filed her supplemental brief on November 29, 2019. (Doc. 92). She informed the Court that on November 1, 2019, Defendants produced 141 pages of discovery, most of which were maintenance records it previously claimed it did not have. (Doc. 92, p. 2). Lair also informed the Court that the Defendants changed their discovery responses that previously denied any restriction on Mr. Reyes's license and produced additional documents evidencing the restriction that required Reyes to wear corrective lenses while driving. Id. As a result of these late disclosures, Lair sought, among other things, a sanction that Combined be prevented from offering evidence at trial that it adequately maintained its tractor/trailer and that Reyes be prohibited from presenting any evidence that he kept a proper lookout. Id. at 6-7.
Defendants also filed their supplemental brief on November 29, 2019. (Doc. 91). Combined acknowledged that it made a more extensive search and produced additional maintenance records to Lair on November 1, 2019. Id. at p. 6. Specifically, those records included records documenting maintenance on the anti-lock brake system of the tractor/trailer as originally sought by Lair. Id. Combined further noted that it supplemented its discovery to include an excel spreadsheet of Mr. Reyes's fuel transactions for a seven day period prior to the accident. Id. Combined also stated that it had supplemented its original interrogatory responses regarding Mr. Reyes's corrective lenses restriction. Id. at p. 6-7. Finally, Combined acknowledged that it had, in fact, preserved dispatch records and that such records were also produced to Lair. Id. at p. 9.
On December 12, 2019, the Defendants sought leave to file a reply memorandum to Plaintiff's supplemental brief. (Doc. 93). The Court granted the motion. (Doc. 94). Defendants sought leave because Lair's supplemental brief appeared to raise new issues that had not been previously addressed in the original motion and at the hearing. For example, Lair's supplemental brief argued that Combined should be sanctioned for failure to preserve driver inspection reports and dispatch records. (Doc. 92, p. 9-11). Previously, Lair's spoliation argument was directed solely at Combined's purported failure to retain dispatch records and not for the retention of driver inspection reports.
Having carefully considered the various briefs of the parties and the evidence presented at the hearing on the motion for sanctions, the Court recommends that sanctions should be levied against Combined and Reyes for their discovery related conduct. However, the Court recommends that sanctions not be imposed against counsel of record for Combined and Reyes, Mr. Joseph Swift.
LEGAL STANDARDS
Lair moves for sanctions under Rule 37 of the Federal Rules of Civil Procedure. At issue are various provisions of Rule 37. For instance, Lair argues that Combined has failed to comply with a prior discovery order of the Court, specifically, the order from the June 24, 2019 discovery dispute conference. Rule 37 permits a court to issue sanctions for not obeying a discovery order. See FED. R. CIV. PROC. 37(b)(2)(A). Such sanctions could include the following:
(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;FED. R. CIV. PROC. 37(b)(2)(A). Instead of or in addition to the above, the rule also empowers the Court to order the "disobedient party" "to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." FED. R. CIV. PROC. 37(b)(2)(C).
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vi) treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.
Rule 37 also provides for sanctions for failing to disclose or supplement discovery responses as required by Rule 26(a) or (e). See FED. R. CIV. PROC. 37(c)(1). Here, Lair contends that the Defendants failed to supplement their responses to interrogatories and requests for production of documents regarding the restriction placed on Reyes's driver's license. To determine whether to impose sanctions under Rule 37(c)(1), the Court must first determine (1) whether a violation of Rule 26(a) or Rule 26(e) occurred; (2) whether the violation was substantially justified or harmless; and (3) the selection of an appropriate sanction for the violation if one is found. See Schemelzer v. Muncy, No. 3:16-cv-00290-GCS, 2019 WL 3842335 (S.D. Ill. Aug. 14, 2019). The sanctions available to the Court include: ordering the payment of reasonable expenses, including attorney's fees, informing the jury of the party's failure to disclose or supplement, and imposing other appropriate sanctions as listed in Rule 37(b)(2)(A)(i)-(vi). See FED. R. CIV. PROC. 37(c)(1)(A)-(C).
Lair has also raised the question of Combined's failure to preserve certain categories of information, such as dispatch records. To the extent that such information is electronically stored information, it is governed by Rule 37(e). Rule 37(e) provides as follows:
If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the Court:
(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation may:
FED. R. CIV. PROC. 37(e).(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
Finally, Lair argues that defense counsel engaged in misconduct during the deposition of Combined's corporate representative, Laura Castro. Rule 30 permits a court to "impose an appropriate sanction - including the reasonable expenses and attorney's fees incurred by any party - on a person who impedes, delays, or frustrates the fair examination of the deponent." FED. R. CIV. PROC. 30(d)(2).
A court is vested with the discretion to determine whether to sanction a party for non-compliance with its discovery orders and the appropriateness of any such sanctions. See Melendez v. Ill. Bell Tel. Co., 79 F.3d 661, 671 (7th Cir. 1996). This is because the court "is in the best position to . . . settle any discovery disputes" that arise during litigation. Gile v. United Airlines, Inc., 95 F.3d 492, 495 (7th Cir. 1996). Where a court determines that sanctions are necessary, "the sanction selected must be one that a reasonable jurist, apprised of all of the circumstances, would have chosen as proportionate to the infraction." Salgado v. General Motors Corp., 150 F.3d 735, 740 (7th Cir. 1998).
Rule 37 sanctions are appropriate where a party displays "willfulness, bad faith or fault." Langley v. Union Elec. Co., 107 F.3d 510, 514 (7th Cir. 1997). See also In re Golant, 239 F.3d 931, 936 (7th Cir. 2001). Bad faith includes "intentional or reckless disregard of a party's obligations to comply with a court order." Marrocco v. General Motors Corp., 966 F.2d 220, 224 (7th Cir. 1992). Fault, on the other hand, pertains to "the reasonableness of the conduct or lack thereof, which eventually culminates in the violation." Langley, 107 F.3d at 514.
The purpose of imposing sanctions is to prevent abuse of the judicial process and to promote the efficient administration of justice. See Barnhill v. United States, 11 F.3d 1360, 1367 (7th Cir. 1993). Sanctions are also designed to ensure that the disobedient party does not benefit from non-compliance. See Natl. Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643 (1976). Sanctions further provide a general deterrent in the particular case and litigation in general. Id. See also Roadway Express v. Piper, 447 U.S. 752, 763-764 (1980)(noting that sanctions must be applied to penalize those whose conduct deserves sanctions but also "to deter those who might be tempted to engage in such conduct in the absence of such a deterrent.").
Dismissal is available as a sanction under Rule 37. See FED. R. CIV. PROC. 37(b)(2)(A)(v). "Although dismissal is indeed a hefty sanction, 'the most severe in the spectrum of sanctions provided by statute or rule must be available . . . to penalize those whose conduct may be deemed to warrant such a sanction,' . . . ." Greviskes v. Universities Research Ass'n, Inc., 417 F.3d 752, 759 (7th Cir. 2005)(quoting Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643 (1976)). However, the severe sanction of dismissal is usually reserved for circumstances where there has been a prior warning and a failure to comply. See, e.g., Ladien v. Astrachan, 128 F.3d 1051, 1057 (7th Cir. 1997)(noting that the sanction of dismissal is harsh and should be limited but that dismissal was warranted where the non-compliant party had been sufficiently and previously warned that further intransigence would result in dismissal).
ANALYSIS
A. Failure to produce maintenance, repair and inspections records for the subject tractor/trailer.
In request No. 4 of Lair's second request for production of documents, Lair sought "any and all documents evidencing an inspection or repair of the brakes on the tractor or trailer involved in the collision that is the subject of the instant lawsuit, including but not limited to inspection reports, invoices, repair bills and/or payment receipts." (Doc. 82, Exh. I). Combined responded on March 15, 2019, and lodged various objections regarding time, scope and the burdensome nature of the request. Id. However, it also produced bates stamped documents 117 to 122, which purported to be an equipment history report. Id.
In request No. 5 of the same request for production, Lair also sought "any and all documents evidencing an inspection or repair of any safety system on the tractor or trailer involved in the collision that is the subject of the instant lawsuit, including but not limited to inspection reports, invoices, repair bills and/or payment receipts." (Doc. 82, Exh. I). Combined responded with similar objections and produced bates stamped documents 117 to 122. Id.
On May 1, 2019, Lair took the deposition of Laura Castro, Combined's corporate representative. (Doc. 82, ¶ 10). In her deposition, Ms. Castro testified to the existence of work orders and invoices that would have been generated for every event listed in the subject tractor/trailer's equipment history. (Doc. 82, Exh. K, p. 53:13-54:7, 57:23-62:6).
Based on information obtained during the Castro deposition, Lair served Combined with her Third Request for Production on May 16, 2019. Request No. 5 sought "any and all 'work orders' you prepared for inspection, repair, maintenance or service to the subject tractor/trailer in 2016 as described by Laura Castro in her deposition on pages 60 through 61, including but not limited to work orders identified by number in bates stamped pages 117-122 of defendants' document production." (Doc. 82, Exh. L). On June 14, 2019, Combined responded and objected to the request for work orders. (Doc. 82, Exh. M).
On June 24, 2019, the Court held a discovery dispute regarding Combined's responses to Lair's second and third requests for production. (Doc. 82, ¶ 14). As to Request No. 4 of the second request, i.e., documents regarding an inspection or repair of the brakes on the tractor trailer involved in the collision, the Court overruled Combined's objection and ordered Combined to supplement its response. (Doc. 80, p. 23:16-18). Regarding Request No. 5 of the second request, i.e., documents evidencing an inspection and repair of the safety system on the trailer involved in the collision, the Court likewise overruled Combined's objections and ordered Combined to supplement its response. (Doc. 80, p. 24:18-20). The Court further overruled Combined's objections and ordered it to respond to Request No. 5 of Lair's third request, i.e., work orders referenced in the Castro deposition. (Doc. 80, p. 20:11-14).
On July 2, 2019, Combined supplemented its production and produced the requested work orders, but such production only consisted of 4 additional documents, bates stamped pages 123-127. (Doc. 82, ¶ 15). This included an invoice for service to the subject tractor/trailer on January 4, 2016 and an inspection report from May 30, 2016. Id. At the discovery dispute conference, Combined indicated that it had produced the aforementioned pages, which purported to be the work orders requested by Lair. (Doc. 80, p. 6:3-5). Combined further indicated that it did not have additional work orders with respect to the brakes. Id. at p. 6:7-8.
On October 18, 2016, the Court held a hearing on the motion for sanctions. Lair credibly argued that based on the equipment history of the subject tractor/trailer there should be more maintenance, repair and inspection records than the two sets of documents previously produced (Bates 117-122, 123-127). Specifically, Lair pointed to a work order which should have been generated in July 2016 when a new ABS sensor was installed on the tractor/trailer. (Doc. 82, ¶ 25). In response, Defendants' attorney represented that Combined did not have any more maintenance records other than what was already produced. (Doc. 90, p. 43-44). In response to that representation, the Court expressed suspicion that there would not be more documents in Combined's possession given the existence of federal regulations which would require the maintenance of such documents. (Doc. 90, p. 54). The Court then instructed defense counsel to consult with his client to make sure that they did not have additional documents responsive to Lair's requests. Id. at p. 55.
On November 1, 2019, Combined produced 141 additional pages in discovery. Combined stated that it "made a more extensive search and produced . . . additional maintenance records." (Doc. 91, p. 6). The supplemental discovery included, for example, "records that detail maintenance performed on or about July 6, 2016 documenting maintenance on the anti-lock brake system." Id.
Here, Combined's late disclosure of maintenance records constitutes a clear violation of a prior discovery order issued by the Court. Such an order need not be written, but can be oral. See Halas v. Consumer Serv. Inc., 16 F.3d 161, 164 (7th Cir. 1994). At the June 24, 2019 discovery dispute conference, the Court orally overruled Combined's objections and unequivocally ordered Combined to supplement and produce documents concerning the maintenance, repair and service done to the tractor/trailer in question. Combined responded by producing a handful of responsive documents with defense counsel representing to the Court that Combined had produced all of the documents in its possession. Only after the Court expressed skepticism that Combined did not have any more documents to produce, did Combined ultimately relent and produce the requested documentation.
Combined's recalcitrant compliance, of course, comes more than 4 months after the Court's discovery order and was only ultimately secured after Lair was forced to file a motion for sanctions. The substantive production further underscores the woefully inadequate nature of Combined's initial response as it only initially provided a handful of documents in response to Lair's requests. Based on the foregoing, the Court has no trouble concluding that the requisite "willfulness, bad faith or fault" for imposing Rule 37 sanctions is present. Combined's failure to comply clearly constitutes "bad faith" as it amounts to the intentional or reckless disregard of the Court's prior order. See Marrocco, 966 F.2d at 224. At the very least, Combined's conduct amounts to "fault" as there does not appear to be any reasonable explanation for why Combined did not previously conduct a more thorough search for the requested documents. See, e.g., Langley, 107 F.3d at 514 (noting that "fault" focuses on the reasonableness or lack thereof of the party's conduct).
Combined, however, argues that its failure to produce is harmless and does not warrant sanctions. (Doc. 91, p. 6). Specifically, Combined notes that the equipment history it initially provided in its original supplemental disclosure disclosed the maintenance performed on the tractor/trailer. Id. Combined, however, is mistaken. First, a harmless analysis is not relevant to whether there has been a violation of a discovery order under Rule 37(b)(2)(A). The term "harmless" is not present in Rule 37(b)(2)(A). See FED. R. CIV. PROC. 37(b)(2)(A). Rather, the term "harmless" is present for sanctions sought under Rule 37(c)(1) for a failure to disclose or supplement. See FED. R. CIV. PROC. 37(c)(1). Even if it were a part of the instant analysis, Combined's non-disclosure is far from harmless as Lair and her counsel had to extend much time and effort with respect to the instant motion to secure Combined's compliance.
In light of the foregoing, the Court concludes that Combined violated a prior discovery order of the Court and that sanctions are warranted pursuant to Rule 37(b)(2).
B. Combined's failure to produce Mr. Reyes's credit card receipts.
At the discovery dispute conference on June 24, 2019, the Court overruled Combined's objections and ordered Combined to produce documents responsive to Lair's third request for production of documents No. 6. (Doc. 80, p. 17:1-9). Request No. 6 asked Combined to "produce any and all credit card receipts you have in your possession for purchases made by Santiago Reyes on December 2, 2016 and seven days prior thereto."
In the motion for sanctions, Lair argued that Combined's 30(b)(6) witness, Laura Castro, testified that credit card receipts were scanned and kept indefinitely by the company. (Doc. 82, ¶ 32). Ms. Castro further noted that she thought there were some fuel receipts for Mr. Reyes from December 2, 2016 (day of the accident), but that to the best of her knowledge, she did not know. Id. at ¶ 10, Exh. K, p. 88. Lair complained that Combined never produced any receipts for Mr. Reyes. Id. Lair also claimed that Combined was required to state in a verified supplemental response whether it possessed or controlled such documents. Id. at ¶ 33. Finally, Lair asserted that if such documents were not maintained, it would be tantamount to spoliation. Id.
In response, Combined stated that it did not produce any credit card receipts because there was nothing to produce. (Doc. 84, p. 8). Combined noted that Ms. Castro testified that if the receipts were provided , they would be kept in the system indefinitely. Id. (emphasis added). And, at the hearing, Combined's counsel represented that it did not have any such documents. (Doc. 90, p. 45:21-25). As to the spoliation argument raised by Lair, Combined noted that Lair's preservation letter did not mention credit card receipts. Id. While this is true, the preservation letter did seek "fuel receipts" and "fuel billings." (Doc. 82, Exh. A). Moreover, in his deposition, Reyes indicated that he used a company credit card from Comdata to purchase fuel. (Doc. 95, Exh. D, p. 53:7-14).
As with the late production of maintenance records, Combined also supplemented its response with the requested credit card information on November 1, 2019. Specifically, Combined produced "an excel spreadsheet of Mr. Reyes'[s] fuel transactions extracted directly from ComData for seven days prior to the accident." (Doc. 91, p. 6).
The analysis above with respect to the production of maintenance records applies equally to the late production of credit card receipts. The Court unequivocally ordered the production of such information on June 24, 2019. And, after consistently denying the existence of such documents, Combined finally complied with the Court's order without any explanation as to why this simple spreadsheet could not have been produced sooner.
Combined appears to excuse its non-compliance by claiming that it does not have the actual credit card receipts. This, however, is a distinction without a difference as Combined clearly had in its possession the underlying information of Reyes's Comdata fuel purchases. One of the reasons Lair sought credit card information was to get a better idea of Reyes's whereabouts during his trip. (Doc. 80, p. 13:10-19). According to Lair, Reyes's whereabouts were not completely accounted for based on the logs provided by Combined. Id. Obviously, these purported gaps could be filled by providing information as to where and when Reyes filled up with fuel using a company credit card. There being no excuse for the late production of this information, the Court readily finds that the requisite bad faith or fault clearly exists and that sanctions are warranted pursuant to Rule 37(b)(2).
C. Destruction of dispatch records.
On February 7, 2017, Lair's attorney sent a preservation letter to Combined seeking the preservation of various materials relevant to the claim. Specifically, the letter sought the preservation of the following:
The 2015 Freightline Cascadia Tractor and Trailer involved in the above incident and any on-board recording device such as a black box, event data recorder, crash data recorder (CDR), electronic data interchange, satellite date or transmissions, computer data or transmissions, communication records , tracking device information, etc. and the content recorded thereon from December 2, 2016 and seven days prior thereto[.](Doc. 82, ¶ 2, Exh. A) (emphasis added).
On February 12, 2019, Lair served Combined with a second request for production of documents. Request No. 3 sought "all driver call in reports, dispatch records and any other documentation of any communications between Combined and [] Reyes on the day of the collision that is the subject of the instant lawsuit or during the seven (7) days prior thereto." (Doc. 82, ¶ 5, Exh. G). On March 15, 2019, Combined responded indicating that it did not possess any documents responsive to Lair's request. (Doc. 82, ¶ 8, Exh. I). On May 1, 2019, Lair took the deposition Combined's corporate representative, Laura Castro. Ms. Castro testified that there were some dispatch records between Combined and Reyes during the relevant time frame. According to Ms. Castro, dispatch records are messages sent by Combined to the driver and displayed on on-board communication devices in the truck. However, Ms. Castro indicated that such records were purged from Combined's computer systems 6 months after they were created. (Doc. 82, Exh. K., p. 57:17-58:22).
At the discovery dispute conference on June 24, 2019, the issue of the dispatch records was addressed. Combined's counsel represented to the Court that it did not have any documents responsive to Lair's Request No. 3. (Doc. 80, p. 21:6-10). As a result of this representation, the Court ruled that Request No. 3 was moot because Combined had answered it. Id. at p. 21:17-19.
Lair argues that in light of her preservation letter, Combined had a duty to preserve the dispatch records at issue. (Doc. 82, ¶ 35). Lair asserts that the letter sought to preserve communication records from "any on-board recording device." Id. The letter also sought to preserve the contents of "any mobile communication device." Id. Because the dispatch records involved messages sent by Combined to its driver via an on-board communication device, such information should have been preserved. Id. In fact, Combined was put on notice two months after the collision that it had to preserve such information, which would have been approximately four months before such records were to be purged from the system. Id. Because Combined failed to take reasonable steps to preserve such evidence, Lair believes sanctions are warranted. Id.
Combined counters by arguing that the preservation letter did not specifically request dispatch records. (Doc. 84, p. 9-10). In fact, the first request made for dispatch records was two years after the preservation letter was sent. Id. at p. 9. As such, Combined claims there was no specific duty to preserve such records.
On November 1, 2019, however, Combined changed course and indicated for the first time that "dispatch records" had, in fact, been preserved and produced to Lair. (Doc. 91, p. 9). In its reply brief filed on December 13, 2019, Combined also attached the documents it claimed were dispatch records (Bates 587-588, 602). (Doc. 95, p. 2). Because of this late production, Combined argued that sanctions were not warranted under Rule 37(e) because such documents were preserved and there was no loss of electronically stored information. (Doc. 91, p. 9).
Rule 37(e) does provide for sanctions for the failure to preserve electronically stored information. FED. R. CIV. PROC. 37(e). Combined is correct that there can be no sanctions imposed under Rule 37(e) unless the electronically stored information "is lost because a party failed to take reasonable steps to preserve it[.]" Id. Because the dispatch records were produced and thus are not "lost," the Court cannot impose sanctions under Rule 37(e).
The Court also cannot impose sanctions under Rule 37(b)(2)(A) for failure to obey a prior discovery order of the Court. At the discovery dispute conference held on June 24, 2019, the Court ruled that Lair's Request No. 3 to her Second Request for Production of Documents was moot because Combined had answered that it had no documents to produce. Therefore, Combined did not fail to comply with a prior order of this Court. See, e.g., Porche v. Oden, No. 02-C-7707, 2009 WL 500622, at *5 (N.D. Ill. Feb. 27, 2009)(stating that an "oral order must unequivocally direct a party to provide the requested discovery before sanctions can be in order.").
However, the Court can sanction Combined under Rule 37(c)(1) for failure to supplement an earlier response. Combined's late disclosure can be sanctioned if there is no substantial justification for it and if it was not harmless. See FED. R. CIV. PROC. 37(c)(1). With respect to substantial justification and harmlessness, the Court's discretion is guided by the following factors: (1) prejudice or surprise; (2) the ability to cure the prejudice; (3) the likelihood of disruption to the trial; and (4) the bad faith or willfulness of the offending party. See David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003); Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (7th Cir 1999).
Here, Combined clearly had a duty to supplement its earlier response to Lair's Request No. 3 to her Second Request for Production of Documents. Rule 26(e) imposes a duty on a party who has responded to a request for production to supplement its response in a timely manner once it "learns that in some material respect the disclosure or response is incomplete or incorrect[.]" FED. R. CIV. PROC. 26(e )(1)(A). Combined makes no substantial justification for its almost nine month delay in finally producing documents responsive to Lair's original request, which was made on February 12, 2019.
Combined's late disclosure is also not harmless. While Combined eventually did supplement its response, it only did so after a hearing in which the Court made it clear that it was seriously contemplating sanctions. In light of this, the Court has no trouble concluding that this late disclosure is tantamount, at the very least, to reckless disregard of Combined's discovery obligations, thus constituting bad faith.
There is likewise clear prejudice to Lair. In order to obtain the requested dispatch records, Lair's counsel has expended significant amounts of time, money and effort to obtain items which should have been provided long ago. Such efforts have also resulted in several rounds of briefings and two court hearings, all of which could have been avoided had Combined complied with its discovery obligations in a timely manner.
However, in an attempt to show the lack of prejudice, Combined downplays the significance of the dispatch records it provided. For example, Combined argues that it has provided other information showing the same or similar information provided by the dispatch records. But, Combined's argument completely misses the point. Lair made a valid discovery request for dispatch records that was clearly relevant and within the scope of the discovery rules. Combined made no objections to this request and thus there is no legitimate basis to withhold such documents. Combined simply does not have the power to decide unilaterally what it will and will not produce pursuant to a valid discovery request. Nor does it have the luxury of responding to such valid requests at a time and place of its own choosing. It is this cavalier attitude towards discovery that ultimately warrants an award of sanctions.
Lair also seeks sanctions for Combined's apparent failure to preserve driver inspection reports. In her original motion for sanctions, Lair only raised the issue of failure to preserve dispatch records. (Doc. 82, ¶¶ 34-35). The issue of the driver inspection reports, however, was raised for the first time in the supplemental brief filed by Lair. (Doc. 92, p. 9-11). In her brief, Lair relied on federal regulations which purport to show that such reports should be preserved for a certain period of time. As a result, Combined sought permission and obtained leave to file a reply to Lair's supplemental brief. (Doc. 95). In that reply, Combined explained why there were no such reports to produce. Id. Because this issue was raised late in the briefing process, the Court will not address this purported failure to preserve in its report and recommendation. Such an issue deserves more careful treatment, and the Court recommends denying this aspect of Lair's motion for sanctions without prejudice to Lair raising the issue at a later date.
D. Combined and Reyes's failure to correct interrogatory answers and provide copies of documents related to the restriction on Reyes's driver's license and his August 2017 medical certificate.
Lair also seeks sanctions against Combined and Reyes for failing to correct interrogatory answers that deny restrictions on Mr. Reyes's driver's license and for failing to supplement document production with a copy of the license that shows a restriction as well as a medical certificate issued in August 2017.
On or about October 22, 2018, Combined responded to Lair's first request for production of documents. Lair sought various documents to include: "[c]opies of any and all driver's license of the driver of the vehicle . . . []" and "[c]opies of any and all physician's report and/or letter of approval regarding the driver of the vehicle . . . ." (Doc. 82, Exh. B). In response, Combined produced a driver's license for Mr. Reyes which listed no restrictions, as well as medical certificates for Mr. Reyes from 2013 and 2015. (Doc. 82, ¶ 3). Neither medical certificate produced by Combined indicated the need for corrective lenses or any other restriction for Mr. Reyes. Id.
Lair also propounded interrogatories to both Defendants regarding the driver's license of Mr. Reyes. For example, Lair's first set of interrogatories, interrogatory No. 20, asked Combined whether Mr. Reyes "ha[s] or [] ever had any restrictions on his driver's license." (Doc. 82, Exh. E). Combined answered and swore that Mr. Reyes had no such restrictions. Id. Lair propounded the same interrogatory to Mr. Reyes, who likewise answered no. (Doc. 82, Exh. F).
Regarding Mr. Reyes's medical history, Lair propounded interrogatory No. 22 to both Defendants seeking "the name and address of any physician, ophthalmologist, optician or other health care provider who performed any eye examination of Santiago Reyes within the last five years and the dates of such examination." (Doc. 82, Exh. E, F). Combined responded with the name of one physician who was the eye doctor Mr. Reyes saw in 2015, who did not place a restriction on his license. (Doc. 82, ¶ 40, Exh. E). Mr. Reyes responded with the name of another doctor that was in addition to the one provided by Combined. (Doc. 82, Exh. F).
On February 27, 2019, Mr. Reyes was deposed and testified that he was required to undergo a physical and vision exam every two years and that as a result of such exams, he had a restriction placed on his license which required him to wear corrective lenses. (Doc. 82, ¶ 6, Exh. H). Mr. Reyes further testified that the exam which resulted in a restriction occurred in August 2017 and that he possessed a report from it. Id.
Lair argues that since the initiation of the lawsuit, he has maintained that Mr. Reyes failed to keep a proper lookout. (Doc. 82, ¶ 36). Thus, Mr. Reyes's visual acuity and whether he needed corrective lenses to drive were clearly relevant to Lair's claims. Id. Thus, according to Lair, Combined and Mr. Reyes swore to responses that were clearly inaccurate because the interrogatory requested whether Mr. Reyes ever had a restriction on his license. Id. at ¶ 37.
Ms. Castro denied knowledge of the restriction based on information she was provided from Mr. Reyes's personal file. Id. at ¶38. She acknowledged, however that she could request the 2017 medical certificate that would have resulted in the restriction being placed on Mr. Reyes's license. Id. Lair further claims that Combined violated the rules of discovery by failing to turn over the 2017 medical certificate when there was no objection to such document. Id. at 39. The 2017 medical certificate was never identified in written discovery. Lair also points out that Combined failed to identify the eye doctor who saw Mr. Reyes in August 2017, because interrogatory no. 22 asked for all eye doctors in the previous 5 years.
In response, Defendants argues that the supplementation of the interrogatory response was not required because the information was disclosed to the other side in Mr. Reyes's deposition. Specifically, Defendants rely on the "otherwise" clause of Rule 26(e)(1)(A), which provides for a duty to supplement unless "the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing." FED. R. CIV. PROC. 26(e)(1)(A). As such, the Defendants contend that sanctions for failing to supplement are inappropriate.
With respect to the copy of Mr. Reyes's license showing the restriction and the existence of such a restriction, Defendants are correct that the plain language of Rule 26(e) absolves them of a discovery violation. At Mr. Reyes's deposition, Lair discovered that Mr. Reyes did in fact have a restriction on his license. Lair also discovered the nature of the restriction. Because the existence and nature of the restriction on Mr. Reyes's license was made known to Lair during the discovery process, it was not necessary for Combined to supplement its document production with a copy of Mr. Reyes's current license. Nor was it necessary for Combined and Reyes to correct their previous interrogatory responses indicating that there was no such restriction. See, e.g., Flores v. Flying J, Inc., No. 08-cv-00308-MJR-DGW, 2010 WL 914722, at *2 (S.D. Ill. Mar. 9, 2010)(denying motion for sanctions against defendant even though defendant failed to supplement its discovery document because of the "otherwise clause" in Rule 26(e)).
However, the analysis is different for the other information requested by Lair. For example, in the first document request to Combined, Lair sought copies of any and all physician's reports and/or letters of approval regarding the driver of the vehicle. In interrogatory requests to both Combined and Reyes, Lair also sought the names and addresses of any physician who performed an eye examination on Mr. Reyes within the last 5 years. The deposition of Reyes revealed that there was, in fact, another physician that had conducted an eye examination on him within the last five years, and that examination resulted in a restriction being placed on his license. Although Reyes could not recall the name of the physician who had examined him in 2017, he indicated that he had a report. (Doc. 82, Exh. H, p. 14). Ms. Castro, Combined's representative, also testified that she had the ability to request Reyes's 2017 medical certificate. (Doc. 82, Exh. K, p. 34).
As is clear from the above, the identity of the physician who examined and placed a restriction on Reyes's license was not otherwise made known during the course of discovery. However, both Combined and Reyes had it in their power to produce the certificate or report which arguably would have disclosed the name of the physician who conducted the examination. In fact, Lair's counsel noted at the hearing that if he had the medical certificate, he would be able to discover the name of the medical examiner and subpoena the records. (Doc. 90, p. 16). This indicates to the undersigned that despite the deposition of Reyes occurring in February 2019, neither Combined nor Reyes had supplemented its document production or interrogatory responses by the time of the October 18, 2019 hearing, more than eight months later. Although Combined noted in its supplemental brief that it had supplemented its interrogatory answers regarding Mr. Reyes's corrective lenses restriction, it does not appear it has provided the identity of the physician who examined and placed a restriction on Reyes's license. (Doc. 91, p. 6-7). Thus, Combined and Reyes cannot rely on the "otherwise" clause of Rule 26(e)(1)(A) to excuse the failure to supplement their discovery responses.
Combined appears to justify its failure to supplement by arguing that it thought the date of the accident was the relevant date, and as a result any information after that was irrelevant. However, the plain language of the document and interrogatory requests clearly call for documents and information not limited by the date of the accident. If Combined and Reyes wanted to withhold documents or information on relevancy or other grounds, then they should have advanced an appropriate objection and informed Lair of the documents or information they were withholding. See, e.g., FED. R. CIV. PROC. 34(b)(2)(C)(noting that "[a]n objection must state whether any responsive materials are being withheld on the basis of that objection."). But neither Combined nor Reyes made any objections to the document requests and interrogatories propounded by Lair on this subject. As such, Combined and Reyes have waived their right to object to such discovery requests on any grounds. See, e.g., FED. R. CIV. PROC. 33(b)(4)(noting that "[a]ny ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure."). Combined's proffered reason thus cannot constitute "substantial justification" for its failure to supplement. The failure to disclose is also not harmless as Lair is still seeking the name of the physician who imposed the restriction. To the extent that such information has been disclosed, it is also not harmless given the time and effort undertaken by Lair to acquire such information.
Once the inaccuracy of the discovery responses became known to Reyes and Combined, i.e., at the depositions of Reyes and Combined respectively, they should have supplemented their discovery responses accordingly with the 2017 medical report. Because they failed to do so, Combined and Reyes have violated their duty to supplement under Rule 26. There being no substantial justification for the delay and given that such a delay was not harmless, sanctions are appropriate.
To the extent that the 2017 medical report has not already been provided to Lair, Combined and Reyes are given 21 days from the date of this Report and Recommendation to provide this document to the Plaintiff.
E. Misconduct during Ms. Castro deposition
Lair contends that defense counsel for Combined and Mr. Reyes should be sanctioned for misconduct during the deposition of Laura Castro. Specifically, Lair points to the fact that defense counsel interrupted questioning or testimony on at least 50 different occasions. (Doc. 82, ¶ 11). As a result, the deposition lasted approximately three hours with a transcript that was 105 pages in length. Id.
Lair further contends that the speaking objections interposed by defense counsel caused Ms. Castro to change her deposition testimony. (Doc. 82, ¶ 41). For example, Lair pointed to specific instances where such objections were made and Ms. Castro would change her answer from a definitive response to a more equivocal response, such as "I don't know." Id. Defense counsel would also object to the form of the question, but then elaborated on how and why the form was improper.
The Defendants, on the other hand, argue that defense counsel properly made valid objections. (Doc. 84, p. 10). According to the Defendants, most of the claimed interferences were form objections, which are required to be raised during a deposition, lest they be waived. Id. at 11. At the hearing, defense counsel also argued that the objections made were valid because some of the questions went beyond the scope of the 30(b)(6) notice. (Doc. 90, p. 40-41).
For its claimed misconduct, Lair relies on Rule 30(d)(2), which provides that sanctions that may imposed for conduct occurring during a deposition. Specifically, the rule states that "[t]he court may impose an appropriate sanction - including the reasonable expenses and attorney's fees incurred by any party - on a person who impedes, delays, or frustrates the fair examination of the deponent." FED. R. CIV. PROC. 30(d)(2). Excessive or improper objections can also constitute sanctionable conduct. See Nat. Bank of Sioux City, Iowa v. Day, 800 F.3d 936, 942 (8th Cir. 2015).
In reviewing the transcript of Ms. Castro's deposition, the Court agrees with the Defendants and finds that the conduct of defense counsel did not "impede[], delay[], or frustrate[] the fair examination of the deponent." With respect to the deposition excerpts identified by Lair, several of the claimed interruptions were form objections, but defense counsel nevertheless instructed Ms. Castro to answer if she knew it. See, e.g., Doc. 82, Exh. K, 21:16-19, 22:14-15, 23:9-12, 23:15-20, 24:6-7, 27:12-16, 32:22-33:4, 67:21, 100:9-11. Other interruptions included simple form objections with no direction given to the witness. See, e.g., Doc. 82, Exh. K, 32:16-17, 46:24, 84:13-14, 87:15. Defense counsel also made objections to questions that counsel thought was not proper given the scope of the 30(b)(6) notice. See, e.g., Doc. 82, Exh. K, 9:24-10:4, 13:13-14, 16:21-25. And, while some of the objections levied by defense counsel at times had a narrative bent to them, it appeared it was done for the purpose of clarification. See, e.g., Doc. 82, Exh. K, 24:17-21, 26:8-25, 35:23-36:10, 54:15-23, 57:11-21, 84:13-85:19, 100:9-11.
As to the examples used in Lair's motion, while there appeared to be some excessive narration by defense counsel, reading the deposition as a whole, the Court does not believe that defense counsel impeded or frustrated the fair examination of the deponent. Part of the excessive narration appeared to stem from a dispute over the scope of the 30(b)(6) notice, but on the whole Lair's counsel was able to obtain substantive answers from Ms. Castro.
Defense counsel, however, is hereby cautioned on the use of speaking objections in future depositions. Rule 30(c)(2) of the Federal Rules of Civil Procedures provides for how objections are to be made during a deposition. It states that "[a]n objection must be stated concisely in a nonargumentative and nonsuggestive manner." FED. R. CIV. PROC. 30(c)(2). The rule further states that "[a] person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation ordered by the court, or to present a motion under Rule 30(d)(3)." Id. Defense counsel is cautioned to be mindful of these rules in the future and to avoid making objections that would appear to be argumentative or suggestive to the witness.
In light of the above, the Court denies Lair's request to sanction defense counsel for its conduct during the deposition of Ms. Castro.
In her supplemental brief in support of sanctions, Lair also raised potential misconduct issues by Combined's defense counsel at the deposition of Santiago Reyes. (Doc. 92, p. 11-13). This was not originally raised in Lair's Motion for Sanctions, and as such the Court will not consider such alleged conduct in its Report and Recommendation. --------
F. Recommendations for the Appropriate Sanctions to be Ordered.
Having concluded that sanctions are appropriate, the question turns to what sanctions should be imposed. First, Lair seeks dismissal, the entry of a default judgment or the striking of Defendants' pleadings. (Doc. 92, p. 15). While such sanctions are definitely permitted by the rules, the Court will not recommend those sanctions here because Combined and Reyes were not previously warned by this Court that further non-compliance would result in dismissal. See, e.g., Ladien, 128 F.3d at 1057 (noting that it was proper to dismiss where the disobedient party had been previously warned that further non-compliance would result in dismissal). The Court, however, now issues such a warning. Combined and Reyes are warned that future discovery misconduct of the type seen here will clearly subject them to the most extreme sanction that can be levied.
Lair also seeks lesser forms of sanctions in the form of adverse inferences or prohibiting the Defendants from supporting or opposing certain claims. For example, Lair seeks an order prohibiting the Defendants from presenting evidence or arguments at trial that it properly maintained and inspected the vehicle in question. (Doc. 92, p. 15). Lair further seeks an order prohibiting Mr. Reyes from arguing that he kept a proper lookout at the time of the accident. Id. Finally, Lair seeks an adverse negative inference jury instruction regarding unpreserved documents. Id. The Court carefully considered the imposition of some or all of these sanctions. In fact, Lair cited to a number of cases where such sanctions were imposed. However, the Court is not recommending these sanctions because such sanctions would clearly be outcome determinative to the case. The Court is mindful of the Seventh Circuit's admonition that "the interests of justice are best served by resolving cases on their merits." Long v. Steepro, 213 F.3d 983, 985 (7th Cir. 2000). The Court, however, would not hesitate to recommend such sanctions in the future if the Defendants continue to ignore their discovery obligations under the Federal Rules of Civil Procedure.
Combined and Reyes clearly engaged in conduct which demonstrates a lack of respect for the Federal Rules of Civil procedure and the judicial process. For instance, Combined and Reyes consistently engaged in providing dilatory, incomplete and sometimes wrong responses to Lair's formal discovery requests. Although the Court is not recommending the more extreme sanctions sought by Lair, the Defendants' conduct is definitely worthy of sanction. As such, a substantial monetary penalty is clearly in order, as well as certain other discovery related orders designed to alleviate the prejudice to Lair as a result of the Defendants' misconduct.
First, the Court is recommending that Lair be entitled to recover the reasonable expenses, including the attorney's fees and costs incurred in investigating, researching, preparing and presenting the instant motion for sanctions. This will obviously include the time counsel spent on briefing and attendance at the October 18, 2019 hearing, as well as preparation time for that hearing.
Second, the Court is mindful of the havoc that Combined's late disclosure of documents has caused. For example, Lair argues that she was forced to conduct defendant's expert deposition without the benefit of a complete set of maintenance records. Lair also claimed that she conducted certain party depositions without complete and adequate written discovery responses. As a result, the Court is recommending that Lair be permitted to re-depose Reyes, Laura Castro and Combined's expert regarding the newly disclosed documents, with the Defendants ordered to pay the reasonable expenses for such depositions, including court reporter and attorney's fees. The Court is further recommending that if other depositions are sought as a result of the late disclosure, that Lair be permitted to justify the need for such depositions and if ultimately approved by the Court, for the Defendants to pay the reasonable expenses for such depositions, including court reporter and attorney's fees.
Finally, the Court is not unmindful of the fact that Lair took various party and expert depositions based on incomplete and inaccurate discovery information. As a result, the Court is also recommending that Lair be awarded the reasonable expenses for the original depositions taken of Reyes, Laura Castro and Combined's expert, including court reporter and attorney's fees.
The Court's order is aimed squarely at Combined and Reyes, and it is recommended that the aforementioned monetary sanctions be imposed upon them jointly and severally. The Court believes that the aforementioned sanctions are proportionate to the misconduct engaged in by the Defendants. It imposes a hefty monetary sanction on the Defendants to punish them for their conduct and to deter them from any future misconduct. And, if such misconduct should continue, the Defendants have been forewarned that more severe sanctions can be implemented. The recommended discovery orders also properly rectify the prejudice done to Lair due to her not having a complete set of documents and information for various depositions.
CONCLUSION
For the foregoing reasons, the undersigned RECOMMENDS the Court GRANT IN PART and DENY IN PART Plaintiff's motion for sanctions (Doc. 82). The Court recommends the granting of Plaintiff's motion for sanctions:
• Against Combined for its late production which ignored the discovery order to supplement certain discovery responses and to produce maintenance, repair and inspections records for the subject tractor/trailer;
• Against Combined for its late production which ignored the discovery order to produce credit card receipts showing purchases made by Mr. Reyes on the day of the collision and 7 days prior;
• Against Combined for its late production of dispatch records;
• Against Combined and Reyes for their late supplementation of certain interrogatory answers that denied any restriction on Mr. Reyes's driver's
license and for failing to supplement document production with a copy of the license showing a restriction on Mr. Reyes's license and a medical certificate issued in August 2017; and
• The imposition of monetary sanctions and discovery orders as outlined in Section F of this Report and Recommendation, with such monetary sanctions being owed by the Defendants jointly and severally to Plaintiff.
The Court recommends the denial of Plaintiff's motion for sanctions against Combined's and Reyes's defense counsel, Mr. Joseph R. Swift, for alleged misconduct during the deposition of Laura Castro.
Pursuant to 28 U.S.C. § 636(b)(1) and SDIL-LR 73.1(b), the parties shall have fourteen (14) days after service of this Report and Recommendation to file written objection thereto. The failure to file a timely objection may result in the waiver of the right to challenge this Report and Recommendation before either the District Court or the Court of Appeals. See, e.g., Snyder v. Nolen, 380 F.3d 279, 284 (7th Cir. 2004). Objections due on or before March 31, 2020.
IT IS SO ORDERDED.
Dated: March 17, 2020.
/s/ _________
GILBERT C. SISON
United States Magistrate Judge