Aastra v. Jones, et al.

2005 DNH 015

• Court: District Court, D. New Hampshire
• Decided: February 9, 2005
• Docket: CV-03-487-SM
• Status: Published

Opinion

Aastra v . Jones, et a l . CV-03-487-SM 02/09/05 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Aastra Technologies Limited; and Aastra Telecom U.S., Inc., Plaintiffs

v. Civil N o . 03-487-SM Opinion N o . 2005 DNH 015 Douglas Jones, an individual d/b/a 5399-800.com; William Bailey, an individual; and Network Design Concepts, Inc., Defendants

O R D E R

Plaintiffs have asserted claims for copyright infringement

and theft of trade secrets. Before the court is Plaintiffs’

Motion to Strike Defendant Bailey’s Answer and for Entry of

Default Judgment Against Defendant Bailey, and for Entry of Other

Appropriate Sanctions. Bailey objects. For the reasons given,

plaintiffs’ motion is granted in part.

At issue here are interrogatory answers given by William

Bailey on April 5 , and May 2 4 , 2004, in which Bailey denied

copying certain software. After being presented with evidence to

the contrary by plaintiffs, Bailey supplemented his May 24 interrogatory answer, on June 2 , 2004, admitting that he had, in

fact, copied some if not all of the software in question. In an

August 3 , 2004, deposition, Bailey admitted that he had made

false statements in both his April 5 and his May 24 interrogatory

answers.

Plaintiffs now move the court to strike Bailey’s answer, to

enter default judgment against him, and for other appropriate

sanctions. Plaintiffs base their motion on both F E D . R . C I V . P .

37 and the court’s inherent supervisory powers. Bailey counters

that Rule 37 is inapplicable because he has not been accused of

violating any court order issued pursuant to Rule 3 7 , and he

further argues that his actions do not warrant the extreme

sanction of a default judgment. While Rule 37 may or may not

apply to the facts of this case, the court possesses inherent

power to sanction a party for misconduct during discovery. See

Brockton Sav. Bank v . Peat, Marwick, Mitchell & Co., 771 F.2d 5 ,

11 (1st Cir. 1985) (“A federal district court must be able ‘to

protect the administration of justice by levying sanctions in

response to abusive litigation practices.’”) (quoting Penthouse

2 Int’l Ltd. v . Playboy Enters., Inc., 663 F.2d 3 7 1 , 386 (2nd Cir.

1981)).

As it is undisputed that Bailey made material false

representations in his April 5 and May 24 interrogatory answers,

the only question is the appropriate sanction. Dishonesty is

never an acceptable litigation strategy and often will justify

the sanction of dismissal or entry of judgment. Default,

however, is too harsh a sanction under the circumstances

presented here. This is not a case, like Aoude v . Mobil Oil

Corp., 892 F.2d 1115 (1st Cir. 1989), in which a plaintiff filed

and vigorously prosecuted a suit based upon a bogus document of

his own manufacture. Nor does Bailey’s misrepresentation – wrong

as it was – rise to the level of the “broader pattern of deceit”

pursued by the plaintiff in Hull v . San Juan, 356 F.3d 98 (1st

Cir. 2004). In Hull, a personal injury plaintiff: (1) “failed to

disclose . . . [three] prior injuries when specifically asked for

such information during his deposition,” id. at 101; (2) did not

mention a relevant diagnosis that resulted from one of those

injuries, even when asked about that injury after the defense had

independently discovered information about i t , id.; and (3)

3 “withheld [medical history] information from his own doctor . . .

reducing the likelihood that it would be discovered,” id.

Here, by contrast, there was a single misrepresentation -

Bailey’s false statement that he had not copied the software at

issue. Bailey corrected the inaccuracy – albeit in response to

incontrovertible evidence produced by plaintiffs – without the

intervention of the court. Thus, plaintiffs’ prejudice is

measurably less than that faced by a defendant who has been

obligated to answer a complaint based upon a false document,

forced to spend many months to untangle a deceitful discovery

response from an untruthful plaintiff, or compelled to engage the

power of the court to procure truthful discovery materials.

These comparisons are not intended to diminish the wrongful

character of Bailey’s admitted deceit, but only to provide

context in determining the appropriate sanction.

Default judgment is an extreme sanction, and runs counter to

this circuit’s “strong policy favoring the disposition of cases

on the merits.” Benjamin v . Aroostook Med. Ctr., Inc., 57 F.3d

101, 107 (1st Cir. 1995) (quoting Zavala Santiago v . Gonzalez

4 Rivera, 553 F.2d 7 1 0 , 712 (1st Cir. 1977)) (ruling on defendant’s

motion to dismiss for want of prosecution). In this case, a

lesser sanction is called for. Specifically, Bailey shall not be

permitted to contest the element of copying as it relates to

either plaintiffs’ copyright infringement claim or their trade

secret claim. In addition, Bailey shall pay all reasonable

attorneys’ fees incurred by plaintiffs in uncovering the false

statement and obtaining Bailey’s correction. Plaintiff’s counsel

shall advise Bailey of the fees incurred and Bailey shall pay

that amount or contest the reasonableness of the amount claimed

by pleading, within thirty (30) days of the date of this order.

For the reasons given, plaintiffs’ motion for sanctions

(document n o . 25) is granted in part.

SO ORDERED.

Steven J. McAuliffe Chief Judge February 9, 2005

cc: William Bailey John R. K. Gunert, Esq. Lawrence K. Kolodney, Esq. Daniel E . Will, Esq.