Pan American Grain Manufacturing Co. v. Puerto Rico Ports Authority

193 F.R.D. 26, 2000 U.S. Dist. LEXIS 5288, 2000 WL 432454
CourtDistrict Court, D. Puerto Rico
DecidedJanuary 5, 2000
DocketNos. CIV. 96-1499 HL, CIV. 96-1501 HL
StatusPublished
Cited by27 cases

This text of 193 F.R.D. 26 (Pan American Grain Manufacturing Co. v. Puerto Rico Ports Authority) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pan American Grain Manufacturing Co. v. Puerto Rico Ports Authority, 193 F.R.D. 26, 2000 U.S. Dist. LEXIS 5288, 2000 WL 432454 (prd 2000).

Opinion

OPINION AND ORDER

LAFFITTE, Chief Judge.

Before the Court are Defendants’ motions for attorney’s fees, bills of costs, and motion requesting the filing of an appeal bond. Plaintiff has filed its opposition. Defendants are Puerto Rico Ports Authority (“PRPA”) and Procesadora de .Granos, Inc. (“Progranos”). The Court entered judgment for Defendants in this matter, Dkt. No. 200, on July-21, 1999 following a nine-day bench trial.

DISCUSSION

I. Sanctions

PRPA and Progranos have moved that the Court shift attorney’s fees in this case, notwithstanding the “American Rule” on attorney’s fees, because of Plaintiff Pan American Grain’s (“Pan American”) alleged bad faith in filing suit. The Court declines to shift fees, as Pan American’s case was not brought in bad faith, presented triable issues of fact, and in the end turned on witnesses’ credibility. See Chambers v. NASCO, Inc., 501 U.S. 32, 46-47, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (requiring bad faith in the bringing of the case for the wholesale shifting of attorney’s fees as an exercise of a court’s inherent powers).

[30]*30As PRPA and Progranos have both pointed out in their motions for attorney’s fees, Pan American on several occasions engaged in behavior that was abusive of the discovery process and shameful to Pan American. While this behavior does not warrant the wholesale shifting of attorneys’ fees in the ease, it warrants the Court’s strong disapproval and stiff sanctions. Pan American’s actions in the course of discovery were disruptive of the orderly course of litigation, insulting to the dignity of the Court, and, most importantly, utterly lacking in civility. There is no excuse for such disregard of the principles of civility, one of society’s most important virtues. This Court will not countenance such behavior.

The Court’s power to levy sanctions on Pan American for its discovery abuses arises from' two sources of authority. The first is Fed.R.Civ.P. 37(a)(4). The second is the Court’s inherent power to sanction abuses of the discovery process. Under Fed.R.Civ.P. 37(a)(4), if a party applies to the court for an order compelling discovery, and the court grants the application, or the opposing party cooperates with the discovery request only after the application was made, the court shall impose sanctions. The Rule actually creates a presumption in favor of the imposition of sanctions under such circumstances. The Advisory Committee Notes explain that the Rule “requires that expenses be awarded unless the conduct of the losing party or person is found to have been substantially justified.” Fed.R.Civ.P. 37(a)(4) advisory committee’s note.

On several occasions, Defendant Puerto Rico Ports Authority (“PRPA”) was forced to file motions for orders compelling discovery. These motions were granted on every occasion save one, in which the requested discovery was provided after the motion was filed. Thus, the provisions of Fed.R.Civ.P. 37(a)(4) apply. Before the Court can impose sanctions, the Court must afford the sanctioned party an opportunity to be heard. In this case, Plaintiff Pan American has had ample opportunity to be heard via its written submissions with respect to the award of attorneys’ fees.1

If Pan American’s actions during discovery were “substantially justified,” then no award of sanctions should issue. Fed. R.Civ.P. 37(a)(4). Instead of being substantially justified, Pan American’s failure to cooperate with PRPA’s discovery requests was clearly without justification and served only to impede the discovery process and to make life as difficult as possible for PRPA. Accordingly, sanctions will issue from this Court in the form of PRPA’s “reasonable expenses incurred in making the motion[s], including attorney’s fees.” Fed.R.Civ.P. 37(a)(4). These sanctions include the award of certain attorney’s fees, but they are not to be confused with a wholesale shifting of fees.

The record shows that PRPA was forced to file a number of motions to compel discovery when Pan American should simply have complied with PRPA’s discovery requests. First, PRPA filed two motions to compel the production of the ITB Zorra; this Court granted both of them. The two motions were an Urgent Motion to Compel Discovery, 95-1794, Dkt. No. 88, and an Urgent Motion to Compel Production of the ITB Zorra, 95-1794, Dkt. No. 100. Later, PRPA filed a Motion to Compel Discovery of Certified Financial Statements and Income Tax Returns, 95-1794, Dkt. No. 155. This Court never ruled on the motion, but Pan American only provided the requested discovery after PRPA filed the motion to compel. Finally, PRPA filed another Motion to Compel Discovery, 96-1499, Dkt. No. 85, with respect to some of its interrogatories. This Court granted PRPA’s motion in a margin order and forewarned Pan American of “stiff sanctions.”

Thus, as a sanction for Pan American’s willful failure to cooperate in the discovery process, this Court imposes sanctions on Pan American in the amount of Defendant PRPA’s reasonable expenses incurred in making the motions, including attorney’s [31]*31fees.2 Consequently, PRPA is hereby ordered to file with the Court, within thirty days hereof, an itemization of expenses, including attorney’s fees, that it incurred in connection with these motions. These motions are set forth at 95-1794, Dkt. No. 88; 95-1794, Dkt. No. 100; 95-1794, Dkt. No. 155; 96-1499, Dkt. No. 85.

Rule 37(a)(4)’s provisions for sanctions arising from motions to compel discovery are not the sole source of the Court’s power to sanction abusive discovery tactics. The Court also has inherent powers that enable it to enforce standards of conduct during discovery.3 Thus, the Court is not without recourse when a party engages in inappropriate behavior that does not precipitate the filing of a motion to compel. When a party engages in conduct that merits sanctions, and “the Rules are [not] up to the task,the court may safely rely on its inherent power.” Chambers, 501 U.S. at 50, 111 S.Ct. 2123.

Pan American’s behavior at various points in the discovery process justifies the imposition of sanctions. The choice of an appropriate sanction is within the Court’s sound discretion. Chambers, 501 U.S. at 44-45, 111 S.Ct. 2123. Accordingly, Pan American shall be sanctioned in the amount of attorney’s fees spent by Defendants PRPA and Progranos because of Pan American’s misbehavior. There are, however, two significant limitations on the Court’s ability to impose attorney’s fees against a party under the authority of its inherent powers. The first is that the sanctioned party must have an opportunity to be heard on the matter. See Chambers, 501 U.S. at 50, 111 S.Ct. 2123 (explaining that a court must “comply with the mandates of due process” in imposing sanctions under its inherent power);

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Bluebook (online)
193 F.R.D. 26, 2000 U.S. Dist. LEXIS 5288, 2000 WL 432454, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pan-american-grain-manufacturing-co-v-puerto-rico-ports-authority-prd-2000.