Smith v. Ergo Solutions, LLC

• Court: District Court, District of Columbia
• Decided: November 6, 2018
• Docket: Civil Action No. 2014-0382
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

TWILA SMITH, et al.,

Plaintiffs,

v. Civil Action No. 14-382 (JDB)

ERGO SOLUTIONS, LLC, et al.

Defendants.

MEMORANDUM OPINION

Plaintiffs Twila Smith and Deirdra Gilliam Osborne filed this action against their former

employer, defendant Ergo Solutions, LLC (“Ergo”), and one of Ergo’s managing partners,

defendant George Brownlee, alleging sexual harassment. A discovery dispute erupted, and

plaintiffs filed a motion to compel discovery, which the Court resolved following a hearing and a

round of supplemental briefing. Plaintiffs now move for sanctions in the form of attorney’s fees

and costs under Federal Rule of Civil Procedure 37. 1 Plaintiffs also seek costs and fees for

litigating this motion for sanctions. For the reasons that follow, plaintiffs’ motion for sanctions

will be denied.

1 Plaintiffs’ motion for sanctions (and the first paragraph of its memorandum of points and authorities in support of its motion) state that plaintiffs seek relief under D.C. Rule of Civil Procedure 37. See Mot. for Disc. Sanctions [ECF No. 82] at 1; Mem. of P. & A. in Supp. of Mot. for Disc. Sanctions [ECF No. 82-1] at 1. However, because plaintiffs copied the text of Federal Rule of Civil Procedure 37(a) into the body of their memorandum, the Court construes plaintiffs’ motion for sanctions as arising under Federal Rule 37, as is proper before this Court.

1 BACKGROUND

Plaintiffs move for sanctions in the form of attorney’s fees and costs related to litigating

their motion to compel, drafting supplemental briefs ordered by the Court following the motion to

compel, and preparing this motion for sanctions.

In October 2016, Smith and Osbourne filed their motion to compel, arguing that defendants

had failed to provide proper documents in response to thirteen requests for production (“RFPs”)

and had failed to respond adequately to eight interrogatories. Br. in Supp. of Pl.’s Mot. to Compel

(“Mot. to Compel I”) [ECF No. 64-1] at 8–25. Plaintiffs also argued that defendants had failed to

designate a Rule 30(b)(6) witness competent to testify on the areas of examination identified in

plaintiffs’ Rule 30(b)(6) Notice. Id. at 25. This Court held a hearing on the motion to compel in

February 2017, discussing each alleged deficiency in turn, and issued an order the same day. See

Mot. Hr’g Tr. Feb. 13, 2017 (“Hr’g Tr.”) [ECF No. 70]; Order, Feb. 13, 2017 (“Feb. 13 Order”)

[ECF No. 69].

Of the twenty-two issues raised in the motion to compel, the largest proportion involved

technological—not legal—discovery issues; plaintiffs were unable to open electronic documents

sent through defendants’ file-sharing service. The Court characterized the dispute about problems

opening these files as “just craziness” and “not something that counsel should have to involve the

Court in.” Hr’g Tr. at 6:8–9. The Court ordered the parties to work out among themselves the

exchange of documents and for defendants to supplement their responses to the RFPs related to

these sets of documents as appropriate. Feb. 13 Order ¶¶ 1–2. The Court also ordered that

defendants “provide . . . documents in another accessible format” if plaintiffs were unable to access

the documents in an electronic format. Id. ¶ 1.

2 As to the remaining issues in dispute, the Court granted in part and denied in part plaintiffs’

motion. Some issues were clearly resolved in plaintiffs’ favor. The Court ordered defendants to

produce Brownlee’s personnel file and resume, to the extent one existed, in response to two of

plaintiffs’ RFPs. Hr’g Tr. at 19:8–19. The Court also ordered defendants to identify an appropriate

Rule 30(b)(6) designee for an additional deposition, id. at 37:10–18; and required defendants to

check most of the challenged answers to interrogatories and to supplement their responses as

appropriate, see, e.g., id. at 27:13–14; 29:20–30:2; 30:19–20. But the Court denied plaintiffs’

request for production of Brownlee’s medical records because there was no evidence these records

were “sufficiently relevant . . . in a context where there are both privacy and privilege concerns

that apply with respect to an individual’s medical records.” Id. at 21:24–22:2, 24:17–22.

Only one legal issue remained unresolved after the hearing on the motion to compel.

Plaintiffs sought production of an internal investigation report 2 conducted in response to

allegations of sexual harassment brought against Brownlee at Ergo. Defendants asserted attorney-

client privilege. Feb. 13 Order ¶ 4. The Court ordered that the parties submit supplemental briefs

on the privilege issue and that defendants provide a copy of the report for in camera review. Id.

A month after the Court’s order, the parties submitted a joint status report stating that, aside

from the unresolved issue of whether the internal investigation report would be disclosed (and

ongoing difficulty identifying a suitable Rule 30(b)(6) witness), “[a]ll other discovery” was

complete. Joint Status Report [ECF No. 76] ¶ 3. The parties agreed on a Rule 30(b)(6) witness a

few weeks later. See Status Report on 30(b)(6) Witness [ECF No. 79] at 1. The Court next turned

2 As the Court explained in its previous order, outside counsel conducted the investigation, and thus the investigation was technically an “external investigation,” but the Court followed the parties’ use of the phrase “internal investigation report” in its decision. Smith v. Ergo Solutions, LLC, Civ. No. 14-382, 2017 WL 2656096 at *1 n.1 (D.D.C. June 20, 2017). Here, too, the Court will use the term “internal investigation” for the sake of consistency with the parties’ briefs.

3 to the issue of whether the internal investigation report should be produced. After considering the

parties’ supplemental briefs, the Court determined that privilege applied to the document but that

Brownlee had waived the privilege when he discussed the report in his deposition. Smith, 2017

WL 2656096 at *3–*4.

Plaintiffs moved for Rule 37 sanctions in the form of attorney’s fees and costs. Mem. of

P. & A. in Supp. of Mot. for Disc. Sanctions (“Mot. for Sanctions”) [ECF. No. 82-1] at 2–3.

Plaintiffs claim they are “entitled to attorney[’s] fees and cost[s] for the motion to compel

answer[s] to [plaintiffs’] discovery request[s] as well as production of the internal investigation

report and the motion for sanctions” pursuant to Rule 37(a)(5), which permits a court to award

attorney’s fees and costs to a party prevailing on a motion to compel discovery. Id. at 6. More

specifically, plaintiffs argue that they prevailed because the Court ordered defendants to

supplement their responses to plaintiffs’ interrogatories and RFPs, to produce Brownlee’s

personnel file, and to allow the deposition of an additional Rule 30(b)(6) witness. Mot. for

Sanctions Reply to Opp’n of Def. Ergo Solutions (“Pls.’ Reply”) [ECF No. 96] at 4–5, 13–14.

Plaintiffs also argue that they are entitled to attorney’s fees and costs because the Court ultimately

ordered that the internal investigation report be disclosed. Plaintiffs conclude that defendants’

actions in withholding the report were not justified, that defendants “simply didn’t review the

documents and provide documents Plaintiff’s [sic] had a reasonable right to request,” and that

accordingly they “should be made to pay for their representation sloppiness.” Id. at 16.

Defendants respond that their objections to plaintiffs’ discovery requests and

interrogatories were “substantially justified” and therefore not subject to sanctions under Rule

37(a). Mem. of P. & A. in Opp’n to Mot. for Sanctions (“Defs.’ Opp’n”) [ECF. No. 84-1] at 7.

Defendants argue that all objections were “supported by the law” and that defendants “produced

4 everything they had within their possession at the time.” Id. at 12. Furthermore, they note that

“the Court decided in favor of Defendants regarding [plaintiffs’ request for Brownlee’s medical

records].” Id. at 11. Defendants also contend that plaintiffs “did not meet their burden” with

respect to their challenges to defendants’ responses “because they gave no reasoning other than

. . . ‘Defendant’s answer totally non-responsive.’” Id. at 12. Defendants characterize this response

as “cast[ing] doubt on whether or not they attempted to resolve these issues in good faith before

filing their motion to compel,” as Rule 37(a) requires. Id. With respect to the dispute over the

internal investigation report, defendants note that the Court agreed with defendants on two

substantive points: the internal investigation report was protected from disclosure by attorney-

client privilege and Ergo’s human resources director had not waived the privilege. Id. at 8–9.

Plaintiffs first raised the argument on which they ultimately prevailed—that Brownlee had waived

the privilege—in their reply brief, months after moving to compel production of the document. 3

Defs.’ Opp’n at 9. Thus, defendants argue that they never had an opportunity to consider plaintiffs’

prevailing theory for disclosure before involving the Court in the dispute, and Rule 37(a) sanctions

should not be applied. Id.

3 Pursuant to the Court’s February 13, 2017, Order, plaintiffs filed a supplemental brief that argued (1) that Jerry Warren, Ergo’s former Human Resources Director, had waived the company’s privilege by discussing the report in his deposition and (2) that the report constituted business advice, not legal advice. Mot. to Compel Produc. of Docs. (“Mot. to Compel II”) [ECF No. 73] at 2–5. In response, defendants argued that Warren did not have the capacity or authority to waive the privilege and that the report clearly provided legal—not business—advice. Def. Ergo Solutions[’s] Resp. to Pl[s.’] Mot. to Compel (“Opp’n to Mot. to Compel II”)[ECF No. 74] at 1–3. Plaintiffs noted in their reply that Brownlee, too, had discussed the report in his deposition. Pl[s.’] Reply to Opp’n to Mot. to Compel II [ECF No. 75] at 4. In June 2017, the Court concluded that (1) the report was protected by attorney-client privilege; (2) Warren “was not able to waive the attorney-client privilege on behalf of the company” during his deposition because of his status as a former employee; but (3) that Brownlee had waived attorney-client privilege by disclosing “the ‘gist’ of the report” during his deposition. Smith, 2017 WL 2656096, at *3–*4 (quoting Navajo Nation v. Peabody Holding Co., 255 F.R.D. 37, 48 (D.D.C. 2009)). Accordingly, the Court granted plaintiffs’ motion to compel production of the internal investigation report. Id. at *4.

5 LEGAL STANDARD

“District court judges enjoy wide discretion in managing the discovery process.” 3E

Mobile, LLC v. Global Cellular, Inc., 222 F. Supp. 3d 50, 53 (D.D.C. 2016) (alteration omitted)

(quoting Shatsky v. Syrian Arab Republic, 312 F.R.D. 219, 223 (D.D.C. 2015)). When this

discovery process is abused, courts are permitted under Federal Rule of Civil Procedure 37 to

award sanctions.

Rule 37(a) describes procedures by which a party may move to compel disclosure or

discovery and describes when a court should award attorney’s fees and costs to the party who

prevails on such a motion. See Fed. R. Civ. P. 37(a). If a motion to compel is granted, “the court

must . . . require the party . . . whose conduct necessitated the motion . . . to pay the movant’s

reasonable expenses incurred in making the motion, including attorney’s fees” unless the movant

filed the motion without first “attempting in good faith to obtain” the materials, “the opposing

party’s nondisclosure, response, or objection was substantially justified,” or sanctions would be

unjust. Fed. R. Civ. P. 37(a)(5)(A). A party’s actions are “substantially justified” when “there is

a ‘genuine dispute’ or ‘if reasonable people could differ as to the appropriateness of the contested

action.’” Parsi v. Daioleslam, 778 F.3d 116, 127 (D.C. Cir. 2015) (quoting Pierce v. Underwood,

487 U.S. 552, 565 (1988)). “On many occasions, to be sure, the dispute over discovery between

the parties is genuine, though ultimately resolved one way or the other by the court. . . . But the

rules should deter the abuse implicit in carrying or forcing a discovery dispute to court when no

genuine dispute exists.” Fed. R. Civ. P. 37 advisory committee’s notes to 1970 amendment.

Although the Rule directs that courts “must” order a losing party to pay, the advisory

committee’s notes make clear that this language “does not significantly narrow the discretion of

the court, but rather presses the court to address itself to abusive practices.” Id.. The Rule

6 maintains “necessary flexibility . . . since the court retains the power to find that other

circumstances make an award of expenses unjust—as where the prevailing party also acted

unjustifiably.” Id.; see also Bonds v. District of Columbia, 93 F.3d 801, 808 (D.C. Cir. 1996)

(“The central requirement of Rule 37 is that ‘any sanction must be “just[.]”’” (citation omitted)).

DISCUSSION

Rule 37(a) generally permits an award of sanctions to a party whose motion to compel is

granted, and plaintiffs’ motion to compel here was granted in large part. However, the disputed

issues generally reflected the parties’ failure to communicate, failure to cooperate, or both. In

many respects, this case serves as an exemplar of how parties should not conduct discovery. This

dispute has taken months to resolve and has caused the parties to file hundreds of pages of

documents with this Court—not including their various motions for extension of time and for leave

to file—which has unnecessarily expended the parties’ and the Court’s resources. Of more than a

dozen issues raised in the motion to compel, only one—the issue of attorney-client privilege as

applied to the internal investigation report—constituted a genuine dispute requiring a legal

determination. The Court believes that parties acting in good faith likely could have resolved the

other issues without court intervention. The Court will deny plaintiffs’ motion because defendants

were substantially justified in opposing production of the internal investigation report, because

plaintiffs did not attempt to obtain the materials in good faith before employing a motion to

compel, and because sanctions would be unjust under the circumstances because of the parties’

shared responsibility for their breakdown in cooperation.

First, the Court agrees with defendants that the question of whether the internal

investigation report would be protected from disclosure by attorney-client privilege ultimately

constituted a genuine dispute that required analysis and consideration by the Court. See Smith,

7 2017 WL 2656096, at *3–*4. The fact that defendants received no notice of plaintiffs’ argument

that Brownlee, not Warren, had waived attorney-client privilege before the motion to compel was

filed further militates against awarding sanctions against defendants. See Pl[s.’] Reply to Opp’n

to Mot. to Compel II at 4. Thus, sanctions are not appropriate in relation to this part of the

discovery dispute because defendants’ objection was substantially justified.

Second, the Court agrees that, even as to the other disputes resolved in plaintiffs’ favor,

sanctions are not appropriate. The clearest example is plaintiffs’ request for Brownlee’s Ergo

personnel file. Because of the nature of the claims in this case, the Court concluded that defendants

were not justified in withholding the personnel file on relevance grounds. See Hr’g Tr. at 19:14–

19. As the Court noted, Brownlee is “the alleged discriminating official here” in a lawsuit alleging

workplace sexual harassment. Id. The personnel file was of clear relevance to the claims in the

case, and defendants did not argue that any privilege or other exception applied. However, Rule

37 requires a movant to “attempt[] in good faith to obtain” the disputed materials before filing a

motion to compel. Fed. R. Civ. P. 37(a)(5)(A). Plaintiffs sent defendants a “deficiency letter”

before filing their motion, but its descriptions of the alleged deficiencies are so vague as to be

entirely unhelpful. See Letter from Samuel Bailey, Jr. to Morris E. Fischer (Sept. 19, 2016), Ex.

A to Mot. to Compel (“Deficiency Letter”) [ECF No. 64–2] at 2–3. As to defendants’ objection

to producing Brownlee’s personnel file, for example, plaintiffs simply stated “Defendants have

not responded to this request. Response is imperative.” Id. at 3. 4 This does not meet the bar for

engaging in a good-faith attempt to obtain the disputed materials. Similarly, although plaintiffs’

motion to compel challenged eight interrogatory responses, the record before the Court suggests

4 Although this response appears under the heading “Defendant’s Interrogatory Responses,” the section describes production of documents and the numbered responses match the challenged responses to plaintiffs’ RFPs, not their interrogatories. Accordingly, the Court concludes that the statements quoted above were intended to address defendants’ response to RFP No. 15, not Interrogatory No. 15.

8 that plaintiffs raised a concern over only one interrogatory response before filing their motion to

compel, and the challenge consisted of only a single, unhelpful sentence: “Defendant’s response

is insufficient.” See Deficiency Letter at 3. 5 Because the Court finds that plaintiffs did not make

an adequate attempt to resolve their discovery disputes before filing their motion to compel, an

award of attorney’s fees and costs is not permitted under Rule 37(a)(5)(A).

Third, most of the remaining discovery issues could—and should—have been resolved

without the intervention of the Court. For example, the dispute about whether plaintiffs’ counsel

could open certain electronic files, including whether hyperlinks in emails were time-limited,

certainly falls outside of what the Court should be asked to adjudicate. “It is emphatically the

province and duty of the judicial department to say what the law is,” Marbury v. Madison, 5 U.S.

137, 177 (1803)—not to resolve quibbles over the functionality of counsel’s file-sharing service.

Although this aspect of the discovery dispute was particularly wasteful of the Court’s time, neither

party’s hands are sufficiently clean to justify an award of attorney’s fees and costs. Defendants

appear to have followed a reasonable course in attempting to share discovery documents with

plaintiffs through its file-sharing service, and defendants’ supporting documentation suggests that

its emails initially reached plaintiffs’ counsel. See Email from ShareFile Notifications to Gloria

Victor-Dorr (Oct. 10, 2016), Ex. 2 to Defs.’ Opp’n [ECF No. 84–4]. From there, something clearly

went wrong. See Deficiency Letter at 1–2 (stating that “Plaintiff is not in receipt of any Bates

stamped documents,” that “those sent to Samuel Bailey were time locked, and are no longer

available,” and asking for the responses to be resent). The parties shared responsibility for working

out a solution, which they failed to do. Neither party stands out as being especially recalcitrant;

5 This response appears under the heading “Defendant’s Responses to Requests for the Production of Documents,” but since plaintiffs objected to Interrogatory No. 19, not RFP No. 19, the Court concludes that this statement was intended to address defendants’ response to Interrogatory No. 19.

9 they simply failed to cooperate. Under these circumstances, an award of attorney’s fees and costs

to either side would be unjust.

CONCLUSION

In this case, an award of sanctions would encourage rather than “deter the abuse implicit

in carrying or forcing a discovery dispute to court when no genuine dispute exists,” in

contravention of the purpose of Rule 37. Fed. R. Civ. P. 37 advisory committee’s notes to 1970

amendment. Rule 37 does not permit an award of attorney’s fees and costs in a case such as this

in which some aspects of the overall dispute were substantially justified, the movant’s explanations

for why other materials should be produced were so vague that they did not constitute a good-faith

effort to obtain the materials, and the breakdown in the discovery process reflects both parties’

failure to cooperate and communicate.

For these reasons, plaintiffs’ motion for sanctions is denied. A separate order has been

issued on this date.

/s/ JOHN D. BATES United States District Judge

Dated: November 6, 2018