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O'Shaughnessy v. Cypress Media, L.L.C.

United States District Court, W.D. Missouri, Western Division

August 24, 2016

ELIZABETH O'SHAUGHNESSY, MICHAEL O'SHAUGHNESSY, and RANDALL L. HENSLEY, Plaintiffs,
v.
CYPRESS MEDIA, L.L.C., Defendant.

          ORDER GRANTING IN PART MOTION FOR SANCTIONS

          GREG KAYS, CHIEF JUDGE.

         This lawsuit arises from Plaintiffs' allegations that Defendant Cypress Media, L.L.C. (“Cypress”), unlawfully “double-billed” them for newspaper subscriptions. Plaintiffs brought this case as a class action, and the Court subsequently denied Plaintiffs' motion for class certification.

         Now before the Court is Plaintiffs' Motion to Strike Defendant's Motion for Summary Judgment (Doc. 138). Plaintiffs argue that Cypress violated Federal Rules of Civil Procedure 26 and 37 by failing to disclosing seventy-five documents until three weeks after the close of discovery, and that this late disclosure prejudiced them by causing the Court to deny class certification. Plaintiffs ask the Court to strike Cypress's summary judgment motion and impose unspecified additional sanctions. Plaintiffs have also filed a renewed motion for class certification (Doc. 141) based on the new documents.

         Cypress responds that the November 2015 production was primarily a supplemental production, the disclosure did not violate any discovery rule or order, and Plaintiffs were not prejudiced.

         The motion is GRANTED IN PART. The Court holds that some of these documents were untimely disclosed in violation of Rule 26, but only the late disclosure of the subscription invoice/renewal form templates prejudiced Plaintiffs, and this prejudice was relatively mild. Nothing in these late-disclosed documents alters the Court's class certification ruling or otherwise justifies granting Plaintiffs the drastic relief they seek. That said, the late disclosure of the subscription invoice/renewal form templates violated Rule 37, and so the Court orders Cypress to pay the reasonable expenses, including attorney's fees, caused by the violation. The Court will determine the exact amount of this sanction after the parties have briefed the issue.

         Standard

         Among other things, Federal Rule of Civil Procedure 26 requires a party, “without awaiting a discovery request, [to] provide to the other parties: (ii) a copy-or a description by category and location-of all documents . . . that the disclosing party has in its possession, custody, or control and may use to supports its claims or defenses.”[1] Fed.R.Civ.P. 26(a)(1)(A). It also requires a party who has responded to an interrogatory or request for production to supplement or correct its disclosure or response:

(A) in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if 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. P. 26(e)(1)(A). By signing a disclosure or discovery response, the signing attorney “certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry, ” the disclosure “is complete and correct as of the time it is made.” Fed.R.Civ.P. 26(g)(1)(A).

If a certification violates this rule without substantial justification, the court, on motion or on its own, must impose an appropriate sanction on the signer, the party on whose behalf the signer was acting, or both. The sanction may include an order to pay the reasonable expenses, including attorney's fees, caused by the violation.

Fed. R. Civ. P. 26(g)(3).

         Rule 37 also provides an enforcement mechanism for violations of Rule 26(a) or (e):

If a party fails to provide information . . . as required by Rule 26(a) or (e), the party is not allowed to use that information . . . to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. In addition to or instead of this sanction, the court, on motion and after giving an opportunity to be heard:
(A) may order payment of the reasonable expenses, including attorney's fees caused by the failure;
. . .
(C) may impose other appropriate sanctions, including any of the orders listed in Rule 37(b)(2)(A)(i)-(vi).

Fed. R. Civ. P. 37(c)(1) (emphasis added).[2]

         Where there is a Rule 37 violation, the burden is on the potentially sanctioned party to prove harmlessness or justification. Roberts ex rel. Johnson v. Galen of Va., Inc., 325 F.3d 776, 782 (6th Cir. 2003). A district court enjoys wide discretion to fashion a remedy or sanction appropriate for the circumstances. Wegener v. Johnson, 527 F.3d 687, 692 (8th Cir. 2008). In so doing, the court considers the reason for the noncompliance, the surprise and prejudice to the opposing party, the extent to which allowing the information or testimony would disrupt the order and efficiency of the trial, and the importance of the information or testimony. Id. The court's discretion, however, narrows as the effective severity of the sanction increases. Id. Exclusion of evidence is a harsh penalty that should be used sparingly. Id.

         Background

         On February 6, 2014, Plaintiffs served their initial discovery on Cypress, including their First Request for Production of Documents, Electronically Stored Information, and Tangible Things (“RFP”), as well as their First Interrogatories (“Interrogatories”). Relevant to the present dispute, Plaintiffs' RFP sought the following documents from January 1, 2008, to the present:

2. All written agreements for subscription newspaper service . . . .
3. All documents which relate in any manner to any written agreement for subscription newspaper service . . . .
4. All Subscription Invoice and Subscription Renewal documents, or any other similar form document . . . .

. . .

9. All documents, written correspondence, e-mail correspondence, or any other form of communication sent to you by, or by you . . . including . . . records of telephone calls, emails, or internet communications. . . .

. . .

16. All documents which you contend provided any type of notice . . . regarding your billing practices, including . . . any notice which has appeared on . . . Subscription Invoice forms or any similar document, Subscription Renewal forms, and/or in any of Defendant's newspapers . . . . . . .
18. All documents which you contend provided any type of notice . . . regarding any amount charged to your customers for “Special Editions, ” “Premium Editions, ” or similar editions of your newspapers.

         Plaintiffs' Interrogatories asked Cypress to identify all documents in the same time frame which:

9. . . . reflect the “Begin Date” and/or the end date (sometimes referred to as a “Pays To” date) of your . . . initial Subscription Period and any subsequent Renewal Subscription Period . . .
. . .
21. . . . reflect or refer to the assessment of a fee or charge . . . for Subscription Services . . . .
. . .
23. . . . reflect or otherwise relate to your reimbursement, adjustment or credit of a fee or charge . . . related to Defendant's Subscription Billing Practice.

         In August 2014, after multiple discovery disputes which required the Court's intervention to resolve, Cypress produced many documents responsive to Plaintiffs' requests. Among these were sixty-five subscription invoices sent to Plaintiffs, four publisher's notices, and four screen snapshots from The Kansas City Star's (“The Star”) accounting database showing transactions and events related to the Plaintiffs' accounts. On September 5, 2014, discovery into class certification issues closed.

         On July 13, 2015, the Court denied Plaintiffs' motion for class certification, finding Plaintiffs had not demonstrated that there were questions of law or fact common to the class, or that common questions of law or fact predominated over questions affecting individual members. Order (Doc. 115) at 1.

         On October 30, 2015, merits discovery closed.

         Three weeks later, on November 24, 2015, Cypress produced seventy-five documents to Plaintiff, Bates labelled Cypress011991 to 012065, which had not previously been disclosed. The ...


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