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Great Plains Theatre Foundation, Inc. v. Ward Manufacturing, Inc.

United States District Court, D. Kansas

April 3, 2018

GREAT PLAINS THEATRE FOUNDATION, INC. and GREAT PLAINS THEATRE FESTIVALS COMPANY, Plaintiffs,
v.
WARD MANUFACTURING, LLC Defendant.

          MEMORANDUM AND ORDER

          GWYNNE E. BIRZER United States Magistrate Judge

         This matter is before the Court on Plaintiffs' Motion for Discovery Sanctions (Motion) (ECF No. 41). Defendant responded to Plaintiffs' Motion on March 21, 2018. (ECF No. 44). On March 27, 2018, at the request of Defendant, the Court convened the parties to address the Motion. Plaintiffs appeared through counsel, Marc A. Powell. Defendant appeared through counsel, Mark A. Katz. After consideration of both the arguments of counsel and the parties' briefing, the Court DENIED Plaintiffs' Motion. (See Order, ECF No. 46). The previously-announced ruling of the Court is now memorialized below.

         I. Background [1]

         This case arises out of a 2014 fire that substantially destroyed the Great Plains Theatre in Abilene, Kansas. (ECF No. 4, ¶ 5). The Great Plains Theatre building and its contents were owned by Plaintiffs. (Id. at ¶ 6). Plaintiffs assert their building was destroyed when Defendant's product, Wardflex, was perforated by lightening, resulting in the escape of natural gas and the subsequent fire. (ECF No. 44, p.1). Wardflex is corrugated stainless steel tubing (CSST) that can be used to convey natural gas (among other things) from one point to another in a structure. (Id.). Plaintiffs' causes of action against Defendant are strict product liability, breach of express and implied warranties, and negligence. (ECF No. 4, ¶¶ 12-28). Defendant denies liability. (ECF No. 5).

         Plaintiffs filed their Complaint on January 30, 2016 (ECF No. 1) and amended it on February 27, 2016 (ECF No. 4), to which Defendant timely answered (ECF No. 5). On April 28, 2016, the Court held a scheduling conference and entered a Scheduling Order setting discovery and other deadlines. (ECF No. 10). From April 28, 2016 to the present, the Court has revised the Scheduling Order four times, due to circumstances beyond the control of the parties, but largely due to issues with Plaintiffs' experts. (See ECF Nos. 23, 30, 35, 36, and 40).

         On February 28, 2018, Plaintiffs filed the present Motion. (ECF No. 41). Defendant responded on March 21, 2018 (ECF No. 44) and requested a conference with the Court to discuss the same. The Court accordingly convened the parties on March 27, 2018.

         II. Plaintiffs' Motion for Discovery Sanctions

         Plaintiffs' Motion centers around Defendant's failure to: (1) respond to Plaintiffs' ten discovery requests, which have been pending for approximately one year and (2) pay Plaintiffs' expert witnesses' outstanding deposition invoices, totaling in excess of $10, 000.00. Citing Fed.R.Civ.P. 37(b)(2), Plaintiffs ask the Court to impose the following sanctions: (1) direct the opinions of Plaintiffs' experts on the origin and cause of the fire to be taken as established facts; (2) prohibit Defendant from using any of its expert witnesses at trial; (3) strike Defendant's pleadings pertaining to its defenses on the cause of the fire; (4) double the amount of funds owed to Plaintiffs for their outstanding expert witness fees; and (5) award attorney fees to Plaintiffs' counsel for bringing this Motion.

         Defendant argues since Plaintiffs' Motion was filed, all experts have been paid. Defendant also advises the Court of several challenges in responding to Plaintiffs' discovery requests, including technical difficulties in converting electronically stored information (ESI) into a usable format. Nevertheless, Defendant committed to providing complete discovery responses no later than April 27, 2018. (See Order, ECF No. 46).

         A. Legal Standard

         While Rule 37(b)(2) authorizes sanctions, the Court has discretion in deciding to impose them.[2] The Court's discretion, however, is limited in that any sanction “must be in the interests of justice and proportional to the specific violation of the rules.”[3] Sanctions under Rule 37 are intended to ensure a party does not benefit from its failure to comply, and to deter others from similar conduct in the absence of such a deterrent.[4]

         B. Discussion Regarding Imposing Sanctions

         Imposing the first three of Plaintiffs' requested sanctions would amount to a default judgment against Defendant. The Court should refrain from imposing harsh sanctions, such as dismissal or its equivalence, for a discovery violation, except when the violation is “predicated upon ‘willfulness, bad faith, or [some] fault . . . rather than inability to comply.”[5] After reviewing the briefings and based on Defendant's arguments justifying the delay in responding to the discovery requests, the Court does not believe Defendant or its counsel acted willfully or in bad faith, and will decline to impose these sanctions.[6]However, the Court reminds Defendant and its counsel that failure to fully answer Plaintiff's outstanding discovery requests by April 27, 2018 will be considered a direct violation of the Court's orders and imposition of sanctions will be re-examined. The Court also declines to impose the fourth requested sanction because Defendant has paid the outstanding expert invoices.

         Similarly, the Court declines to award attorney fees to Plaintiffs' counsel for this Motion. Rule 37(b)(2)(C) states in addition to or instead of ordering sanctions, the Court “must order the disobedient party, the attorney advising that party, or both 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.”[7] The Court, based on Defendant's explanations of the ESI and other issues in responding to Plaintiff's discovery, finds substantial justification exists, making an award of fees unjust.[8]Additionally, Defendant has committed to providing complete discovery responses by April 27, 2018, which will not further substantially delay the case or ...


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