the end, the court held that the local newspaper was primarily responsible, rather than the AP, which had demonstrated ordinary care in preparing and transmitting the article. Id.
In this case, there is no evidence that the AP was negligent in publishing any of the allegedly defamatory statements. In the past, when Taylor personally covered the same event as the Virginian-Pilot, the ensuing article by that reputable newspaper had always accurately reflected the events witnessed by Taylor. Taylor Aff. P 6. Moreover, at the rewriting stage, Taylor concluded that the Virginian-Pilot article was thoroughly researched, fairly presented, neither improbable nor implausible and suggested no factual errors warranting further investigation. Id. P 9. Similarly, Petkofsky was fully familiar with the strong journalistic reputation of the Virginian-Pilot during his fifteen years with the AP, including seven years as the Norfolk correspondent. Petkofsky Aff. P 4. At the editing stage, Petkofsky likewise concluded that the article did not appear inaccurate in any respect and approved it for transmission on the state wire without any substantive revisions. Id. P 5.
Accordingly, the first, second and third causes of action must be dismissed in their entirety because plaintiffs have failed to demonstrate that there is any basis for a rational fact finder to conclude that defendants were negligent in publishing the allegedly defamatory statements.
B. Tortious Interference with Contracts
In their fourth cause of action, plaintiffs claim that defendants tortiously interfered with plaintiffs' contracts with reigning winners, past winners and sponsors by publishing the allegedly defamatory statements. Complaint PP 17-20.
Under the law of Virginia, a plaintiff may set forth a prima facie case of tortious interference with a contractual relationship by demonstrating the following: (1) a valid contractual relationship, (2) knowledge of the contractual relationship, (3) intentional interference with the contractual relationship; and (4) damages resulting therefrom. Century-21 v. Elder, 239 Va. 637, 391 S.E.2d 296, 298 (Va. 1990) (citing Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97, 102 (Va. 1985)). There is no evidence that defendants interfered with any contractual relationships by publishing the allegedly defamatory statements. Nor is there any evidence that Taylor and Petkofsky were aware of any such contractual relationships. Taylor Aff. P 10 n. 1; Petkofsky Aff. P 5 n. 1. There is also no evidence that either Taylor or Petkofsky intended to interfere with any such relationships. Taylor Aff. P 10 n. 1; Petkofsky Aff. P 5 n. 1.
In any event, because the Court has concluded that defendants did not act improperly in transmitting the information for dissemination, it follows that its conduct in so doing cannot afford a rational basis for any alleged interference with contractual relationships. Therefore, the fourth cause of action must also be dismissed.
Pursuant to Rule 37, defendants also move for dismissal and the imposition of monetary sanctions based upon plaintiffs' willful obstruction of discovery. Since the Court has concluded that plaintiffs' claims must be dismissed on the merits, the Court need not reach the question of whether the sanction of dismissal should be imposed based upon the misconduct alleged. However, for the reasons which follow, the Court concludes that the imposition of monetary sanctions is warranted.
The Federal Rules of Civil Procedure were designed to afford each party a full and fair opportunity to conduct discovery necessary for trial preparation. See Nittolo v. Brand, 96 F.R.D. 672, 676 (S.D.N.Y. 1983) (citing Cine Forty-Second St. Theatre Corp. v. Allied Artists Pictures Corp., 602 F.2d 1062 (2d Cir. 1979)). A federal district court possesses broad inherent power to impose sanctions in response to abusive litigation practices, thereby ensuring the proper administration of justice. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 49 L. Ed. 2d 747, 96 S. Ct. 2778 (1976) (per curiam). Accordingly, pursuant to Fed. R. Civ. P. 37, if a party fails to provide discovery or to obey a court order, a district court may, inter alia, dismiss the action and require the payment of reasonable expenses, including attorney's fees. See Cine Forty-Second Theatre Corp., 602 F.2d at 1066.
In this case, six pre-trial conferences were required to ensure compliance by plaintiffs, who the Court finds have deliberately impeded the discovery process.
The deposition of Gale Winn, for example, required an inordinate amount of time, necessitated numerous pre-trial conferences and generated limited factual information. The first deposition of Gale Winn, on January 7, 1994, commenced almost two hours late because Gale Winn and her counsel arrived late. Affidavit of Margaret Blair Soyster Sworn to July 29, 1994 ("Soyster Aff.") P 5 Then, after overhearing a conversation concerning the case, plaintiffs abruptly terminated the first deposition. Id. P 5; Deposition of Gale Winn ("Winn Dep.") 59-60. By letter, defendants issued a formal apology concerning any possible misunderstanding and requested a rescheduling. Soyster Aff. P 6, Exh. A. Plaintiffs ignored the request. Id. P 6. On January 21, 1994, the Court held a pre-trial conference at which the Court directed Gale Winn to complete her deposition over a three day period or face a dismissal with prejudice.
On February 23, 1994, defendants resumed the deposition of Gale Winn. Soyster Aff. P 8. However, Gale Winn insisted on writing out each question and proposed answer prior to issuing a verbal response. Id. P 8; Winn Dep. 86-90. On February 23, 1994, the Court held another pre-trial conference. At that conference, Franshone Winn, counsel for plaintiffs, advised the Court that Margaret Blaire Soyster, counsel for defendants, did not express any objections concerning the conduct of the deposition. Transcript of Pre-Trial Conference dated February 23, 1994 ("2/23/94 PTC Tr.") at 3. However, the deposition transcript indicates that Soyster unambiguously expressed her objections. Winn Dep. 86-90. As a result, the Court removed the three day limitation, allowed the deposition to continue to completion "however long it takes," and warned that costs could be assessed at the close of the case. 2/23/94 PTC Tr. at 3.
On February 25, 1994, defendants for the third time resumed the deposition of Gale Winn. Soyster Aff. P 11. At the close of the second day of the deposition, however, Franshone Winn indicated that plaintiffs deemed the deposition to be complete. Id. PP 12-13; Winn Dep. 612-14. On March 8, 1994, the Court held a pre-trial conference. At the pre-trial conference, the Court heard testimony from both Soyster and Franshone Winn concerning the matter. While under oath, Franshone Winn, in effect, denied that plaintiffs indicated that they deemed the deposition to be complete at the close of the second day, a claim that is refuted by the transcript of that deposition. Transcript of Pre-Trial Conference dated 3/8/94 ("3/8/94 PTC Tr.") at 4, 17-18; Winn Dep. 612-14. Although the deposition transcript was not then available, the Court did not find Winn's testimony credible on that issue, reiterated that there were no time limitations on the deposition and imposed the costs of the conference upon plaintiffs.
Id. at 19-20, 23, 26, 28.
In addition, Gale Winn failed to cooperate by repeatedly providing uninformative responses at her deposition. For example, during the deposition conducted in February, Gale Winn did not recall who managed the financial affairs of the MBVP, what financial records were maintained and where such records were located. Winn Dep. 143-191. At the pre-trial conference on March 8, 1994, the Court warned Gale Winn that claiming lack of knowledge or recollection as to basic facts, clearly within her knowledge, could result in a dismissal. 3/8/94 PTC Tr. at 14-23.
On March 24, 1994, defendants resumed the deposition of Gale Winn. Despite the warnings of the Court, Gale Winn did not recall numerous matters which she surely should be expected to know. For example, Winn did not recall, inter alia, the board of directors for the MBVP in 1992, when the alleged defamation occurred, Winn Dep. at 827, the major sponsor which forwarded a copy of the articles to Gale Winn and requested a contractual release, id. at 973-76, any major sponsors of the MBVP in 1991-92, id. at 901, 911-12,
any sponsors who refused to perform their contractual obligations with the MBVP and the contracts in relation thereto, id. at 1021, any prospective contestants or sponsors which refused to conduct business with the MBVP, id. at 957-62, any individuals, other than Gale Winn, authorized to sign contractual agreements, id. at 979-81, any individuals involved in the decision to cancel the pageants in 1993, id. at 915, or the sources of the gross receipts of the MBVP, id. at 983.
In addition, plaintiffs failed to comply with document discovery in accordance with an order of the Court. At the initial pre-trial conference on December 2, 1992, the Court ordered the parties to simultaneously exchange certain documents, including the articles underlying the instant action. Soyster Aff. P 28. Without any advanced notice, however, Franshone Winn failed to appear for the scheduled exchange of documents. Id. P 29. On March 31, 1993, the Court held a pre-trial conference at which Winn failed to appear. Id. P 30. On April 16, 1993, the Court held another pre-trial conference. Id. PP 30-31. At that conference, the Court again directed plaintiffs to produce the specified documents. Soyster Aff. P 31. On April 26, 1993, plaintiffs produced a single document, which was not even an AP news report. Id. P 32.
Nor was this plaintiffs' only failure to produce documents as ordered by the Court. On January 21, 1994, the Court held a pre-trial conference and directed plaintiffs to produce numerous documents within thirty days. Transcript of Pre-Trial Conference dated 1/21/94 at 6-15. Nonetheless, at her deposition on May 13, 1994, Gale Winn admitted that plaintiffs had not even attempted to locate numerous documents which were maintained by the MBVP, which had been requested by defendants and which, in many instances, were directed to be produced by the Court. Soyster Aff. P 36; Winn Dep. 906-09, 912-13, 930-32.
On May 27, 1994, the Court held a pre-trial conference which coincided with the close of discovery. At that conference, Gale Winn repeatedly asserted that plaintiffs had complied with all outstanding discovery requests. Transcript of Pre-Trial Conference dated May 27, 1994 at 2, 5, 7. The Court again directed plaintiffs to produce all outstanding document requests within thirty days and warned that their failure to comply could result in dismissal. Id. at 6, 9. Following that conference, plaintiffs produced supplemental documents. Soyster Aff. P 41.
In view of the foregoing, the Court concludes that the aforesaid obstruction of discovery by plaintiffs and their counsel would be an adequate predicate for a dismissal with prejudice were not the case being dismissed on other grounds. It follows that a monetary sanction should be imposed upon plaintiffs and their counsel, Franshone Winn, for their repeated willful non-compliance with the discovery process.
Defendants seek sanctions in three respects. First, defendants seek attorneys' fees in the amount of $ 3,800.00 in connection with the six pre-trial conferences necessitated by plaintiffs' misconduct. Soyster Aff. P 53. This figure represents ten hours billed at an hourly rate of $ 380.00 per hour. Id. Secondly, defendants seek attorneys' fees and costs in the amount of $ 13,868.82 in connection with the deposition of Gale Winn. Id. P 54. This figure represents one-third of the total of thirty-two hours billed at an hourly rate of $ 380.00 per hour and $ 5,446.45 in court reporter fees. Id. Finally, defendants seek attorneys' fees and costs in connection with the instant motion. Id. P 52. Plaintiffs have failed to address the amount of sanctions or their financial ability to pay sanctions.
In its discretion, the Court therefore awards defendants their attorneys' fees incurred in connection with the numerous pre-trial conferences in the amount of $ 2,000.00 and attorneys' fees and costs in connection with the deposition of Gale Winn in the amount of $ 10,000.00. In addition, the Court awards defendants attorneys' fees and costs incurred in connection with the instant motion in an amount to be determined. To that end, defendants are hereby directed to submit an affidavit, detailing their attorneys' fees and costs in connection with the instant motion.
For the foregoing reasons, defendants' motion for summary judgment and motion for sanctions shall be and hereby are granted. Plaintiffs' cross-motions are denied in their entirety. Defendants are hereby directed to submit a proposed order within the next thirty days. The Clerk of the Court is hereby directed to enter appropriate judgment for defendants and close the above-captioned action.
It is SO ORDERED.
Dated: New York, New York
November 1, 1995
John E. Sprizzo
United States District Judge