The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
Defendant Latvian Economic Commercial Bank ("Lateko") moves to dismiss
the claims of 775 Doe plaintiffs who failed to respond to interrogatories
as ordered by the Court by December 20, 2004, the date on which Lateko
claims the responses were due. It acknowledges that 215 of those
plaintiffs produced signed and sworn responses to the interrogatories
after that date. Plaintiffs cross-move for sanctions on the ground that
counsel for Lateko have violated disciplinary rules contained in the Code
of Professional Responsibility.
Lateko's Motion for Discovery Sanctions
Rule 37(b)(2) provides, in part, that if "a party fails to obey an
order to provide or permit discovery," the Court may "make such orders in
regard to the failure as are just," including "an order striking out
pleadings or parts thereof." In determining whether to dismiss the claim
of a plaintiff that has failed to comply with a discovery order, the
Court first must determine whether the failure is attributable to
wilfulness, bad faith or fault. Assuming that it is, the Court then must
consider (1) the efficacy of lesser sanctions, (2) the duration of the
period of non-compliance, and (3) whether the non-compliant party has been
warned. E.g., In re Rezulin Prods. Liability Litig., 223 F.R.D. 109, 116-17
(S.D.N.Y. 2004) (collecting cases).
In this case, the interrogatories in question were served on February
12, 2004. On May 24, 2004, the Court ordered each of the Doe plaintiffs
to respond, with limited exceptions not here relevant, within thirty
days. In an order dated June 1, 2004, which rejected plaintiffs'
objections to another defendant's interrogatories and compelled
responses, the Court expressly cautioned that "any failure to comply with
this or any other order of this Court may result in the imposition of
sanctions, which may be case dispositive." On June 22, 2004, the Court
granted an extension of
time, but warned that no further extensions would be granted. Despite
this warning, the Court did grant more time, but the clock ultimately ran
out on December 20, 2004.
The failure of the 560 Doe plaintiffs who had not responded by the time
this motion was made on January 21, 2005 can only have been wilful.
Indeed, plaintiffs' counsel does not seriously suggest otherwise. Given
the warnings that these plaintiffs have received, there is no reason to
suppose that lesser sanctions would be effective. Indeed, plaintiffs'
papers, which are dated February 4, 2005, do not claim that any of these
560 had responded even by then. These plaintiffs have not responded to
the interrogatories that now have been outstanding for a year and two
days. In all the circumstances, the claims of these 560 plaintiffs will
That leaves for consideration the 215 Doe plaintiffs whom Lateko
concedes filed sworn answers after December 20 but on or before January
21, 2005. Given the relatively brief default following the ultimate
deadline and the disagreement about whether a private agreement among
counsel tolled the December 20 date for two weeks over the holidays, the
Court declines to dismiss as to these plaintiffs.
Plaintiffs claim that Lateko's counsel have violated certain
disciplinary rules and seek the imposition of sanctions on three bases.
First, they contend that "this Court's Local Rule 1.5(b)(5) permits the
Court to discipline an attorney for any ethical violations if" certain
criteria are satisfied. (Pl. Mem. 21-22) That statement is exceedingly
misleading and does plaintiffs' counsel no credit. What Local Civil Rule
1.5(b) actually says is that sanctions "may be imposed, by the Committee
on Grievances," in the circumstances referred to in plaintiffs'
memorandum. (Emphasis added) The suggestion that an individual judge, in
the course of a pending litigation, may impose professional discipline
under the rule was less than candid.
Second, plaintiffs argue that federal courts have inherent power to
impose sanctions in appropriate circumstances. Quite so. But further
complicating this already unduly complicated lawsuit by a satellite
dispute over a charge of professional misconduct particularly in
circumstances where charges of professional conduct either have been or
could be made against plaintiffs' counsel as well would not serve the
goal of resolving the parties' dispute. The Court declines to go there,
as the litigants have more appropriate avenues open to them.
Third, plaintiffs rely on 28 U.S.C. § 1927, which permits courts to
require counsel "who so multipl[y] the proceedings in any case
unreasonably and vexatiously" to pay the excess costs thus incurred. Even
if the attorneys in question have committed the professional misconduct
of which they are accused, however, plaintiffs have failed to demonstrate
that the conduct "multiplied the proceedings." In any case, the Court, in
the exercise of discretion, would decline to
entertain the request for reasons previously stated.
Accordingly, the motion to dismiss the claims of the Doe plaintiffs who
had not filed sworn answers to the interrogatories [docket item 240] is
granted to the extent that the claims of such plaintiffs who had not
filed such answers on or before January 21, 2005 are dismissed. It is
denied in all other respects. Lateko is directed to settle an order
embodying this ruling and specifically ...