The opinion of the court was delivered by: Richard Conway Casey, United States District Judge
International Business Machines Corporation ("IBM" or "Defendant") filed this motion for sanctions pursuant to 28 U.S.C. § 1927 and the Court's inherent power, alleging that John Costello ("Plaintiff") and his federal-court counsel ("Plaintiff's Counsel") (1) deliberately instituted this lawsuit against IBM knowing that it was barred by collateral estoppel in light of a prior state-court adjudication, and (2) repeatedly and deliberately failed to produce requested documents from the prior state-court proceeding in bad faith. For the following reasons, Defendant's motion for sanctions is DENIED.
A. Plaintiff's Employment at IBM
Plaintiff began working for IBM in December 1967, and thereafter worked at IBM's offices in Indiana, New York, and Texas until 1996. From 1996 until his separation from the company in late 2000, Plaintiff worked at IBM's Research Triangle Park Facility in Durham, North Carolina, where he held the position of Operations Manager of Workstation Products for North America. In October 2000, Plaintiff took a medical leave with the alleged intention to return to work in December 2000. Prior to his return to work, however, Plaintiff's employment ended. Thereafter, Defendant maintained that Plaintiff left voluntarily (i.e., retired), whereas Plaintiff argued that he was involuntarily retired (i.e., fired).
B. Plaintiff's Divorce Proceedings
In May 2000, Plaintiff's wife filed for divorce. In the summer of 2001, a trial was held before Justice John W. Sweeny, Jr. ("Justice Sweeny") in the Supreme Court of New York, Putnam County to determine the amount of spousal maintenance and child support to be paid as well as the distribution of wealth and property. Throughout the divorce proceedings, Plaintiff argued for a reduction of his maintenance and support payments based on his alleged termination from IBM. At the conclusion of the trial, however, Justice Sweeny ruled, in essence, that Plaintiff was not terminated from IBM but rather had retired, stating from the bench:
[On] the issue of Mr. Costello's leaving his employment from IBM. Was he fired?
Did he retire? . . . [B]efore we started this trial . . . I made it very clear I wanted something in writing from IBM, or I wanted somebody from IBM here to tell me, very simple thing to do, that Mr. Costello, in fact, was fired or terminated or whatever other adverb we would use to describe his leaving employment. I never got it. What I got was testimony from Mr. Costello, which, quite frankly, I found to be self-serving and unsupported by the record. As such, I feel that his employment from IBM was not other than his own volition; therefore, I will impute to him income of $80,000 a year, which he is capable of making for the purposes of any financial issues to be resolved in this case, including, but not limited to, the issue of maintenance. (Divorce Tr. Sept. 7, 2001 2:18 - 3:16.)*fn1
In April 2003, the New York State Appellate Division, Second Department ("Appellate Division") affirmed Justice Sweeny's decision. Costello v. Costello, 757 N.Y.S.2d 588, 589-90 (N.Y. App. Div. 2003) (holding that because "the trial court did not find credible [Plaintiff's] testimony that he was wrongly terminated from his employment as opposed to having voluntarily sought retirement, the court providently exercised its discretion in imputing income to [Plaintiff] higher than that claimed" for purposes of calculating a spousal-maintenance award to Plaintiff's ex-wife).
C. Plaintiff's Federal District Court Proceeding
In July 2002, Plaintiff filed the instant action, alleging that he was terminated from IBM in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. ("AEDA"), the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq. ("FMLA"), and New York State Human Rights Law, 18 N.Y. Exec. Law § 296 et seq. (McKinney 2001).
During discovery, Defendant asked Plaintiff to produce "[a]ll documents concerning [Plaintiff's] divorce proceedings . . . in the New York State Supreme Court for Putnam County." (Def.'s Doc. Produc. Req., Oct. 3, 2002, ¶ 12.) Plaintiff produced some documents but objected to Defendant's request as "overly broad, unduly burdensome, irrelevant and not reasonably calculated to lead to the discovery of admissible evidence." (Pl.'s Supp. Resp., Jan. 9, 2003, ¶ 12.) Defendant sought the Court's intervention. On January 22, 2003, the Court referred the case to Magistrate Judge Henry B. Pitman to oversee discovery. On February 4, 2003, Judge Pitman heard oral arguments by the parties as to the relevance of Plaintiff's divorce documents and the breadth of Defendant's discovery request. By order dated February 5, 2003, Judge Pitman directed Plaintiff to produce, by February 10, 2003, "only . . . those documents [responsive to Defendant's request] that post-date November 30, 2000 to the extent that they relate to [P]laintiff's employment with [and] retirement from IBM." (Discovery Order, Feb. 5, 2003, at 1-2.)
On February 6, 2003-the day after Judge Pitman issued his discovery order-Plaintiff executed a records release to the Supreme Court of New York, Putnam County authorizing Defendant to obtain the divorce documents. Defendant did not then object to that method of production, the same production procedure that Plaintiff had previously used for his unemployment and tax records. By late March 2003, however, Defendant was not able to obtain the divorce documents from the state court because the files were under review by the Appellate Division, which ...