The opinion of the court was delivered by: H. Kenneth Schroeder, Jr. United States Magistrate Judge
This case was referred to the undersigned by the Hon. William M. Skretny, in accordance with 28 U.S.C. § 636(b)(1)(A), for all pretrial matters, and for hearing and disposition of all non-dispositive motions or applications. Dkt. #14.
Currently before the Court is plaintiff's motion seeking sanctions, pursuant to Fed. R. Civ. P. 37(b), for contempt of this Court's Order (Dkt. #63), and seeking to reinstate its prior motion (Dkt. #47), to amend its complaint to add a cause of action pursuant to the Racketeer Influenced and Corrupt Organization Act ("RICO"). Dkt. #64. For the following reasons, plaintiff's motion for sanctions is granted and plaintiff's motion to amend its complaint to assert a civil RICO cause of action is granted.
Plaintiff served its First Set of Interrogatories and First Request for Production of Documents upon defendant on February 8, 2005. Dkt. #49. Of relevance to the instant motion, plaintiff propounded the following interrogatory:
22. For each withdrawal made by Defendant from Plaintiff's Fleet Account, itemized on the attached Schedule A, state how, to whom and for what purpose each sum was distributed.
Dkt. #49, Exh. C. Plaintiff also served the following document demands:
13. All documents relating to Defendant's withdrawal of moneys from Plaintiff's and/or Plan's Fleet bank account to Defendant's account(s).
14. All documents relating to the disbursement by Defendant of moneys transferred from Plaintiff and/or Plan's Fleet Bank account to Defendant, including all documents relating to [how] the payments identified in answer to interrogatory 22 were disbursed.
22. All documents related to Defendant's payment of health care providers for services rendered to participants in the Plan. Dkt. #49, Exh. D.
Defendant responded to Plaintiff's First Set of Interrogatories on May 25, 2005 and to Plaintiff's First Request for Production of Documents on June 15, 2005. Dkt. #49, ¶ 5. By letter dated July 25, 2005, plaintiff's counsel objected to defendant's responses as deficient. Dkt. #49, ¶ 6. As relevant to the instant motion, plaintiff's counsel requested that defendant "provide all documents detailing how, to whom and for what purpose each reimbursed sum was paid out by HealthNow, including all original invoices received from the individual healthcare providers for all claims administered by Defendant which it paid and for which it sought and obtained 'reimbursement' from Plaintiff." Dkt. #49, Exh. E. After discussion between counsel for the parties, defense counsel agreed, by letter dated September 13, 2005, that Defendant shall produce all documents in its possession, custody or control concerning its application of funds from plaintiff's account; and Defendant shall produce an interrogatory response stating the amount of access fees paid by plaintiff, the amount of unpaid access fees recoverable pursuant to its counterclaim and an explanation for each of these calculations.
Plaintiff's counsel affirms that defense counsel agreed to produce its supplemental discovery responses by October 4, 2005. Dkt. #49, ¶ 12. However, on October 4, 2005, defense counsel asked to reschedule a meeting to exchange these documents to October 5, 2005. Dkt. #49, ¶ 12. On October 5, 2005, defense counsel assured plaintiff's counsel that defendant was working on its supplemental responses, but requested a week extension. Dkt. #49, ¶ 12. On October 20, 2005, defense counsel advised that it could take several months to retrieve the supplemental discovery documents. Dkt. #49, ¶ 14. By letter dated October 24, 2005, defense counsel advised that with regard to the location of documents detailing how funds obtained from Columbus McKinnon were disbursed by HealthNow, our client is still in the process of attempting to locate and/or identify the same. My client believes that to the extent such documents may exist and/or are maintained electronically, the process to retrieve any such documents may take several months to complete.
Dkt. #49, Exh. H. On October 31, 2005, plaintiff moved, pursuant to Fed. R. Civ. P. 37(b), to compel defendant to supplement its responses to Plaintiff's First Set of Interrogatories and Plaintiff's First Request for Production of Documents. Dkt. #49.
By letter dated November 16, 2005, defense counsel advised that: With respect to the production of all responsive documents, I advised in my August 5, 2005 correspondence that all documents requested in plaintiff's first request for production of documents were produced and/or made available.*fn1 Your request that we produce documents concerning HealthNow's application of funds for plaintiff's account is essentially a new request not previously made in your first request for production of documents. Notwithstanding this, to avoid motion practice, we agreed to produce documents responsive to your request. We are in the process of gathering this information and we anticipate that this process will take up to an additional month.
Dkt. #56, Exh. A. In response to the motion, defense counsel declared that:
With respect to the documents evidencing HealthNow's application of funds from plaintiff's bank account . . . HealthNow has agreed to produce all responsive documents in its possession as soon as they can be identified and/or located. Since that time, HealthNow's representatives have been engaged in an exhaustive search for all responsive documents. Attempting to locate the documents has proved somewhat problematic because of the numerous withdrawals made by HealthNow from plaintiff's bank account from 1998 through 2003. Furthermore, the documents requested were generated, maintained and/or stored by various individuals and departments within HealthNow and many of the documents are only stored electronically and may be required to be downloaded to a compact disc in order to be produced.
Dkt. #56, ¶ 5. Defense counsel represented that "HealthNow expects that it will be in a position to produce the requested documents within the next thirty (30) to forty-five (45) days." Dkt. #56, ¶ 6. At oral argument on plaintiff's motion to compel, defense counsel represented that they had "people working on" plaintiff's request for an itemization regarding the disbursement of funds from its bank account. Accordingly, this Court directed "defendant to produce itemization of withdrawals by 1/13/2006 or certify why such records have not been produced and to certify production of all other requested records." Dkt. #63.
On January 13, 2006, defense counsel declared that "all records detailing and demonstrating how, to whom and for what purpose each sum withdrawn and/or transferred from Columbus McKinnon Corporation's . . . Fleet Bank account was paid out by HealthNow have been or will be produced during the course of discovery in this action." Dkt. #64, Exh. A. Defense counsel also declared that "[a]ll of the subject documents detailing HealthNow's application of funds from plaintiff's bank account, with the exception of monthly reports detailing administrative claims charges paid, were previously produced in discovery and/or made available for [Columbus McKinnon's] review and inspection at HealthNow's offices in August 2005." Dkt. #64, Exh. A. Defense counsel further declared that:
The only information not previously produced by HealthNow or made available for [Columbus McKinnon's] review and inspection are Monthly Administrative Claim Reports detailing the amounts of each administrative claim charged to [Columbus McKinnon]. The Monthly Administrative Claim Reports do not contain any information concerning payment of access fees. This ...