The opinion of the court was delivered by: Gerard E. Lynch, Circuit Judge*fn1
Plaintiffs and counterclaim/third-party defendants Spanski Enterprises, Inc., et al., (collectively, "SEI") move for discovery sanctions against defendant Telewizja Polska, S.A. ("TVP"). SEI claims that TVP failed to provide deposition witnesses with sufficient knowledge to fulfill TVP's obligations under Rule 30(b)(6) of the Federal Rules of Civil Procedure and asks the Court to impose sanctions of $372,236.35, the amount it expended deposing these witnesses and two-thirds of the amount it expended in preparing and filing a summary judgment motion, as well as any additional fees and expenses it incurred moving for discovery sanctions. For the reasons set forth below, SEI's motion will be granted in part, and SEI will be awarded its expenses in deposing the useless witnesses provided by TVP, as well as its expenses in preparing and filing this motion. However, SEI will be awarded a smaller portion of its fees and expenses in moving for summary judgment.
The facts of this case are well known to the parties and are set forth in the Court's previous opinion, Spanski Enters., Inc. v. Telewizja Polska, S.A., No. 07 Civ. 930, 2007 WL 1187870, at *1-2 (S.D.N.Y. Apr. 23, 2007). Accordingly, they will be recited only in brief. On February 8, 2007, SEI initiated this action to enforce its rights under a 1994 agreement, under which SEI was to distribute Polish-language television programming produced by TVP. Although the parties brought a number of claims against one another, their dispute centered on the interpretation of the 1994 distribution agreement, as well as the agreement's subsequent amendments.
The parties began discovery in the spring of 2007. On July 3, 2007, SEI served TVP with a Rule 30(b)(6) deposition notice, seeking testimony, inter alia, as to TVP's negotiation, understanding, and performance of the distribution agreement and its later amendments. (Pl. Ex. 5.) In response, TVP produced Piotr Dmochowski-Lipski as its corporate representative and asserted that he was competent to testify as to the negotiation and performance of the 1994 agreement. (Dmochowski-Lipski Dep. 9.) At the time of the deposition, Dmochowski-Lipski had been employed by TVP for approximately 18 months. (Id. 14.) In his deposition, Dmochowski-Lipski expressed near-complete ignorance of the facts and circumstances surrounding the negotiation of the 1994 agreement and its subsequent amendments, and admitted that he had not discussed the agreements with anyone at TVP who had personal knowledge of them. (Id. 67-70.) Dmochowski-Lipski's only discussions of the agreements in question in preparation for the deposition were with TVP's counsel. (Id. 37-40.)
On December 20, 2007, TVP amended its counterclaims against SEI. Subsequently, SEI again demanded a Rule 30(b)(6) deposition seeking information concerning the factual basis for TVP's new counterclaims, as well as additional information concerning the topics of its previous Rule 30(b)(6) request. In response, TVP produced Joanna Skierska, who had been employed by TVP for less than one year. (Skierska Dep. 23.) Skierska, like Dmochowski-Lipski, had no personal knowledge concerning the subjects of the deposition, and had not discussed the topics for which she was TVP's representative with anyone other than TVP's attorneys. (Id. 33, 36.)
In due course, SEI moved for summary judgment. In support of its motion, SEI submitted declarations from its principal, Boguslaw Spanski, testifying to his understanding of the meaning of the distribution agreements and to the parties' performance of them. SEI also submitted the declarations of two former TVP employees, who had been involved on behalf of TVP in the negotiation and early performance of the agreements, Adam Brodziak and Bronislaw
A. Borkowski, whose testimony substantially corroborated Spanski's. In opposition, TVP submitted the declarations of two current TVP employees, Antoni Bartkiewicz and Jerzy Romanski. Bartkiewicz oversaw the implementation of the distribution agreements for TVP. (Decl. of A. Bartkiewicz ¶ 3, 6). Romanski had negotiated the original distribution agreement on TVP's behalf. (Decl. of J. Romanski ¶ 3.) Neither of these witnesses had been deposed by SEI, and both presented views the distribution agreements that conflicted with those of SEI's witnesses.
On March 16, 2009, the Court held a hearing on SEI's motion for summary judgment. At the conclusion of the hearing, the Court ruled that the original contract between SEI and TVP was ambiguous, and that extrinsic evidence concerning its meaning was therefore admissible. Because the declarations of Bartkiewicz and Romanski created material fact disputes concerning the meaning of the contract, the Court denied SEI's motion as to all of its claims related to it.
On June 2, 2009, SEI moved for sanctions against TVP for its failure to produce Romanski, Bartkiewicz, or other similarly knowledgeable deponents in response to its discovery requests pursuant to Rule 30(b)(6). On August 20, 2009, the parties notified the court by letter that they settled their underlying dispute. This motion for discovery sanctions, however, is still pending.
Rule 37 of the Federal Rules of Civil Procedure authorizes the court to impose disciplinary measures for intentional misconduct or grossly negligent behavior during discovery. Metro. Opera Ass'n, Inc. v. Local 100, Hotel Employees and Restaurant Employees Intern. Union, 212 F.R.D. 178, 219 (S.D.N.Y. 2003). The Court has broad discretion in assessing sanctions, based on all the facts of the case. AAIpharma Inc. v. Kremers Urban Dev. Co., No. 02 Civ. 9628, 2006 WL 3096026, at *3 (S.D.N.Y. Oct. 31, 2006). Any discovery sanctions imposed by a court, however, must be just and commensurate with the failure to comply. Monaghan v. SZS 33 Assocs., L.P., 148 F.R.D. 500, 508 (S.D.N.Y. 1993). Rule 37(b)(2) specifically instructs that in order to avoid paying the expenses caused by its failure, a noncompliant party must show that its failure was justified or that special circumstances make an award of expenses unjust. Novak v. Wolpoff & Abramson LLP, 536 F.3d 175, 178 (2d Cir. 2008) (per curiam).*fn2
In the case at hand, TVP failed to fulfill its obligations under Rule 30(b)(6) of the Federal Rules of Civil Procedure, which allows a party to direct a discovery subpoena to an entity rather than to a named individual. According to this rule, when a party seeking to depose a corporation or other organization announces the subject matter of the proposed deposition, that organization must produce someone familiar with that subject, who is able "to give complete, knowledgeable and binding answers" on its behalf. Reilly v. Natwest Markets Group Inc., 181 F.3d 253, 268 (2d Cir. 1999) (internal quotations omitted). When a party fails to comply with Rule 30(b)(6), Rule 37 allows courts to impose sanctions. Id. However, in order for the court to impose sanctions, the inadequacies in a deponent's testimony must be egregious. Kyoei Fire & Marine Ins. Co., Ltd. v. M/V Maritime Antalya, 248 F.R.D. 126, 152 (S.D.N.Y. 2007).
In seeking discovery from TVP, SEI served two "Notice[s] of Rule 30(b)(6) Depositions," which made clear that SEI sought information concerning TVP's understanding of and performance of the distribution agreements. To comply with SEI's demands under Rule 30(b)(6), TVP was required to put forward corporate representatives who were familiar with these topics either from personal knowledge or by informing themselves through inquiry of other corporate agents with knowledge. TVP produced only Dmochowski-Lipski and Skierska, witnesses who not ...