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Star Direct Telecom, Inc. v. Global Crossing Bandwidth

February 26, 2010

STAR DIRECT TELECOM, INC., A CALIFORNIA CORPORATION, ET AL., PLAINTIFFS,
v.
GLOBAL CROSSING BANDWIDTH, INC., A CALIFORNIA CORPORATION, DEFENDANT.



DECISION & ORDER

By Order of Hon. Michael A. Telesca, United States District Judge, dated February 22, 2007, all pretrial matters in the above-captioned case have been referred to this Court pursuant to 28 U.S.C. §§ 636(b)(1)(A)-(B). (Docket # 19). Plaintiffs, Star Direct Telecom, Inc. and United States Telesis, Inc., have sued defendant Global Crossing Bandwidth, Inc. ("Global Crossing") under the Communications Act, 47 U.S.C. §§ 201, 202, and for breach of contract arising from Global Crossing's alleged breach of various agreements to provide plaintiffs with telecommunication services. (Docket # 1). Global Crossing has filed counterclaims against plaintiffs for breach of the same agreements. (Docket # 17).

On May 19, 2009, Global Crossing filed a motion for discovery sanctions. (Docket # 101). The motion sought an order precluding plaintiffs from introducing evidence concerning one of their theories of damages as a sanction for plaintiffs' failure to comply with this Court's earlier order dated February 6, 2009 compelling them to produce documents evidencing those damages. (Docket # 101). Following oral argument, this Court issued an oral decision from the bench denying Global Crossing's application for preclusion, but requiring plaintiffs to reimburse Global Crossing's attorneys' fees and costs in prosecuting the motion. (Docket # 116).*fn1 Currently pending before this Court is plaintiffs' motion for reconsideration of that decision. (Docket # 117).

Before the motion for reconsideration was fully submitted, one of the plaintiffs, Star Direct Telecom, Inc., filed a Chapter 7 petition for bankruptcy. (Docket # 137). As a result of the filing, this motion was stayed pursuant to the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362. On February 1, 2010, the automatic stay was lifted, permitting this Court to decide the pending motion. (Docket # 178).

DISCUSSION

"The standard for granting [a motion to reconsider] is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked -- matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995) (citations omitted). If the moving party presents no legal authority or facts that the court failed to consider, then the motion to reconsider should be denied. Id. ("a motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided").

Plaintiffs argue that the Court's award of attorney's fees must be vacated for three reasons. First, they argue that the award cannot stand absent a finding by the Court that plaintiffs' conduct was "vexatious, wanton, or in conscious disregard for its discovery obligations." (Docket # 117-2 at 14). Second, they contend that the award was improper because they had produced all of the requested documents by the deadline set in this Court's February 6, 2009 Order. (Id. at 8-13). Finally, they urge that the award should be vacated as a matter of fairness because Global Crossing's conduct during discovery, which plaintiffs characterize as "notorious, ongoing and extremely costly" (Docket # 124 at 2), did not result in a similar sanction. (Docket # 117-2 at 2).

Plaintiffs have cited no controlling authority or facts that this Court overlooked in its earlier decision. At the July 9, 2009 oral argument, this Court made the following relevant factual findings in support of its sanctions award:

1. In response to an earlier motion to compel filed by Global Crossing, this Court issued an order on February 6, 2009, compelling plaintiffs to produce by no later than February 13, 2009, all documents responsive to Global Crossing's First Set of Interrogatories and Request for Production of Documents served on May 30, 2007.

2. Plaintiffs produced some, but not all, of the responsive documents on February 13, 2009.

3. On February 16, 2009, counsel for Global Crossing sent a letter to plaintiffs' counsel identifying perceived deficiencies in the February 16 production.

4. Counsel for plaintiffs did not respond directly to the February 16 letter.

5. On February 23, 2009, the parties agreed to an informal stay of discovery until April 23, 2009 in order to pursue mediation.

6. On April 24, 2009, following the parties' unsuccessful mediation efforts, counsel for Global Crossing wrote to plaintiffs' counsel attaching its earlier February 16 letter and renewing its demand for the outstanding documents. The letter stated that if the documents were not produced by May 4, 2009, Global Crossing would file a motion for sanctions.

7. On May 4, 2009, counsel for plaintiffs advised Global Crossing's counsel that counsel was working to gather the requested documents, but did not provide any information ...


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