The opinion of the court was delivered by: Michael A. Telesca United States District Judge
Crown Castle USA, Inc., Crown Castle GT Company LLC, Crown Castle Atlantic LLC, Crown Atlantic Company LLC and Crown Communication Inc. (collectively, "Crown") bring this action against defendants Fred A. Nudd Corporation ("Nudd"), Underhill Consulting Engineers, P.C., George R. Underhill (collectively ("Underhill"), Steven F. Carini and Derek R. Hartzell alleging breach of contract, breach of express and implied warranty, professional negligence, fraud and misrepresentation related to the allegedly defective design of thirty-nine cellular telephone towers (known as "monopoles") that were designed and manufactured by Nudd.
By order dated December 21, 2005, this case was referred to Magistrate Judge Marian W. Payson for pre-trial proceedings. On June 24, 2009 and July 21, 2009, defendants Nudd and Underhill respectively, filed motions for sanctions pursuant to Rule 37 of the Federal Rules of Civil Procedure against Crown for spoilation or destruction of evidence, the late production of certain documents and the failure to comply with this Court's May 3, 2007 discovery Order.*fn1 (Docket ##186, 193). Nudd and Underhill are seeking the dismissal of Crown's claims as a sanction.*fn2 Id. On March 31, 2010, Judge Payson issued a Report and Recommendation recommending that this Court grant the defendants' motions for sanctions and order that Crown pay the cost of additional depositions and reimburse defendants for their attorneys' fees and costs associated with the motions. (Docket #229 at 34). Judge Payson further recommended that this Court deny defendants' request for dismissal of Crown's claims. Id.
On April 19, 2010, Crown filed objections to Judge Payson's Report and Recommendation, contending that Judge Payson (1)erred in awarding attorney's fees and costs and in failing to provide a procedure to determine the reasonableness of the costs and fees awarded, (2)erred in requiring Crown to bear the costs of additional depositions without the appropriate limitations as to the scope and reasonableness of such depositions, and (3)erred in awarding sanctions regarding the production of certain engineering reports which were the subject of a continued dispute between the parties as to the necessity of their production. (Docket #230 at 2-3).
For the reasons set forth below, I affirm and adopt Judge Payson's Report and Recommendation in its entirety. Nudd and Underhill's motions for sanctions are granted and plaintiff is hereby ordered to bear the cost of additional depositions and to reimburse Nudd and Underhill for the attorney's fees and costs associated with the motions. Nudd and Underhill's request for dismissal of the complaint is denied.*fn3
Pursuant to 28 U.S.C. § 636(b)(1), after the filing of a Report and Recommendation, any party may serve and file written objections to such proposed findings and recommendations. After such filing,
[a] judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. 28 U.S.C. § 636(b)(1). I apply this standard to the following analysis.
The instant motion is one of several discovery disputes that have arisen over the course of this litigation. Nudd and Underhill are now seeking sanctions for Crown's destruction of documents of key individuals who had relevant knowledge of the facts underlying the case, for the late production of documents from the pre-November 2003 time period and for the failure to produce certain engineering reports. This Court assumes familiarity with the procedural and factual background of this case, as set forth in its prior decisions and in Judge Payson's Report and Recommendation, and thus this Court will not repeat all of the facts and procedural history, but will summarize only those facts pertinent to the instant motion for sanctions. See Crown Castle USA Inc. et al. v. Fred A. Nudd Corp., et al., 2007 WL 700901 (W.D.N.Y.2007); Crown Castle USA Inc. et al. v. Fred A. Nudd Corp., et al., 2008 WL 163685 (W.D.N.Y.2008); Crown Castle USA Inc. et al. v. Fred A. Nudd Corp., et al., 2008 WL 3841298 (W.D.N.Y. 2008); Crown Castle USA Inc. et al. v. Fred A. Nudd Corp., et al., 2009 WL 385442 (W.D.N.Y. 2009); Crown Castle USA Inc. et al. v. Fred A. Nudd Corp., et al., 2010 WL 1286366 (W.D.N.Y. 2010).
In 2006, Crown produced approximately 20,000 to 30,000 pages of documents pursuant to Nudd and Underhill's initial interrogatories and document requests. None of those documents were dated prior to November 2003. Following subsequent discovery requests from Nudd and Underhill, Crown produced an additional 10,000 pages of documents, which still did not contain any pre-November 2003 documents. Nudd and Underhill questioned the absence of such documents, and Crown submitted a sworn affidavit, pursuant to Judge Payson's May 3, 2007 Order, that they had not chronologically limited their search to documents that post-dated November 2003.
In September 2008, Nudd discovered the computer of an employee, Clark Cogan ("Cogan"), who was terminated in 2002, but who had knowledge relevant to the case. Cogan's computer contained several e-mails between he and Andrew Bazinet ("Bazinet"), a Crown employee, which were dated between 2001 and 2003. Bazinet was an "Asset Specialist" who was responsible for Crown's monopoles and had significant knowledge of the facts underlying this case. Following this discovery, Nudd notified Crown, and in early 2009 Crown produced an additional 3,000 pages of documents, a large number of which pre-dated November 2003. Later, in August 2009, Crown produced another 22 e-mails from Jim Kyriacopoulus ("Kyriacopoulos"), who also had significant knowledge of the facts of this case. Additionally, in 2009, Crown produced several engineering reports by outside firms that had analyzed the Nudd monopoles. This production occurred only after Nudd received several similar reports in response to FOIL requests to several municipalities.
Crown has also admitted that it did not institute a litigation hold and instead continued with its normal document retention policy, which required that electronic documents were deleted within two weeks of an employee's departure and that e-mails were deleted within 90 days of an employees's departure, despite anticipating litigation as early as August 2004. At least one Crown employee, Paul Lent ("Lent"), who Crown admitted would have had relevant e-mails or electronic documents due to his participation on an internal team formed to investigate and repair the Nudd monopoles, was terminated in 2005 and his documents were destroyed in accordance with Crown's ...