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Wells Fargo Bank, N.A v. National Gasoline

June 22, 2011


The opinion of the court was delivered by: Carter, United States Magistrate Judge


Presently before me is plaintiff's motion to compel and impose sanctions. Based on the submissions of the parties, and for the reasons stated below, the motion is granted.


Plaintiff Wells Fargo Bank, N.A. ("Plaintiff" or the "Bank"), filed the instant action on April 21, 2010, alleging that it was defrauded by defendants who individually or through sham entities obtained a $6,500,000 line of credit from the Bank. The complaint names over 20 individual and corporate defendants, although the subjects of the instant motion are only those defendants who have appeared in this action, to wit: National Gasoline, Inc., Chaim Lax, David Rishty, 96 Gas Corporation, Baisley Gas Corporation, Melrose Gas Corporation, 111th Street Gas Corporation, Neptune Oil Corporation, 100 Rockaway Gas Corporation, Cooper Gas Corporation, 2061 Gas Corporation, 8521 Gas Corporation, 8521 Gas Corporation and Forest Gas Corporation ("Defendants").

On August 12, 2010, I held an Initial Conference, at which August 26, 2010 was set as the due date for Rule 26(a) disclosures. Plaintiff served its disclosures along with interrogatories and a request for the production of documents, to be answered by September 28, 2010. Defendants served neither their initial disclosures nor responses or objections to Plaintiff's discovery requests. Counsel for Plaintiff attempted on three occasions to agree upon a date for Defendants' responses, to no avail. In an October 14, 2010 joint status report, counsel for Defendants claimed the discovery was "too voluminous" and requested an in-person conference to "discuss the relevance" of Plaintiff's discovery requests. (Docket No. 29 at 4.)

I held a conference on November 10, 2010 and ordered the parties to meet and confer immediately thereafter in an effort to narrow the discovery disputes. I also instructed Defendants to file their still-outstanding Rule 26 disclosure, reminded counsel that objections to discovery requests must be provided in writing, and set November 24, 2010 as the due date for Defendants' responses and/or objections. As of the parties' filing of the next status report on December 16, 2010, only a portion of that discovery had been turned over to Wells Fargo, and Defendants again claimed, in cursory fashion, that the requested discovery was too voluminous. (Docket No. 37 at 4.) Plaintiff's motion followed.

On December 22, 2010, I set a briefing schedule, requiring Defendant's response to Plaintiff's motion to be filed by January 4, 2011, and set January 14, 2011 for a hearing on the motion. Defendants were unable to respond by the January 4, 2011 deadline, and at a January 5, 2011 conference, I extended that time to January 11, 2011. Also at that conference, Defendants represented that the outstanding discovery would be turned over in advance of the January 14 hearing. However, at the January 14 hearing, Plaintiff represented that it still had not received the responses, at which point counsel for Defendants informed me that he had brought the discovery to court with him and was then prepared to serve it. Plaintiff thereafter reviewed the responses and informed Defendants, in a detailed letter also filed with the Court, of the deficiencies in their discovery responses. (Docket No. 47.) Briefly, Defendants' responses to Plaintiff's request for the production of documents consisted of a disc containing documents which, Plaintiff claims, are not organized in any manner sufficient to determine which documents relate to which requests. (See generally Docket No. 47.) Plaintiff also claims that Defendants' interrogatory responses are inadequate in that, inter alia, Defendants failed to provide a log of those documents withheld on the basis of privilege; provided truncated names of reports and documents insufficient to identify them with any certainty; failed to identify certain documents altogether, claiming instead that documents are in Plaintiff's possession; and failed to evince any sincere effort on Defendants' part to provide reasonable responses. (Docket No. 47-1.)


I. Discovery Rules

Several different provisions in the Federal Rules of Civil procedure (the "Rules") are at play in this action. Rule 37(a)(3)(B)(iii) permits the filing of a motion to compel discovery responses when an adverse party fails to answer an interrogatory submitted pursuant to Rule 33. Rule 33(b), in turn, requires responses or objections to interrogatories to be filed within 30 days. Fed. R. Civ. P. 33(b)(2). Otherwise, any objection thereto is deemed waived. Fed. R. Civ. P. 33(b)(4). A party served with interrogatories is charged with the duty of providing complete answers, or, in the alternative, may direct the interrogating party to examine specific business records, provided the latter is given both a method of identifying those documents and reasonable access. Fed. R. Civ. P. 33(b)(3), 33(d). Rule 34 governs the request for production of documents and also requires production within 30 days, unless another time frame is agreed upon by the parties or ordered by the court. Rule 34(b)(2)(E) permits the producing party to submit documents either as they are kept in the normal course of business or as organized and labeled to correspond to the request. Finally, Local Rule 26.2 requires the party asserting a privilege in objection to a discovery request to provide, contemporaneously with the remainder of discovery responses, certain information related to the claimed privilege, including the general subject matter, date, and nature of the relationship between the parties to the communication. See E.D.N.Y. R. 26.2.

Under these rules, a party who fails to respond to a request for interrogatories or disobeys a court order may be sanctioned in a variety of ways, including the striking of pleadings, rendering of an order of default, the entry of an order of contempt, or the designation of disputed facts in the light most least favorable to the sanctioned party. See Fed. R. Civ. P. 37(b), (d). The Court's discretion in this regard is broad, Nat'l Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639 (1976), and a party who is found sanctionable under Rule 37(d) shall pay the related expenses. Fed. R. Civ. P. 37(a)(5)(A), 37(d)(3).

II. Court's Inherent Power to Sanction

In addition to those powers conferred by the Federal Rules, the Court is vested with inherent authority to sanction conduct which interferes with or abuses the judicial process. Chambers v. Nasco, Inc., 501 U.S. 32 (1991). Among other powers, a court may assess attorney's fees as a sanction for disobedience of an order or "when a party has acted in bath faith, vexaciously, wantonly, or for oppressive reasons." Id. (citations omitted); see generally United States v. Seltzer, 227 F.3d 36, 41 (2d Cir. 2000) ("[A] lawyer's negligent or reckless failure to perform his or her responsibility as an officer of the court" may justify sanctions.); cf. United States v. Morales, No. 07 CR 460 (SJ), 2010 WL 2400120, at *9 (E.D.N.Y. Jun. 11, 2010) (imposing monetary sanctions on attorneys who failed to abide by court ...

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