United States District Court, S.D. New York
GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE
Order to Show Cause issued on August 8, 2017 (Docket # 165)
(“Order to Show Cause”), this Court ordered
defendants Dyntek Services, Inc., and Dyntek, Inc.
(collectively, “Dyntek”), and their former
counsel, Lea Spiess, Esq., to show cause why each should not
be sanctioned for their failure to respond to plaintiff Sara
Martinez's discovery requests and to obey numerous Court
orders. Dyntek and plaintiff submitted a number of papers in
response. Spiess did not respond to the Order to
Show Cause. For the reasons stated below, we conclude that
Spiess's conduct warrants sanctions and that Dyntek's
conduct does not.
not review in detail the conduct that led to the issuance of
the Order to Show Cause as it was set forth in the original
Order to Show Cause as well as a previous order of the Court.
See Order, filed July 25, 2017 (Docket # 160). In
brief, Dyntek failed to respond to Martinez's
interrogatories and document requests for at least six months
preceding a June 5, 2017 status conference. At the
conference, Spiess admitted that she had not responded to
Martinez's discovery requests. See Transcript,
filed July 13, 2017 (Docket # 155), 28. The Court set a new
deadline to respond of June 9, 2017. Id. 30; see
also Amended Scheduling Order, filed June 6, 2017
(Docket # 149).
5, 2017, Martinez filed a letter stating that Dyntek
“still [has] not responded to Plaintiff's First Set
of Interrogatories and Document Requests, in direct violation
of Your Honor's Order, dated June 5, 2017.”
See Letter from Laurie E. Morrison, dated July 5,
2017 (Docket # 150). Spiess responded on July 10, 2017,
claiming that she had mailed the outstanding discovery to
Martinez's counsel on June 20, 2017, by disc, because the
files were too large to email. See Letter from Lea
Spiess, dated July 10, 2017 (Docket # 152). Martinez's
counsel responded that she had not received any discovery
responses from Dyntek by email or in any other form.
See Letter from Laurie E. Morrison, dated July 13,
2017 (Docket # 153).
Court issued an Order directing Spiess to either email her
responses to Morrison, breaking the documents down into
separate emails if necessary, or to hand-deliver a disc
containing the responses, by noon on July 14, 2017, and to
call Morrison on that day to confirm receipt. Order, filed
July 13, 2017 (Docket # 154). Morrison then filed two letters
stating that Spiess had not complied with the Court's
order other than to send Morrison a single email with seven
pages attached. See Letter from Laurie E. Morrison,
dated July 14, 2017 (Docket # 158); Letter from Laurie E.
Morrison, dated July 17, 2017 (Docket # 159) (“Morrison
July 17 Letter”). While Morrison did not state what was
on these seven pages, it appeared from the letters that they
were not the responses and objections to the discovery
requests. See Order, filed July 25, 2017 (Docket #
160), at 2. The transmission of only seven pages was also
inconsistent with Spiess's previous claim that the
responsive materials were “too large to send via
e-mail.” Id. Spiess never responded to
Morrison's letters. Id.
25, 2017, the Court ordered Spiess and “an officer of
Dyntek with the most knowledge of this topic” to file
sworn statements describing in detail what Dyntek and counsel
had done to comply with the Court's Orders of June 5 and
July 13, 2017. See id. The Court also required that
either Dyntek or Spiess attach “all discovery responses
that Dyntek claims to have previously transmitted to
plaintiff, ” and required that all filings be made by
August 1, 2017. Id. at 2-3.
filings were made on that date. Accordingly, on August 2,
2017, a law clerk called Spiess to inquire about this
failure. Later that day, Spiess filed a letter requesting an
extension to August 4, 2017, which the Court granted.
See Order, filed Aug. 2, 2017 (Docket # 163). Dyntek
and Spiess failed to comply with that deadline either.
Accordingly, the Court ordered them both to show cause, in
writing, by August 15, 2017, for why each should not be
sanctioned for their failure to respond to Martinez's
discovery requests and to obey the Court's orders.
See Order to Show Cause. Spiess and Dyntek made no
filing by that date.
August 21, 2017, the Court scheduled a hearing on the Order
to Show Cause for August 28, 2017, and ordered the President
or Chief Executive Officer of Dyntek to attend. Order, filed
Aug. 21, 2017 (Docket # 169). Spiess was also directed to
file an affidavit by August 22, 2017, “indicating that
she has personally confirmed with the President or CEO of
[Dyntek], that he or she must attend this hearing.”
Spiess filed an affirmation on August 23, 2017 (Docket #
172), stating that she had “personally informed the
President and Chief Executive Officer of [Dyntek] that his
presence is required at the hearing.”
appeared alone and 15 minutes late to the August 28 hearing.
Order, filed Aug. 28, 2017 (Docket # 174). When asked why her
client, whom she identified as Ron Ben-Yishay, was absent,
Spiess did not provide an adequate explanation. Id.
Consequently, the Court adjourned the proceeding until August
31. Id. In a written Order confirming oral orders
given at the hearing, the Court ordered Spiess and “a
representative from the New York offices of Dyntek with the
most information concerning this litigation” to attend
the next hearing in person. Id. Ben-Yishay was
allowed to attend via telephone. Id. In addition,
the Court ordered Ben-Yishay to file an affidavit by August
29, 2017, explaining why he failed to comply with the
Court's August 21 Order. Id.
filings were made by that date. Accordingly, on August 30,
2017, a law clerk called Spiess to confirm that no affidavit
had been submitted. See Order, dated Aug. 30, 2017
(Docket # 177). After failing to reach her and finding her
voicemail inbox full, the law clerk telephoned Ben-Yishay to
ask whether he had received a copy of the August 28 Order.
Id. Ben-Yishay said he had not seen the Order, and
provided an email address to which the law clerk could email
the Order. Id.; see also Declaration of Ron
Ben-Yishay, dated Sept. 19, 2017 (annexed as Ex. 1 to Def.
Mem.) (“Ben-Yishay Decl.”), ¶ 7. The law
clerk subsequently emailed the Order to Ben-Yishay, along
with prior Orders. Ben-Yishay Decl. ¶ 7.
did not appear at the August 31, 2017 hearing. See
Declaration of Adam LaChant, dated Sept. 19, 2017 (annexed as
Ex. 3 to Def. Mem.) (“LaChant Decl.”), ¶ 6.
Ben-Yishay, however, appeared by telephone, and Dyntek Senior
Account Executive Adam LaChant appeared in person. Ben-Yishay
Decl. ¶ 9; LaChant Decl. ¶ 6. After the Court
explained to Ben-Yishay the full scope of Dyntek's
counsel's actions in this case, Ben-Yishay stated that he
had been unaware of Spiess's conduct. See
Transcript, filed Sept. 7, 2017 (Docket # 182)
(“Tr.”), 3-10. Ben-Yishay requested and the Court
granted a week for Dyntek to obtain new counsel. Id.
timely obtained new counsel, see Notices of
Appearance, dated Sept. 7, 2017 (Docket ## 184, 185),
following which the parties responded to the Order to Show
Cause. In their response the Dyntek Chief Executive Officer,
Ron Ben-Yishay, indicated that he hired Spiess because she
had been counsel on a previous litigation that was
successfully resolved. Ben-Yishay Decl. ¶ 3. His Chief
Operating Officer, Karen Rosenberger, and a Senior Account
Executive, Adam LaChant, were to be in charge of interactions
with Spiess. Id. ¶ 4. Ben-Yishay did not have
knowledge of Spiess's discovery failures and failures to
obey court orders in June and July 2017 (let alone earlier)
and was not properly informed of the Court's order
regarding his appearance in court on August 23, 2017, or the
requirement that he submit an affidavit. Id.
¶¶ 5, 8, 10. Ben-Yishay terminated Spiess the same
day he learned of the Court's orders, which was August
31, 2017. Id. ¶ 9. Rosenberger and LaChant were
similarly unaware of the Court's orders, the
plaintiff's motions to compel, or Spiess's failure to
comply with discovery obligations. See Declaration
of Karen Rosenberger, dated Sept. 19, 2017 (annexed as Ex. 2
to Def. Mem.); LaChant Decl.
GOVERNING LEGAL STANDARDS
Order to Show Cause directed the parties to explain why each
should not be sanctioned pursuant to “Fed. R. Civ. P.
16(f), Fed.R.Civ.P. 37(b), Fed.R.Civ.P. 37(d), 28 U.S.C.
§ 1927 (as to Spiess only), the Court's contempt
powers, and/or the inherent powers of the Court.” Order
to Show Cause. Having reviewed the responses, ...