The opinion of the court was delivered by: Judge Gregory L. Frost
Magistrate Judge Mark R. Abel
This matter is before the Court for consideration of motion to compel (Doc. # 115) filed by Star Lock Systems, Inc. ("Star Lock"), a memorandum in opposition (Doc. # 117) filed by Royal Vendors, Inc. ("Royal Vendors"), and a reply memorandum (Doc. # 118) filed by Star Lock.*fn1 For the reasons that follow, the Court finds the motion well taken and imposes the sanctions sought, with one exception.
Federal Rule of Civil Procedure 37 authorizes a motion to compel discovery when a party fails to make Rule 26 disclosures, fails to answer Rule 30 or 31 deposition questions, fails to make a Rule 30 or 31 designation, fails to interrogatories submitted under Rule 33, or fails to provide a proper response to requests under Rule 34. Rule 37(a) expressly provides that a "party, upon reasonable notice to other parties . . . may apply for an order compelling disclosure or discovery . . . ." See also S.D. Ohio Civ. R. 37.1. The application for the order compelling discovery made by "motion must include a certification that the movant has in good faith conferred or attempted to confer with the party not making the disclosure in an effort to secure the disclosure without court action." Id. See also S.D. Ohio Civ. R. 37.2.
Star Lock argues that Royal Vendors has violated the discovery rules so as to warrant intervention by the Court and appropriate sanctions. The company asserts that Royal Vendors has withheld select discovery information, most significantly financial data regarding profits, and that it produced a Rule 30(b)(6) witness who would not--or, apparently could not--testify on relevant matters. Royal Vendors disagrees and presents a number of arguments against the motion. This Court's review of the record fully supports Star Lock's contentions.
The Court is ill pleased with Royal Vendors' conduct, including its nonsensical arguments in opposition to the motion to compel. Treating the discovery rules as advisory as opposed to imposing mandatory obligations, the company questions the relevancy of and need for the information Star Lock seeks. But Royal Vendors fails to recognize that discovery affords a plaintiff a greater scope of inquiry than what may or may not ultimately be admitted at trial. The company also appears to think that it can avoid its discovery obligations by producing a designated representative who is ill equipped to answer reasonable questions. Such strategic gamesmanship is poorly conceived and of no avail.
Royal Vendors also posits the motion to compel is premature because Star Lock has allegedly failed to comply with the S.D. Ohio Civ. R. 37.1 mandate that, before filing a motion to compel, a movant must "first exhaust ... all extra-judicial means for resolving the differences." The record indicates that Star Lock sought reasonable discovery and that Daniel Crowe, counsel for Royal Vendors, responded with antics that included an e-mail communication stating that "Royal Vendors does not have any further responsive documents that it is willing to produce." (Doc. # 115, Ex. D-1, at 1 (emphasis added).) The Federal Rules of Civil Procedure do not restrain the scope of discovery to what a party feels like disclosing, and neither those rules nor the local civil rules require a plaintiff to beg for reasonable discovery as part of exhausting extra-judicial means of conflict resolution. Star Lock asked, Royal Vendors said no, and the matter is now properly before the Court.
Equally insulting is Royal Vendors' argument that it has opted not to comply with its discovery obligations because the" [i]nadvertent disclosure of Royal Vendors' profit margin on sales of its vending machines would cause irreparable harm." (Doc. # 117, at 3.) Assuming arguendo that this is a true statement, the protective order governing this action and a designation of "Outside Counsel's Eyes Only" should provide sufficient and appropriate protections. Under Royal Vendors' rationale, the risk of inadvertent disclosure that exists in every case involving sensitive information in every court in every region of this country would preclude much discovery of necessary material. There is no evidence before this Court that the risk here is any greater than usual or that the described protective measures are inherently insufficient so that only complete non-disclosure is warranted.
The information sought may, contrary to Royal Vendors' argument, also lead to the discovery of additional relevant information. The company does not get to deny Star Lock information based on the fact that some of the related information sought may or may not ultimately be admissible or useful, or that it does not break its pricing down in a way that creates easy calculations. Royal Vendors' "scope of discovery" argument is too narrow and ignores that Star Lock may not seek a double royalty, but may elect to pursue its claim against any or all of the companies involved, which would necessitate some review of relevant financial condition and status.
Finally, the fact that Royal Vendors has produced some of the discovery sought since the filing of the motion to compel does not excuse the misconduct that necessitated the motion and does not preclude the imposition of an appropriate sanction. The Court appreciates the delayed disclosures, but such after-the-fact disclosure does not mandate absolution. The motion to compel is neither moot nor toothless.
The Court finds both that Star Lock made a good faith effort to obtain the discovery sought without involving the Court and that Royal Vendors' actions have been substantially unjustified. See Fed. R. Civ. P. 37(a)(4)(A). Accordingly, the Court GRANTS the motion to compel (Doc. # 115) makes the following ORDERS:
(1) Within fourteen days of the date of this Order, Royal Vendors shall turn over the discovery sought, including profit information on the sale of vending machines containing the allegedly infringing lock.
(2) Royal Vendors shall pay Star Lock the reasonable expenses Star Lock incurred in bringing the motion to compel, including attorney's fees. Star Lock may serve an accounting of these fees and costs on Royal Vendors and attempt to come to an agreement or, in lieu of or upon the failure of such an effort, Star Lock can proceed to submit a properly supported fee application to this Court, at which time the Court will schedule the matter for an in-court hearing.
(3) Royal Vendors shall also pay the cost of the first deposition for Rule 30(b)(6) witness Kevin Ward and shall designate for a second deposition a witness who can speak to the questions asked. Because Star Lock would incur deposition costs for one of the now-necessary two depositions even without Royal Vendors' misconduct, the Court declines to include the costs of the second deposition as a sanction (unless Royal Vendors again resorts to gamesmanship). Star Lock ...