In Kalra v. Adler Pollock & Sheehan, No. 3:18-CV-00260 (KAD) (D. Conn. Nov. 5, 2021), Connecticut Kari A. Dooley, despite citing “egregious course of conduct by the Plaintiffs”, denied the defendants’ motion to dismiss Plaintiffs’ complaint as a sanction for Plaintiffs’ continued failure to comply with the Court’s discovery orders and also denied plaintiffs’ cross-motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure (FRCP) for the purportedly frivolous motion to dismiss.

Case Background

In this case involving claims that the defendants, former legal counsel to the plaintiffs, had breached their duty of loyalty to the plaintiffs, Judge Dooley began her ruling with this statement:

“This Court has previously observed:

Time and again, this Court has ordered the Plaintiffs to meet their discovery obligations. Time and again, the Plaintiffs have failed to do so. At this juncture, the only remaining question is what the consequences shall be for this egregious course of conduct by the Plaintiffs.

Whether this observation has continued viability, i.e., whether Plaintiffs have, in fact, still not provided discovery as ordered, and if not, what the appropriate sanction should be, is addressed herein.”

Judge Dooley then recapped the plaintiffs’ egregious discovery failures, including consistent failure to provide timely responses to discovery requests (even after the Court accepted their motion to modify the scheduling order, which was unopposed by the defendants), the Court’s granting of multiple defendants’ motions to compel and awarding attorneys’ fees of a total of over $42,000 (for two separate granted motions). The plaintiffs even failed to timely respond to the defendants’ motion to dismiss, but eventually did so, asserting that they had fully complied with the Court’s discovery orders; that the motion to dismiss was baseless and that Rule 11 sanctions should therefore issue. A week later, they also filed a motion for extension of time nunc pro tunc, within which to respond to Defendants’ motion to dismiss (citing a death in counsel’s family), which was granted by the Court.

Judge’s Ruling

Judge Dooley began with the plaintiffs’ cross-motion first, stating: “Plaintiffs’ motion for sanctions utterly ignores the strict and explicit requirements of Rule 11 and is denied.” She observed: “Rule 11(c)(2)…, the so-called safe harbor provision, precludes a party from filing a motion for sanctions until twenty-one days after service upon the opposing party, thereby giving the other party an opportunity to correct the allegedly improper filing…Here, Plaintiffs certified that they provided Defendants with a copy of their motion for sanctions on the same day that it was filed, to wit, through the Court’s electronic filing system. This procedure clearly does not comply with Rule 11(c)(2).” She also rejected the cross-motion on another basis, that “Rule 11 explicitly ‘does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.’”

As for the defendants’ motion to dismiss regarding the plaintiffs’ egregious discovery behavior, Judge Dooley stated: “To be sure, if, at this juncture, the Court were to determine that Plaintiffs have yet again failed to provide the discovery at issue, dismissal would be an appropriate sanction. As discussed below, however, the Court cannot so conclude.” She noted that “In response to the Court’s most recent order, Plaintiffs produced to Defendants all of the documents that had been in prior counsel’s possession. In doing so, Plaintiffs enlisted the assistance of an attorney to organize the documents by category and to review them for work product or privileged communications. Moreover, Plaintiffs produced to Defendants an additional fourteen documents on a variety of subjects.”

With regard to the defendants’ contention that the plaintiffs did not reveal the nature and scope of the search undertaken to locate and produce the communications at issue, Judge Dooley said, in denying the defendants’ motion: “Defendants’ skepticism, no doubt, derives from Plaintiffs’ heretofore abysmal effort to meet its discovery obligations in this case. However, the Court cannot, on this record, conclude that Plaintiffs continue to withhold responsive documents. Plaintiff Kalra states, under oath, that he searched for the requested communications as between the directors and officers of TAL and Asia Pacific at the request of both prior and current counsel and that “all such communications in Plaintiffs’ possession” have been disclosed. That prior counsel did not believe he had been provided such records at a date specific in the past, does not demonstrate that the records have not been produced at this juncture. Further, the Court has not previously ordered, or been asked to order, Plaintiffs to conduct the search by any particular method or using specific search terms. Plaintiffs’ refusal to respond to Defendants’ inquiry in this regard, does not therefore form an additional basis to conclude that the disclosures were not complete or that Plaintiffs’ complaint should be dismissed as a result.”

So, what do you think? Should the plaintiffs have been given so many chances to correct their egregious discovery behavior?  Please share any comments you might have or if you’d like to know more about a particular topic.

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