In Fluor Fed. Sols., LLC v. BAE Sys. Ordnance Sys., Inc., No. 7:19-cv-698 (W.D. Va. Feb. 7, 2023), Virginia Magistrate Judge Robert S. Ballou declined to award sanctions against the defendant because of its vendor error causing a late production, “finding…that any prejudice to Fluor as a result of BAE’s production error has been cured and additional sanctions are not warranted.”

Case Discussion

This “complex” construction case involved voluminous document production, which the parties exchanged on a rolling basis throughout the discovery period and had numerous disputes, leading to several discovery conferences with the court.

On June 3, 2022, the court granted defendant’s motion to amend the scheduling order and continued the discovery deadline to September 16, 2022. The defendant discovered an error on June 13, 2022 by its eDiscovery vendor which caused an under-disclosure of a significant number of documents. The defendant notified the plaintiff of this error three days later. The court held an informal discovery conference regarding the vendor error and its implications and entered an order on July 14, 2022, requiring the rolling production of the newly discovered documents, with production to be completed by August 1, 2022. The defendant produced over 79,000 additional documents, all within the deadline. As a result of the defendant’s supplemental production, the plaintiff re-deposed five fact witnesses, but still sought to recover the fees and costs it incurred to prepare for and take the five depositions, and the fees to prepare for and argue this motion for sanctions.

The plaintiff argued that sanctions were appropriate under Rules 16(f) and 37(c) because the defendant failed to supplement its document production in a “timely” manner and failed to have reasonable procedures in place to preserve and locate responsive documents. The plaintiff emphasized that it repeatedly warned the defendant of deficiencies with BAE’s document production in this case, including noting that the plaintiff had produced four times as many documents as the defendant and identifying multiple custodians with low document counts.

The defendant responded it was able to explain each deficiency and did not suspect any vendor discovery issues until June 8, 2022, also arguing that sanctions were not appropriate under the circumstances because it “did not violate the court’s scheduling order, the order specifically addressing the vendor error, or any other order that could justify the award of sanctions.” It also stated that because its document production was completed over a month before the close of discovery, it cannot be considered untimely.

Judge’s Ruling

Judge Ballou stated: “I agree with Fluor that the eighty thousand documents mistakenly withheld due to BAE’s vendor error and produced between June and August 2022 were not timely disclosed. BAE would have produced these documents earlier in litigation, but for the vendor de-duplication error. Indeed, BAE acknowledges that the documents at issue were improperly identified as duplications by its vendor, and thus were not produced in BAE’s regular document production. Ultimately, the vendor error is BAE’s error and the late document supplementation, although within the discovery deadline, was untimely.”

Continuing, he said: “However, applying the Southern States five-factor test to determine the appropriate sanction under Rule 37(c), I do not find additional sanctions warranted. While the document production resulting from the vendor error was a surprise to Fluor, BAE immediately notified Fluor of the error, cured any surprise by producing the documents within the deadline set by the court, and allowed Fluor to re-depose necessary witnesses. Fluor received the documents within the discovery period and the additional evidence did not disrupt any motions deadlines or the trial date…Fluor does not argue (and cannot) that the late production impacted its ability to fully prosecute its case at trial.”

Concluding, Judge Ballou stated: “BAE promptly notified Fluor and the court of the mistake, provided timely document supplementation, and agreed to the re-deposition of the witnesses identified by Fluor – the precise sanction I could have and would have imposed because of the late production. Imposing sanctions in this situation would only serve to discourage parties from disclosing and addressing discovery errors in the future.”

So, what do you think? Is it fair that the plaintiff had to re-depose the witnesses on its own dime? Please share any comments you might have or if you’d like to know more about a particular topic.

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