How many times can a litigant ignore his discovery obligations before his misconduct catches up with him? The plaintiffs in this case failed to produce documents in response to a discovery request. Then they proceeded to violate not one but two judicial orders compelling production of the requested materials. After patiently affording the plaintiffs chance after chance, the district court eventually found the intransigence intolerable and dismissed the case as sanction. We affirm. Our justice system has a strong preference for resolving cases on their merits whenever possible, but no one, we hold, should count on more than three chances to make good a discovery obligation.
Circuit Judge Neil Gorsuch,
Lee v. Max Int’l, LLC, 638 F.3d 1318 (10th Cir. Utah 2011)
The Plaintiffs in Lee v. Max Int’l, LLC, engaged in discovery misconduct that included an inadequate document production that drove the Defendants to file a motion to compel. A magistrate judge issued a discovery order to produce the requested material. A limited amount of information was produced, driving the Defendants to the courthouse again. Lee, at *2-3.
The magistrate judge stopped short of dismissing the case and ordered the Plaintiffs to produce the requested discovery. Lee, at *3.
Some discovery was produced; along with a declaration stating all discovery had been produced. Lee, at *3.
The production lacked certain requested information, such as specifically requested tax information, and the Defendants went back to court. Lee, at *3.
As one can imagine, the magistrate judge was not happy to see the Plaintiffs did not follow two court orders. Lee, at *3.
The magistrate recommended the Plaintiffs’ complaint be dismissed, which the District Court did. An appeal followed. Lee, at *4.
The Court of Appeals had no sympathy for the Plaintiffs. Moreover, the Court of Appeals noted that “district courts enjoy ‘very broad discretion to use sanctions where necessary to insure . . . that lawyers and parties . . . fulfill their high duty to insure the expeditious and sound management of the preparation of cases for trial.’” Lee, at *4, citing In re Baker, 744 F.2d 1438, 1440 (10th Cir. 1984) (en banc).
The Court of Appeals recounted that the Plaintiffs had three chances to comply with the discovery requests. First, was responding to the original request. Second, after the first motion to compel. Finally, after the second motion to compel. Lee, at *6-7. As the Court of Appeals explained:
[A] party’s thrice repeated failure to produce materials that have always been and remain within its control is strong evidence of willfulness and bad faith, and in any event is easily fault enough, we hold, to warrant dismissal or default judgment.
Lee, at *7.
However, there was another issue the bothered the Court of Appeals down to its core: A false declaration.
As the Court of Appeals explained:
Once the plaintiffs chose to declare — under penalty of perjury, no less — that their production of tax records was now compliant with the January 2010 order, the game was up. The court and defendants were entitled to take that sworn declaration to the bank, to rely upon it, to consider the matter closed. Yet, the plaintiffs produced the tax records only after Max uncovered the falsity of the declaration and only after Max was forced to file yet another motion concerning their production.
None of this should’ve been necessary. And none of this, in any reasonable sense, demonstrates “compliance” with the January 2010 order. Discovery is not supposed to be a shell game, where the hidden ball is moved round and round and only revealed after so many false guesses are made and so much money is squandered.
Lee, at *11.
In the final analysis, the Court of Appeals found the District Court did not abuse its discretion in dismissing the Plaintiffs’ complaint. Lee, at *15-16.
Bow Tie Thoughts
Few actions upset a court more than false declarations and failing to comply with court orders. While courts prefer cases heard on their merits and loath issuing defaults, the threat of a default judgment is a very powerful sanction to ensure compliance with discovery responsibilities.