BANS PASTA, LLC, Plaintiff, v. MIRKO FRANCHISING, LLC, et al. Defendant and Counterclaim Plaintiff. v. Bans Pasta, LLC, et al. Counterclaim Defendants Civil Action No.: 7:13-CV-360 United States District Court, W.D. Virginia, Roanoke Division Signed February 06, 2015 Counsel Beshoy Rizk, Pro Hac Vice, Himanshu M. Patel, Pro Hac Vice, Robert Mitchell Einhorn, Pro Hac Vice, Zarco Einhorn Salkowski & Brito, P.A., Miami, FL, Melissa Walker Robinson, Michael James Hartley, Glenn Robinson Cathey Memmer & Skaff, PLC, Roanoke, VA, for Plaintiffs/Counterclaim Defendants Bans Pasta, LLC. Charles Carter Lee, Francis H. Casola, Woods Rogers PLC, Roanoke, VA, Jeffrey William Deloach, Pro Hac Vice, Fortson, Bentley and Griffin, P.A., Athens, GA, for Defendant and Counterclaim Plaintiff. Himanshu M. Patel, Zarco Einhorn Salkowski & Brito, P.A., Miami, FL, for Counterclaim Defendants Randy A. Sowden, Michael X. Boggins Ballou, Robert S., United States Magistrate Judge ORDER *1 In this franchising dispute, Plaintiff, Bans Pasta, LLC, filed a motion for sanctions against Defendants Mirko Franchising, LLC, Mirko Di Giacomantonio, and Archie B. Crenshaw (collectively “Defendants”) for fraud upon the court and spoliation of evidence. Dkt. No. 105. The motion has been fully briefed, and the court held oral argument on February 3, 2015. During the hearing, the court allowed the parties to raise additional factual issues regarding the court's prior ruling on Defendants' motion to quash a subpoena duces tecum (Dkt. No. 110), and the motion to reconsider the motion to quash (Dkt. No. 113). Having carefully considered the filings and hearing oral argument, I find that Plaintiff's motion for sanctions should be GRANTED in part, as discussed below. I. Defendants' Motion to Reconsider the Court's Ruling on Motion to Quash The motions before the court stem from two subpoenas duces tecum issued by Plaintiff to Astila Corporation, a company that provides IT services to Defendants such as email hosting and online document storage. One subpoena sought documents that Astila stores on its server on behalf of Defendants (“the Mirko subpoena”). The other subpoena sought documents Astila stores on its server for the email account of Bret Eldridge, Mirko Franchising LLC's former Chief Operations Officer (“the Eldridge subpoena”). Defendants filed a motion to quash the Mirko subpoena on the grounds of privilege and relevance. Astila produced documents responsive to both subpoenas to Plaintiff, but Plaintiff and Defendants agreed that Plaintiff would not review the documents responsive to the Mirko subpoena until the court resolved Defendants' motion to quash. Meanwhile, Plaintiff reviewed the documents produced in response to the Eldridge subpoena (“the Eldridge documents”) and filed a motion for sanctions attaching those documents. On January 20, 2015, the court issued a ruling granting in part Defendants' motion to quash the Mirko subpoena. At the time of its ruling, the court was not aware that two subpoenas were issued to Astila, and that Plaintiff had reviewed only the documents responsive to the Eldridge subpoena, but had not reviewed documents responsive to the Mirko subpoena. Thus, the court's ruling on the motion to quash and subsequent ruling on the motion to reconsider both stated that Defendants' objections to the subpoena on the grounds of relevance were moot because Plaintiff had already reviewed the documents and filed a motion for sanctions based upon that review. Dkt. No. 110 & 113. The court also concluded that Defendants had not waived the protection of the work product doctrine and attorney-client privilege, and thus granted the motion to quash the subpoena as to those privileged documents. Dkt. No. 110. The parties subsequently informed the court that there were, in fact, two subpoenas duces tecum issued to Astila, and Plaintiff had not reviewed the documents responsive to the Mirko subpoena that Defendants were seeking to quash. Accordingly, the court agreed to reconsider its ruling on Defendants' motion to quash on the grounds of relevance. The court's need to reconsider was rendered moot, however, by the court's ruling on the motion for sanctions set forth below. II. Plaintiff's Motion for Sanctions *2 Plaintiff moves for sanctions against Defendants under Federal Rule of Civil Procedure 37, alleging that Defendants failed to produce all documents responsive to Plaintiff's document requests, and failed to fully comply with this court's order compelling Defendants to produce certain documents. Plaintiff also argues that Defendants engaged in spoliation by failing to properly preserve documents relevant to this litigation. Dkt. No. 105. Plaintiff bases its motion on documents obtained from the Eldridge subpoena, which are responsive to Plaintiff's requests for production and were not identified or produced by Defendants in discovery, despite repeated requests from Plaintiff and an order from this court compelling production. Defendants object to the motion, alleging that they responded to Plaintiff's document requests in good faith, provided all responsive documents found within their possession, custody or control, and properly complied with this court's order compelling the production of certain documents by responding that no such documents exist. Dkt. No. 120. A party that fails to properly provide information in discovery as required by the Federal Rules faces sanctions pursuant to Rule 37(c)(1), “unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). The determination of whether a discovery violation is justified or harmless is entrusted to the broad discretion of the district court. Reed v. Washington Area Metro. Transit Auth., No. 1:14cv65, 2014 WL 2967920, at *2 (E.D. Va. July 1, 2014). The party facing sanctions bears the burden of establishing justifiability or harmlessness. Southern States Rack and Fixture, Inc., v. Sherwin-Williams Co., 318 F.3d 592, 596 (4th Cir. 2003). Likewise, Rule 37(b)(2) provides for the imposition of sanctions when a party fails to obey an order to provide or permit discovery. Rule 37(b)(2) sets forth a non-exhaustive list of available sanctions for failing to obey a discovery order, which are not mutually exclusive, and the court has wide discretion to impose any disposition that is just in light of the specific facts of each individual case. Mutual Federal Sav. & Loan Ass'n v. Richards & Assoc., Inc., 872 F.2d 88, 92 (4th Cir. 1989). However, sanctions should never be imposed “when it has been established that failure to comply has been due to inability, and not to willfulness, bad faith, or any fault of the [non-complying party].” Wilson v. Volkswagen of Am., Inc., 561 F.2d 494, 503 (4th Cir. 1977). Here, documents obtained from the Eldridge subpoena are responsive to Plaintiff's requests for production and were not identified or produced by Defendants in discovery, despite the fact that many of the documents are emails with attachments that were copied to the email addresses of Defendants Archie Crenshaw and Mirko Di Giacomantonio.[1] These documents should have been found in a proper and thorough search of Defendants' computer systems and email accounts. Defendants have no explanation for why these documents were not identified and produced in discovery, aside from maintaining their position that they performed a good faith search as required by the Federal Rules and did not find these documents. *3 With regard to their document review, Defendants represent that their company is a small business with three salaried employees, Archie Crenshaw, Mirko Di Giacomantonio and Sylvia Vargas. Ms. Vargas, the comptroller, took the lead on searching for and assembling documents in response to Plaintiff's discovery requests. Dkt. 120-8, p. 3. Defendants represent that they provided Mr. Crenshaw and Ms. Vargas with Plaintiff's discovery requests and “told them what to look for,” and that Ms. Vargas searched Defendants' computer system, including email accounts and documents stored with Astila. However, Defendants could not provide the court with details regarding the specific methodology of Ms. Vargas's search, the search terms she used, and whether there was any oversight or quality controls in place to ensure that all responsive documents were captured and made available to Defendants' attorneys for review and production. Defendants had an obligation under the Federal Rules of Civil Procedure to conduct a reasonable search for relevant documents and produce those documents responsive to discovery requests.[2] Here, Defendants have failed to demonstrate that the search they performed of their electronic data was reasonable. Rather, Defendants' document review, with no oversight or quality control mechanisms in place was, at best, negligent, and sanctions are appropriate. See Beach Mart, Inc. v. L & L Wings, Inc., 302 F.R.D. 396, 412 (2014) (Holding that sanctions may be imposed even for negligent failures to provide discovery.) While the court does not attribute bad faith to Defendants, the Eldridge documents reflect that Defendants' document review and production was not complete. Further, because Defendants could not identify for the court the search terms and methods they previously used, the court is not satisfied that Defendants will locate all responsive documents in a subsequent search. Accordingly, I find that sanctions are necessary to eliminate any prejudice to Plaintiff and ensure that all responsive discovery is produced in this case. When determining what sanctions to impose under Rule 37, the court is guided by the four part test set forth by the Fourth Circuit in Wilson v. Volkswagen of Am., Inc., 561 F.2d at 505–06. As set forth in Wilson, the court should consider the following factors before imposing severe sanctions: 1) whether the non-complying party acted in bad faith; 2) the amount of prejudice that noncompliance caused the adversary; 3) the need for deterrence of the particular sort of non-compliance; and 4) whether less drastic sanctions would have been effective. Mutual Federal Sav. & Loan Ass'n, 872 F.2d at 92. The proper sanction must be no more severe than is necessary to prevent prejudice to the movant. Wilson, 561 F.2d at 504. Having considered the facts of this case and the prejudice Plaintiff incurred as a result of Defendants' incomplete document production, I find that Plaintiff's motion for sanctions should be GRANTED to the extent that: *4 1. Defendants shall produce to Plaintiff all non-privileged documents produced by Astila in response to the Mirko subpoena. The documents shall be provided to Plaintiff on a rolling basis, and production shall be completed within thirty (30) days from the date of this order. 2. Within fourteen (14) days from the date of this order, the parties shall confer and agree upon specific search terms for a search of the personal computers of Defendants Mirko Di Giacomantonio and Archie B. Crenshaw. Defendants shall conduct a review of those computers using the agreed upon search terms, and counsel for Defendants shall certify to Plaintiff that the search was conducted in accordance with the terms of this order. 3. Discovery shall be reopened for a period of sixty (60) days from the date of this order to allow Plaintiff to conduct additional discovery related to any documents produced pursuant to this order. 4. Defendants shall bear the court reporter fees and any other additional costs of any depositions taken or reopened as a result of these document production issues. 5. Plaintiff's request for more severe sanctions, such as striking Defendants' affirmative defenses and giving an adverse inference instruction in favor of Plaintiff at trial is denied. The sanctions imposed by the court should cure the prejudice Plaintiff suffered from Defendants' failure to produce all responsive documents. Additionally, until Plaintiff has an opportunity to review all of the documents produced pursuant to this order, it cannot prove that Defendants have either failed to preserve or destroyed documents; thus, Plaintiff's motion for sanctions based upon spoliation is moot. 6. Plaintiff's request to be reimbursed for attorneys' fees and expenses incurred in connection with the issues raised in this motion is denied. Plaintiff may renew its request for fees, if appropriate, at a later date. 7. Given the need to reopen discovery, the dispositive motion hearing and trial of this matter will be continued to a later date. It is SO ORDERED. Footnotes [1] Defendants' assertion that the Eldridge documents are not responsive to Bans Pasta's requests for production is unavailing. Defendants assert that Plaintiff should have drafted its document requests more precisely, to identify the particular documents in Defendants' possession that it sought. Defendants' argument construes Plaintiff's discovery requests in an unreasonably narrow manner, and contradicts the spirit of the Federal discovery rules. Discovery requests “should not be read or interpreted in an artificially restrictive or hypertechnical manner to avoid disclosure of information fairly covered by the discovery request.” Fed. R. Civ. P. 37, Advisory Committee's Notes (1993 Amendments). “[T]he spirit of the [R]ules is violated when advocates attempt to use discovery tools as tactical weapons rather than to expose the facts and illuminate the issues ...” Fed. R. Civ. P. 26, Advisory Committee's Notes (1983 Amendments). Further, gamesmanship to evade answering discovery requests is not allowed. Wagner v. St. Paul Fire & Marine Ins. Co., 238 F.R.D. 418, 422 (N.D.W. Va. 2006). [2] The Federal Rules contemplate that the parties will cooperate early in the discovery process and develop a reasonable discovery plan that includes identifying search terms and agreeing upon parameters for searching electronically stored information. See Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228, 245 (D. Md. 2005) (“[C]ounsel have a duty to take the initiative in meeting and conferring to plan for appropriate discovery of electronically stored information at the commencement of any case in which electronic records will be sought.) Here, the parties did not agree upon specific search terms or methods for searching electronically stored information. However, Plaintiff's requests for production clearly identified its interest in discovering documents that were stored electronically and Defendants had an obligation to conduct a reasonable search of those documents.