Stingray Music USA, Inc. v. uCast LLC

Background

The court had previously sanctioned uCAST twice for failing to comply with discovery obligations and court directives. Those earlier orders required Stingray to identify the factual matters it wanted to address through a company witness under Federal Rule of Civil Procedure 30(b)(6). uCAST then had three weeks either to provide such a witness or to tell the court that no suitable witness existed. The court had also warned that, if no witness was timely identified, Stingray’s factual propositions would be treated as proven unless documentary materials in the record contradicted them.

Stingray submitted its proposed factual propositions on May 20, 2020, making uCAST’s response due June 11, 2020. According to the opinion, uCAST did not timely identify a witness or state that no suitable witness existed. On June 19, uCAST’s counsel said that no witness had been provided and that counsel intended to withdraw. Counsel moved to withdraw on June 22, citing uCAST’s continued lack of assistance and cooperation. Later that day, counsel notified Stingray that uCAST had finally designated a Rule 30(b)(6) witness, but Stingray had not received the information needed to schedule the deposition.

Court’s reasoning

The court stated that sanctions are an appropriate tool for dealing with a party that disregards court orders. It found that uCAST had ignored the court’s instructions despite earlier monetary sanctions and warnings about more serious consequences. The court concluded that waiting for new counsel to become familiar with the case could delay the deposition for months and would unfairly delay Stingray’s litigation.

Ruling

The court granted Stingray’s third motion for sanctions. It ordered uCAST to pay Stingray $5,000 within three weeks for the costs of bringing the motion and in recognition of uCAST’s conduct, stating that uCAST would face further sanctions if it did not pay. The court also deemed proven, unless later directly controverted by documentary evidence, the factual propositions Stingray submitted.

Those propositions covered the negotiations and terms of the asset-purchase, transition-services, and software-license agreements; uCAST’s transfer of Qello Concerts and related source code; uCAST’s consulting agreements and payment history with X3EAM or Nextstream LLC; notices and communications concerning defaults; uCAST’s counterclaim damages; allegations in a related case; and uCAST’s document-preservation practices. The opinion’s conclusion says “Defendant’s motion” was granted, but the surrounding text identifies the ruling as granting Stingray’s third sanctions motion, and the order closes Stingray’s motion at ECF No. 43.