Shnyra v. State Street Bank and Trust Co., Inc.

Background

Ksenia Shnyra, Alexander Reyngold, and Kenneth Walker sued State Street Bank and Trust Co., Inc., alleging discrimination based on age and gender and retaliation under state and federal statutes. The Court had denied State Street’s motion to dismiss in March 2020.

The Court issued a discovery schedule in May 2020 and emphasized that the deadlines were real deadlines. The plaintiffs missed the deadlines for medical-record authorizations and initial disclosures. They also failed to serve their own discovery requests by the required date and did not timely respond to State Street’s requests for documents and answers to written questions.

After several extensions, including extensions based on health-related reasons involving plaintiffs’ lawyer, the Court ordered the plaintiffs to provide their discovery responses by September 18, 2020. The plaintiffs did not meet that deadline. They later provided some materials, but the productions were incomplete, some answers were not verified, and materials from one plaintiff were missing. The plaintiffs’ lawyer gave several explanations for the delays, including health problems, technical problems with a file-sharing service, and difficulty obtaining information from the plaintiffs.

State Street repeatedly contacted plaintiffs’ counsel, participated in conferences, and asked the Court to intervene. State Street then moved for sanctions under Rule 37 of the Federal Rules of Civil Procedure and the Court’s inherent authority. State Street sought dismissal as the most severe sanction. The plaintiffs’ counsel opposed sanctions, citing personal and health-related difficulties and arguing that the delays were not willful and had not prejudiced State Street.

Legal standard

Rule 37 allows a court to impose sanctions when a party fails to obey a discovery order. Possible sanctions include establishing facts against the noncompliant party, limiting evidence, striking pleadings, staying the case, dismissing claims, entering default judgment, and treating the failure as contempt. The Court considered the willfulness of the noncompliance, the length of the delay, whether lesser sanctions would work, prior warnings, and prejudice to State Street.

The Court also explained that Rule 37 generally requires an award of reasonable expenses caused by a discovery violation unless the failure was substantially justified or other circumstances would make an award unjust. The Court further stated that a party’s failure to respond to discovery on time can waive available objections, particularly when the party does not respond even after Court intervention.

Court’s analysis

The Court found that the plaintiffs’ noncompliance was willful. It concluded that the September 18 order was clear, that the plaintiffs understood their obligations, and that their failure was caused by a lack of diligence rather than circumstances beyond their control. The Court relied on the repeated missed deadlines, the plaintiffs’ failure to meet deadlines they had requested themselves, their changing explanations, and their failure to provide a reasonable plan for completing discovery.

The Court recognized the health problems raised by plaintiffs’ counsel and stated that it had granted the requested extensions. But the Court concluded that those circumstances did not substantially justify the continued failures, particularly because the plaintiffs still did not comply with later deadlines.

The Court found that lesser sanctions were available and therefore did not impose dismissal. It warned that additional sanctions, including dismissal, could be considered if the plaintiffs’ conduct continued or if State Street incurred further direct costs because of the same misconduct.

The Court also found that State Street had incurred prejudice because it had to spend money and attorney time pursuing information that should have been provided. The Court ruled that the plaintiffs had waived objections to State Street’s discovery requests because they had not fully responded despite Court intervention and had not shown good cause for the continued delay.

Disposition

The opinion’s opening states that State Street’s motion for sanctions was granted. The Court ordered the plaintiffs and their counsel to jointly and severally pay State Street’s reasonable fees and expenses incurred in pursuing the overdue discovery after September 18, 2020, including costs connected with emails, letters to the Court, conferences, and the sanctions motion. State Street was directed to submit a fee application by December 11, 2020.

The conclusion contains an apparent wording inconsistency: it says, “Plaintiffs’ motion for sanctions is granted in part and denied in part,” even though the opinion describes State Street as the party seeking sanctions and otherwise states that sanctions were imposed while dismissal was not. The substance of the ruling was that sanctions were ordered, dismissal was not imposed at that time, and the plaintiffs waived objections to State Street’s discovery requests.