Cox v. German Kitchen Center LLC

Background

The court had previously ordered Mark Cox to respond to a subpoena in his capacity as officer and principal of non-party Mark Cox Designs, Inc. The earlier order found that the subpoena sought relevant information and was not unduly burdensome. It required Cox to respond by September 8, 2020, and required Mayan Metzler to be deposed in person by September 15, 2020. Cox later obtained stays concerning production of tax returns, and his objections to the earlier order remained pending during the period relevant to these motions.

The defendants moved under Federal Rule of Civil Procedure 45(g) for civil contempt and under Rule 37(b)(2)(A) for discovery sanctions. They argued that Cox had violated the earlier order by failing to answer all interrogatories and document requests fully, repeating objections, and responding “N/A” to some requests. They sought a default judgment, dismissal of Cox’s complaint, or a negative inference against him.

Cox opposed the defendants’ motion and cross-moved under 28 U.S.C. § 1927 for sanctions against the defendants’ counsel. He argued that the defendants’ motion was frivolous and that the requested documents had been produced, did not exist, or were not in his possession, custody, or control. He also stated that a technical problem delayed transmission of the tax returns, which he said he later uploaded to an online server accessible to defense counsel.

Ruling on the Motions

The court denied the defendants’ motion, docket entry 62, and denied Cox’s cross-motion, docket entry 67.

First, the court ruled that both motions had been made improperly while a stay concerning the tax-return production was in effect and while Cox’s objections to the earlier order were pending. The court stated that this independently supported denying both motions.

The court then addressed the merits of the requests in the alternative. It found that the earlier order was clear and unambiguous, but concluded that the defendants had not presented clear and convincing evidence that Cox violated it. The defendants had not identified language in the earlier order that barred Cox’s objections based on vagueness or the scope of discovery. Cox’s statements that documents had already been produced, did not exist, or were not in his possession tended to show an inability to comply rather than a violation. The court also found no factual basis to show a violation concerning the tax documents and declined to certify contempt facts to the assigned district judge under 28 U.S.C. § 636(e).

The court separately ruled that Rule 37 sanctions were not warranted. It identified inconsistencies in defense counsel Aaron H. Pierce’s declarations about which discovery requests were contained in the subpoena and concluded that the defendants appeared to seek sanctions concerning discovery requests that were not part of the subpoena resolved by the earlier order.

The court also denied Cox’s request for sanctions under 28 U.S.C. § 1927. Cox had not shown that defense counsel multiplied the proceedings unreasonably and vexatiously. The court noted that Cox relied primarily on conclusory assertions and that the earlier motion to compel had not been found frivolous.