ABKCO Music & Records, Inc. v. Coda Publising, Ltd.

Background

The plaintiffs alleged that the defendants produced and distributed documentary films containing recordings of performances by musical acts including Lynyrd Skynyrd, The Rolling Stones, ABBA, U2, Nirvana, Elton John, and the Red Hot Chili Peppers. The plaintiffs claimed ownership of copyrights in the musical compositions and performance recordings and alleged that the defendants lacked permission to use them.

The parties had already briefed cross-motions for summary judgment and motions to preclude expert testimony. The discovery dispute concerned ten documents attached to a declaration supporting the plaintiffs’ summary-judgment motion. The documents purported to establish the plaintiffs’ ownership interests in certain Rolling Stones compositions. The plaintiffs had not produced them in response to the defendants’ discovery requests, before a relevant deposition, or at another time during the litigation.

Discovery violation

Federal Rule of Civil Procedure 26 requires parties to disclose documents in their possession, custody, or control that they may use to support their claims or defenses. Rule 37 permits sanctions when a party fails to make a required disclosure, unless the failure was substantially justified or harmless.

The court found that the plaintiffs violated Rule 26(a)(1) by disclosing the ten documents for the first time with their summary-judgment papers. The plaintiffs conceded that the documents should have been produced earlier. The court also found that the failure was not substantially justified or harmless. The plaintiffs’ explanations, including the COVID-19 pandemic and limitations in their electronic recordkeeping practices, did not justify the violation. The late disclosure prevented the defendants from questioning the plaintiffs’ designated representative, Jody Klein, about the documents during an earlier deposition.

Choice of sanction

The court considered the plaintiffs’ explanation, the importance of the documents, the prejudice to the defendants, and whether a continuance was feasible. The court found that the plaintiffs were negligent but did not find that they intentionally withheld the documents. It also found that the documents were critical to the plaintiffs’ ownership and standing arguments, meaning that excluding them could prevent the plaintiffs from continuing to pursue their claims.

The court concluded that the prejudice could be addressed through sanctions less severe than dismissal or exclusion. It therefore granted in part the defendants’ motion for discovery sanctions under Rule 37. The court ordered:

- limited reopening of fact discovery so the defendants could depose Klein about the ten documents; - reopening of the summary-judgment briefing schedule so the defendants, but not the plaintiffs, could file a supplemental brief of no more than ten pages concerning the supplemental deposition; and - payment by the plaintiffs of the defendants’ reasonable expenses for litigating the sanctions motion, conducting the supplemental deposition, and filing the anticipated supplemental brief.

The court did not dismiss the case and did not exclude the ownership documents. It deferred ruling on the pending cross-motions for summary judgment and motions to preclude expert testimony until after the supplemental briefing. The court also administratively stayed the case and warned that further discovery violations could lead to more severe sanctions.