Skyline Risk Management, Inc. v. Legakis

Background

Defendants sought sanctions after Skyline failed to produce George Menexas, its corporate representative under Federal Rule of Civil Procedure 30(b)(6), for a properly noticed deposition. Defendants had raised the scheduling problem with the court, and the court later ordered Skyline to produce an adequate corporate representative by January 31, 2023. The order allowed Skyline to use a different representative, but Skyline did not produce one. The court also noted that Skyline had obtained new counsel during this period.

Requested sanctions

Defendants requested three forms of relief: dismissal of Skyline’s claims, a judgment against Skyline on Defendants’ counterclaims, or, alternatively, an adverse inference preventing Skyline from using evidence supporting its claims. Defendants also sought fees and costs related to the missed deposition, the earlier letters to the court, and the sanctions motion.

Court’s analysis

The court explained that Rule 37 allows sanctions when a party does not obey a discovery order. Possible sanctions include establishing facts against the disobedient party, limiting evidence, striking pleadings, dismissing claims, entering judgment based on default, or holding the party in contempt. Rule 37 also generally requires payment of reasonable expenses caused by a failure to appear for a properly noticed deposition unless the failure was substantially justified or paying expenses would otherwise be unjust.

The court declined to impose dismissal, a judgment based on default, or an adverse inference at that time. It stated that the legal system generally favors resolving cases on their merits and that these sanctions were extreme remedies that did not yet fit the conduct. The court extended fact discovery until May 31, 2023, solely for the corporate-representative deposition, regardless of whether Menexas or another witness served as the representative. The court stated that it would impose an adverse inference if the deposition was not completed by that deadline.

The court rejected Skyline’s argument that prior counsel’s failure to keep Skyline informed excused the missed deposition because Skyline had not provided evidence that prior counsel had failed in those duties. The court found that Defendants’ court-reporter, travel, and exhibit-binder expenses were directly caused by the missed deposition. It also found that Defendants could recover reasonable fees and costs for preparing the earlier letter motions and the sanctions motion.

Disposition

The court granted in part Defendants’ sanctions motion. It awarded sanctions for fees and costs associated with the deposition and the sanctions motion, ordered Defendants to submit an updated fee request, and reserved whether further briefing would be needed. It extended fact discovery until May 31, 2023, solely for taking Skyline’s corporate-representative deposition.