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Court Sanctions Wells Fargo For Failure to Obey an ESI Discovery Order

Posted on August 11th, 2017

sanctions against a partyIn United States District Court, E.D., California case Bird v. Wells Fargo Bank, (Case No. 1:16-cv-01130-DAD-EPG), Plaintiff Kimberly Sue Bird (“Plaintiff”) has filed a motion to compel and for sanctions contending in part that Defendant Wells Fargo Bank (“Defendant”) failed to comply with the Court’s March 31, 2017 discovery order. Specifically, that order required that Defendant produce documents consistent with this order and schedule its production on a rolling basis to conclude no later than June 1, 2017. It is undisputed that Defendant failed to produce the required discovery by that deadline, without obtaining an extension from the Court.

The Court previously issued a discovery order on March 31, 2017 ordering defendant Wells Fargo to immediately design and implement a discovery plan to diligently and in good faith produce documents consistent with this order and schedule its production on a rolling basis to conclude no later than June 1, 2017 (see our previous article discussing that dispute). The order set out the scope of discovery, and ordered Wells Fargo to produce eleven sets of documents by June 1, 2017, to disclose the scope of its search including any search terms, custodians or other limitations within two weeks from the order, and to produce a privilege log.

Plaintiff filed a motion to compel and motion for sanctions against Defendant on April 28, 2017. Plaintiff stated that Defendant still has not begun its rolling production of ESI as ordered in the Court’s discovery order. Defendant Wells Fargo informed the Court that it did not produce data regarding the age and gender of employees terminated by the June 1, 2017 deadline. Second, Defendant did not produce electronically-stored information in a rolling format and did not intend to adhere to the June 1 deadline, as ordered. Plaintiff requested sanctions.

Under FRCP 37(b), the Court may impose sanctions against a party for the failure to obey a discovery order or permit discovery. The potential sanction may be to allow designated facts to be taken as true for purposes of the action, as the prevailing party claims, prohibiting the non-compliant party from using certain claims or defenses, or from introducing certain items into evidence. The Court may strike certain pleadings, stay further proceedings until the party is compliant, render a default judgment against that party, or treat the disobedience as contempt of court.

FRCP 37(b)(2)(A)(i)-(vii) says, instead of or in addition to the orders above, the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified.

Defendant Wells Fargo admitted it was in non-compliance, and the Court stated that it did not think the Defendant would comply with the discovery orders without being compelled by the Court. Defendant’s delay tactics caused prejudice to Plaintiff’s ability to prosecute her case. Plaintiff has incurred substantial attorney fees in filing the motions to compel and attending discovery hearings, has been unable to schedule depositions, and finds it unlikely that the parties will be able to comply with the present discovery schedule, which has already been modified on at least one prior occasion.

Although Defendant Wells Fargo eventually did comply, the Court stated that because of the repeated issues with discovery, the Court could not let the failure to abide by a clear court order go without any sanction. Under Rule 37, “the court must order disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified…” Therefore, the Court ordered Wells Fargo to pay fifty-percent of the reasonable costs and attorney fees associated with the filing of the April 28, 2017 motion to compel and motion for sanctions, inclusive of the costs and attorney fees associated with preparing Plaintiff’s May 27, 2017 filings and attendance at the June 1, 2017 hearing.

ILS–Plaintiff ESI Discovery Experts

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