The Court reserves ruling on the sanctions request at this time, and will address that request by a separate order. This Order addresses the Motion to Compel Production (R. Doc. 101). It was heard by oral argument on September 4, 2013.

This action arises out of the alleged trademark infringement of Plaintiff, Premier Dealer Services, Inc.'s (“Premier Dealer”) customer loyalty programs and other products for interstate automobile dealers. (R. Doc. 1, p. 5). This action has been ongoing for quite some time. The crux of this dispute centers around customer loyalty programs used for interstate automobile dealers. (R. Doc. 1, p. 5). Premier Dealer alleges that Defendants, which included Troy Duhon and Premier Automotive[1] were contacted in 2010 by Premier Dealer's agent, now third-party defendant, Dealer Services South, Inc. (“DSS”). Id. at 7. Defendants allegedly indicated that they were interested in participating in the program. Id. DSS then established a relationship with Defendants, sharing certain proprietary business information with them. See id.

On January 10, 2011, Premier Dealer alleges that Defendants indicated their willingness to enter a long-term business relationship with it. Id. On September 20, 2011, Premier Dealer alleges that it entered into contracts called “Administration Agreements” with each of the Defendants. Id. at 8. These Agreements required Defendants to participate in the Lifetime Powertrain Protection and Lifetime Engine Protection plans, to arrange for insurers, and to process claims. Id. The Agreements also included provisions regarding the use of Premier Dealer's intellectual property and proprietary information. See id.

Premier Dealer alleges that it subsequently learned that Defendants had copied its marketing and administrative materials, in contravention of the Administrative Agreements. See id. at 9. Premier Dealers allege that Defendants' true intention was not to enter into a business relationship with it, but rather to gain access to Premier Dealers' materials, training expertise, and trade secrets. Id. at 10.

As to the instant Motion, Defendants' allege that DSS failed to comply with its discovery requests related to the allegations in Defendants' Third-Party Complaint. (R. Doc. 101). Specifically, Defendants move this Court impose sanctions on Third-Party Defendant, Dealer Services South, (“DSS”) for responding to discovery requests inadequately, for failing to produce relevant documents referenced during the deposition of DSS's Chief Executive Officer, (“CEO”) Marc Mader (“Mader”), and for the alleged destruction of an iPad and original e-signature of one of DSS's employees who allegedly signed the agreements with Defendants. Id.

*2 Federal Rule (“Rule”) of Civil Procedure 26 requires a party to produce non-privileged documents which are relevant to the subject matter involved in the pending action. That requirement embraces documents and information that are reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1); see also Yelton v. PHI, Inc.,279 F.R.D. 377, 384 (E.D. La. 2011).

This broad duty of disclosure extends to all documents that fit within the definition of relevance for the purposes of discovery—whether the documents are good, bad, or indifferent. Id. See also Danis v. USN Communications, Inc., No. 98–7482, 2000 WL 1694325, at *1 (N.D. Ill., October 20, 2000). “Self-reporting is, in fact, a central concept of the discovery process. The duty of disclosure finds expression in the rules of discovery, and in this Court's Rules of Professional Conduct, which prohibit an attorney from suppressing any evidence that he or his client has a legal obligation to reveal or produce.” Yelton, at 384-385.

“The duty of disclosure would be a dead letter if a party could avoid the duty by failing to preserve documents that it does not wish to produce.” Id.Therefore, “fundamental to the duty of production of information is the threshold duty to preserve documents and other information that may be relevant in a case.” Id. See also Danis, 2000 WL 1694325, at *1. Furthermore, there is no “bad document” exception to the duties of preservation and production. Id. The duties are twin obligations that are a part of the legal system and are applicable to lawyers and parties engaged in litigation.

“Rule 37 applies to circumstances in which a party has violated a court order, such as a discovery ruling.” Yelton, at 385. See also Fed. R. Civ. P. 37(b)(2); Brandt v. Vulcan, Inc., 30 F.3d 752, 756 (7th Cir. 1994). The Court's own authority encompasses its “inherent power to impose sanctions for abuse of the judicial system, including the failure to preserve or produce documents.” Id. (quoting Barnhill v. United States, 11 F.3d 1360, 1367 (7th Cir. 1993) (stating that this power stems from a court's authority to manage its own affairs)).

In support of the motion to compel, Defendants argue that DSS violated its duty to respond and or supplement its discovery responses when it learned that its prior response was incomplete, incorrect, inaccurate or otherwise inadequate. See R. Doc. 101. Specifically, Defendants contend that even after DSS allegedly “supplemented” its responses to discovery requests, its responses remained inadequate as DSS allegedly failed to produce all the responsive documents that it had within “its possession or control.” (R. Doc. 101-2, p. 4). Defendants argue that DSS claims it produced all the emails in its possession, but it only produced two emails. Id.

Defendants also assert that at his deposition, Mader “gave dubious and evasive responses that called into question his credibility and the completeness of DSS's responses.” Id. Specifically, Defendants argue that Mader claimed that DSS switched email providers in January 2013, because its provider, named “Teknarus, got ‘out of the e-mail hosting business.’ ” Id. Mader Depo, 59:13–14. However, that company still lists “email hosting” on its current website. Id. Furthermore, Mader testified a number of documents have not been produced in this litigation, including: shipping documentation for marketing materials, an amendment to an agency agreement, and shipping documentation of signed contracts by Mader are at issue in this case. Id. Mader Depo, 293: 2-23.

*3 In support of its opposition, DSS contends that Mader did not reference that the shipping methods had any particular tracking information, and that the “shipping label” could have been a postage stamp, therefore Mader / DSS was not intentionally hiding documents. (R. Doc. 108, p. 3). Furthermore, DSS contends that the proposed amendments pertain to the ability of DSS to sell GAP insurance, and does not relate to the claims of this litigation. Id.

Rule 37(c) provides that a party's failure to supplement an earlier discovery response, or to answer the request at all is sanctionable. Yelton v. PHI, 279 F.R.D. at 385. See also In re September 11th Liability Insurance, 243 F.R.D. 114, 125 (S.D.N.Y. 2007) (citing Fed. R. Civ. P. 37(c)(1)). Once a proper discovery request has been propounded, the Court “will not allow a party sentiently to avoid its obligations by failing to examine records within its control.” Id. See Anderson v. Cryovac, Inc., 862 F.2d 910, 929 (1st Cir. 1988); A. Farber and Partners, Inc. v. Garber, 234 F.R.D. 186, 189 (C.D. Cal. 2006). Therefore, a failure to disclose under Rule 37 includes a party's untimely production of documents and information required to be produced. Id. See also In Re September 11th, at 125; Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir. 2002).

During oral argument, Defendants asserted that the following seven Requests for Production of Documents (“RFP”) were at issue. The Court will address each of them below.

Request No. 9 provides: Please produce all documents referenced in your responses to the Requests for Admission and Interrogatories. See R. Doc. 101-4, p. 23.

DSS's response provided that “any and all documents in the possession of DSS have been produced in response to Request No. 1.” Id.

During oral argument, the Court found that because Defendants did not ask for particularized or specific documents, RFP No. 9 was an untenable request. Therefore Defendants's request to compel response to No. 9 is denied.

Request No. 16 provides: Please produce all materials, including forms and policies, provided when a dealership agrees to participate in the Lifetime Powertrain Loyalty Program or Lifetime Engine Protection Program. See R. Doc. 101-4, p. 25.

DSS's response provided that “any and all documents in the possession of DSS have been produced in response to Request No. 1.” Id. In support of its opposition, DSS argued that it produced nearly eighty-one (81) pages of documents in its initial response to Defendants discovery, on May 13, 2013, which included the documents that Defendants are requesting. See R. Doc. 108, p. 1.

During oral argument Defendants argue that DSS has failed to produce anything. Counsel for DSS did not object to or support its position during oral argument. Therefore, the Court finds that due to DSS's alleged failure to produce responsive documents as to Request No. 16, the Court grants Defendants request as to RFP No. 16. The Court also finds that DSS has seven (7) days from the issuance of this Order to produce any documents that are responsive to this request.

Request No. 19 provides: Please produce any and all evidence of training meetings or other visits made to Defendants. See R. Doc. 101-4, p. 26.

DSS's response provided that “[i]nformation used to conduct the training has been identified in response to Request No. 1 and will be produced subject to a protective (sic) order. All training was conducted at the request and direction of Defendants.” Id.

*4 During oral argument Defendants argue that the time frame Mader referenced in his deposition differed from the documents DSS actually produced. Defendants also argue that Mader claimed to have given documents to his attorney, but failed to produce these documents in its response. Counsel for DSS did not object to or acknowledge Defendants' contention that responsive documents were in its possession.

Because of the DSS's alleged failure to produce anything, the Court herein grants Defendants request as to RFP No. 19. The Court also finds that DSS has seven (7) days from the issuance of this Order to produce any documents that are responsive to this request.

Request No. 20 provides: Please produce copies of all marketing materials that you provided to Defendants. See R. Doc. 101-4, p. 26.

DSS's response provided that “[i]nformation responsive to this request has been provided in response to Request No. 1.” Id.

During oral argument, the Court found that it was difficult to determine which documents produced by DSS were responsive to Defendants request, and constituted marketing materials. For purposes of clarity, the Court required DSS to supplement its responses by bate stamping the documents which correlate to the Request for Production No. 20 and including the relevant bate numbers in the actual response to Request No. 1, so that Defendants can ascertain which materials are responsive to the request. Therefore the Court orders DSS to supplement its response by correlating bate stamps to the responsive documents already produced within seven (7) days of the issuance of this Order.

Request No. 21 provides: Please produce any and all documents and materials relating to your policies, procedures, and/or protocols regarding document retention and document destruction, including those related to electronic documents. See R. Doc. 101-4, p. 26.

DSS's response objected to this request on the basis of overbreadth. Specifically, DSS stated “[s]ubject to and without waiving this objection, DSS responds that it does not maintain a formal policy of document retention or destruction for documents that would relate to this matter. DSS generally saves emails that it feels may be needed later but in January of 2013 the company switched service providers and lost a considerable amount of previously retained emails.” Id.

During oral argument the Court found that DSS's objection was overruled. However, the Court also found that DSS's response was otherwise sufficient, as the responses indicate that its retention policy is not written. Therefore, Defendants request was denied.

Request No. 23 provides: Please produce copies of all training materials related to PDS's customer loyalty programs. See R. Doc. 101-3, p. 19.

DSS's response provided “[s]ee the response to Request No. 1.” See R. Doc. 101-4, p. 27. In support of its opposition, DSS argued that it produced a copy of the power point presentation concerning its customer loyalty programs within the eighty-one (81) pages of material it produced in conjunction with its response to Defendants discovery requests on May 13, 2013. See R. Doc. 108, p. 1–2.

For purposes of clarity, the Court required DSS to supplement its responses by bate stamping the documents which correlate to the Request for Production No. 23 and including the relevant bate numbers in the actual response to Request No. 1, so that Defendants can ascertain which materials are responsive to the request. The Court orders DSS supplement its response by correlating bate stamps to the responsive documents already produced within seven (7) days of the issuance of this Order.

*5 Request No. 24 provides: Please produce all electronic documents in its native format or the format in which is kept in ordinary course of business. See R. Doc. 101-4, p. 27.

DSS's response provided “[s]ee the response to Request No. 1.” Id.

During oral argument, Defendants sought an Order from this Court directing DSS to perform a more comprehensive search. Counsel for Defendants also argued that Mader destroyed files one week before the instant action was filed in federal court. They also argued that Mader has not searched for these documents.

In response, DSS argued that Mader stated he did not know where these documents were, but not that he conducted a search for them. Therefore, the Court ordered DSS to perform a search of its files to determine whether or not it has responsive documents to this request. This search must be completed no later than seven (7) days from the issuance of this Order.

Defendants also sought an award of attorney fees and reasonable costs occasioned by the failure of DSS to adequately respond to the discovery propounded. In opposition, DSS contends that it properly responded to Defendants discovery requests, and that it should not be required to pay costs and attorney fees “for having to respond to the baseless motion.” SeeR. Doc. 108, p. 6.

Rule 37 provides that when a party prevails on its Motion to Compel, the Court “must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion ... to pay the movant's reasonable expenses incurred in making the motion.” Rule 37(a)(5)(A). However, the Court must not award such fees when the opposing party's conduct was “substantially justified.” Id. at 37(a)(5)(A)(ii). Moreover, where a motion to compel is granted in part and denied in part, the Court may, at its discretion, either deny fees, award fees to one party, or apportion fees among both parties. Id. at 37(a)(5)(A)(iii).

Although the Court granted five of the requests for production, two of them ordered that DSS supplement responses already produced, one ordered another search of documents and or computer files, but only two were granted in entirety. Defendants two other requests for production were denied in entirety. Therefore, the Court finds that an award of attorney fees and reasonable costs at this time are inappropriate.

Accordingly, Defendants' Motion for Attorney Fees and Costs should be denied.

Accordingly,

IT IS ORDERED that Defendants, Troy Duhon, (“Duhon”) and Premier Automotive Products, LLC's, (“Premier Automotive”) (collectively, “Defendants”) Motion to Compel Production(R. Doc. 101) is GRANTED IN PART and DENIED IN PART.

IT IS GRANTED IN PART as to Requests for Production Nos. 16, 19, 20, 23, 24 as explained in detail above. DSS shall supplement and or produce responsive information no later than seven (7) days from the issuance of this Order.

IT IS DENIED IN PART as to Requests for Production Nos. 9 and 21.

IT IS DENIED as to Attorneys Fees and Costs.

IT IS FURTHER ORDERED that the Court reserves ruling on Defendants' Motion for Sanctions Based on Spoliation of Evidence (R. Doc. 101). The parties are required to produce the Notice of Deposition of Marc Mader dated July 22, 2013, in readable format, to the Court's Efile-Roby@laed.uscourts.gov. email no later than ten (10) days from the issuance of this Order.

*6 IT IS FURTHER ORDERED that Defendants are required to produce all documents, referenced as exhibits, whether attached or not, in the July 22, 2013, Deposition of Marc Mader. To the degree that the October 1, 2013, Court Ordered Extended Deposition of Marc Mader (R. Doc. 120) adds to the merits of the Motion for Sanctions based on Spoliation of Evidence (R. Doc. 101), Defendants shall produce those relevant portions to the Court with the Notice of Deposition, in readable format, to the Court's Efile-Roby@laed.uscourts.gov, email no later than ten (10) days from the issuance of this Order.

Premier Dealer also sued Scott Neitert, (“Nietert”) Wayne Skinnard, (“Skinnard”) Premier Nissan of Fremont