The parties have been embroiled in discovery disputes for over a year. For a description of the events leading up to the particular issues that are the subject of this present motion, the court incorporates by reference the Background section of its July 1, 2016 Order Granting in Part and Denying in Part Wright Medical's Motion to Compel Discovery and for Discovery Sanctions and Motion for Protective Order (the “July 1 Order”). (ECF No. 107 at 1-3.) Wright Medical claims that Beijing Fito violated the terms of the July 1 Order. Based on said violations and a general pattern of discovery misconduct, Wright Medical requests that the court sanction Beijing Fito pursuant to Rule 37 of the Federal Rules of Civil Procedure by “precluding Fito from introducing evidence of its purported lost profits for Wright's alleged tortious interference” and awarding Wright Medical attorney's fees and expenses. (ECF No. 139.) In particular, Wright Medical complains of Beijing Fito's conduct in three areas: its court-ordered supplemental electronically stored information (“ESI”) discovery, its production of sub-distributor agreements, and the preparation of its Rule 30(b)(6) deposition witnesses. Beijing Fito responds that sanctions are unwarranted based on what amounts to a few deficiencies in the face of Wright Medical's “burdensome discovery requests.” (ECF No. 148 at 2.)

The July 1 Order indicates that the parties came to an agreement as to the necessary search terms and protocol to be required of Beijing Fito in regard to its supplementation of its ESI production. Thus, the court ordered Beijing Fito to “produce responsive documents pursuant to the parties' agreement on a rolling basis as they become available, but in any event, by no later than July 18, 2016.” (ECF No. 107 at 7.) The parties do not dispute that Beijing Fito failed to comply in full with the court's order. By the court-imposed deadline, Beijing Fito was unable to secure the cooperation of Beijing Qibang Technology Limited Company (“Beijing Qibang”), the third-party server host that has stored Beijing Fito's e-mails since December 2014. On July 28, 2016, Beijing Fito filed a motion requesting that the court issue a Letter of Request, pursuant to the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters and 28 U.S.C. § 1781. (ECF No. 112.) The court granted the motion on August 1, 2016 (ECF No. 113), which eventually led to Beijing Qibang's cooperation on September 3, 2016.

*2 Wright Medical asserts that it first learned of Beijing Fito's problems with Beijing Qibang in late July 2016 (on the morning of the first day of the court-ordered second round of its Rule 30(b)(6) deposition), even though Beijing Fito knew of potential issues as early as December 2015 and Beijing Fito's ESI discovery efforts had been the subject of contention between the parties for several months. Beijing Fito responds that it had a good faith belief that Beijing Qibang would comply with the July 1 Order of the court, though, as it turned out, the Letter of Request was required. (See ECF No. 148, Exs. B (affidavit of Liu Nan Nan) & C (affidavit of Sun Hongliang).) Beijing Fito argues that Wright Medical has not demonstrated any prejudice as a result of the delayed production, which included only 40 non-duplicative documents, especially in light of the fact the parties have agreed to an additional deposition to review these documents, as discussed below.

On July 28, 2016, Wright Medical questioned Beijing Fito's Rule 30(b)(6) designee as to whether the approximately 15 sub-distributor contracts that Beijing Fito had produced represented all of the relevant contracts pursuant to Wright Medical's discovery requests regarding Beijing Fito's tortious interference claim. (See ECF No. 139, Ex. 10.) Based on the deposition transcript excerpt provided by the parties, it appears that a dispute arose during the deposition regarding the existence of additional contracts. The next morning, Beijing Fito produced 24 additional sub-distributor contracts. When questioned about these additional contracts at the deposition, Beijing Fito stated:

(ECF No. 139, Ex. 11 (transcript of deposition testimony).) It does not appear that the documents were reviewed by anyone else prior to being sent to Beijing Fito's counsel for production to Wright Medical.

Wright Medical claims that this situation illustrates Beijing Fito's “complete disregard for the discovery process” and that Wright Medical was prejudiced by not being able to “translate, review, or make any use of these documents” in time for the deposition. (ECF No. 139-1 at 11.) Beijing Fito does not appear to dispute that the contracts were required to be produced and should have been produced prior to the second round of depositions. However, Beijing Fito argues that sanctions are not warranted because Wright Medical has not demonstrated that it has been prejudiced by the “unintentional delay.” (ECF No. 148 at 2.)

The July 1 Order addresses Wright Medical's claim that Beijing Fito's Rule 30(b)(6) deponents were evasive and unprepared during the first round of depositions from May 2 through May 6, 2016. The court determined, “Beijing Fito must be required to produce designated Rule 30(b)(6) witnesses to continue the deposition.” (ECF No. 107 at 16.) Pursuant to the court's order, the Rule 30(b)(6) deposition continued the week of July 25, 2016.[1]

*3 Wright Medical now argues that Beijing Fito's designees were once again unprepared. Wright Medical cites three particular issues. First, the designees were unable to answer questions about Beijing Fito's damages calculations. Second, the designees were unable to answer questions about Beijing Fito's discovery efforts. And, finally, the designees lacked knowledge of the hip and knee aspects of Beijing Fito's business.[2]

Wright Medical argues that Beijing Fito has now twice failed to present knowledgeable witnesses on these topics, and should not now be given a third opportunity. Based on its inability to obtain testimony on these topics, Wright Medical moves to preclude Beijing Fito from presenting any evidence of lost profits. Beijing Fito argues that its designees successfully responded to the majority of topics over five days of testimony. (See ECF No. 148 at 12.) Moreover, the topics Beijing Fito's witnesses could not address were overly technical or not specified clearly enough in Wright Medical's notice of deposition.[3] Finally, at the hearing, counsel for Beijing Fito reiterated that the depositions in Memphis continue to be difficult for Beijing Fito's personnel due to the language barrier and the extensive travel required. Nevertheless, due to its late productions and inability to address certain questions, Beijing Fito has already agreed to make Rule 30(b)(6) designees available for another continued deposition. (See ECF No. 148 at 2.) The parties informed the court at the hearing that this deposition, which is also intended to cover documents produced in response to 16 additional requests by Wright Medical unrelated to the issues here, is scheduled for the end of February or beginning of March of this year.

Wright Medical brings this motion for sanctions “pursuant to Rule 37 of the Federal Rules of Civil Procedure ... because Fito violated this Court's [July 1 Order].” (ECF No. 139 at 1.) As its primary form of relief, Wright Medical requests that the court preclude Beijing Fito from introducing evidence of lost profits as to its tortious interference claim. Rule 37(b)(2) allows the court to sanction a party that fails to comply with a court order by prohibiting the party “from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence.” Fed. R. Civ. P. 37(b)(2)(A)(ii). As to Wright Medical's request for attorney's fees, the rule states in relevant part: “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 or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).

*4 “A court's decision to impose sanctions under Rule 37 falls within its discretion.” Deleon v. Kalamazoo Cty. Rd. Comm'n, No. 1:11-CV-539, 2015 WL 11752847, at *2 (W.D. Mich. Aug. 25, 2015) (citing Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 642 (1976)); see also Spizizen v. Nat'l City Corp., 516 Fed.Appx. 426, 431 (6th Cir. 2013) (stating that the Sixth Circuit “reviews a district court's denial of a motion for discovery sanctions for an abuse of discretion”). As a threshold issue, there is no dispute that Beijing Fito was not in full compliance with the July 1 Order. Thus, the task of the court is to determine, in its discretion based on the record before it, whether the imposition of Rule 37 sanctions against Beijing Fito for its violations is warranted.

Beijing Fito was aware of the difficulty in obtaining Beijing Qibang's cooperation with its discovery efforts in this case as early as December 2015. (See ECF No. 148, Ex. B (affidavit of Liu Nan Nan).) The court credits Beijing Fito's attorney's assertion that his client did not make him aware of these issues until July 25, 2016, which was the first day of the second round of the Rule 30(b)(6) depositions. For Beijing Fito's part, it should have brought the matter to the attention of its counsel while the dispute regarding Beijing Fito's ESI discovery efforts progressed. However, the court credits the affidavits of Liu Nan Nan and Sun Hongliang indicating that there was a good faith belief that Beijing Qibang would allow the necessary searches pursuant to a court order. (ECF No. 148, Exs. B & C.) Once it was clear that Beijing Qibang would not comply with the court's order, Beijing Fito sought and obtained a Letter of Request from the court, which resulted in the production of the e-mails shortly thereafter. For these reasons, the court declines to impose sanctions for the late production of e-mails from the Beijing Qibang server.[4]

The court is troubled by Beijing Fito's mid-deposition supplemental production of newly discovered sub-distributor agreements. By Beijing Fito's own admission, the original production was delegated to the “new person” in the company, who was wholly unfamiliar with the relevant files. (ECF No. 139, Ex. 11 (transcript of deposition testimony).) Moreover, there appears to have been no supervision or review by personnel more familiar with the files or the matters at issue. However, Wright Medical has not established a level of prejudice that, in the court's belief, justifies sanctions based on the unorganized production of this set of sub-distributor agreements. Wright Medical has now had ample time to translate and review the agreements, and it will have an opportunity to question Beijing Fito as to the documents during the continued Rule 30(b)(6) depositions. Therefore, sanctions are not warranted based on this delayed production.

*5 For a second time in this case, Wright Medical alleges serious issues with Beijing Fito's inability to answer questions at its Rule 30(b)(6) depositions. As to the hip and knee products, the designees admitted that they lacked knowledge on these topics. (See, e.g., ECF No. 139, Ex. 5 (transcript of deposition testimony).) Beijing Fito argues that it should not be sanctioned for its designees inability to answer questions about the hip and knee products, which it contends are “a side issue” in this case and were not specifically mentioned by Wright Medical in its Rule 30(b)(6) notice. (ECF No. 148 at 14.) Beijing Fito's decision not to seek damages as to the hip and knee products appears to support its position. In its reply brief, Wright Medical seems to clarify that, in referring to the hip and knee aspects of the case, its specific concern is “the impact of the divestiture of Wright's hip and knee business.” (ECF No. 158 at 5.) From Wright Medical's perspective, an accounting of Beijing Fito's hip and knee business in the aftermath of the alleged assignment of Wright Medical's interest in the distribution contract between the parties is central to its defense, regardless of any questions regarding damages. (See ECF No. 158 at 6.) Wright Medical claims that these topics were adequately noticed and cites to topic no. 5 from its Second Amended Notice of Fed. R. Civ. P. 30(b)(6) Deposition to Beijing Fito, dated April 28, 2016:

(ECF No. 73 at 4.)

The court believes that Wright Medical genuinely anticipated that Beijing Fito's Rule 30(b)(6) designees were on notice to discuss Beijing Fito's hip and knee business in relation to these topics. Moreover, the court recognizes Wright Medical's reasonable frustration in being referred by the designees to Yue as the person who can address hip and knee product issues, after Beijing Fito had strenuously argued that it was unnecessary for Yue to return. However, the court also believes that Beijing Fito, in good faith, had a different interpretation of the noticed topics based on its theories as to the central issues in the case.[5] The question before the court is limited to whether Beijing Fito's stated inability to answer questions related to its hip and knee business warrants sanctions. The court finds that it does not. However, when the Rule 30(b)(6) depositions continue, Beijing Fito must provide a witness or witnesses who can answer questions related to the hip and knee business on behalf of the company.

Next, the court addresses the topic of questions regarding discovery procedures and the topic of damages calculations. The court recognizes that the designees could not directly answer some of these questions. Even so, after careful review of the sections of the transcripts provided by the parties, the court simply cannot conclude that the designees' inability to answer questions related to these topics arises to the level of sanctionable conduct. However, as the record shows certain insufficiently answered questions, Beijing Fito must prepare a witness or witnesses to fully address these topics at the upcoming continued depositions.

For the above reasons, Wright Medical's Second Motion for Discovery Sanctions is DENIED.

IT IS SO ORDERED.

A point of contention between the parties was whether Beijing Fito should have been required to bring back the same designees for the second round of depositions (including Beijing Fito's Chief Executive Office, Wayne Yue), or whether Beijing Fito should be allowed to designate different Rule 30(b) (6) witnesses. The court ultimately determined that “Beijing Fito shall be allowed, if it so chooses, to designate different Rule 30(b)(6) designees, both for the sake of cost and convenience and also to provide Wright Medical with the most knowledgeable witnesses for addressing the deposition topics.” (ECF No. 107 at 17.) Beijing Fito did not bring Yue back for the second week of depositions.

The deposition testimony of designee Liu Nan Nan, as questioned by Wright Medical's counsel, provides a clear example:

As discussed in the court's Order Granting in Part and Denying in Part Wright Medical's Third Motion to Compel Discovery (ECF No. 173 (Jan. 23, 2017)), Beijing Fito is no longer seeking damages related to the hip and knee products. Beijing Fito contends that issues related to the hip and knee products are not central to the case.

Wright Medical suggests that this court should apply the reasoning of Martin County Coal Corp. v. Universal Underwriters Insurance Services, Inc., No. 08-93-ART, 2011 WL 836859 (E.D. Ky. Mar. 4, 2011), and find that Wright Medical's requested relief is appropriate on these facts. In that case, as a Rule 37(b)sanction for violation of the court's prior discovery order, the court found that the jury should be instructed that “unequal economic footing” between the parties had been established, where the unenforceability of an indemnification agreement was a central defense in the case. Id. at *5. The reasoning of Martin County Coal does not apply to the instant case for multiple reasons, including this court's finding that Beijing Fito had a good faith basis for the delayed ESI production.

In fact, the record before the court appears to contain evidence that one of Beijing Fito's designees was able to answer questions about the “contract Mr. McAllister sent,” citing three particular reasons Beijing Fito did not sign it. (ECF No. 139, Ex. 12 (transcript of deposition testimony).) While the excerpt is not complete and does not provide the court with the full context, this seems to indicate that Beijing Fito was able to respond to Wright Medical's noticed topic no. 5 as to certain aspects (other than the hip and knee product aspects).