The Court, being duly advised in the premises, upon all the records and proceedings herein, and for the reasons stated on the record and described in the memorandum below, now makes and enters the following Order:

IT IS HEREBY ORDERED that:

1. Defendant's Motion to Take Deposition Out of Time [Docket No. 61] is GRANTED in part and DENIED in part.

2. Defendant's Motion to Extend Expert Discovery [Docket No. 66] is DENIED.

3. Plaintiff's Motion to Compel Discovery [Docket No. 71] is GRANTED.

Remote Technologies, Inc. (“RTI”) sued Data International Co., Ltd. (“Data”), a manufacturer of high-end remote control devices,[1] for breach of contract, breach of express warranty, breach of implied warranty of merchantability and breach of implied fitness for a particular purpose in connection with Data's manufacture of allegedly defective remote controls, which RTI sold to its customers. Complaint, ¶¶ 6, 17-33 [Docket No. 1].

Data moved for an order permitting it to take the deposition of RTI witness Billie Cheng after the close of fact discovery.[2] Data's Memorandum in Support of Motion (“Data Mem.”), p. 1 [Docket No. 63]. RTI disclosed Cheng as a person with knowledge of the facts regarding the Complaint. Declaration of Michelle Muthiani in Support of Motion, (“Muthiani Decl.”), ¶ 4 [Docket No. 64]. According to Data, it served a Notice of Taking Deposition for Cheng's deposition on July 20, 2011, and Amended Notices on August 4, 2011, August 19, 2011, and November 11, 2011. Muthiani Decl., Exs. 1-4. RTI's counsel responded to the August 4, 2011 Notice stating, “Also, please confirm that you plan to use a translator for this deposition so that Ms. Cheng will have the opportunity for her deposition to be taken in her native language.” Id., Ex. 3.

On December 9, 2011, RTI's counsel notified Data that although Data noticed Cheng's deposition to take place in the offices of Data's counsel in Minnesota, Cheng is located in Taiwan and had made no arrangements to travel to the United States for her deposition. Id., Ex. 6. RTI's counsel expressed reservations regarding Cheng's status as a “managing agent” of RTI and whether she could be required to submit to a deposition. Id., Ex. 6 (correspondence from counsel for RTI to counsel for Data dated Dec. 9, 2011). RTI's counsel indicated that “we are currently inquiring whether Ms. Cheng will appear voluntarily.” Id.

*2 Data served a Fourth Amended Notice of Taking Deposition on December 16, 2011, proposing a telephonic deposition. Id., Ex. 7. On December 22, RTI's counsel indicated that he had not received confirmation regarding Cheng's availability and agreed that the deposition should be postponed. Id., Ex. 8 (email correspondence between counsel for Data and counsel for RTI dated December 22, 2011). Data served another Amended Notice of Taking Deposition on December 23, 2012, for a telephonic deposition to take place on January 17, 2012. Id., Ex. 9.[3]

On January 16, 2012, RTI's counsel notified Data that Cheng would not appear voluntarily and provided Data with Cheng's work address and telephone number. Id., Ex. 10. Fact discovery closed the next day.

Data argued that it was caught short by RTI's late notice that Cheng would not appear voluntarily, particularly in light of the six previous Notices of Taking Deposition it had served. Data Mem., p. 3.

RTI contended that Cheng is a citizen of Taiwan and is employed at a registered office of RTI in Taiwan, but is not an officer, director, or a managing agent of RTI and that RTI had never promised that it could make Cheng available for a deposition against her will or otherwise compel her attendance. Declaration of John Cotter in Opposition to Defendant's Motion to Take Deposition Out of Time (“Cotter Decl.”), ¶¶ 2-3 [Docket No. 82]; Declaration of John Demskie in Opposition to Defendant's Motion to Take Deposition Out of Time, ¶ 2 [Docket No. 83]. Cheng did not notify RTI's counsel until January 12, 2012, that she would not appear voluntarily for her deposition. Id., ¶ 7.

At the motion hearing, the parties disagreed as to Cheng's status with RTI. Data maintained that Cheng was RTI's only representative in Taiwan and was, therefore, a “managing agent,” although Data conceded that Cheng was an office manager. RTI countered that Cheng had no decision-making authority and was not really an employee. RTI's initial disclosures only identified Cheng as a witness, with an affiliation of “Remote Technologies Incorporated.” Remote Technologies Incorporated's Initial Disclosure Pursuant to Fed. R. Civ. P. 26(a)(1) [Docket No. 15]. Under questioning from this Court, RTI's counsel admitted that RTI may call Cheng as a trial witness.

A scheduling order issued pursuant to Fed. R. Civ. P. 16(b) “may be modified only for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4). “The primary measure of ‘good cause’ is the movant's diligence in attempting to meet the order's requirements.” Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 716-17 (8th Cir. 2008) (quoting Rahn v. Hawkins, 464 F.3d 813, 822 (8th Cir. 2006)). The Court may also consider prejudice to the nonmovant resulting from modification of a scheduling order, but the Court does not generally consider prejudice if the movant has not been diligent in meeting the scheduling order's deadlines. See Bradford v. DANA Corp., 249 F.3d 807, 809 (8th Cir. 2001) (concluding that there was “no need to explore beyond the first criterion [diligence], because the record clearly demonstrate[d] that [plaintiff] made only minimal efforts to satisfy the [scheduling order's] requirements.”).

This Court concluded that Data had good cause to bring its motion for leave to take Cheng's deposition out of time, which was essentially a motion to modify the scheduling order to change the fact discovery cutoff as it related to Cheng. Data was unaware until the day before the cutoff that Cheng would not appear. Although RTI never promised to produce Cheng, neither did it state with finality, until January 16, 2012, that it would not or could not produce Cheng. Therefore, at the hearing the Court granted Data's motion to this extent:

*3 1. Data failed to establish that Cheng is an officer, director or managing agent of RTI pursuant to Fed. R. Civ. P. 30(b)(6). To the extent that Data wants to depose Cheng, it must use whatever subpoena process is required in the foreign jurisdiction in which she resides—in this case, Taiwan.

2. Data may take Cheng's deposition beyond the fact discovery cutoff date, up to immediately preceding trial.

3. If Cheng travels to the United States for trial in this matter, counsel for RTI shall timely notify counsel for Data and shall make reasonable accommodations for Cheng's deposition before trial.

Data moved to amend the pretrial scheduling order to extend the expert discovery deadline for the purpose of allowing Data to submit an expert report after the October 1, 2011 deadline for expert reports. Data's Memorandum of Law in Support of Motion to Extend Expert Discover (“Data Mem. Expert Disc.”), p. 1 [Docket No. 68].[4] Data claimed it needed additional time for its expert report because of its “late receipt” of samples of defective T2C and T3 remote control circuit boards. Id.

This Court previously ordered that Data be allowed to inspect all of the allegedly defective circuit boards at RTI's Shakopee, Minnesota facility on or before December 16, 2011. Order, December 23, 2011, p. 12 [Docket No. 50].[5] Data could then select up to 72 defective boards for shipment to Data's experts in Taiwan for inspection and destructive testing. Id. Data brought its motion to compel production of the circuit boards on November 2, 2011, nearly a month after the close of expert discovery. [Docket No. 40].

At the December 5, 2011, hearing on Data's motion to compel production of the defective circuit boards, RTI expressed its great concern that Data's testing of the circuit boards at this point, which was already over two months after the close of expert discovery, would inevitably result in Data seeking to reopen expert discovery. Id., pp. 11-12. This Court noted “[a]s to RTI's concern that such testing would result in Data seeking to reopen expert discovery, all objections by RTI to such discovery are reserved.” Id., p. 12.

Data selected the defective circuit boards for testing on December 16, 2011, in accordance with this Court's Order and shipped the boards to Taiwan, where they were received on December 25, 2011. Declaration of Michelle Muthiani in Support of Motion to Extend Expert Discovery (“Muthiani Decl.”), ¶¶ 12-14 [Docket No. 69]. Data claimed that “due to plaintiff's failure to provide samples during the expert discovery period, [it] was unable to prepare an expert report based on tests it would have conducted on the samples.” Id., ¶ 18. In other words, Data believed that RTI should have produced the circuit boards earlier (it served its discovery seeking the boards on January 7, 2011), even though it did not bring a motion to compel until November 2, 2011. Id., ¶¶ 3, 10.

*4 RTI objected to Data's request, indicating that Data has had 2,158 defective T3 boards and 2,643 defective T2C boards in its possession since between early 2008 and July 2009. Affidavit of David Brooks in Opposition to Data's Motion to Extend Expert Discovery, (“Brooks Aff.”), ¶ 4 [Docket No. 80]. RTI had shipped these defective boards to Data in Taiwan because Data demanded receipt of the defective boards before it would ship replacements. Id., ¶ 3. Despite having the boards, Data did not submit an expert report analyzing the alleged defects by the expert disclosure cutoff.

RTI submitted its expert reports on June 1, 2011, and Data did not submit a rebuttal report. Declaration of John Cotter in Opposition to Defendant's Motion to Extend the Expert Discovery Deadline (“Cotter Decl.”), ¶¶ 3, 4. RTI argued that if Data was allowed to submit a rebuttal report at this late date, RTI would be significantly prejudiced as RTI's experts have been deposed without any opportunity to review Data's experts' testimony. Id., ¶ 7. Further, if the Court granted Data's motion, RTI would be forced to conduct additional depositions and discovery. Id.

As noted, a Court may modify its scheduling order for good cause shown. This Court concluded that Data failed to establish the requisite good cause and had not been diligent in bringing the issue to the Court in a timely manner. Data had RTI's expert report in its possession since June 1, 2011, and knew or should have known on receiving it that it wanted to submit a rebuttal report. Further, the issue was clearly highlighted for Data at the motion hearing on December 5, 2011, when RTI previewed its concern that Data would attempt to use the receipt of the 72 defective circuit boards as a springboard to reopening expert discovery.

The Court was not required to assess the prejudice to RTI that might result from granting Data's motion in light of Data's lack of diligence. Bradford, 249 F.3d at 809. Nonetheless, the Court concluded that the prejudice to RTI and to the Court that would result from reopening expert discovery at this late date was simply too great. Data's motion was denied at the hearing in its entirety.

RTI moved for an order compelling Data to: (1) produce all email attachments that could not be converted to PDF format; (2) organize its documents in numerical order by Bates number; (3) supplement its responses to Document Request Nos. 14-16, 21-23 and 29 to produce all responsive documents containing discussion of the T2C and T3 remotes; (4) supplement its answers to Interrogatories Nos. 4-9, 11-12, 14-15, 20 and 22 and Document Requests 2-5, 11 and 13-31 with references to specific documents within its October 19, 2011, production; (5) produce Sunny Ho and Jin-Wei Chiu for fact depositions immediately; (6) designate and produce witnesses for a Rule 30(b)(6) deposition; and (7) produce Jin-Wei Chiu for an expert deposition.[6] RTI's Memorandum in Support of Motion to Compel Discovery (“RTI Mem.”) p. 1 [Docket No. 77].

The tortured background to RTI's motion is this. Data served written discovery on January 4, 2011. Declaration of John Cotter in Support of Plaintiff's Motion to Compel (“Cotter Decl.”), ¶¶ 1, 2, Exs. A, B. [Docket No. 74]. Data's initial production contained only 394 pages of documents. Id., ¶ 4. After several meet and confers and an informal motion with this Court, at which time the Court gave Data until August 19, 2011, to supplement its responses, Data served three discs containing over 58,000 pages of documents allegedly responsive to RTI's requests for production (the “August 19, 2011, production”). Id., ¶ 7. RTI experienced great difficulty in opening the files and the files were not searchable using conventional litigation-support software. Id., ¶¶ 8, 9. The parties attempted to resolve the issues regarding the electronic files and Data agreed to reprocess the files. Id., ¶ 11. Data then produced a DVD containing the documents—this production contained fewer than 20,700 documents and they were not produced in Bates-numbered order (the “October 19, 2011, production.”). Id., ¶ 15. The October 19, 2011, production apparently “superseded” the August 19, 2011, production. Id., ¶ 14, Ex. C (Letter from Vytas Rimas to John Cotter Serving Data's Third Supplemental Document Production). In addition, it appeared to RTI that where Data could not convert an attachment to a PDF, it put in a “placeholder” and did not produce the corresponding document in any form. Id., ¶ 16. Data never provided RTI with any information as to how the documents in the October 19, 2011 production related to the documents in the August 19, 2011 production. Id., ¶ 17. Further, RTI indicated that Data relied on Fed. R. Civ. P. 33(d) in answering RTI's interrogatories, but instead of identifying specific responsive documents for each interrogatory, Data identified broad Bates-number ranges that were relatively useless (e.g. “D000395-058324) and failed to indicate which production the answers related to (i.e., when referencing Bates numbered documents, RTI could not determine if Data was referring to the August, 2011 production or to the October 19, 2011 production). RTI Mem., p. 15.

*5 On January 24, 2012, Data produced a CD with 2,352 files it claimed were the documents referenced by the placeholders in the October 19, 2011 production, but the documents on the CD were not Bates-numbered and Data did not provide any narrative linking the documents to the placeholders. Cotter Decl., ¶ 22.

At the hearing on RTI's motion to compel, RTI's counsel stated that just a few days before he had received another supplemental production consisting of Second Supplemental Responses to Requests for Production of Documents and Third Supplemental Answers to Plaintiff's Interrogatories. RTI provided the Court with copies of these responses at the motion hearing. In its Third Supplemental Answers to Interrogatories, Data deleted references to Fed. R. Civ. P. 33(d), but according to RTI's counsel, the answers suffered from the same defect as before—they referenced broad Bates-number ranges with no effort to identify specific documents.

RTI's counsel also expressed skepticism regarding the way in which Data had conducted its searches of electronic files, as internal Data communications discussing technical issues with the remote control devices were missing. RTI Mem., p. 9. For example, RTI knew from other documents produced that at a February 4, 2008 meeting, Data discussed a change in the thickness of gold plating on the remotes' circuit boards, but Data did not produce the February 4, 2008 minutes. Id., p. 13. Further, Data produced fewer than 100 emails containing the word “Phico,” although Phico was Data's primary supplier in connection with the defective remotes. Id., p. 14, n.1.

As relief, in addition to seeking supplementation of Data's responses to many of RTI's document requests and interrogatories, RTI sought an order requiring Data to organize its documents by Bates number, explain the gaps in Bates numbering, relate the most recently produced documents to the “placeholders,” and produce internal meeting minutes where the T2C and T3 remotes were discussed. Id., pp. 9, 13-15. RTI contended that to the extent that Data relied on Fed. R. Civ. P. 33(d) to answer many of RTI's interrogatories, Data's answers were useless because they referenced the August 11, 2011 production, which had been superseded by the October 19, 2011 production and the answers did not properly identify the documents that would answer the interrogatories. Id., p. 15. As to the depositions, RTI claimed that Data was obstructing RTI's depositions of two Data employees, Sunny Ho and Jin-Wei Chiu, before the close of fact discovery and had not produced a witness for a Fed. R. Civ. P. 30(b)(6) deposition, and sought to take all of these depositions. Cotter Decl., ¶ 26; Ex. I (Notice of Taking Deposition of Defendant Data International); J (Notice of Taking Deposition of Sunny Ho); K (Notice of Taking Deposition of Jin-Wei Chiu).

In response, Data claimed that it produced its electronically stored information (“ESI”) in a “reasonably” usable format, as required by Fed. R. Civ. P. 34(b)(2)(E)(ii). Defendant's Memorandum of Law in Opposition to Plaintiff's Motion to Compel (“Def. Mem.”), p. 2 [Docket No. 84].[7] Data conceded that its Third Supplemental Production did not include the documents for which it had submitted a “placeholder,” but stated that it sent the placeholder documents on January 4, 2012 (almost three months after RTI's counsel had raised the issue). Id., p. 3. Data denied that there were responsive documents that it had not produced and contended that merely because RTI “thought” there were emails it had not produced, such “thoughts” could not form the basis for an order compelling the production of documents. Id., p. 4. Data also protested that its supplemental responses to RTI's interrogatories did identify Bates-ranges of responsive documents. Id., p. 4.

*6 Data indicated that it had agreed to produce witnesses for RTI's depositions after the conclusion of the Chinese New Year and, therefore, an order compelling Data to produce witnesses was unnecessary. Id., p. 13.

Because RTI had just received Data's supplemental discovery, this Court continued the hearing to provide RTI an opportunity to review the discovery and determine whether it rendered any aspect of its discovery motion moot.

At the continued hearing, RTI's counsel indicated that critical communications between Data and its subcontractors, which RTI knows exists, were missing. In addition, 72-74% of the attachments produced were not Bates-numbered and a large percentage of them did not appear to relate to any of the documents that had been produced—although Data promised that it would correlate the placeholder attachments to documents already produced.

At the continued hearing, RTI's counsel indicated that he was still in need of the following:

1. All email attachments that could be converted to PDF by placing the Bates number in the file name;

2. Organization of all documents, including email attachments, in numerical order, by Bates number;

3. Copies of all internal meeting minutes and any other documents responsive to RTI's Document Request Nos. 14, 15, 16, 21, 22, 23 and 29;

4. For Data to supplement its answers to RTI's Interrogatories Nos. 4-9, 11 and 13-31 to provide references to specific documents within its October 19, 2011, document production. RTI objected to any further reliance by Data on Fed. R. Civ. P. 33(d).

RTI also sought an award of attorneys' fees as a sanction for Data's discovery abuses. RTI's Reply Memorandum in Support of Motion to Compel, (“RTI Reply”), p. 5 [Docket No. 92].[8]

As to the document production, RTI's counsel provided the Court with a print-out of file attachment descriptions, many of which were not Bate-numbered. Many documents contained the word “T2C” in the description, but without Bates numbers there was no hope of correlating the attachments to the produced documents.

Data's counsel admitted at the continued motion hearing that nearly 75% of the attachments were not relevant and that Data had never opened the attachments. Nevertheless, Data believed it had fulfilled its obligations under the discovery rules by producing the attachments as they had been kept in the ordinary course of business, even though counsel had never opened or reviewed the attachments for relevancy. Counsel also indicated that his client was unable to determine if the attachments were relevant or not, and so produced everything.[9]

*7 As to the depositions, RTI indicated that the depositions were scheduled to take place on March 25 and 26, 2012. As these depositions could enlighten RTI and the Court on Data's document production and efforts to locate responsive documents, the Court invited RTI to supplement its motion to compel after the depositions, if it so wished, and provided Data with an opportunity to respond to RTI's supplemental submission.

On April 6, 2012, RTI filed a supplemental memorandum of law in support of its motion to compel, as allowed by this Court. (“RTI Supp. Mem.”) [Docket No. 121]. RTI indicated that its depositions of Data's employees confirmed that Data never instituted a litigation hold or stopped the destruction of documents since the lawsuit was initiated. RTI Supp. Mem., p. 1. Further, Data failed to locate and produce relevant materials and allowed Data's information management department to search for documents with no real oversight or direction. Id., p. 2. Additionally, Data's Rule 30(b)(6) designee, Sunny Ho, was completely unprepared to testify on the topics outlined in RTI's deposition notice. These topics were:

Cotter Decl., Ex. I; Data's Supplemental Memorandum in Opposition to Motion to Compel, p. 7, n.6 [Docket No. 131].

RTI also argued that it was disadvantaged by the fact that Data had not produced all of its relevant documents before RTI took Jin-Wei Chiu's deposition. RTI Supp. Mem., p. 2. Therefore, RTI asked that the Court require Data to produce a properly prepared Rule 30(b)(6) deponent, produce all relevant and responsive documents, and produce Chiu for a continued deposition after RTI had a chance to review any newly-produced documents. Id. Finally, RTI asked for an award of fees and costs associated with its multiple motions to compel, for having to take depositions without all available documents, and for having to depose an improperly prepared Rule 30(b)(6) witness, and sanctions for Data's bad-faith actions in connection with discovery and its destruction of documents after the lawsuit began. Id., pp. 2-3.

In support of these requests for relief, RTI submitted that Data knew from at least July 28, 2009, that it was considering legal action against RTI. Declaration of John Cotter in Support of Motion to Compel (“Cotter Decl. II”)[10], Ex. A [Docket No. 122] (email between Data employees regarding “some actions from legal department” regarding RTI). Sunny Ho, Data's Rule 30(b)(6) witness, testified that since the summer of 2009, she had never received any instructions regarding the preservation of documents. Cotter Decl. II, Ex. C (deposition transcript of Ho as 30(b)(6) witness), pp. 15-16, 21; Ex. D (deposition transcript of Sunny Ho in her personal capacity), p. 30. According to Ho, it was Data's practice to destroy all documents after three years, and there was no indication that the pending litigation changed that practice. Id., Ex. C, p. 21. In her capacity as a Rule 30(b)(6) witness, Ho also testified that Smart Lee, a Data employee charged with searching for documents responsive to RTI's requests, “[d]id search on the server. He wouldn't go through the computers of all these individuals. Everyone was busy. We didn't have time to let him look through our computer.” Id., p. 14. Further, “[t]hese things happened in 2008 or 2009. We are in 2012 now. Some of these emails already disappeared. I didn't take particular care in keeping them or deleting them. I do not know why, but they just disappeared.” Id., p. 18.

*8 Further, in her individual deposition, Ho testified:

Cotter II Decl., Ex. D, pp. 28-31.

Regarding RTI's failure to produce relevant documents, Chiu testified that only two electronic search terms were used: “T3” and “T2C.” Id., Ex. G (deposition transcript of Jin-Wei Chiu), pp. 23-25. Chiu refused to answer any detailed questions about the search terms: “I only used the terms “T2C” and “T3” and the years, and the questions other than this are not in the scope of my deposition.” Id., p. 28.

According to Ho, Data created an “RTI task force” to determine the reason for the high rate of failure of the T3 and T2C remotes. Id., Ex. D, pp. 100-102. Paper copies of the minutes were prepared, but Ho did not know where the documents were kept (although she also testified that she signed some of the minutes), and they have not been produced. Id.

Finally, Data never produced copies of the “Gerber files”[11] that RTI contended Data sent to outside manufacturers. Ho testified that Data's engineers “should” have copies of the Gerber files, but they were not produced. Id., pp. 102-103.

*9 Ho also testified that the system Data used to record bills of materials and engineering change orders was replaced in December, 2009 by a new system. Id., pp. 55-57. Data did not transfer the data from the old system to the new system, and Ho did not believe that Data's legal department searched the older system for information or documents relevant to the litigation. Id., pp. 56-57. According to RTI, there was no evidence that Data searched its new system for information or documents. RTI Supp. Mem., p. 7.

Data designated Sunny Ho as its Rule 30(b)(6) witness on the topics described in RTI's Notice of Taking Deposition and Amended Notice of Taking Deposition. Cotter Decl. II, Ex. H (letter to counsel for RTI from counsel for Data dated March 1, 2012, designating Ho). RTI argued that Ho was not in the least prepared to answer questions on the topics RTI described. RTI Supp. Mem., pp. 9-10; Cotter Decl. I, Ex. I (Notice of Taking Deposition).

Ho could not answer questions on Topic 1 (subjects discussed at a February 4, 2008 meeting at Data); Topic 2 (regarding the Data's decision to plate the controls with 3μ of gold); Topic 3 (storage of the remotes) (“Q. Other than reviewing the report by Mr. Zarrow, did you do anything to educate yourself concerning Subject Number 3? A. No, because I was very busy.”) (Cotter Decl. II, Ex. C, p. 29); Topic No. 4 (communications between Data, Phico and Subtle in December 2008, regarding the controls) (Ho testified: “The question for Topic 4, it touches December 2008. We're already in 2011 now. I had to refresh my memory. I couldn't just stay in this RTI nightmare. I had to move on. But I went back to refresh my memory. Q. What did you do to go back and refresh your memory? A. Memory, just memory ... I tried hard to remember.”) (Id., p. 31); Topic 5 (Data's communications with Phico or consultants regarding performance of the remotes and all related defects); and Topic 6 (Data's knowledge of and compliance with IPC standards relating to the manufacture of the remotes' circuit boards). As to Topics 5 and 6, Ho testified that she “swept other things aside and tried hard to remember the entire story, what happened in the beginning, ... middle and what in the end.” Id., p. 31. Further, she did not review any IPC documents to prepare herself to answer questions on Topic 6, as she “wouldn't ... read something out of my profession. Even if I did, I wouldn't understand anything there.” Id., pp. 31-32.

RTI's counsel submitted that Ho was so unprepared that he adjourned the deposition and indicated that he would seek relief from the Court. Id., p. 36. RTI then supplemented its original motion to compel and sought the following relief: 1) sanctions in the form of a negative inference instruction if Data cannot produce relevant, responsive documents from the period of the summer of 2009 to the present; 2) monetary sanctions to punish Data for its willful, bad faith abuse of the discovery process; 3) requiring Data to immediately conduct a search of all employee computers for relevant, responsive documents and to produce those documents; 4) requiring Data to reimburse RTI for its costs associated with its Rule 30(b)(6) deposition of Ho and also requiring Data to produce a fully prepared Rule 30(b)(6)witness. RTI Supp. Mem., pp. 10-14.

In opposition, Data denied that there was impending litigation between Data and RTI in 2009, because the emails supplied by RTI in support of its argument only indicated that Data was having difficulty collecting payment from RTI. Data's Supplemental Memorandum in Opposition to Motion to Compel (“Data Supp. Mem.”), p. 2 [Docket No. 131]; Cotter Decl. II, Ex. A (email string between RTI and Data dated between July 13, 2009 and August 20, 2009). Data further denied that it failed to place a litigation hold on its documents and ESI for the relevant time period, which it stated commenced on the date RTI filed its Complaint (April 16, 2010) [Docket No. 1]. Data Supp. Mem., p. 3. Data submitted a declaration from Smart Lee, Data's MIS engineer, in which Lee stated that “all documents at Data relating to the T2C and T3 remotes have been either retained on the servers and/or individual computers at Data or have been archived.” Declaration of Smart Lee in Opposition to Motion to Compel (“Lee Decl.”), ¶ 4 [Docket No. 132]. Data further represented in its memorandum that its in-house lawyer, Lin, was assigned the tasks of “maintaining” and searching for documents to the MIS department, and that a litigation hold has been in place from 2010 to the present.[12] Data Supp. Mem., p. 3. Data argued that because RTI could not prove that it had destroyed documents, the sanctions sought by RTI were inappropriate. Id., pp. 3-4.

*10 Data also maintained that Ho was properly prepared for her Rule 30(b)(6) deposition, indicating that she was able to answer some questions regarding the topics during RTI's deposition of her in her individual capacity. Id., pp. 9-10.

“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.” Fed. R. Civ. P. 26(b)(1). Rule 26 is to be construed broadly and encompasses “any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” In re Milk Prod. Antitrust Litig., 84 F.Supp.2d 1016, 1027 (D. Minn. 1997) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)); Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992) (“Rule 26(b) ... is liberal in scope and interpretation”).

Federal Rule of Civil Procedure 26(g) requires that every discovery response be signed by counsel of record, and that the signature certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry, that the discovery response is not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation. Fed. R. Civ. P. 26(g)(1)(B)(ii). If the certification violates the Rule without substantial justification, the court, on motion or on its own, must impose an appropriate sanction, which may include an order to pay reasonable expenses and attorney's fees, caused by the violation. Fed. R. Civ. P. 26(g)(3) (emphasis added).

The advisory committee's notes to Rule 26(g) further describe the correlation between the Court's sanction powers and the duty the Rule imposes on counsel to conduct discovery reasonably:

Fed. R. Civ. P. 26(g) advisory committee's notes to the 1983 amendments (citations omitted); see also Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354, 356-360 (D. Md. 2008) (providing an overview of the history and purpose of Fed. R. Civ. P. 26(g) and describing its role in curbing discovery abuses).

Federal Rule of Civil Procedure 34(b)(2)(E) provides:

The advisory committee's notes emphasize that ESI productions may not be randomly organized:

Fed. R. Civ. P. 34(b), advisory committee's notes to the 2006 amendment. “Interpreting the Federal Rules to require ESI productions to be organized in such a way as to facilitate, not hinder, the usefulness of the information produced also makes common sense.” City of Colton v. American Promotional Events, Inc., 277 F.R.D. 578, 584 (C.D. Cal. 2011).

In this case, Data blatantly violated both Rule 26(g) and Rule 34 in responding to RTI's discovery. Data produced a mass of electronic files that were either unnumbered, out of sequence, could not be opened, or were irrelevant to the discovery sought by RTI.[13] Data produced attachments to documents that it never opened or reviewed for relevance and responsiveness. Further, because of the overlap between the August 19, 2011, October 19, 2011 and January 24, 2012, document productions Data made it difficult, if not impossible for RTI to determine which documents were responsive to which requests, much less correlate the attachments produced on January 24, 2012 to the documents produced on October 19, 2012. In short, Data's conduct in responding to RTI's written discovery, if not designed to harass RTI, clearly caused unnecessary delay and needlessly increased the cost of litigation in violation of Rule 26(g). This Court has completely lost confidence in Data's ability to respond to discovery pursuant to Rules 26 and 34 without intervention by the Court.

*12 Therefore, Data is ordered to do the following within 30 days of the date of this Order:

1. It shall supplement its responses to Document Request Nos. 14-16, 21-23 and 29 and produce all documents responsive to these requests, but only responsive documents, or identify by Bates number all documents previously produced responsive to these requests, but only responsive documents.

2. It shall supplement its answers to Interrogatories Nos. 4-9, 11, 12, 14, 15, 20 and 22 and Document Request Nos. 2-5, 11 and 13-31 including specific reference by Bates number to each document it has already produced or is producing that is responsive to each discovery request.

3. It shall produce all email attachments in PDF format, or another readable format if it cannot produce the attachment in PDF format, and indicate by Bates number which document the attachment should be attached.

Additionally, Data is prohibited from producing to RTI any ESI that is not readable or cannot be opened using conventional software readily accessible to RTI at minimal cost.

This Court has concluded that the ESI search terms “T2C” and “T3” are overly broad and may not have captured some of the information RTI sought, or even more likely, captured information that RTI had not requested and resulted in the production of documents that were not responsive to RTI's discovery. Consequently, to insure that only responsive documents are produced to RTI, within 7 days of the date of this Order, Data's counsel must consult with RTI's counsel and reach an agreed-upon protocol to search Data's ESI for responsive documents to RTI's written discovery. To the extent that the parties cannot agree on a protocol, within 10 days of this Order, they are directed to submit letters to this Court describing their respective protocols and setting forth why their protocols should be adopted and the opposing party's protocol should be rejected. This Court will then decide the appropriate protocol for searching ESI for responsive documents or whether to hold a further hearing and obtain evidence (including expert testimony) regarding the appropriate protocol to be used to search ESI for responsive documents. After reaching an agreed-upon protocol or the issuance of a court-ordered protocol, Data must use that protocol to search its ESI and produce any files not already produced.

Following the production of the documents and supplemental responses ordered above, RTI may if it so chooses, resume the deposition of Chiu to address any newly-produced documents.

Finally, because this Court has determined that Data violated Rule 26(g), RTI is awarded its reasonable attorneys' fees and costs in connection with the following: (1) preparation of its motion to compel, attendance at both hearings, and supplemental submission; and (2) its fees and costs incurred conferring with Data regarding the inadequacy of Data's discovery responses. To support its request for attorney's fees and costs, 10 days from the date of this Order, RTI shall serve and file an affidavit setting forth its reasonable attorney's fees and costs incurred in connection with these activities, and including the following information: the identity of each service provider; the amount of time each service provider expended on the motion and a description of each service provided; the hourly rate, level of experience and year of graduation for each service provider; and a description and amount for all expenses incurred.[14] Within two weeks of the date RTI files and serves its affidavit, Data may serve and file its objections to RTI's submission on fees and costs. Upon receipt of the parties' submissions the Court will issue its Order on the award of fees and costs.

*13 “The obligation to preserve evidence begins when a party knows or should have known that the evidence is relevant to future or current litigation.” E*Trade Securities, LLC v. Deutsche Bank, 230 F.R.D. 582, 587 (D. Minn. 2005) (internal quotation and citation omitted). The ultimate focus for imposing sanctions for spoliation of evidence is the intentional destruction of evidence indicating a desire to suppress the truth, not the prospect of litigation.” Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th Cir. 2007). A party claiming spoliation of evidence must meet a high evidentiary standard to win an adverse inference, and must also prove bad faith. Stevenson v. Union Pacific R. Co., 354 F.3d 739, 746 (8th Cir. 2004); Morris v. Union Pac. R. R., 373 F.3d 896, 901 (8th Cir. 2004) (noting that pursuant to Stevenson, “a finding of intent is required to impose the sanction of an adverse inference instruction.”); Lewy v. Remington Arms Co., 836 F.2d 1104, 1111–12 (8th Cir. 1988) (adverse inference instruction is appropriate only where the spoliation or destruction of evidence is intentional and indicates a fraud or desire to suppress the truth).

RTI suspects, and with good reason, that Data has failed to adequately preserve documents. Ho's deposition testimony did not provide support for Data's suggestion that it undertook a meaningful effort to preserve documents. Further, in light of Ho's testimony regarding the routine purging of documents, it is possible that Data is continuing to destroy documents relevant to this litigation. Nonetheless, RTI provided no evidence that particular documents have been destroyed, and the Court rejects RTI's suggestion that a litigation hold should have been in place by the summer of 2009. The emails submitted by RTI indicate that Data was having trouble collecting payment from RTI, but that is insufficient to trigger a duty to preserve the documents dating from that period. “The undeniable reality is that litigation ‘is an ever-present possibility’ in our society.” Cache La Poudre Feeds, LLC v. Land O'Lakes, Inc., 244 F.R.D. 614, 621 (D. Colo. 2007) (citing and quoting National Union Fire Ins. Co. v. Murray Sheet Metal Co., Inc., 967 F.2d 980, 984 (4th Cir. 1992)). As a result, while a party is not permitted to destroy documents after it has unequivocal notice of litigation, the duty to preserve documents is not triggered by the mere possibility of litigation. Id.

The Court therefore denies without prejudice RTI's motion for sanctions for spoliation in the form of an adverse inference. However, the Court does find that Data has engaged in discovery tactics that are sloppy at best, and abusive at worst. Consequently, within 10 days of the date of this Order, Data must file and serve a declaration or affidavit from Data's in-house counsel, Lin, attesting with specificity the steps he took to ensure that Data has placed an effective litigation hold on its documents related to the issues in this case, including a description of the means by which he communicated the litigation hold (e.g. oral, email or by written document), to whom he communicated the litigation hold, a description of the contents of the communication, the date on which the litigation hold was implemented, and a description of Data's on-going efforts to preserve relevant evidence. Additionally, to the extent that Data's U.S. counsel assisted with or participated in the litigation hold, he should file and serve his own declaration or affidavit setting forth his role in and the steps he took to put in place and implement the litigation hold, including the same information Lin has been directed to provide to this Court.

After Lin files this declaration or affidavit, RTI may renew its motion for sanctions for spoliation of evidence if it believes it has a basis for doing so.

*14 “ ‘Corporations, partnerships, and joint ventures have a duty to make a conscientious, good-faith effort to designate knowledgeable persons for Rule 30(b)(6) depositions and to prepare them to fully and unevasively answer questions about the designated subject matter.’ ” Prokosch v. Catalina Lighting, Inc., 193 F.R.D. 633, 638 (D. Minn. 2000) (citing and quoting Starlight Intern, Inc. v. Herlihy, 186 F.R.D. 626, 639 (D. Kan. 1999)). “[I]f it becomes obvious during the course of a deposition that the designee is deficient, the [organization] is obligated to provide a substitute.” Id.(quoting Dravo Corp. v. Liberty Mut. Ins. Co., 164 F.R.D. 70, 75 (D. Neb. 1995)). As noted by the court in Prokosch:

193 F.R.D. at 638-39 (citations omitted).

Under the Rule, “the deponent selected to be the designee does not even need to have personal knowledge of the subject matter of the testimony so long as he can become knowledgeable of information that is generally known to the organization through reasonable preparation. Kendall Lakes Towers Condo. Ass'n, Inc. v. Pacific Ins. Co., Civ. No. 10-24319, 2011 WL 6190160 at *8 (S. D. Fla. 2011) (emphasis in original). The designated deponent's answers are binding on the corporation, and the Rule makes clear that the corporate designee is not merely testifying about matters within her own personal knowledge, but is speaking on behalf of the corporation. It is axiomatic that answers that a deponent gives on her own behalf are not binding on the corporation.

*15 As a preliminary matter, this Court finds that RTI described the topics to be covered in the Rule 30(b)(6) deposition with the requisite specificity. Fed. R. Civ. P. 30(b)(6) (the matters for examination must be described “with reasonable particularity”). On the other hand, it is clear that Ho was woefully unprepared to testify on Data's behalf. Her answers conveyed both a sense of surprise that she would be expected to know about some the topics and a belligerence at being asked the questions to begin with. Data's conclusory statement that “Ms. Ho was adequately prepared for her 30(b)(6) deposition on March 27, 2012,” (Data Supp. Mem., p. 9), is belied by the transcript.

Furthermore, Data's explanation of why it selected Ho as its Rule 30(b)(6)designee showed that Data misunderstood the purpose of the designation. According to Data, it chose Ho because she was one of the more senior employees at Data and would have “first-hand knowledge and account of the particular information requested.” Id. As noted above, it is not the corporate designee's personal knowledge or experience that matters. What matters is how well the deponent has been prepared by the corporation to answer questions that may lie outside the reaches of her personal knowledge. Data submitted no evidence in the way of declaration from the company or counsel regarding what steps it affirmatively took to prepare Ho. The only conclusion the Court can reach is that it took none. Furthermore, Data's reliance on the fact that Ho was able to answer some questions related to topics described in the Rule 30(b)(6) notice during her personal deposition is misplaced. Ho's answers during her personal deposition are not binding on Data and are of little help to RTI in establishing facts and evidence as to Data.

The long and short is that Data failed to fulfill its obligation under Rule 30(b)(6). As a consequence, Data must produce a fully prepared witness for a deposition to take place at a mutually acceptable time, in the Twin Cities. Data shall be liable for all costs associated with the deposition, including the witness or witnesses' travel expenses, the cost of the court reporter and translator (if any) and RTI's counsel's reasonable attorneys' fees incurred in connection with the deposition.[15]

In addition, RTI is awarded its reasonable attorneys' fees and costs incurred in connection with the Rule 30(b)(6) deposition and shall prepare an affidavit that comports with the directives of this Court in Section III, B.1, supra. RTI shall include in the affidavit the following additional information: attorneys' fees and costs incurred in connection with preparing for and taking Ho's deposition; the cost of the translator and court reporter; long-distance telephone charges; and attorneys' fees and costs incurred in connection with preparing its supplemental memorandum. Data may file and serve objections as previously ordered in Section III, B.1.

The remotes at issue are the T2C and T3 models. Complaint, ¶ 6 [Docket No. 1].

The fact discovery cutoff was January 17, 2012. Fourth Amended Pretrial Scheduling Order, p. 2 [Docket No. 51]

Data apparently served this Notice of Taking Deposition, as well as the others, without ever receiving confirmation from RTI regarding Cheng's availability or willingness to appear voluntarily.

Pursuant to the Second Amended Pretrial Scheduling Order [Docket No. 26], for any party as to any issue on which it had the burden of proof, the deadline for full disclosures required by Rule 26(a)(2)(B), accompanied by the written report prepared and signed by the expert witness, was June 1, 2011, and for any party desiring to present expert witnesses in rebuttal to the responsive expert reports, the disclosure deadline was October 1, 2011.

This Court issued its written order on December 23, 2011. However, the written order merely confirmed the Court's ruling from the bench on December 5, 2011. Minute Entry for December 5, 2012 [Docket No. 48].

Since the motion was filed and heard, RTI has deposed Ho and Jin-Wei Chiu.

Without explanation, permission or apology, Data untimely filed its responsive memorandum on February 14, 2012. Its brief was due on February 8, 2012. While the Court does not countenance Data's conduct on this issue, in the interests of an orderly resolution of the parties' discovery dispute, the Court has opted to consider Data's untimely submission.

A the continued motion hearing, RTI's counsel told the Court that morning he had received an amended expert report from Data, although the Court's operative scheduling order required expert reports to be disclosed on June 1, 2011, and rebuttal reports on October 1, 2011. Fifth Amended Pretrial Scheduling Order, p. 2 [Docket No. 100]. Data's counsel indicated that the amended expert report was merely a “correction” of the original report, but indicated he had not read the amended report. In response to RTI's objection, Data withdrew its untimely amended expert report.

The Court reminded Data's counsel of his obligation pursuant to Fed. R. Civ. P. 26 to produce only relevant documents in response to RTI's discovery requests, not to “dump” documents on RTI and leave it to RTI to sort out the mess.

The exhibits to this Declaration were filed under seal. However, this Court sees no basis for the filing the exhibits under seal and precluding the public from having access to them. This Court will give the parties 10 days from the date of this Order to explain in writing why any part of the Declaration or exhibits should remain under seal.

A “Gerber file” is “a standard electronics industry file format used to communicate design information to manufacturing for many types of printed circuit boards.” www.circuitpeople.com.

Data did not supply a declaration from Lin to support this representation or any evidence of a litigation hold, such as a communication from outside or in-house counsel to Data's employees.

This Court was particularly troubled by Data's colossal production of documents without any review, much less review for relevance. Such conduct evidences an untenable search protocol, sloppiness, or both. “Whether intended or not, the result is the proverbial “needle in a haystack.” In re Sulfuric Acid Antitrust Litigation, 231 F.R.D. 351, 364 (N.D. Ill. 2005) (finding that defendants violated Rule 34 by “dump [ing] massive amounts of documents, which defendants concede ‘have no logical order to them’ on their adversaries and demand they try to find what they are looking for”).

As noted below, the Court is awarding RTI its fees and costs in connection with Ho's Rule 30(b)(6) deposition. RTI shall submit a single affidavit in connection with both awards.

By mutual consent of the parties the deposition may take place telephonically, with the witness located in Taiwan.