KIPU SYSTEMS, LLC, a Florida limited liability company, Plaintiff, v. ZENCHARTS, LLC, a Florida limited liability company, et al., Defendants Case No. 17-24733-Civ-WILLIAMS/TORRES United States District Court, S.D. Florida Entered on FLSD Docket August 26, 2019 Counsel Cameron Christopher Murphy, Allen Dyer Doppelt Milbrath and Gilchrist, Jake Matthew Greenberg, Bilzin Sumberg, Joshua B. Spector, Law Offices of Joshua Spector, P.A., Robert Houpt Thornburg, Allen, Dyer, Doppelt Gilchrist P.A., Miami, FL, Christopher B. Spuches, Jason Alan Martorella, Agentis PLLC, Coral Gables, FL, Mark Evan Stein, Mark Stein Law, Aventura, FL, for Plaintiff. Adam K. Israel, Pro Hac Vice, Balch & Bingham LLP, Birmingham, AL, Geremy Walden Gregory, Balch and Bingham LLP, Charles Brumby, Jacksonville, FL, Walter H. Boone, Pro Hac Vice, Kye C. Handy, Pro Hac Vice, Balch & Bingham LLP, Jackson, MS, for Defendants Zencharts, LLC, Website Consultants, Inc., Sean Callahan, Richard Glaser, Daniel J. Callahan. Adam K. Israel, Pro Hac Vice, Balch & Bingham LLP, Birmingham, AL, Geremy Walden Gregory, Balch and Bingham LLP, Charles Brumby, Jacksonville, FL, Walter H. Boone, Pro Hac Vice, Balch & Bingham LLP, Jackson, MS, for Defendant Solutions Recovery Center, LLC. Geremy Walden Gregory, Balch and Bingham LLP, Charles Brumby, Jacksonville, FL, Kye C. Handy, Pro Hac Vice, Balch & Bingham, Jackson, MS, for Defendant Yanko Karkalichev. Alexis Sophia Read, Miami, FL, for Defendant Zen Medical, LLC. Adam K. Israel, Pro Hac Vice, Balch & Bingham LLP, Birmingham, AL, Geremy Walden Gregory, Balch and Bingham LLP, Jacksonville, FL, Walter H. Boone, Pro Hac Vice, Kye C. Handy, Pro Hac Vice, Balch & Bingham LLP, Jackson, MS, for Defendant Solutions Recovery, LLC. Geremy Walden Gregory, Balch and Bingham LLP, Jacksonville, FL, for Defendants Callahan Holdings, Inc., Seamus Callahan. Torres, Edwin G., United States Magistrate Judge ORDER ON DEFENDANTS’ MOTION FOR SANCTIONS *1 This matter is before the Court on Zen Charts, LLC’s, Solutions Recovery Center, LLC’s, Website Consultants Inc.’s, Richard ‘Rick’ Glaser’s, Sean Callahan’s, Daniel Callahan’s, and Yanko Karkalichev’s (collectively, “Defendants”) motion for sanctions [D.E. 193] against Kipu Systems LLC (“Plaintiff”). Plaintiff responded to Defendants’ motion on July 25, 2019 [D.E. 222] to which Defendants replied on August 1, 2019. [D.E. 224]. Therefore, Defendants’ motion is now ripe for disposition. After careful consideration of the motion, response, reply, relevant authorities, and for the reasons discussed below, Defendant’s motion for sanctions is DENIED. I. ANALYSIS This case concerns allegations that Defendants accessed Plaintiff’s electronic medical systems in 2015 without Plaintiff’s authorization and that Defendants made copies of it for their own personal gain. Thus, one of the primary issues in this case is the nature of Plaintiff’s electronic medical records (“EMR”) before and after Defendants accessed the system. If Defendants can show that they did not access Plaintiff’s system nor copy any of its features, Defendants conclude that this case cannot stand. In preparing for a jury trial scheduled for October 15, 2019, Defendants request that sanctions be imposed because Plaintiff has repeatedly failed to comply with a Discovery Order that required Plaintiff to produce a working version of its EMR for May 2015, February 2016, January 2016, and December 2017. Defendants argue, for example, that Plaintiff’s data from 2015 is not from that time period because the source code reflects that the information was from 2017. Defendants also suggest that the data cannot be from May 2015 because it contains a tab identifying a “Golden Thread” – a feature that Plaintiff did not release to the public until the fourth quarter of 2016. Without the correct data requested, Defendants fear that Plaintiff will be allowed to prove its case and that Defendants will be unable to show otherwise because the data is in the exclusive hands of the Plaintiff. Therefore, Defendants request that the Court (1) exclude any evidence that Defendants accessed Plaintiff’s system after May 2015, and (2) award Defendants its reasonable costs and fees incurred in resolving this dispute. Plaintiff’s response is that there is no basis for sanctions because Plaintiff complied with its discovery obligations. Plaintiff claims that – after Defendant complained about Plaintiff’s data from May 2015 and suggested that it was from a later date – Plaintiff investigated the matter. During that investigation, Plaintiff discovered that the hard drive, where the data was stored, had crashed and that it was replaced on May 10, 2017. Plaintiff then contends that, after it restored the system, the date on the files now reflect May 10, 2017 even though some of the underlying data is from May 2015. Plaintiff maintains that this provides a credible explanation for the alleged discrepancy in the data and that it undermines any finding that Plaintiff failed to comply with a court order. As for the golden thread feature, Plaintiff argues that it regularly tests new features before releasing them to the public and that this explains why the May 2015 data includes a feature that was not released until 2016. Therefore, Plaintiff concludes that Defendants’ motion fails at every turn and that, despite some perceived discrepancies, Plaintiff has produced everything requested. *2 Pursuant to Federal Rule of Civil Procedure 37, the Court may impose discovery sanctions when a party fails to obey an order to provide or permit discovery. Fed. R. Civ. P. 37(b)(2). Rule 37 sanctions are intended to prevent unfair prejudice to the litigants and insure the integrity of the discovery process. See Gratton v. Great American Communications, 178 F.3d 1373, 1374–75 (11th Cir. 1999) (affirming dismissal of suit for discovery abuse where trial court found that plaintiff bore “substantial responsibility” for the delays in discovery and that the defendants were not at all at fault). Rule 37(b)(2) provides a range of sanctions that a district court may impose upon parties and their attorneys for failure to comply with the court’s discovery orders. It provides that the court, in its discretion, may impose, among others, the following sanctions: (1) the court may order that disputed facts related to the violated order be considered established in accordance with the claim of the party obtaining the sanctions order; (2) the court may refuse to permit the violating party to raise certain defenses, or it may prohibit that party from opposing certain claims or defenses of the party obtaining the sanctions order; (3) the court may strike any pleadings or any parts of the pleadings of the violating party, stay the proceedings, or even dismiss the action or render a judgment of default against the violating party; and (4) the court may treat the violation as contempt of court. Fed. R. Civ. P. 37(b)(2). The Court may grant sanctions against the “disobedient party [and/or] the attorney advising that party,” who “fails to obey an order to provide or permit discovery.” Fed. R. Civ. P. 37(b)(2)(A). “Instead of or in addition to” the sanctions listed in Rule 37(b)(2)(A), “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); Carlucci v. Piper Aircraft Corp., 775 F.2d 1440, 1453 (11th Cir. 1985) (finding that a court may “penalize uncooperative attorneys or parties litigant in discovery proceedings by requiring the payment of ‘reasonable expenses, including attorney’s fees, caused by the failure.’ ”) (internal citations omitted). After a thorough review of the record presented – including the competing declarations – Defendants’ motion is unpersuasive because this is an issue to be resolved on a motion for summary judgment or at trial. At a prior discovery hearing, the Court contemplated the need for an evidentiary hearing to assess the credibility of the witnesses responsible for the discrepancies in data served after 2015. But, upon further review, an evidentiary hearing is unnecessary because Plaintiff represents, with the aid of a declaration of its in-house counsel Brian Bell, that the data Plaintiff produced is the same data that the Court compelled. Defendants, of course, disagree because the source code reflects a 2017 date, but there is nothing in the record that allows the Court to resolve this dispute at this stage of the proceedings and a month before trial. Defendants then suggest that the 2015 data cannot be accurate because it includes a feature that Plaintiff did not release until 2016. But, as Plaintiff contends, the discrepancy can be explained if Plaintiff regularly engages in beta-testing to release new features to certain populations before they are made available to the public. This means that, there is a credible explanation for the discrepancies that Defendants identified, and that the issue of authenticity must be resolved at a later stage. And Defendant has filed no sworn evidence that categorically rebuts the Plaintiff’s expert on this issue. *3 Defendants nonetheless suggest that they are left without a remedy if Plaintiff has, in fact, made misrepresentations about the data that it produced. But, Defendants do have a remedy at both the summary judgment stage and at trial. If the data is so unreliable, the Court may exclude that evidence in the disposition of a motion for summary judgment. The Court may also exclude Plaintiff’s evidence at trial to the extent Plaintiff cannot authenticate that the data is what it purports to be. See, e.g., Partylite Gifts, Inc. v. MacMillan, 2012 WL 13059665, at *3 (M.D. Fla. Sept. 13, 2012) (“To the extent PartyLite contends this information is inherently unreliable, inaccurate, or otherwise untrustworthy, those issues are more properly raised by PartyLite at trial in response to specific exhibits.”). Indeed, authenticity is a prerequisite for admissibility,[1] and if the data is tainted because of a hard drive crash (with 2015 data having a source code of 2017), then Plaintiff will have an extraordinarily difficult time in admitting any of this data into evidence. As a result, Plaintiff may not have any evidence to meet its burden of establishing that Defendant accessed its systems and copied Plaintiff’s EMR.[2] We therefore conclude that Defendant’s motion for sanctions is DENIED because there is no discovery violation presented. II. CONCLUSION For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that Defendants’ motion for sanctions is DENIED and Defendant’s request for a hearing is DENIED as moot. [D.E. 193]. DONE AND ORDERED in Chambers at Miami, Florida, this 26th day of August, 2019. Footnotes [1] A party may authenticate, or lay the foundation for, a document through extrinsic evidence, as contemplated under Federal Rule of Evidence 901, or a document may be self-authenticating under Rule 902. See Fed. R. Evid. 901–02. [2] We nonetheless leave all trial-related matters for the District Judge to consider at the appropriate time.