Palomo v. DeMaio
Palomo v. DeMaio
2018 WL 10323057 (N.D.N.Y. 2018)
May 16, 2018
Kahn, Lawrence E., United States District Judge
Summary
The court found that Defendants failed to comply with the August 2017 Protective Order, which required the recording inspection to take place in the presence of the parties and their attorneys, and forbade the presence of experts. As a result, the court precluded the expert testimony and denied the Appeal.
Additional Decisions
SERGIO FRANCISCO PUEBLA PALOMO, Plaintiff,
v.
JOSEPH G. “JOEY” DeMAIO, et al., Defendants
v.
JOSEPH G. “JOEY” DeMAIO, et al., Defendants
5:15-CV-1536 (LEK/TWD)
United States District Court, N.D. New York
Filed May 16, 2018
Kahn, Lawrence E., United States District Judge
DECISION AND ORDER
*1 On March 19, 2018, defendants Joseph DeMaio, Circle Song Music, LLC, God of Thunder Productions, Ltd., Magic Circle Films Int’l LLC, Magic Circle Music Guitars, LLC, Magic Circle Music, Ltd., and Caromark, LLC appealed a text order filed by the Honorable Thérèse Wiley Dancks, U.S. Magistrate Judge. Dkt. Nos. 115 (“March 2018 Order”), 124 (“Appeal”), 124-1 (“Appeal Memorandum”). The March 2018 Order precluded Defendants from introducing the testimony or expert report from their proposed expert, Michael Rorick. Mar. 2018 Order. Plaintiff opposed the Appeal. Dkt. No. 131 (“Plaintiff’s Memorandum”). For the following reasons, the Appeal is denied.
II. BACKGROUND
First, the Court briefly summarizes the action from which this discovery dispute arises. Plaintiff is a keyboardist for the band HolyHell, whose albums were once produced by Defendants. Palomo v. DeMaio, No. 15-CV-1536, 2017 WL 6001825, at *1 (N.D.N.Y. Dec. 4, 2017) (Kahn, J.). Plaintiff and Defendants allegedly entered into a series of written contracts governing Plaintiff’s work on HolyHell albums, and an oral agreement in 2011 governing Plaintiff’s work on a forthcoming HolyHell album entitled “Darkness Visible.” Id. at *1–2. Plaintiff terminated his employment with Defendants in 2013 without finishing Darkness Visible, and filed an action in this Court alleging that Defendants refused to return his musical equipment. Id. at 1. Defendants filed breach of contract and unjust enrichment counter-claims against Plaintiff, alleging that he refused to return work product belonging to Defendants and that he wrongfully completed and sold copies of Darkness Visible on his own. Id. at *1–3.
On March 2, 2017, Judge Dancks issued a uniform pretrial scheduling order which, in relevant part, set September 1, 2017, as the deadline for all discovery. Dkt. No. 25 (“Scheduling Order”) at 2. The Scheduling Order also required Plaintiff to identify potential experts and serve expert reports upon Defendants “[n]o later than 90 days prior to the discovery deadline,” and required Defendants to do the same “[n]o later than 45 days prior to the discovery deadline.” Id. On May 11, 2017, Defendants served Plaintiff a request for inspection, asking for all “device[s] owned and/or used by Plaintiff during and/or subsequent to his employment with Defendants to perform work for Defendants and/or on behalf of HolyHell.” Dkt. No. 131-1. After the parties met and conferred via telephone, Plaintiff agreed to make “a log of all the recordings concerning Darkness Visible in his possession, which would enable Defendants to know exactly what [Plaintiff] possessed without obtaining ... possession of the recordings.” Pl.’s Mem. at 8.
On July 21, 2017, Plaintiff’s counsel suggested that the parties extend the discovery deadline, but Defendants’ counsel refused, stating that the “request to extend the discovery schedule ... is nothing more than a ploy to excuse [Plaintiff’s counsel’s] missed deadline to submit an expert report.” Dkt. No. 89-4 at 1–2. On July 25, 2017, Plaintiff’s counsel submitted a letter motion to the Court, which asked the Court to extend the discovery deadline. Dkt. No. 65 at 3. On August 1, 2017, the Court issued a text order that stated, in relevant part, “the Court resets pretrial deadlines as follows ... [a]ll Discovery due by 1/31/2018.” Dkt. No. 68 (“August 2017 Order”).
*2 On August 21, 2017, Defendants submitted a letter motion asking the Court to schedule a conference to resolve discovery disputes that the parties encountered. Dkt. No. 69 at 1. The letter motion explained that Plaintiff objected to Defendants’ request for inspection described above. Id. at 2. Plaintiff responded to the letter motion on August 31, 2017, stating that requiring Plaintiff to produce all of his recordings from HolyHell was improper “because the recordings are the very relief sought by Defendants in this litigation.” Dkt. No. 72 at 2. Judge Dancks convened a telephone conference with the parties on August 31, 2017. Dkt. No. 131-3 (“Phone Conference”).
At the Phone Conference, Defendants’ counsel explained that they wanted to listen to Plaintiff’s recordings in order to determine the extent to which the recordings had been changed since Plaintiff terminated his employment in 2013, and suggested that they wanted to retain an expert to inspect the recordings. Id. at 10. Plaintiff’s counsel remarked that Defendants could not retain an expert because “the expert deadline has passed,” and reiterated that an inspection was unnecessary because “the actual sound of [the] recording[s] is irrelevant” to establish Defendants’ counterclaims. Id. at 12–13.
Judge Dancks, acknowledging Plaintiff’s concern that providing his recordings to Defendants during discovery would essentially give Defendants the ultimate relief they sought, suggested that the parties inspect the recordings together, and stated that Plaintiff “wouldn’t have to actually give up the tracks if everybody just sat down together in the room and listened.” Id. at 15. After hearing from both parties regarding the inspection request, Judge Dancks concluded: “I’m going to permit the inspection with just the attorneys and clients, no experts, and all you’re going to be doing is listening to the music.” Id. at 18. She issued a text minute entry on August 31, 2017, stating, “Court permits inspection of computers to listen to the recording files, no experts are to be present, just the attorneys and clients, for listening only.” Docket (“August 2017 Protective Order”). The parties listened to the recordings at “Defendants’ offices” on September 20, 2017. Pl.’s Mem. at 6–7.
Around this time, Plaintiff’s wife, Mary Breon, was involved in a bankruptcy proceeding. Pl.’s Mem. at 7. “Defendants are creditors in that action, and are represented by their counsel in this action and local counsel.... [Plaintiff] is not a party to the bankruptcy.” Id. Breon is the owner and lead singer of HolyHell. Appeal Mem. at 4. The bankruptcy court ordered the parties to attend a listening session to inspect the same audio files from Darkness Visible that were the subject of Defendants’ request for inspection in the action before this Court. Id. at 4; Pl.’s Mem. at 11. The bankruptcy court permitted Defendants to retain an expert to inspect the files. Id. “Defendants retained Michael Rorick of Rock Central Audio Forensics,” who analyzed the audio files in October 2017 and authored an expert report discussing “the files that Plaintiff took or retained when he left Magic Circle, ... [and] the process which Plaintiff took in order to manipulate the files.” Appeal Mem. at 4–5.
After Rorick created the report for the bankruptcy proceeding, Defendants informed Plaintiff that they planned to introduce the report in this case. Pl.’s Mem. at 7. On November 1, 2017, Plaintiff requested that the Court bar Rorick’s testimony, arguing that “expert discovery is closed and this Court has previously ruled that Defendants may not introduce expert testimony concerning the audio recordings.” Dkt. No. 89. On March 5, 2018, Judge Dancks issued the March 2018 Order which stated, in relevant part, that Defendants were precluded “from using the testimony and/or expert report of M. Rorick in this action. The disclosure was untimely pursuant to the Court’s original discovery deadline, and not all parties to this action were present during the proposed expert’s inspection of the subject music tracks because it was done in conjunction with a bankruptcy action involving some of the same property at issue in this action.” Mar. 2018 Order. On March 19, 2018, Defendants appealed the March 2018 Order. Appeal.
III. LEGAL STANDARD
*3 In reviewing a magistrate judge’s orders concerning non-dispositive matters, “[t]he ‘district judge in the case must consider timely objections and modify or set aside any part of the [magistrate judge’s] order that is clearly erroneous or contrary to law.’ ” Arista Records, LLC v. Doe 3, 604 F.3d 110, 116 (2d Cir. 2010) (quoting Fed. R. Civ. P. 72(a)). An order is “ ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948); accord Easley v. Cromartie, 532 U.S. 234, 242 (2001) (quoting U.S. Gypsum Co., 333 U.S. at 395). An order is contrary to the law if “it fails to apply or misapplies relevant statutes, case law or rules of procedure.” Tompkins v. R.J. Reynolds Tobacco Co., 92 F. Supp. 2d 70, 74 (N.D.N.Y. 2000) (quoting Thompson v. Keane, No. 95-CV-2442, 1996 WL 229887, at *1 (S.D.N.Y. May 6, 1996)); accord New York v. Salazar, No. 08-CV-644, 2011 WL 1938232, at *4 (N.D.N.Y. Mar. 8, 2011) (Kahn, J.).
“[A] magistrate judge is afforded broad discretion when resolving discovery disputes and a reversal is appropriate only if the district judge finds that discretion is abused.” Moore v. Publicis Groupe SA, No. 11-CV-1279, 2012 WL 517207, at *1 (S.D.N.Y. Feb. 14, 2012); see also Leviton Mfg. Co. v. Greenberg Traurig LLP, No. 09-CV-08083, 2011 WL 2946380, at *1 (S.D.N.Y. July 14, 2011) (“It is well-settled that a magistrate judge’s resolution of a non-dispositive matter should be afforded substantial deference and may be overturned only if found to have been an abuse of discretion.” (quoting RMED Int’l Inc. v. Sloan’s Supermarkets, Inc., No. 94-CV-5587, 2000 WL 420548, at *2 (S.D.N.Y. Apr. 18, 2000))). “Thus ‘a party seeking to overturn a discovery order bears a heavy burden.’ ” Moore, 2012 WL 517207, at *1 (quoting AP Links, LLC v. Glob. Golf, Inc., No. 08-CV-1730, 2011 WL 888261, at *4 (E.D.N.Y. Mar. 14, 2011)).
IV. DISCUSSION
The Court finds that Judge Dancks did not abuse her discretion by precluding Defendants’ use of Rorick’s expert testimony. Rule 37(b) of the Federal Rules of Civil Procedure permits a district court to impose sanctions, including preclusion of evidence, when a party refuses to comply with a discovery order. Matter of Bouchard Transp. Co., Inc., Nos. 14-CV-1262, 617, 4462, 2018 WL 1581992, at *1 (S.D.N.Y. Mar. 28, 2018) (quoting Scantibodies Lab., Inc. v. Church & Dwight Co., No. 14-CV-2275, 2016 U.S. Dist. LEXIS 154396, at *56 (S.D.N.Y. Nov. 4, 2016)). “A district court has wide discretion to impose sanctions, including severe sanctions, under ... Rule ... 37, and its ruling will be reversed only if it constitutes an abuse of discretion.” Design Strategy, Inc. v. Davis, 469 F.3d 284, 294 (2d Cir. 2006). “In determining whether the district court acted within its discretion, this Court must consider (1) the party’s explanation for the failure to comply with the [disclosure requirement]; (2) the importance of the testimony of the precluded witness[es]; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance.” Design Strategy, Inc., 469 F.3d at 296 (citing Patterson v. Balsamico, 440 F.3d 104, 117 (2d Cir. 2006)). Judge Dancks offered two reasons for precluding Rorick’s testimony: first, Defendants’ disclosure was untimely; and second, Rorick performed the inspection of the Darkness Visible audio files without Plaintiff and his attorneys being present. Mar. 2018 Order. The Court analyzes these justifications below.
A. Timeliness
*4 Judge Dancks stated that Defendants’ “disclosure was untimely pursuant to the Court’s original discovery deadline.” Mar. 2018 Order. Defendants argue that this reasoning is clearly erroneous because, on August 1, 2017, Judge Dancks extended the discovery deadline to January 31, 2018, and Defendants’ disclosure was timely under the revised deadline. Appeal Mem. at 8. Defendants’ straightforward argument is compelling. The original Scheduling Order, issued on March 2, 2017, stated that the discovery deadline was September 1, 2017. Scheduling Order at 2. The Scheduling Order required Plaintiff to identify potential experts and serve expert reports upon Defendants “[n]o later than 90 days prior to the discovery deadline,” and required Defendants to do the same “[n]o later than 45 days prior to the discovery deadline.” Id. The August 2017 Order altered the Scheduling Order, stating, “the Court resets pretrial deadlines as follows ... [a]ll Discovery due by 1/31/2018.” Aug. 2017 Order. Per the discovery deadline as revised by the August 2017 Order, Defendants’ expert disclosures would be due 45 days prior to January 31, 2018, or on December 18, 2017. Defendants provided Plaintiff with Rorick’s preliminary expert report on October 31, 2017. Appeal Mem. at 8; see also Dkt. Nos. 89-1 to -2. Therefore, Defendants’ expert disclosure appears to be timely.
Plaintiff contends that the August 2017 Order only extended the deadline for fact discovery, but that the expert discovery deadline remained unchanged. Pl.’s. Mem. at 11. This distinction is certainly not present in the August 2017 Order. Plaintiff points to a July 21, 2017 email from Defendants’ counsel, id., which states, “[I]t appears that your request to extend the discovery schedule seemingly indefinitely is nothing more than a ploy to excuse your missed deadline to submit an expert report,” Dkt. No. 89-4. However, Defendants’ counsel sent this email before Judge Dancks extended the discovery deadlines. Pursuant to the original Scheduling Order, Plaintiff was required to disclose his experts ninety days before September 1, 2017—well before July 21, 2017. Therefore, Defendants’ counsel’s statement in this email is unremarkable; at the time, the original Scheduling Order was operative, and any expert report Plaintiff submitted would have been untimely. This email does nothing to suggest, however, that the August 2017 Order distinguished between the fact and expert discovery deadlines.
Plaintiff also argues that the parties made statements during the Phone Conference that indicate that the expert deadline was not extended. Pl.’s Mem. at 11. To begin with, the Court is unsure why Plaintiff thinks the parties’ statements, rather than the text of Judge Dancks’s August 2017 Order, should be considered when determining the discovery schedule in this action. Moreover, while Plaintiff’s counsel’s statements at the Phone Conference suggest that Plaintiff’s counsel thought the expert discovery deadline was not extended, e.g., Phone Conference at 12 (“[T]he expert deadline has passed.”), Defendants’ counsel never agreed or disagreed with that assessment, and Judge Dancks indicated that the deadline was extended, see id. at 5 (suggesting that, because the revised discovery deadline was January 31, 2018, Plaintiff’s expert report was due “90 days before that”). Plaintiff’s counsel’s opinion regarding the expert discovery deadline does not, without any support, suggest that the August 2017 Order left the original expert discovery deadline undisturbed.
Finally, Plaintiff states that Defendants’ co-counsel in the bankruptcy proceeding, Peter Tsarnas, represented to Plaintiff’s counsel “that expert discovery in this action had ended.” Pl.’s Mem. at 11. Again, the Court observes that statements regarding the discovery deadline from people other than Judge Dancks are of little use in illuminating the discovery schedule in this action. Moreover, Mr. Tsarnas is not Defendants’ counsel in this action. E.g., Pl.’s Mem. at 7. Even if he did make such a representation, his opinion on the meaning of the August 2017 Order is entitled to even less weight than those of counsel for the parties in this action.
For the above reasons, the Court concludes that the August 2017 Order extended both the fact and expert discovery deadlines. Accordingly, Defendants’ October 31, 2017 disclosure was not untimely. Therefore, the March 2018 Order improperly rejected Rorick’s expert report as untimely. However, because, as will be discussed below, Defendants failed to comply with other requirements of the August 2017 Order, the Court need not reverse Judge Dancks’s decision.
B. Failure to Comply with Judge Dancks’s Protective Order
*5 Rule 26 of the Federal Rules of Civil Procedure permits a district court to, “for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense” by, for example, “forbidding the disclosure of discovery,” “specifying terms ... for the disclosure of discovery,” “prescribing a discovery method other than the one selected by the party seeking discovery,” and “designating the persons who may be present while the discovery is conducted.” Fed. R. Civ. P. 26(c). “[A] protective order issued under Rule 26(c) can be enforced through Rule 37(b).” Bouchard Transp. Co., Inc., 2018 WL 1581992, at *1 (quoting Koch v. Greenberg, No. 07-CV-9600, 2011 WL 13260757, at *8 (S.D.N.Y. Aug. 16, 2011)).
On May 11, 2017, Defendants served Plaintiff with a request for inspection that asked Plaintiff to produce “[a]ll computers, hard drives, tablets, cellular phones, or other device[s] owned and/or used by Plaintiff during and/or subsequent to his employment to perform work for Defendants and/or on behalf of HolyHell.” Dkt. No. 69 ¶ 1. Defendants expected Plaintiffs to produce recordings from the Darkness Visible album in response to this request. Id. After a dispute between the parties regarding this request, Judge Dancks ordered, in the August 2017 Phone Conference, that Defendants could inspect the recordings as long as the parties and their attorneys were present, and as long as no experts were present. Phone Conference at 18. Judge Dancks explained that she wanted the parties to be present in the room during the inspection so that Plaintiff “wouldn’t have to actually give up the tracks,” id. at 15, acknowledging Plaintiff’s concern that producing the recordings for Defendants would provide Defendants “the very relief [they] sought” in this action, Dkt. No. 72 at 2. The August 2017 Protective Order similarly stated, “Court permits inspection of computers to listen to the recording files, no experts are to be present, just the attorneys and clients, for listening only.”
While Judge Dancks did not explicitly label the August 2017 Protective Order a protective order, the Court treats it as one. See Rule 26(c) (explaining that a protective order can involve a judge “specifying ... terms for the disclosure of discovery” or “designating the persons who may be present while the discovery is conducted”). On October 25 and November 3, 2017, Defendants retained Rorick to perform a sound inspection of the Darkness Visible recordings in connection with Plaintiff’s wife’s bankruptcy proceeding. Pl.’s Mem. at 7. On October 31, 2017, Defendants told Plaintiff that they planned to introduce Rorick’s expert report and testimony in this action. Pl.’s Mem. at 7. The August 2017 Protective Order required the recording inspection to take place in the presence of the parties and their attorneys, and forbade the presence of experts. Defendants’ attempt to introduce expert testimony of an inspection of the Darkness Visible recordings performed in the absence of Plaintiff and his attorneys plainly violated the August 2017 Order.
Because Defendants violated the August 2017 Protective Order, and because this Order can be enforced through Rule 37, the Court now analyzes whether Judge Dancks’s decision to preclude Rorick’s testimony was a proper exercise of her discretion based on the factors discussed in Design Strategy, Inc. As mentioned above, the Court first analyzes Defendants’ explanation for failing to comply with the August 2017 Protective Order. Design Strategy, Inc., 469 F.3d at 296. While Defendants criticize Judge Dancks for deeming their introduction of Rorick’s testimony untimely, Appeal Mem. at 10–12, they do not explain why they attempted to introduce testimony from a sound inspection that was performed in the absence of Plaintiff and his attorneys and in the presence of an expert. Because Defendants provide no explanation for their failure to comply with this portion of the August 2017 Protective Order, this factor favors preclusion.
*6 Next, the Court considers “the importance of the testimony of the precluded witness[es].” Design Strategy, Inc., 469 F.3d at 296. Defendants contend that Rorick’s testimony is helpful because the report examines recordings “produced by Plaintiff that were created” when he worked for Defendants. Appeal Mem. at 13. Plaintiff states that Rorick’s testimony is unnecessarily cumulative because Plaintiff provided Defendant with a “Log of Recordings” that identified portions of Plaintiff’s recordings by their date of creation, including recordings “that were made ‘before the Summer of 2012,’ i.e., when [Plaintiff] worked for Defendants.” Pl.’s Mem. at 14; see also Dkt. No. 89-6 (“Log of Recordings”). Because Rorick’s testimony is apparently cumulative, this factor supports Judge Dancks’s decision to preclude the testimony. See Reilly v. Natwest Mkts. Grp., Inc., 181 F.3d 253, 269 (2d Cir. 1999) (“Judge Conti did not abuse his discretion in precluding the testimony of Adams and Letzler because ... their testimony would have been cumulative in light of the testimony of NatWest’s expert.”).
Next, the Court considers “the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony,” and whether a continuance is possible. Design Strategy, Inc., 469 F.3d at 296. Regarding prejudice, Plaintiff does not suggest that trial is imminent and that he would not have adequate time to respond to the testimony. Instead, he simply states that it will take a substantial amount of time to rebut Rorick’s testimony and to depose him. Pl.’s Mem. at 15–16. The prejudice factor does not favor preclusion. If the need to respond to a disclosure, without more, qualified as prejudice, this factor would always favor the opposing party.
However, the “continuance” factor favors preclusion. Plaintiff correctly observes that “discovery in this straightforward dispute has lingered for nearly a year.” Pl.’s Mem. at 16. The Court finds that a continuance would be inappropriate because “allowing deadlines to continue to slip ‘result[s] in the backup of other cases and eventual scheduling chaos as a series of bottlenecks builds.’ ” Grabin v. Marymount Manhattan Coll., 659 F. App’x 7, 11 (2d Cir. 2016) (quoting Softel, Inc. v. Dragon Med. & Sci. Commc’ns, Inc., 118 F.3d 955, 961 (2d Cir. 1997)). Because three of the four factors discussed in Design Strategy, Inc. weigh in favor of preclusion, the Court finds that Judge Dancks did not abuse her discretion by precluding Rorick’s testimony.
V. CONCLUSION
Accordingly, it is hereby:
ORDERED, that Defendants’ Appeal (Dkt. No. 124) is DENIED; and it is further
ORDERED, that the Clerk of the Court shall serve copies of this Decision and Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.