Meyer v. Bank of Am., N.A.
Meyer v. Bank of Am., N.A.
2019 WL 7820519 (S.D. Ohio 2019)
March 8, 2019
Jolson, Kimberly A., United States Magistrate Judge
Summary
The court found that the production of ESI in the form of emails captured in KMK's document management system was not unduly burdensome and that Defendant was obligated to produce a privilege log for any withheld documents. The court's decision highlights the importance of ESI in legal proceedings and the need for parties to be aware of their obligations to produce ESI and privilege logs.
Additional Decisions
P. JONATHAN MEYER, et al., Plaintiffs/Counter-Defendants, jointly and severally with Third-Party Defendants,
v.
BANK OF AMERICA, N.A., Defendant/Counter-Plaintiff/Third-Party Plaintiff,
v.
STANBERY ENGLISH VILLAGE, LP, et al., Third-Party Defendants, jointly and Severally with Counter-Defendants
v.
BANK OF AMERICA, N.A., Defendant/Counter-Plaintiff/Third-Party Plaintiff,
v.
STANBERY ENGLISH VILLAGE, LP, et al., Third-Party Defendants, jointly and Severally with Counter-Defendants
Case No. 2:18-cv-218
United States District Court, S.D. Ohio, Eastern Division
Filed March 08, 2019
Counsel
Matthew Scott Zeiger, Lauren Plackter Rubin, Marion H. Little, Zeiger Tigges & Little LLP, Columbus, OH, for Plaintiffs/Counter-Defendants, jointly and severally with Third-Party Defendants.Amy M. Johnston, Todd A. Holleman, Miller, Canfield, Paddock and Stone, P.L.C., Detroit, MI, James Lee Allen, Troy, MI, for Defendant/Counter-Plaintiff/Third-Party Plaintiff
Jolson, Kimberly A., United States Magistrate Judge
ORDER
*1 This matter is before the Court on Plaintiffs’ Motion for Attorneys’ Fees and Costs (Doc. 43). Defendant Bank of America, N.A. filed a Response in Opposition (Doc. 45) and Plaintiffs filed a Reply (Doc. 46), therefore this matter is ripe for resolution. For the reasons that follow, Plaintiffs’ Motion is GRANTED IN PART and DENIED IN PART.
I. BACKGROUND
This Court has discussed the factual background of this case elsewhere in detail. (See generally Doc. 39). Relevant here, Plaintiffs served a subpoena on September 21, 2018, requesting documents from Defendant’s former settlement counsel, Keating Meuthing & Klekamp, PLL (“KMK”). (Doc. 34-2). The instructions to the subpoena gave KMK the opportunity to withhold privileged information and produce a privilege log. (Id.). Plaintiffs’ counsel and KMK’s counsel communicated on or about September 26, 2018, at which time Plaintiffs agreed to work with KMK to extend the subpoena deadline. (Doc. 43-1 at 2). Two days later, KMK sent a letter to Plaintiffs’ counsel via first-class mail. (Id.) KMK listed seven objections to Plaintiffs’ subpoena but offered to produce over 250 documents and 2,700 emails that had been captured in KMK’s document management system for the matters involving the settlement. (Id.) KMK made clear that the production was subject to review by Defendant’s counsel for privilege. (Id. at 5–6). On this point, the KMK letter contemplated that Defendant would produce a privilege log for any withheld documents. (Id. at 6 (“BOA’s counsel could then assert its privilege and compile a privilege log for any documents withheld.”)). KMK agreed to withdraw its objections and produce the documents and privilege log if Plaintiffs accepted the terms proposed in its letter. (Id.).
Plaintiffs claim to have received KMK’s letter on October 3, 2018. (Doc. 43 at 4). Plaintiffs contacted KMK the same day, explaining Plaintiffs believed the objections were unfounded but agreeing to work with KMK to ensure complete production. (Doc. 43-1 at 7). The next day, counsel for Defendant left Plaintiffs’ counsel a voicemail requesting a meet and confer regarding the subpoena. (Id. at 2).
The parties dispute the specifics of their communications over the course of October 5 and 6, 2018. (Doc. 43 at 4–5; Doc. 45 at 2–4). Plaintiffs represent that counsel agreed to meet and confer and emphasized it was willing to extend the subpoena deadline; but rather than stipulating to extend the time, Defendant filed the Motion to Quash or Modify the Subpoena (“Motion to Quash”). (Doc. 43 at 5). Defendant counters that Plaintiffs were noncommittal as to whether its objections to the subpoena would be timely after October 5, 2018, so filing the Motion to Quash was necessary. (Doc. 45 at 3–4). At base, the Motion to Quash raised two arguments: 1) the subpoena improperly sought privileged documents, and 2) the subpoena was unduly burdensome. (See Doc. 34).
The Court held a telephonic status conference on Defendant’s Motion to Quash on October 10, 2018, directed the parties to continue to confer, and stayed briefing of the Motion to Quash. (Doc. 35). The parties conferred and exchanged caselaw in support of their positions. (Doc. 43-1 at 17–39). Unable to resolve the dispute extrajudicially (Doc. 36), the Motion to Quash was fully briefed (Docs. 37, 38), and the Court issued an opinion denying the Motion on December 7, 2018. (Doc. 39).
*2 On December 21, 2018, Plaintiffs’ counsel asked Defendant to agree to pay Plaintiffs’ attorney’s fees in connection with the Motion to Quash. (Doc. 45 at 4). Defendant declined. (Id.). Plaintiffs then filed the instant Motion, which is ripe for review. (Docs. 43, 45, 46).
II. STANDARD OF REVIEW
Rule 37(a)(5)(A) of the Federal Rules of Civil Procedure provides:
(5) Payment of Expenses; Protective Orders.
(A) If the Motion Is Granted (or Disclosure or Discovery Is Provided After Filing). If the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed—the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant’s reasonable expenses incurred in making the motion, including attorney’s fees. But the court must not order this payment if:
(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action;
(ii) the opposing party’s nondisclosure, response, or objection was substantially justified; or
(iii) other circumstances make an award of expenses unjust.
Southern District of Ohio Local Rule 37.1 further mandates that “[o]bjections, motions, applications, and requests relating to discovery shall not be filed in this Court under any provision in Fed. R. Civ. P. 26 or 37 unless counsel have first exhausted among themselves all extrajudicial means for resolving the differences.”
Here, an award of attorneys’ fees and costs turns on whether Defendant’s Motion to Quash was “substantially justified.” Fed. R. Civ. P. 37(a)(5)(A)(ii). The Sixth Circuit explained the concept this way:
A motion is “substantially justified” if it raises an issue about which “there is a genuine dispute, or if reasonable people could differ as to the appropriateness of the contested action.” Pierce v. Underwood, 487 U.S. 552, 565 (1988) (citations and quotation marks omitted). As noted by the Supreme Court, “the one [connotation] most naturally conveyed by the phrase before us here [“substantially justified”] is not ‘justified to a high degree,’ but rather ‘justified in substance or in the main’—that is, justified to a degree that could satisfy a reasonable person.”
Doe v. Lexington-Fayette Urban Cnty. Gov., 407 F.3d 755, 765 (6th Cir. 2005). This Court has further explained the standard:
If there is an absence of controlling authority, and the issue presented is one not free from doubt and could engender a responsible difference of opinion among conscientious, diligent but reasonable advocates, then the opposing positions taken by them are substantially justified.
Libertarian Party of Ohio v. Husted, 2:13-cv-953, 2017 U.S. Dist. LEXIS 90084, at *9 (S.D. Ohio June 12, 2017).
In addition, “[t]he Sixth Circuit has adopted a four-factor test to determine whether a district court’s decision to impose sanctions under Rule 37 amounts to an abuse of discretion.” Grier v. Bryden Mgmt., LLC., 2:17-cv-111, 2018 U.S. Dist. LEXIS 163013, at *4 (S.D. Ohio Sept. 24, 2018) (citing Doe, 407 F.3d at 765–66 (other citations omitted)). The Doe factors include (1) whether the party against whom the sanction is sought has acted willfully, in bad faith, or with fault; (2) whether the movant was prejudiced; (3) whether the party against whom the sanction is sought was warned that sanctions could follow a failure to cooperate; (4) and whether less a drastic sanction is considered. Doe, 407 F.3d at 765–66.
III. DISCUSSION
*3 Defendant asked the Court to quash the subpoena on the grounds that: 1) it sought the production of privileged materials, and 2) it was unduly burdensome because it sought duplicative discovery. (See Doc. 34). In brief, the Court rejected Defendant’s privilege argument because the subpoena did not seek the production of privileged materials, and Defendant had no legal support for its assertion that it was not required to produce a privilege log. (Doc. 39 at 5–7). And the Court disagreed with Defendant’s undue burden argument because “[w]ith current discovery technology, the review [2,700] emails and the creation of a corresponding privilege log is not unduly burdensome, particularly given (1) the amount in controversy in the case, (2) the importance of the issues at stake, and (3) the fact that the discovery Plaintiffs requested here is, at least, of moderate relevance, .... to their claims and defenses regarding the Settlement Agreement.” (Id. at 12–13) (internal quotations omitted).
A. Defendant’s Privilege Argument
Prior to the filing of the Motion to Quash, Plaintiffs made clear that they were not seeking attorney-client communications. For example, on October 5, 2018, Plaintiffs’ counsel explained:
Your latest communication claims that the subpoena demands production of attorney client privileged documents necessitating the filing of a motion to quash. This is not true. The Subpoena does not request the disclosure of privileged materials. To the contrary, the instructions in the Subpoena as well as Request 7 provide KMK with the opportunity to withhold information it asserts is subject to the attorney-client privilege and produce a privilege log.
(Doc. 43-1 at 12).
Despite that assurance, Defendant asked this Court to quash the subpoena because “[t]here can be no dispute that [Plaintiffs] are seeking to discover privileged attorney-client communications. (Doc. 34 at 14). That was not true, and Plaintiffs were forced to brief the issue for the Court. (See, e.g., Doc. 37 at 10).
Moreover, a fair read of Defendant’s Motion to Quash—and its position when it filed the Motion—is that it was claiming that it did not need to produce a privilege log. Defendant provided no authority in support of this argument. As the Court previously articulated, had Defendant retained emails from the relevant custodians who communicated with KMK during the time period surrounding the Settlement Agreement, there is no question that Defendant would have been obligated to log those communications on a privilege log in response to Plaintiffs’ discovery requests. (See Doc. 39 at 6). The rules and caselaw are clear on this point, and Defendant provided no authority to support its position. As such, the issue presented was free from doubt and could not engender a responsible difference of opinion among diligent but reasonable advocates. C.f. Libertarian Party of Ohio, 2017 U.S. Dist. LEXIS 90084, at *9. Said affirmatively, Defendant’s argument was not “justified to a degree that could satisfy a reasonable person.” Doe, 407 F.3d at 765 (citations omitted). Indeed, Defendant’s concern of Plaintiffs’ “reverse engineering of attorney-client communications” (see Doc. 39 at 7) was not persuasive and Defendant did not offer any authoritative precedent for this argument. The Court acknowledges that, in Reply (Doc. 38 at 5), Defendant attempted to claim that it was not asserting such an argument, but Plaintiffs already had briefed the issue by that point. (Doc. 37 at 5–11). In sum, the Court finds Defendant’s privilege argument was not substantially justified.
Likewise, the Court finds the Doe factors weigh in Plaintiffs’ favor on this issue. First, Defendant’s failure to cooperate in discovery was due to willfulness because it continued to assert an argument without a factual or legal basis even after Plaintiffs had provided clear support for their position. Indeed, a review of the parties’ communications shows Plaintiffs’ willingness to cooperate on this issue, and the Court provided additional time for resolution so that resources would not be spent on briefing. (Doc. 35). Despite those chances, Defendant persisted. Second, the Plaintiffs have been prejudiced by being forced to expend time and money in order to get Defendant to cooperate in the discovery process. Third, Defendant was warned that a failure to cooperate could lead to legal sanctions because Defendant’s Motion expressly requested attorneys’ fees in the event that it prevailed, evidencing Defendant’s understanding of Rule 37. (Doc. 34 at 8). Finally, the Court has considered less drastic sanctions but finds an award of attorney’s fees and costs is the only appropriate remedy in this circumstance.
B. Defendant’s Undue Burden Argument
*4 The Court, however, comes to a different conclusion with regard to Defendant’s undue burden argument. In deciding this issue, the Court balanced three factors: the amount in controversy, the importance of the issues at stake, and the relevance of the discovery. (Doc. 39 at 12–13). Defendant relied on two decisions from the United States District Court of the District of Columbia to support its argument that the production of the emails was unduly burdensome. (Id. at 10). Defendant at least cited cases where the burden of preparing a privilege log for thousands of documents was found to be unduly burdensome, although this Court found the facts of the dispute required a contrary resolution. (Id. at 12). In other words, whether the preparation of a privilege log for 2,700 emails is unduly burdensome could “engender a responsible difference of opinion among conscientious, diligent but reasonable advocates[.]” See Libertarian Party of Ohio, 2017 U.S. Dist. LEXIS 90084, at *9. While the factors ultimately were not in Defendant’s favor, its argument had a basis in law and the facts were at least somewhat analogous to persuasive caselaw. Accordingly, the Court finds Defendant’s undue burden argument was substantially justified.
C. Sanctions
Whether sanctions should be awarded is a matter about which the Court possesses substantial discretion. See Ruiz-Bueno v. Scott, 2:12-cv-809, 2014 U.S. Dist. LEXIS 60660, at *7 (S.D. Ohio May 1, 2014) (citation omitted). The Court may determine the amount of attorneys’ fees reasonable under the circumstances given the magnitude of the parties’ conduct. See DRFP, LLC v. Republica Bolivariana De Venez., 2:04-cv-793, 2015 U.S. Dist. LEXIS 188336, at *6 (S.D. Ohio Oct. 28, 2015) (“[T]he failure is not, in the overall context of this case, particularly egregious, and any delay was brief. The Court therefore will impose a monetary sanction which reflects the appropriate amount of time necessary to bring the matter to the Court’s attention.”).
Here, it is appropriate to award Plaintiffs half of its attorneys’ fees and costs incurred defending the underlying motion. As explained above, Defendant made two arguments in its Motion to Quash (Doc. 34); one was substantially justified, and one was not. The Court finds that Plaintiffs are entitled to some measure of “reasonable expenses incurred ... including attorney’s fees” under Rule 37(a)(5)(A) stemming from Defendant’s privilege arguments. Defendant has not disputed the quantity of hours or the hourly rate asserted by Plaintiff. (See generally Doc. 45). Accordingly, the Court awards half of Plaintiff’s requested fees, $4,832.50, to Plaintiffs for defending the Motion to Quash.
Plaintiffs also seek attorney’s fees incurred litigating their entitlement to fees, citing Coulter v. Tennessee, 805 F.2d 146, 151 (6th Cir. 1986), abrogated on other grounds by N.E. Coal. for the Homeless v. Husted, 831 F.3d 686, 725 (6th Cir. 2016)); Ra v. Orange Vill., No. 1:15-cv-2416, 2017 U.S. Dist. LEXIS 68272, at *7 (N.D. Ohio May 4, 2017). The decisions cited, however, discuss fee-shifting statutes, not Rule 37. And Plaintiffs have not cited authority establishing that “fees for fees” are appropriate here. Further, an independent search by the Court uncovered authority that indicates expenses under Rule 37(a)(5)(A) are limited to fees “incurred in making the motion [to compel].” See United States v. Bailey, 1:11-cv-059, 2012 U.S. Dist. LEXIS 27018, at *10 (S.D. Ohio Mar. 1, 2012) (refusing to award fees compensating for three hours counsel spent questioning the opposing party regarding his deficient discovery responses at a deposition). Moreover, the Court does not find Defendant’s decision to oppose this Motion as unjustified, nor does the Court find Defendant’s conduct here to be “particularly egregious.” See DRFP, LLC, 2015 U.S. Dist. LEXIS 188336, at *6. Consequently, Plaintiffs request for fees relating to the Motion for Fees is DENIED.
In sum, given the totality of the circumstances, the Court concludes that a fee award of $4,832.50 is just here.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion is GRANTED IN PART and DENIED IN PART. Within thirty days, Defendant shall pay Plaintiffs $4,832.50 as attorneys’ fees in connection with the Motion to Quash.
*5 IT IS SO ORDERED.