EASTERN COLORADO SEEDS, LLC, a Colorado limited liability company, Plaintiff, v. AGRIGENETICS, INC., d/b/a Mycogen Seeds, Defendant Civil Case No. 19-cv-01885-LTB United States District Court, D. Colorado Filed January 21, 2021 Counsel Jack Markham Tanner, Andrew John Helm, Fairfield & Woods, P.C., Denver, CO, for Plaintiff. Isaac T. Smith, Faegre Drinker Biddle & Reath LLP-Denver, Denver, CO, Ross W. Johnson, Faegre Drinker Biddle & Reath LLP-Des Moines, Des Moines, IA, Megan M. Farooqui, Faegre Drinker Biddle & Reath LLP-Boulder, Boulder, CO, for Defendant. Babcock, Lewis T., United States District Judge ORDER *1 This matter is before me on the Objection to Recommendation of United States Magistrate Judge [Doc #74] filed by Plaintiff Eastern Colorado Seeds, LLC., in which it objects to Magistrate Judge Kathleen M. Tafoya's recommendation that this case be dismissed with prejudice as a sanction for Plaintiff's discovery violations. Defendant Agrigenetics, Inc. d/b/a Mycogen Seeds (“Mycogen”) opposes the Objection and asks the court to accept the recommendation. [Doc #81] The matter has been fully briefed. [Doc #82] Upon consideration of the briefing, I agree with and ACCEPT Magistrate Tafoya's recommendation [Doc #71] and, accordingly, I OVERRULE Plaintiff's Objection and I DISMISS this case with prejudice. I. BACKGROUND Plaintiff is a distributor of agricultural seeds that sold grain sorghum, grain corn, silage corn, and sunflower seed produced by Mycogen. Plaintiff was compensated by Mycogen, at least in part, through a variety of performance incentive plans based on sales volume, as modified by other factors including minimum performance levels and sales growth over time. Over the course of the parties’ dealings, Mycogen calculated Plaintiff's earned remuneration and submitted payment to Plaintiff, apparently without Plaintiff's specific input. Mycogen terminated Plaintiff as a distributor around August of 2017. [Docs #71 & #21] Plaintiff then filed this lawsuit asserting a claim for Breach of Contract, and a claim for Breach of the Implied Duty of Good Faith and Fair Dealing. [Doc #21] Plaintiff maintains that it was not fully compensated by Mycogen, under the applicable incentive plans, as follows. In 2014, Plaintiff qualified for $422,334.20 in incentive payments from Mycogen, but was paid only $277,116.06. In 2015, Plaintiff qualified for $866,876.73 in incentive payments, but was paid only $277,116.06. In 2016, Plaintiff qualified for $351,780.00 in incentive payments, but received no payment. And, at the time of termination in August of 2017, Mycogen owed Plaintiff a credit in the amount of $179,614.11. As a result, Plaintiff seeks a money judgment, including pre- and post-judgment interest, attorney fees and costs, and any other relief the Court deems just and proper. [Doc #21] II. UNDERLYING DISCOVERY DISPUTE In January of 2020, Mycogen sought discovery to determine how Plaintiff calculated its claimed losses. Specifically, Mycogen propounded its first set of Requests for Admission, Interrogatories, and Requests for Production of Documents to Plaintiff on January 30, 2020. [Docs #47-1-3] When Plaintiff failed to respond to the discovery requests for months, despite repeated requests to do so, Mycogen filed a motion to compel. [Doc #47] Plaintiff offered the court no explanation for its discovery failure, except averring vague “mitigating circumstances” that it would explain at a hearing “if necessary,” and it represented that it would respond to the outstanding discovery by no later than May 14, 2020 (which was not done). [Doc #53 pg. 2] Magistrate Tafoya granted Mycogen's motion to compel on May 28, 2020. In her order, Magistrate Tafoya found that Mycogen made repeated attempts to get the responses to discovery from Plaintiff prior to filing its motion to compel, and that there was no justification for the failure to respond. As such, she ordered Plaintiff to respond to the “long overdue” Interrogatories and Requests for Production of Documents by June 5, 2020, and that the propounded Requests for Admissions No.1-24 were deemed admitted. In addition, she awarded Mycogen its reasonable expenses, including its attorney fees. [Doc #53 pg. 5-6] In ruling on the motion, Magistrate Tafoya found that a hearing would be a waste of judicial resources and that the matter should be resolved on the papers. [Doc #53 pg. 5] *2 On June 5, 2020, in response to the order to compel, Plaintiff submitted to Mycogen its responses to the Requests for Admissions, even though they had been deemed admitted by Magistrate Tafoya. It also produced several spreadsheets purporting to contain QuickBooks data reflecting its sales statistics of Mycogen products. Mycogen subsequently filed a Motion to Dismiss and for Sanctions for Failure to Comply with Court Order and Failure to Prosecute, on June 12, 2020, in which it argued that Plaintiff's production was not responsive to its discovery requests. [Doc #54] The parties fully briefed the motion [Docs #61 & #65] and, on October 1, 2020, Magistrate Tafoya issued her recommendation that Mycogen's motion be granted, and that this case be dismissed with prejudice. [Doc #71] Plaintiff then filed its Objection to Recommendation of United States Magistrate Judge, on October 15, 2020. [Doc #74] Upon my order, the parties have fully briefed the matter, and it is now at issue. [Docs #81 & #82] III. STANDARD OF REVIEW When a magistrate judge issues a recommendation on a dispositive matter, the district judge must “determine de novo any part of the magistrate judge's [recommendation] that has been properly objected to.” Fed. R. Civ. P. 72(b)(3). In conducting its review, “[t]he district court judge may accept, reject, or modify the recommendation; receive further evidence; or return the matter to the magistrate judge with instructions.” Id. Plaintiff filed a timely objection to the Magistrate Judge's Recommendation pursuant to Federal Rule of Civil Procedure 72(b)(2), and therefore, I review the issue of whether dismissal is appropriate here de novo. To the extent that Mycogen maintains that I should not consider arguments or evidence not before Magistrate Tafoya, I disagree. Nonetheless, I agree with Mycogen's argument that allowing Plaintiff to oppose Magistrate Tafoya's recommendation on grounds it “never bothered to put before her” would defeat the purpose of her efforts, as well as this Court's referrals. [Doc #81 pg. 7] However, in light of my extensive discretion and de novo review, as well as the nature of the dismissal sanction recommendation, I address all Plaintiff's arguments related to Magistrate Tafoya's application of the law raised here. IV. APPLICABLE LAW A court may dismiss an action if a party “fails to obey an order to provide or permit discovery.” Fed. R. Civ. P. 37(b)(2)(C); see also Nat'l Hockey League v. Metro Hockey Club, 427 U.S. 639, 642 (1976); Ehrenhaus v. Reynolds, 965 F.2d 916, 920 (10th Cir. 1992). In the Tenth Circuit, the determination of an appropriate sanction for discovery violation for failing to provide or permit discovery, including dismissal, is a fact-specific inquiry that the district court is best qualified to make. Id. at 920. A district court's discretion in selecting the appropriate sanction is “limited in that the chosen sanction must be both just and related to the particular claim which was at issue in the order to provide discovery.” Id. (citing Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 707 (1982)). In order to determine whether dismissal is a “just” sanction, the district court should consider a number of factors, including: (1) the degree of actual prejudice to the defendant; (2) the amount of interference with the judicial process; (3) the culpability of the litigant; (4) whether the court warned the party in advance that dismissal of the action would be a likely sanction for noncompliance; and (5) the efficacy of lesser sanctions. Ehrenhaus v. Reynold, supra, 965 F.2d at 921. Rather than a rigid test, these factors “represent criteria for the district court to consider prior to imposing dismissal as a sanction.” Id. “Only when the aggravating factors outweigh the judicial system's strong predisposition to resolve cases on their merits is dismissal an appropriate sanction.” Id. (quoting Meade v. Grubbs, 841 F.2d 1512, 1521 n. 7 (10th Cir. 1988)). V. RECCOMMEDATION *3 In her recommendation, Magistrate Tafoya found that for nine months Mycogen had sought the most basic discovery from Plaintiff; namely, how it calculated its claimed losses. After making repeated attempts to get the responses from Plaintiff, Mycogen was forced to file a motion to compel, and Magistrate Tafoya found that there was “no justification for the failure to respond either in the missives from Plaintiff's counsel or [its] page and a half, four paragraph Response, much less a reasonable one.” [Doc #53 pg. 4] Accordingly, she ordered that the propounded Requests for Admission were deemed admitted, that Plaintiff respond to the overdue discovery, and that Plaintiff pay Mycogen's fees related to the motion. [Doc #53] In response to Magistrate Tafoya's order, Plaintiff answered the Request for Admissions that were already deemed admitted and produced several spreadsheets purporting to contain QuickBooks data reflecting its Mycogen sale statistics. [Doc #71] Magistrate Tafoya rejected Plaintiff's contention that this was responsive to the discovery requests. In so doing, she noted that Plaintiff appeared to admit that the amount of sales Mycogen used in its calculations to pay Plaintiff was essentially correct, and that Mycogen correctly figured Plaintiff's percentages towards goals, the applicability of the various programs, and what programs applied. And although Plaintiff indicated that Mycogen retained broad discretion under the programs – including to modify or terminate the program without notice and to withhold payments based on its own subjective determinations of whether transactions were not made in good faith or in the ordinary course of business – Plaintiff did not assert that Mycogen exercised that discretion. Magistrate Tafoya also noted that even if the limited data provided by Plaintiff constituted a complete response, it did not contain the relevant metadata and, thus, was unreliable, was not in “reasonably usable form” pursuant to Fed. R. Civ. P. 34, and was not compliant with the form to provide discovery as agreed to by the parties. In addition, she found that Plaintiff's “lackluster production” of its QuickBooks data showed only the amount of Mycogen product Plaintiff sold, and thus failed to respond to the Interrogatories that go to the “heart of the case,” including the allegation that Mycogen owes Plaintiff a “credit” for an unknown, undefined reason. [Doc #71 pg. 5] Based on Plaintiff's failure to adequately respond to the discovery seeking the most basic information as to the grounds for Plaintiff's lawsuit, a year into the discovery period, and the fact that Plaintiff had been previously sanctioned and warned to comply with the legitimate discovery, Magistrate Tafoya granted Mycogen's request to dismiss Plaintiff's case. [Doc #71 pg. 10] VI. PLAINTIFF'S OBJECTION Plaintiff now objects to Magistrate Tafoya's recommendation that this case be dismissed as a sanction for its failure to adequately respond to Mycogen's discovery requests. In so doing, Plaintiff does not dispute any of her findings regarding the timing or inadequacy of its discovery responses. Rather, it asserts that the extreme sanction of dismissal is inappropriate because the aggravating factors set forth in Ehrenhaus v. Reynolds, supra, fail to outweigh the judicial system's strong predisposition to resolve cases on their merits. [Doc #74] The first factor set forth in Ehrenhaus v. Reynolds is the degree of actual prejudice to the defendant. Magistrate Tafoya indicated that it was obvious that Mycogen was “greatly prejudiced by not knowing even the most basic data concerning why Plaintiff thinks it was underpaid by Mycogen, even after the court ordered it to do so.” [Doc #71 pg. 9] Although Plaintiff asserts that it “believed” that its discovery responses were sufficient and complied with Magistrate Tafoya's order to compel, it does not now challenge her findings related to the inadequacy of the limited QuickBooks data produced. Rather, while Plaintiff acknowledges that its discovery failures ‘invariably cause some delay and increase the costs of litigation,” it asserts that this is not a case where incurable prejudice exists and, as such, “is not so excessive as to warrant a termination of the case of the merits.” [Doc # 74 pg. 10] In so arguing, it notes that it has since supplemented its responses, and that any prejudice in the form of lost time and expense can be remedied via a financial sanction. I agree with Mycogen, however, that this factor weighs in favor of dismissal. It is undisputed that Mycogen has spent over a year attempting to defend this litigation in which Plaintiff has failed to provide timely and adequate responses to discovery request related to the very essence of the case; specifically, how Plaintiff calculated the amount of money it claims it is owed by Mycogen. Plaintiff's arguments that it had begun to cure any prejudice by supplementing it discovery responses, and that it will be properly responding to discovery request in this future, does not detract from the prejudice that Mycogen has incurred to date. *4 As to the amount of interference with the judicial process, Plaintiff again does not dispute that its discovery failures hindered the process but notes that all deadlines in this case have been stayed and that any interference is “slight.” [Doc #82 pg. 11] As such, it maintain that “[a]lthough deadlines for both discovery and the trial have been pushed back, the second Ehrenhaus factor weighs against dismissal, especially in light of the fact that the responsibility for any shortcomings in Plaintiff's discovery [responses] largely lies” with its counsel, as discussed below. [Doc #74 pg. 10] However, it is because of Plaintiff counsel's conduct that those deadlines have been stayed, and I agree with Magistrate Tafoya that “the justice system suffers when judges have to deal with the same issues repeatedly.” [Doc #71 pg. 9] Plaintiff's failure to provide discovery responses for nine months, and then its failure to adequately comply with Magistrate Judge's order on the motion to compel, constitutes a significant interference with the judicial process in this case that, in turn, clearly weighs in favor of dismissal. With regard to the culpability of the litigant – the third Ehrenhaus factor – Plaintiff contends that it failed to timely produce discovery in this case as a result of missed deadlines by its counsel. Plaintiff's counsel, Fairfield & Woods, also acknowledges that any shortcomings with the responses to Mycogen's discovery requests “largely” lies with Fairfield & Woods. [Doc #74 pg. 12] Based on this, Plaintiff argues that the Tenth Circuit has ruled that sanctions should be directed at counsel, rather than with its client, when counsel is at fault for the violations. It cites to Davis v. Miller, 571 F.3d 1058 (10th Cir. 2009), in which the Tenth Circuit overruled the court's sua sponte dismissal of a habeas petition for failure to follow a court order on the basis that the intent is to impose the sanction where the fault lies; “[i]f the fault lies with the attorneys, that is where the impact of sanction should be lodged ... [i]f the fault lies with the clients, that is where the impact of the sanction should be lodged.” Id. at 1061 (quoting In re Baker, 744 F.2d 1438, 1440, 1442 (10th Cir. 1984)(en banc)); see also M.E.N. Co. v. Control Fluidics, Inc., 834 F.2d 869, 873 (10th Cir. 1987)(remanding for a determination of culpability for discovery failures because when the fault lies with the attorneys, the court is required to “explicitly weigh whether sanctions against the offending attorney will not serve the court's legitimate purpose in imposing sanctions”)(quoting DG Shelter Prod. Co. v. Forest Prod. Co., 769 F.2d 644, 645 (10th Cir. 1985)). As such, Plaintiff asserts that because the responsibility for any shortcomings in the timing and adequacy of Plaintiff's discovery responses are Fairfield & Woods’, the culpability of the litigant factor “weighs heavily against dismissal.” [Doc #74 pg. 12] Mycogen, in response, refers me to Tenth Circuit case law affirming dismissal despite the plaintiff's objection that he should not be punished for his or her attorney's failures. In Gripe v. City of Enid, Oklahoma, 312 F.3d 1184 (10th Cir. 2002), the district court ruled that “[d]ismissal does not unjustly penalize the individual plaintiff in this case in light of the repeated and documented failure of his chosen representative” even though the record contained no direct evidence “regarding what plaintiff knew of his attorney's derelictions” in failing to follow court orders and rules. Id. at 1188. The Tenth Circuit ruled that “[a] litigant is bound by the actions of its attorney, and the relative innocence of the litigant in the failure does not constitute grounds for relief.” Id. (affirming the district court's order dismissing plaintiff's complaint as a sanction for his lawyer's repeated violations of court orders and rules); see also Rodriguez-Diaz v. Gallegos Masonry Inc., 2013 WL 1397291 (D. Colo. 2013)(unpublished)(noting that “Tenth Circuit and Supreme Court precedent do not shield litigants from dismissal when their attorneys misbehave”); Link v. Wabash R. Co., 370 U.S. 626, 634 n. 10. (1962)(indicating that to “keep[ ] a suit alive merely because plaintiff should not be penalized for the omissions of his own attorney would be visiting the sins of plaintiff's lawyer upon the defendant”). Accordingly, the law in the Tenth Circuit is that courts “do not excuse a party's failure to comply with court orders simply because responsibility lies with his counsel,” but “we have repeatedly emphasized that importance of directing sanctions at counsel when the fault lies with him.” Davis v. Miller, supra, 571 F.3d at 106. *5 Magistrate Tafoya did not address who was responsible for Plaintiff's discovery failures, or whether there was willful misconduct, and it is only in this motion that Plaintiff's counsel now asserts that it is the culpable party. While Fairfield & Woods’ admission that it was at fault for the untimeliness and inadequacy of the discovery responses weighs against dismissal as a sanction under the factor that assesses the culpability of the litigant, I am not inclined to allow counsel to wait to raise this argument until after Magistrate Tafoya recommends dismissal. I also note that there is evidence that Fairfield & Woods was in communication with Plaintiff about the discovery responses, even though it apparently did not inform Plaintiff of Magistrate Tafoya's order on the motion to compel which warned that continued failure to produce discovery could result in dismissal of this action. And although Magistrate Tafoya did not make a finding regarding whether the failure to respond constituted bad faith or willfulness, it is clear from her order that Plaintiff was guilty of failing to respond to the most basic discovery, despite being asked to do so for nine months, and failed to provide a reasonable justification for not responding. [Doc #71 pg. 2] Plaintiff has indicated here that its initial failure to timely respond to Mycogen's discovery requests was “compounded by the health issues of Plaintiff's principal's wife,” but admits that it did not provide that justification in its briefing on the motion to compel prompting Magistrate Tafoya to rule on the papers after vacating the scheduled hearing on the matter. [Doc #74 pg. 4] And then when Plaintiff did respond, it did so without regard to the order (by responding to Requests for Admission that were already deemed admitted) and was not responsive to the Interrogatories (by only providing incomplete data to answer some Interrogatories, which was wholly unresponsive to other Interrogatories that relate to the disputed issues in the case). [Doc #53 pp. 3-5] Magistrate Tafoya found that “[c]learly there is some specific formula that Plaintiff is applying to come up with its calculations” but it failed to provide it in response to Mycogen's discovery requests who, in turn, “is entitled to know the basis for Plaintiff's assertion that Mycogen underpaid it.” [Doc #71 pg. 5-6] Based on these circumstances, I disagree with Plaintiff's contention that the culpability of the litigant weighs heavily against dismissal. See Gripe v. Enid, supra, 312 F.3d at 1189 (noting that the blameless client “is not totally without a remedy [as t]here may be a meritorious malpractice claim against the attorney”). As to the fourth Ehrenhaus factor, Plaintiff concedes that Magistrate Tafoya warned, in her order on the motion to compel, that failure to comply could result in dismissal. Specifically, she gave “notice to the plaintiff that refusal to obey an order to produce discovery could result in dismissal or a recommendation for dismissal of this action.” [Doc #53 pg. 5] This factor clearly weighs in favor of dismissal when Plaintiff subsequently failed to comply with the order to compel; Plaintiff's argument that it appears that Fairfield & Wood failed to forward the order to Plaintiff and, thus, this factor somehow weighs against dismissal, is unavailing. Finally, as to the efficacy of sanctions other than dismissal, Plaintiff submits that lesser sanctions are warranted in this case. Specifically, it argues that the discovery sanctions set forth in the order to compel (the admitted Requests for Admission and the $10,000 Fairfield & Woods paid in attorney fees and costs) together with additional monetary sanctions against Fairfield & Woods directly for Mycogen's reasonable attorney fees in preparing the motion to dismiss at issue here (as the party largely responsible for the untimely and unresponsive nature of Plaintiff's propounded responses) would be a sufficient sanction in this case. Plaintiff also notes that a more seasoned, senior litigator at Fairfield & Woods is now lead counsel and “will ensure that no further discovery issues will persist” and “further discovery issues will not be repeated.” It is clear, however, that the lesser sanctions already levied in this case have not been effective. Plaintiff's argument amounts to an assertion that even though it was sanctioned – via admitted request for admissions and an award against it for fees and costs – and it was clearly warned of the possible consequence of dismissal but then failed to comply, such failures will not continue. After considering the relevant factors, I agree with Magistrate Tafoya's conclusion that dismissal is the just and appropriate sanction here. While punishing Plaintiff for its counsel's admitted failures is not a favored sanction for discovery violation, I find that the Ehrenhaus factors weigh in favor of dismissal. “It is within a court's discretion to dismiss a case if, after considering all the relevant factors, it concludes that dismissal alone would satisfy the interests of justice.” Ehrenhaus v. Reynolds, supra, 965 F.2d at 918. VII. CONCLUSION Based on the foregoing, Plaintiff's Objection to Recommendation of United States Magistrate Judge [Doc #74] is OVERRULED, and Magistrate Judge Tafoya's Recommendation [Doc #71] is AFFIRMED and ADOPTED. Accordingly, it is ORDERED that this case is DISMISSED WITH PREJUDICE. Costs to be awarded to Defendant. Dated: January 21, 2021 in Denver, Colorado.