Sec. Alarm Fin. Enters., LP v. Alder Holdings, LLC
Sec. Alarm Fin. Enters., LP v. Alder Holdings, LLC
2017 WL 11623970 (D. Alaska 2017)
March 3, 2017

Gleason, Sharon L.,  United States District Judge

Sanctions
Failure to Produce
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Summary
The court found that the ESI, including documents and audio recordings, was relevant and not unduly prejudicial. The documents included complaints filed against Alarm Protection with the Alaska Attorney General, letters from the Attorney General, and letters from Alarm Protection in response. The court also found that the letters from the Attorney General fell within Rule 803(8) and the letters from Alarm Protection in response were statements of a party opponent under Rule 801(d)(2).
Additional Decisions
SECURITY ALARM FINANCING ENTERPRISES, L.P., a California Limited Partnership, Plaintiff and Counterclaim Defendant,
v.
ALDER HOLDINGS, LLC, a Utah Limited Liability Company; et al. Defendants and Counterclaimants
Case No. 3:13-cv-00102-SLG
United States District Court, D. Alaska
Filed March 03, 2017

Counsel

Alfred T. Clayton, Jr., Claton & Diemer, LLC, Anchorage, AK, Robert L. Sallander, Jr., Pro Hac Vice, Greenan Peffer Sallander & Lally LLP, San Ramon, CA, Kyle G. Kunst, Pro Hac Vice, Greenan Peffer Sallander & Lally LLP, New York, NY, for Plaintiff and Counterclaim Defendant.
James E. Torgerson, Kevin M. Cuddy, Stoel Rives LLP, Anchorage, AK, Erik A. Olson, Jason R. Hull, Marshall Olson & Hull, P.C., Karl Adam Christian, Jr., Pro Hac Vice, General Counsel, Salt Lake City, UT, for Defendants and Counterclaimants Alarm Protection Technology, LLC, Alarm Protection Technology Alaska, LLC, Alarm Protection Alaska, LLC.
Jason R. Hull, Marshall Olson & Hull, P.C., Salt Lake City, UT, Kevin M. Cuddy, Stoel Rives LLP, Anchorage, AK, for Defendant and Counterclaimant Alder Holdings, LLC, a Utah Limited Liability Company.
Gleason, Sharon L., United States District Judge

ORDER RE EMERGENCY RULE 37 DISCOVERY MOTION

*1 Before the Court is SAFE's Emergency Rule 37 Discovery Motion Related to Alaska Attorney General Information at Docket 612. The motion is fully briefed.[1] Oral argument was not requested and was not necessary to the Court's decision.
 
During discovery, SAFE sought “any complaints filed against [Alarm Protection] with the Alaska Attorney General.”[2] Alarm Protection indicated in March 2016 that “after a diligent search” it did not find any responsive documents.[3] In support of its opposition to SAFE's motion, Alarm Protection submitted a “declaration” that indicates it was signed “with permission” of Alarm Protection's general counsel, Adam Christian.[4] That “declaration” purports to describe the “diligent search” Alarm Protection performed in March 2016. According to this document, these types of files were once managed by one employee “through approximately Spring of 2015.” That employee allegedly no longer worked at Alarm Protection at the time of SAFE's discovery request, and Mr. Christian was “unsure of the organization of her files.” To comply with the discovery request (according to the “declaration”) Alarm Protection therefore “searched through the folders” in that employee's work files and found no responsive documents.[5] Fact discovery closed May 31, 2016, without Alarm Protection having produced any document responsive to the request.
 
But in February 2017, SAFE obtained copies of several “complaints filed against [Alarm Protection] with the Alaska Attorney General” that were produced by Alarm Protection to a different litigant in a different case.[6] SAFE notified Alarm Protection of the inconsistency between its production in that case and its discovery responses in this case, and sought any additional responsive documents.[7]
 
*2 Alarm Protection now maintains that in the time since its initial response to SAFE's request in March 2016, Alarm Protection updated its filing system in a manner that provides improved search capabilities.[8] Thus, Alarm Protection claims, when Mr. Christian directed a new search on February 16, 2017, he recovered many documents that were responsive to SAFE's initial request.[9] Alarm Protection produced those and many related documents to SAFE on February 21 and 22, 2017.[10]
 
SAFE asks the Court to sanction Alarm Protection for its failure to provide these documents in response to SAFE's request for production in March 2016.[11] SAFE seeks to have the recently produced documents admitted as evidence in the trial, without regard to any evidentiary objections by Alarm Protection. SAFE also seeks admission over any objection of an audio recording related to Terry Jesclard.[12]
 
Alarm Protection contends that no sanctions are appropriate because its initial efforts to respond to the request for production were diligent. Furthermore, Alarm Protection asserts, as soon as SAFE alerted Alarm Protection to the oversight, Alarm Protection “immediately produced [the documents] as well as numerous other materials that were related to those documents but outside the scope of the discovery request.”[13] SAFE's requested sanction, in Alarm Protection's view, is inconsistent with “justice.”[14]
 
The Court is not persuaded that Alarm Protection's search in March 2016 even as described in Alarm Protection's recent filing was reasonably calculated to recover the responsive information. Mr. Christian must have known about these complaints—after all, he responded to at least one of the Attorney General's letters.[15] And certainly Alarm Protection should have updated its responses immediately once it discovered responsive documents in relation to the separate case. Quite simply, Alarm Protection violated its discovery obligations.
 
But neither is the Court persuaded that SAFE's proposed sanction is appropriate. The scope of discovery is far broader than the test for admissibility at trial,[16] and the Court will not burden the jury with marginal evidence as a sanction. However, the Court does believe some sanction is appropriate, in order to remedy the prejudice to SAFE from Alarm Protection's late disclosure.
 
*3 The Court believes an adequate remedy will be to deem the materials authentic and permit SAFE to add them to its trial exhibit list. The Court will not deem the materials to be admitted at this time. Alarm Protection has waived many objections to the materials, but has reserved the right to make certain objections.[17] Based on its review at this time, the Court expects to admit all of these materials. The Court believes the materials to be relevant, does not find them unduly prejudicial, and finds that they might be put to use as non-hearsay, such as to show notice. Furthermore, it would appear that the letters from the Attorney General fall within Rule 803(8) as records of a public office. And the letters from Alarm Protection in response are statements of a party opponent under Rule 801(d)(2).
 
However, the Court's calculus with regard to the materials' admissibility may change in light of the evidence presented at trial. The Court will therefore permit Alarm Protection to object on the basis of Evidence Rules 401, 403, and (solely with respect to the Attorney General's letters) 801.[18]
 
The Court will also award SAFE some of its fees and costs related to this discovery dispute. In light of the fact that these documents were in Alarm Protection's control but Alarm Protection failed to timely produce these documents in response to SAFE's valid discovery request, the Court will award SAFE its fees and costs incurred in ultimately obtaining these materials. However, because SAFE failed to meet-and-confer with regard to this motion, and did not file a good-faith certification, the Court will not award SAFE any fees or costs associated with briefing this motion (or its earlier related motion at Docket 601).
 
Therefore, the Court GRANTS SAFE's Motion at Docket 612 as follows:
• The following materials are hereby deemed authentic: APAK_002060, APAK_035755–APAK_035784; and APAK_035785–APAK_035827.
• Those materials are deemed added to SAFE's Trial Exhibit List.
• Alarm Protection may not object to the admissibility of these materials except under Federal Rules of Evidence 401, 403, and solely with regard to the Attorney General's letter, Evidence Rule 801.
• SAFE will be awarded its reasonable attorney's fees and costs incurred in obtaining these materials, but will not be awarded any fees or costs incurred in bringing this motion.[19]
 
DATED this 3rd day of March, 2017 at Anchorage, Alaska.

Footnotes
Docket 619 (Alarm Protection's Notice); Docket 623 (Alarm Protection's Opp'n); Docket 634 (SAFE's Reply).
Docket 616-1 at 3.
See Docket 616-2 (Mar. 21, 2016 ltr. from Jason R. Hull to Kyle G. Kunst) at 1.
The declaration is not actually signed by Mr. Christian, but is instead signed “with permission.” As one district court has cogently explained:
To be valid, 28 U.S.C. § 1746 requires that such declarations be “subscribed” by the declarant “as true under penalty of perjury.” In pertinent part, 18 U.S.C. § 1621, which governs liability for perjury under federal law, mandates that: “Whoever ... in any declaration ... under penalty of perjury as permitted under section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he does not believe to be true ... is guilty of perjury.” The probative force of a declaration subscribed under penalty of perjury derives from the signature of the declarant.
Blumberg v. Gates, 2003 WL 22002739 at *1 (C.D. Cal. Aug. 19, 2003); see also Underwood v. Mackay, 2013 WL 3270564 at *6 (D. Nev. June 26, 2013); Bell v. O'Brien, 2012 WL 12878214 at *7 (W.D. Tex. Jan. 27, 2012).
Docket 624 (Christian Decl.) at 2, ¶ 3.
See Docket 616 (Kunst Decl.) at 2, ¶ 5–7.
See Docket 616-5 (Feb, 16, 2017 ltr. from Kyle G. Kunst to Erik A. Olson and Jason R. Hull) at 1.
Docket 624 at 2, ¶ 4. The Court notes that this explanation is in some tension with the explanation Mr. Christian gave in his signed declaration in an unrelated case, which makes no mention of the departed employee or new computer system. See Docket 616-3 (Christian ADT Decl.).
Docket 624 at 3, ¶ 5.
See Docket 617-2 (Feb. 21, 2017 ltr. from Jason R. Hull to Kyle G. Kunst); Docket 617-3 (additional documents).
See Docket 617-1 at 7–8 (citing Fed. R. Civ. P. 37(c)(1)(C)).
SAFE identifies this recording by the Bates number APAK_002060, but also refers in its conclusion to Trial Exhibit 59, which the Court believes to be Bates numbered APAK_001278. See Docket 522 at 8. The Court has reviewed the file identified as APAK_001278 and does not believe it relates to this motion, and assumes SAFE intends to refer to APAK_002060.
Docket 623 at 5 (emphasis in original).
Docket 623 at 6 (quoting Dunn v. Wal-Mart Stores, Inc., 2013 WL 5940099 at *6 (D. Nev. Nov. 1, 2013)).
See, e.g., Docket 616-4 at 18 (Apr. 7, 2014 ltr. from K. Adam Christian to Cynthia Drinkwater).
See Fed. R. Civ. P. 26(b)(1) (“Information within this scope of discovery need not be admissible in evidence to be discoverable”).
In it notice, Alarm Protection indicated it would waive all objections save relevancy and hearsay. See Docket 619 at 2. In its opposition, Alarm Protection added reservations under Rules 403 and 404. Docket 623 at 8.
The Court will not permit Alarm Protection to object under Evidence Rule 404, which it initially waived. See Docket 619 at 2.
SAFE shall submit an application in support of its proposed fee award within seven days of this order; Alarm Protection may file a response within seven days thereafter. The award will not be payable until the entry of final judgment in this matter.