*1 This matter is before the Court on several of the parties’ discovery motions. For the reasons that follow: (1) Diane Israel's Motion to Quash Subpoenas of Eileen Dominguez and David A. Israel [Doc. No. 254] is denied; (2) James Adams’ Motion for Limited Confidentiality Order Regarding Use of Transcript or Recordings from Deposition of Defendant Adams [Doc. No. 270] is granted; (3) Diane Israel's Motion for Protective Order Pursuant to Fed. R. Civ. P. 30(d)(3) to Limit Scope of Diane Israel Deposition [Doc. No. 278] is granted in part and denied in part; and (4) Diane Israel's Motion for Rule 37 Sanctions for David's Failure to Honor This Court's Order That He Appear For His Deposition [Doc. No. 293] is granted in part and denied in part.

I. DIANE ISRAEL'S MOTION TO QUASH SUBPOENAS OF EILEEN DOMINGUEZ AND DAVID A. ISRAEL [Doc. No. 254][1]

Defendant Diane Israel (“Diane”) seeks to quash subpoenas served on Eileen Dominguez, who works in Diane's office, and on David A. Israel (“David A.”), Diane's son. Her motion asserts that neither person has relevant information about the case, and Plaintiff's decision to wait until the very end of discovery to depose them demonstrates that Plaintiff also does not consider them to be significant witnesses.

Plaintiff responds that through these depositions, he intends to explore the extent of the eavesdropping scheme and how the information is used, in order to determine the scope of damages. He also believes the depositions could resolve the issue of whether additional devices were used, or other individuals were involved, necessitating further amendments to the complaint.

Plaintiff contends that Dominguez could be expected to have knowledge of additional phone numbers of Shawn Engbrecht, James Adams, and Diane; the identities of and projects performed by Diane's bodyguards; conversations overheard while eavesdropping on Plaintiff; payments made to regard and security personnel retained by Diane; contact information for Engbrecht; and information about Diane's finances, particularly with respect to trusts and companies, to allow Plaintiff to determine Diane's net worth. Plaintiff suggests that Dominguez's testimony might reveal additional incidents, individuals, and devices that might result in further investigation and amendments to the complaint. Plaintiff summarizes the scope of the expected deposition testimony as “her knowledge regarding the full extent of the eavesdropping and conspiracy incidents detailed in the complaint.” (Pl.’s Resp. at 2.)

Plaintiff seeks the testimony of Diane's son David A. to explore Diane's motivation behind placing the eavesdropping devices, how the information was used, who else may have been involved, and how Defendants conspired to begin eavesdropping; contact information for and knowledge of the involvement of a number of Diane's bodyguards and security personnel; information regarding the Moyal events, for which Diane does not seek Fifth Amendment protection; and Diane's financial situation and net worth, including assets and cash holdings. Plaintiff states that he is willing to limit each of these depositions to four hours, not including follow-up by other parties.

*2 Federal Rule of Civil Procedure (“Rule”) 45(d)(3) provides that a court must quash or modify a subpoena that, among other things, “subjects a person to undue burden.” Fed. R. Civ. P. 45(d)(3)(A)(iii). Plaintiff's motion fails to establish that a deposition would subject either Dominguez or David A. to an undue burden. Although the Court agrees that Plaintiff's response suggests strongly that much of the information he seeks relates to liability, not damages, Diane and the third-party deponents have not shown that the depositions would relate solely to prohibited topics.

In addition, Diane offers no support for her suggestion that Plaintiff should be limited to taking only those depositions identified as of May 30, 2018. As she acknowledges in her reply, both witnesses were listed by Plaintiff as persons with knowledge in his interrogatory response, and she does not contend that the subpoenas were not served in time to comply before the discovery deadline. Accordingly, Diane Israel's Motion to Quash Subpoenas of Eileen Dominguez and David A. Israel [Doc. No. 254] is denied. However, neither deponent is required to respond to questions related to Diane's liability with respect to the present complaint or questions about Diane's finances outside the limitations set forth in Section III, infra. Diane Israel shall pay Plaintiff's reasonable costs incurred in bringing this motion.[2]

II. ADAMS’ MOTION FOR LIMITED CONFIDENTIALITY ORDER REGARDING USE OF TRANSCRIPT OR RECORDINGS FROM DEPOSITION OF DEFENDANT ADAMS [Doc. No. 270]

Defendant James Adams requests the entry of a protective order pursuant to Rule 26(c) allowing him to seal designated portions of his deposition transcript that may overlap any criminal investigation. Adams seeks this order to prevent Plaintiff or his agent from furnishing transcripts to the Northbrook Police Department. Plaintiff responds that there is no compelling reason for the entry of this protective order, because no indictment has been issued, and the Northbrook Police have previously indicated that there is no ongoing criminal investigation of Adams. Without citation, David also asserts that he has a constitutionally protected right to disseminate the deposition transcript to members of his family, friends, and members of the public and media in order to “vindicate[ ] him to the public as a victim of Adams’ actions.” (Pl.’s Resp. at 3.)

In denying his motion to stay discovery pending the outcome of a criminal investigation, the Court expressly stated that “Defendants’ Fifth Amendment concerns can instead be addressed by a less drastic remedy, the entry of a protective order sealing those portions of Defendants’ deposition testimony that overlap with the anticipated criminal investigation from those who are or will be involved in the investigation.” (5/30/18 Order at 9.) The Court is not persuaded by Plaintiff's argument that Adams faces no potential criminal liability simply because the Northbrook Police has asserted that there is no ongoing criminal investigation. Plaintiff does not claim that Adams could never be subjected to criminal prosecution by the Northbrook Police or any other arm of law enforcement. And as Adams points out, Plaintiff has raised the threat of criminal liability against him for actions other than those for which the investigation has concluded. Adams’ motion is therefore granted, and he is awarded reasonable fees and costs.

III. DIANE ISRAEL'S MOTION FOR PROTECTIVE ORDER PURSUANT TO FED. R. CIV. P. 30(d)(3) TO LIMIT SCOPE OF DIANE ISRAEL DEPOSITION TO ENFORCE COURT ORDER LIMITING DISCOVERY ON LIABILITY ISSUES[3] [Doc. No. 278]

*3 On May 30, 2018, this Court granted Diane's Motion for Protective Order Limiting Discovery on Liability Issues. That order provided that Diane need not provide discovery on any liability issues that will be admitted in her answer to Plaintiff's Fourth Amended Complaint,[4] namely all matters other than the technical capabilities of the listening devices at issue. The issue of whether or not anyone actually eavesdropped on Plaintiff was also exempted from the protective order, because it could be relevant to Plaintiff's actual damages.

During Plaintiff's deposition of Diane on June 12, 2018, counsel asked questions about a number of topics that Diane asserts are off-limits pursuant to the Court's May 30, 2018 order. For example, she was questioned about work she did with her father starting in 1987 and also asked for specific details about her finances, including the number of bank accounts she holds and the addresses of her real estate assets. Diane asks that a protective order be entered “putting into practice the Court's prior order regarding discovery.” (Def.’s Mot. at 5.) She further asks that discovery related to punitive damages be limited to the statement of net worth that Diane has already disclosed. Plaintiff responds that he should be entitled to ask questions regarding Diane's compilation of her net worth, to determine whether the information is true, accurate, up to date, and complete.

Diane does not dispute that her net worth is relevant to Plaintiff's prayer for punitive damages. See Marshall v. GE Marshall, Inc., No. 2:09 CV 198, 2012 WL 2343368, at *5 (N.D. Ind. June 20, 2012); El-Bakly v. Autozone, Inc., No. 04 C 2767, 2008 WL 1774962, at *5 (N.D. Ill. Apr. 16, 2008); Fieldturf Int'l, Inc. v. Triexe Mgmt. Group Inc., No. 03 C 3512, 2004 WL 866494, at *2 n.1 (N.D. Ill. Apr. 16, 2004). However, she wishes to limit discovery on the matter to her personal summary of her net worth, bolstered by declarations of her tax accountant and trust attorney. The Court concludes that Plaintiff need not take Diane at her word with regard to her net worth, but he may seek discovery of the financial information supporting her claims.

In seeking this discovery, Plaintiff is strongly cautioned that “[o]nly current financial documents are relevant to a claim for punitive damages.” Fieldturf Int'l, Inc. v. Triexe Mgmt. Group Inc., No. 03 C 3512, 2004 WL 866494, at *3 (N.D. Ill. Apr. 16, 2004); see Platcher v. Health Prof'ls, Ltd., No. 04-1442, 2007 WL 2772855, at *3 (C.D. Ill. Sept. 18, 2007). Thus, information about Diane's historical or potential future financial situation is not relevant, and any efforts to use discovery as a tool to pry into unrelated financial matters will not be allowed. Disclosure of Diane's financial information will be subject to the confidentiality order entered on July 20, 2018.

IV. DIANE ISRAEL'S MOTION FOR RULE 37 SANCTIONS FOR DAVID'S FAILURE TO HONOR THIS COURT'S ORDER THAT HE APPEAR FOR HIS DEPOSITION [Doc. No. 293]

On May 30, 2018, the Court granted Diane's motion to compel Plaintiff's deposition, noting that Plaintiff's only response to the motion challenged the timing of Defendants’ depositions. Plaintiff's deposition was scheduled for June 15, 2018, but his attorney sent an email the afternoon of June 14 stating that “[h]e will not attend his examination until the court adjudicates the disingenuous Motion you filed yesterday concerning Diane Israel's deposition and the Motion for Sanctions I intend on filing covering the unfortunate events at Diane Israel's deposition.” (Pl.’s Mot., Ex. 1.) Diane's deposition took place on June 12, 2018, and it was at this deposition that Diane refuse to answer a number of questions relating to her net worth, as discussed above.

*4 Diane seeks sanctions under Rule 37, which provides that the court may issue sanctions, including dismissal, against a party who fails to appear at his deposition. Fed. R. Civ. P. 37(d)(1)(A)(i); see Fed. R. Civ. P. 37(b)(2)(A)(v). Whether to award sanctions under Rule 37 is a matter for the court's discretion. In re Golant (Golant v. Levy), 239 F.3d 931, 937 (7th Cir. 2001). In awarding sanctions under Rule 37, courts are not required to choose the least severe sanction available, but “ ‘the sanction selected must be one that a reasonable jurist, apprised of all the circumstances, would have chosen as proportionate to the infraction.’ ” Id. (quoting Salgado v. Gen. Motors Corp., 150 F.3d 735, 740 (7th Cir. 1998)). Factors to be considered by the Court include “the gravity of the misconduct, the prejudice if any to the defendant, and whether the suit has any possible merit.” Bolt v. Loy, 227 F.3d 854, 856 (7th Cir. 2000).

The sanction of dismissal is “to be used ‘only in extreme situations.’ ” In re Golant, 239 F.3d at 937 (citation omitted). “[A] Rule 37(b)(2)[(A)(v)] dismissal, unlike Rule 41(b) dismissal, requires both a failure to comply with a discovery order and a showing of willfulness, bad faith, or fault.” Ladien v. Astrachan, 128 F.3d 1051, 1056 n.5 (7th Cir. 1997); see also In re Golant, 239 F.3d at 936 & n.1 (noting that the standard of bad faith is not always clear and that some cases have held that dismissal must only be supported by “ ‘clear record of delay or contumacious conduct, or when other less drastic sanctions have proven unavailing’ ”) (quoting Williams v. Chi. Bd. of Educ., 155 F.3d 853, 857 (7th Cir. 1998)). In addition, a court should not dismiss a case pursuant to Rule 37(b)(2) “ ‘without due warning to the plaintiff's counsel.’ ” Spain v. Bd of Educ., 214 F.3d 925, 929-30 (7th Cir. 2000) (citation omitted); see Bolt, 227 F.3d at 856; see also In re Golant, 239 F.3d at 937 & n.3 (holding that a court's warning that it would consider sanctions against a debtor, including denying him discharge, was sufficient notice).

Although Plaintiff's response repeats several times that he has complied with all aspects of the Court's May 30, 2018 order, (Pl.’s Resp. at 4-5), he does not deny that he failed to sit for his deposition, which was part of that order. Plaintiff also makes no effort to provide a reasonable basis for violating the Court's order granting Diane's motion to compel. Indeed, Plaintiff does not appear to deny the propriety of sanctions in the broad sense, arguing only that the sanction of dismissal is not warranted, and further that if sanctions are granted, they should be issued in the form of a Report and Recommendation to the District Court.

The Court concludes that the sanction of dismissal is not yet warranted in the present case and will not recommend to the District Court that the case be dismissed at this time. However, Plaintiff and his counsel are hereby warned that any further violations of this Court's directives may result in sanctions, including the recommendation of dismissal. Plaintiff is ordered to sit for his deposition no later than July 29, 2018. Plaintiff is further ordered to pay Diane's costs in bringing the present motion.[5]

*5 For the foregoing reasons, (1) Diane Israel's Motion to Quash Subpoenas of Eileen Dominguez and David A Israel [Doc. No. 254] is denied; (2) James Adams’ Motion for Limited Confidentiality Order Regarding Use of Transcript or Recordings from Deposition of Defendant Adams [Doc. No. 270] is granted; (3) Diane Israel's Motion for Protective Order Pursuant to Fed. R. Civ. P. 30(d)(3) to Limit Scope of Diane Israel Deposition [Doc. No. 278] is granted in part and denied in part; and (4) Diane Israel's Motion for Rule 37 Sanctions for David's Failure to Honor This Court's Order That He Appear For His Deposition [Doc. No. 293] is granted in part and denied in part.

SO ORDERED.

ENTERED:

Eileen Dominguez and David A. Israel have joined in the motion.

Rule 37 authorizes the payment of reasonable expenses in making a motion to compel if the opponent's position was not substantially justified. Fed. R. Civ. P. 37(a)(5)(A). The parties were advised on July 2, 2018 that this Court intended to strictly enforce Rule 37(a)(5)(A) going forward. (7/2/18 Minute Order) [Doc. No. 310].

In the alternative, Diane's motion sought to stay financial discovery until after ruling on the pending motions to dismiss. The District Court denied the motions to dismiss on June 14, 2018, and thus this form of relief is moot.

Plaintiff filed a Fourth Amended Complaint on July 11, 2018 in response to the District Court's order on Defendants’ motions to dismiss, which required Plaintiff to file a more definite statement in the form of an amended complaint. Defendants’ responsive pleadings are not yet due.

Plaintiff argues at length that this Court's lacks the power to directly award sanctions under Rule 37 and instead must issue a Report and Recommendation to the District Court. Although there is some authority for Plaintiff's argument, the Seventh Circuit has not analyzed at length the authority of a magistrate Judge to award sanctions under Rule 37 for violations of her own orders. The Court agrees with cases that distinguish sanctions imposed under Rule 11 and 28 U.S.C. § 1927 on one side, and awards of discovery expenses under Rule 37(a)(5) on the other. See Knapp v. Evgeros, Inc., No 15 C 754, 2016 WL 2755452, at * 2 (N.D. Ill. May 12, 2016). As Knapp pointed out, Rule 26(c)(1)(B) authorizes the court to enter a protective order specifying discovery terms and allocating expenses. Plaintiff's theory “would allow a magistrate judge supervising discovery to issue an order under Rule 26(c)(1)(B) specifying the ‘time and place’ for discovery yet require the magistrate judge to issue a report and recommendation for the allocation of expenses.” Id. Because Plaintiff violated a direct order of this Court, a direct award of discovery expenses is appropriate.