Allscripts Healthcare, LLC v. Andor Health, LLC
Allscripts Healthcare, LLC v. Andor Health, LLC
2022 WL 3406478 (D. Del. 2022)
June 28, 2022
Kearney, Mark A., United States District Judge
Summary
The court denied Andor's request for fees under Federal Rule of Civil Procedure 37(a)(5)(B) due to Allscripts' failure to move to compel disclosure or discovery. The court also denied Allscripts' second motion for sanctions and noted that Andor may still be able to move for fees under other authority. However, they must have a good faith basis to do so and must segregate the time incurred in responding to the motions for sanctions from the time incurred in addressing Allscripts's objections.
Additional Decisions
ALLSCRIPTS HEALTHCARE, LLC, et al.
v.
ANDOR HEALTH, LLC, et al
v.
ANDOR HEALTH, LLC, et al
CIVIL ACTION NO. 21-704-MAK
United States District Court, D. Delaware
Filed June 28, 2022
Kearney, Mark A., United States District Judge
ORDER
*1 AND NOW, this 28th day of June 2022, upon reviewing Special Master Chief Judge Robinson's Recommended Order (D.I. 534), Plaintiffs’ Objection (D.I. 538), Defendants’ Response (D.I. 543), finding Plaintiffs argue the underlying merit of their strategies but miss the point of our concern with their “shoot first and question later” approach for which they lacked a basis to move for sanctions without notice, moving to compel, or presenting an investigated good faith basis which caused responding parties to incur undisputed fees and costs in responding to sanctions motions and objections to Judge Robinson's Report and Recommendations before we could address whether the responding parties owed and breached the obligation or violated an order, but also finding the parties misplaced their analysis (and consented to misdirecting Judge Robinson's analysis) on a “substantial justification” defense under Federal Rule of Civil Procedure 37(a)(5)(B) which applies to conduct surrounding motions to compel but Plaintiffs never moved to compel instead moving directly for sanctions outside the scope of Rule 37(a)(5),[1] and Defendants having failed to show grounds for sanctions under our inherent power, Federal Rule of Civil Procedure 11, or 28 U.S.C. § 1927 as it relates to Plaintiffs’ sanctions motions (D.I. 350, 370) or objections (D.I. 389, 424),[2] it is ORDERED we DENY Defendants’ requests for fees sought under Rule 37(a)(5)(B) without prejudice to move under Federal Rule 7 and our Policies for reimbursement for their paid reasonable fees and costs under applicable authority if warranted after a good faith review of the facts and governing law.
Footnotes
Defendants, collectively Andor, requested fees for responding to Plaintiffs, collectively Allscripts, two motions for sanctions. D.I. 365, 381, 393, 395. They did so as part of their opposition papers and without moving under Federal Rule 7. Andor grounded all four of their requests in Federal Rule of Civil Procedure 37(a)(5)(B) and Al-Sabah v. Agbodjogbe, No. 17-730, 2019 WL 4447235, at *6 (D. Md. Sept. 17, 2019). D.I. 365, 381, 393, 395. We referred both requests for fees to Judge Robinson for a report and recommendation consistent with our Order appointing her as special discovery master. D.I. 207, 402, 404. The parties provided supplemental briefing to Judge Robinson, both relying upon and arguing their respective positions under Rule 37(a)(5)(B). D.I. 530–31. Judge Robinson accordingly applied Rule 37(a)(5)(B) to award Andor's fees finding Allscripts did not have substantial justification for bringing either motion for sanctions. D.I. 534 at 2, 4.
But we may not issue sanctions under a Rule providing no basis. We must deny Andor's requests for fees under Rule 37(a)(5)(B) without prejudice to move for reasonable paid fees consistent with other authority if warranted after close review of the law and facts. We begin with the plain text of Rule 37(a)(5)(B):
(a) Motion for an Order Compelling Disclosure or Discovery.
(1) In General. On notice to other parties and all affected persons, a party may move for an order compelling disclosure of discovery. The motion must include a certification that the movant has in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.
*****
(5) Payment of Expenses; Protective Orders.
(B) If the Motion is Denied. If the motion is denied, the court may issue any protective order authorized under Rule 26(c) and must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees. But the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust.
Fed. R. Civ. P. 37(a)(1), (5)(A)–(B). Rule 37(a) deals with motions to compel disclosure or discovery. Rule 37(a)(5)(A) and (B) address what we may or must do when a motion to compel is granted or denied. Fed. R. Civ. P. 37(a)(5)(A)–(B); see also Kyko Glob., Inc. v. Bhongir, 807 F. App'x 148, 153 (3d Cir.), cert. denied, 141 S. Ct. 670 (2020) (“But the text of Federal Rule of Civil Procedure 37(a)(5)(B) directs that when a motion to compel is denied, the court ‘must, after giving an opportunity to be heard, require the movant ... to pay the party ... who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees.’ ”) (emphasis added); Miller v. Rodriguez, No. 162744, 2017 WL 5513690, at *3 (D.N.J. Nov. 17, 2017); see also Advisory Committee Notes, 1970 Amendment, Subdivision (a)(4) (discussing then subdivision a(4), now (a)(5), “[t]his subdivision amends the provisions for award of expenses, including reasonable attorney's fees, to the prevailing party or person when a motion is made for an order compelling discovery.”) (emphasis added); Exe v. Fleetwood RV, Inc., No. 11-70, 2014 WL 12788939, at *1–2 (N.D. Ind. June 12, 2014).
Allscripts did not move to compel; Allscripts instead jumped ahead and moved for sanctions. We cannot award Andor fees under the plain text of the Rule 37(a)(5)(B).
We acknowledge Andor's reliance on, but we are not persuaded by, non-binding authority from the United States District Court for the District of Maryland. In Al-Sabah, the judge awarded the plaintiff fees incurred for responding to the defendant's objections to the magistrate judge's ruling denying the defendant's motion for sanctions for spoliation of ESI. Al-Sabah, 2019 WL 4447235, at *1, 6–7. The plaintiff requested fees under Rule 37(a)(5)(B) and 28 U.S.C. § 1927. Id. at *6. The judge ultimately awarded the fees under Rule 37(a)(5)(B) despite there being no motion to compel at issue, only a motion for sanctions. Id. at *6–7. Under the plain text of Rule 37(a)(5)(B) and our Court of Appeals’ interpretation of the text of Rule 37(a)(5)(B), we are not persuaded by Andor's reliance on Al-Sabah.
We deny Andor's request for fees under Rule 37(a)(5)(B) as the Rule only applies to what we may do after denying a motion to compel.
We find merit in Judge Robinson's findings particularly as to the filing of objections to her two reports and recommendations regarding the merits of Allscripts's motions for sanctions. Allscripts first moved for sanctions under Federal Rule of Civil Procedure 37(e) for alleged destruction of ESI. D.I. 350. We noted in our Order adopting Judge Robinson's recommendation Allscripts curiously moved for sanctions under Rule 37(e) for destruction of ESI without first moving to compel access to the computers they then knew still existed. D.I. 402 at 3–4. Allscripts moved for sanctions because Mahathi's Vice President of engineering testified he directed his employees to destroy all data, including source code, from their computers after Allscripts initiated this litigation. D.I. 350 at 2. But Allscripts admitted Andor told them they “serendipitously found the laptops in India and ... they had not reformatted the hard drives” before Allscripts moved for sanctions. Id. at 3. But Allscripts complained Mahathi would not provide Allscripts access to the computers. Id. Without further explanation, Allscripts then told us we “should not tolerate Defendants’ brazed destruction of evidence.” Id. We were left scratching our heads asking, “what destruction of evidence?” Allscripts moved for sanctions for lost ESI knowing the computers existed and Mahathi had not reformatted them. Allscripts must have known they could not prove a required prong for sanctions—lost ESI—without reviewing the computers Mahathi located before Allscripts filed their motion. Allscripts did not move to compel access to the computers (which it could have done); Allscripts jumped right to a motion for sanctions. And then it doubled down on its position costing Andor additional fees and further burdening our docket.
We turn to the second motion regarding the deposition. D.I. 370. We adopted Judge Robinson's recommendation we deny the motion for sanctions albeit for a different reason. D.I. 430. We found Allscripts failed to follow the plain text of the Rule—something Allscripts implores us to do here in declining to award fees under Rule 37(a)(5)(B). Id. We found the plain text of Rule 37(d) requires proper notice of the deposition be issued before imposing sanctions for failure to appear. Id. Allscripts admitted they did not issue proper notice. D.I. 370 at 6 n.2; D.I. 430. They argue an entitlement to avoid notice. We denied their motion for sanctions.
We found in both instances Allscripts admitted it could not carry their burden for sanctions yet moved for sanctions anyway and then filed objections.
But we cannot reimburse Andor for its paid fees under a Rule which does not apply. We deny Andor's motion against this backdrop and without prejudice for Andor to move under our inherent power, Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927 or some other authority, noting these avenues may carry different burdens than merely lacking substantial justification. We expect Andor, consistent with their obligations under the Rules, shall only move for fees if they, after investigating the law and facts, conclude they have a good faith basis to move before us and segregate the time incurred in responding to the Motions for sanctions compared to the time incurred in addressing Allscripts's objections (D.I. 389, 393, 424, 427).