*1 Before the undersigned Magistrate Judge, on reference from the District Court, is a motion for sanctions [doc. # 65] filed by plaintiff/defendant-in-counterclaim, Ocean Sky International, Inc. (“Ocean Sky”). The motion is opposed. For reasons stated below, the motion is DENIED.[1]

Ocean Sky was an independent distributor of the Limu Company, L.L.C. (“LIMU”)[2] for over fourteen (14) years until December 11, 2017, when LIMU suspended Ocean Sky and “confiscated” its income. At least one of the reasons asserted for the suspension was because Ocean Sky allegedly permitted improper health claims to be published by persons within its downline and failed to police that conduct. (Decl. of Chris Wellman, pg. 2; M/Sanctions, Exh. 1). According to LIMU, this constituted a violation of its Policies & Procedures that warranted suspension of Ocean Sky's position.

Ocean Sky contends that LIMU's reason for suspending its distributorship lacks merit, as the health claims alleged by LIMU were not only encouraged by the company, but also ratified by LIMU on its website. For this reason, on December 23, 2017, Shannon Pardue, Ocean Sky's owner, visited https://www.thelimucompany.com/blog and took screen shots of several testimonials, including those from Horrace Eppinette, Kristal Schmidt, Cindy Roseberry, Angie and Frankie Moorman, plus J and Secret Stacey. (Decl. of Shannon Pardue; M/Sanctions, Exh. 7). Pardue believes that there were hundreds of additional improper health claims, but, for an unspecified reason, he only was able to copy a few testimonials. Id.

On March 12, 2018, LIMU formally terminated Ocean Sky's distributorship. The instant suit followed on April 19, 2018. Ocean Sky argues that the termination was both unjustified and fraudulent because, inter alia, LIMU terminated Ocean Sky for conduct that the company, itself, encouraged and adopted. See Second Amended Complaint [doc. # 56].

Following initial motion practice, the filing of amended complaints, answers, and counterclaims, the court issued a scheduling order that set this matter for trial on June 8, 2020. (Jan. 10, 2019, Sched. Order [doc. # 53]). Discovery commenced.

According to defense counsel, on July 11, 2019, plaintiffs, for the first time, brought to LIMU's attention certain testimonials that included improper health claims. (Decl. of Maureen Soles; Opp. Memo., Exh.). Specifically, plaintiffs highlighted the testimonials of Eava and Keith Currence (published on LIMU's blog on June 7, 2015), Rae-Shell Fletcher (published on LIMU's blog on October 20, 2016), Andrea and Fred Lee (published on LIMU's blog in January 2014), Angie and Frankie Moorman (published on LIMU's blog in November 2012), Kristal Schmidt (published on LIMU's blog in October 2015), plus J and Secret Stacy (published on LIMU's blog in June 2014). Id. LIMU reviewed these testimonials and revised two of them (Andrea and Fred Lee and J and Secret Stacy) to address the improper health claims. Id. LIMU also confirmed that the improper health claim in Kristal Schmidt's testimonial had been revised in January 2017 to remove the claim. Id. Finally, LIMU confirmed that Angie and Frankie Moorman's testimonials were made private, and therefore, no longer publicly available. Id.

*2 On July 23, 2019, Ocean Sky served its Second Set of Requests for Production of Documents on LIMU in which it requested “[a]ny and all testimonials that were present on LIMU Nation's Official Blog on December 23, 2017.” (Decl. of Chris Wellman, pg. 2). On August 26, 2019, LIMU answered the request by stating,

(LIMU's Answers to 2nd Req. for Prod. of Docs., No. 73; M/Sanctions, Exh. B) (emphasis added).

After receiving LIMU's response, counsel for Ocean Sky began searching LIMU's website https://www.thelimucompany.com/blog/ to obtain copies of the testimonials. (Wellman, Decl., pg. 3). Specifically, he searched for the names of the testimonials that Shannon Pardue had copied on December 23, 2017. Id. Upon review, he discovered that some of the testimonials from December 23, 2017, had been altered or removed from the website altogether. Id. In light of LIMU's discovery response that it did not have any responsive documents that did not appear on its website, counsel for Ocean Sky researched and confirmed that LIMU's actions constituted spoliation of evidence. Id. Accordingly, he began drafting the instant motion for sanctions pursuant to the court's inherent authority. Id.

On August 29-30, 2019, counsel exchanged detailed email correspondence regarding the sufficiency of LIMU's discovery responses. See Email; Opp. Memo., Exh. U. However, counsel for Ocean Sky did not raise any issue with respect to LIMU's response to Request for Production No. 73. (Decl. of Maureen Soles; Opp. Memo., Exh.). The discovery impasse culminated in a telephone conference between counsel later in the afternoon of August 30. Id.

Counsel for LIMU memorialized the August 30 conversation in an email that she transmitted to opposing counsel that same day. (Aug. 30, 2019, Email from M. Soles to C. Wellman; M/Sanctions, Exh. E). It stated, in pertinent part:

*3 Id.

During the conference, counsel for LIMU explained that LIMU did not have an image of its website by date. Therefore, if Ocean Sky wanted to know the testimonials posted on a specific date the only place to look was the public website, which Ocean Sky could access just as easily as LIMU. (Decl. of Maureen Soles, pgs. 3-4). Counsel added that she would produce the testimonials identified by Ocean Sky in July 2019 and was open to discussing other testimonials. Id.

On September 3, 2019, counsel for Ocean Sky advised opposing counsel, via email, that his client had authorized the filing of a motion for sanctions (incorrectly referred to as a Rule 11 motion) and requested confirmation that LIMU opposed the motion. (Sept. 3, 2019, email from C. Wellman to M. Soles; Opp. Memo., Exh. V). On September 4, LIMU so obliged. (Sept. 4, 2019, email from M. Soles to C. Wellman; Opp. Memo., Exh. V).

On September 5, 2019, Ocean Sky filed the instant motion for sanctions pursuant to the court's inherent authority. Ocean Sky seeks sanctions against LIMU for having to file the instant motion. It argues that had it not been for LIMU's false discovery response, it would not have had to expend the time and resources to prepare the instant motion. Stated differently, “Ocean Sky would have successfully established its assertion of spoliation of evidence assuming LIMU's discovery response was true and accurate.” (M/Sanctions, Memo., pg. 7). Ocean Sky seeks sanctions in the amount of $4,500, plus an order requiring LIMU to produce all requested testimonials immediately. Id.

On September 16, 2019, LIMU produced the “current” version of the testimonials for the six promoters identified by Ocean Sky in July 2019 and the two promoters identified by plaintiff's counsel, together with a copy of the revisions to the testimonial along with data showing when the revision was made. (Soles Decl.).

On September 27, 2019, LIMU filed its opposition to the motion for sanctions in which it argued that it neither failed to preserve any documents, nor acted in bad faith. Ocean Sky filed its reply brief on October 4, 2019, whereby it asserted that in LIMU's September 16 production of documents, it inexplicably failed to produce the un-revised versions of the testimonials of Karon Weatherford and Alatha Swain. See Suppl. Decl. of Chris Wellman and Notice of Errata; [doc. #s 77-1 and 78]. Furthermore, Ocean Sky adduced evidence that LIMU had revised testimonials after Ocean Sky's distributorship had been suspended, but before Ocean Sky brought the testimonials to LIMU's attention. See Decl. of Chris Wellman and Reply Brief, Exh. B. The matter is ripe.

“Federal courts have inherent powers necessary to achieve the orderly and expeditious disposition of their dockets.” Nat. Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 86 F.3d 464, 467 (5th Cir.1996) (citation omitted). However, the threshold for the use of inherent authority sanctions is high. Id. To impose sanctions against a defendant under its inherent authority, the court must find that the defendant acted in bad faith. Id. Bad faith “is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity; ... it contemplates a state of mind affirmatively operating with furtive design or ill will.” United States v. Gilbert, 198 F.3d 1293, 1299 (11th Cir. 1999) (citing inter alia, Black's Law Dictionary 139 (6th ed.1990)).

*4 Applying the foregoing considerations here, the court reiterates that plaintiff's counsel began preparing the instant motion as a motion for sanctions for spoliation of evidence premised upon LIMU's inaccurate representation in its discovery response that it did not retain other prior versions of testimonials other than what was on its active website. Ocean Sky contends that “LIMU was trying to ‘pull a fast one’ by believing that Ocean Sky would not uncover the testimonials.” (M/Sanctions, Memo., pg. 8).

As the court appreciates it, however, Ocean Sky provided LIMU with the testimonials of specific individuals that included improper health claims in July – before Ocean Sky served the instant request for production. Therefore, LIMU knew before it answered the request for production that, at minimum, Ocean Sky was aware of, and possibly possessed at least some testimonials in their original, unaltered state. This sequence of events tends to detract from inferring an improper motive behind LIMU's mistaken response. Moreover, as soon Ocean Sky brought the discrepancy to the attention of opposing counsel, she readily clarified that her client could still produce the altered or removed testimonials despite the fact that they no longer were available on the website. Although counsel for LIMU provided no explanation for the inaccurate discovery response, she half-way conceded that it could have been “more articulate.” (Opp. Memo., pg. 15, n.9). Under these circumstances, the court is unable to conclude that LIMU acted in bad faith.

Furthermore, the Fifth Circuit has remarked that “[w]hen a party's deplorable conduct is not effectively sanctionable pursuant to an existing rule or statute, it is appropriate for a district court to rely on its inherent power to impose sanctions.” Carroll v. Jaques Admiralty Law Firm, P.C., 110 F.3d 290, 292–93 (5th Cir.1997) (citation omitted) (emphasis added). The foregoing conditions are not present here. First, Ocean Sky did not establish that LIMU's conduct was deplorable. Second, the Federal Rules of Civil Procedure contemplate the instant situation.

For example,

Fed. R. Civ. P. 26(e)(1).

Furthermore, Rule 37(c)(1) provides a remedy.

LIMU, however, disclosed its incorrect discovery response within three days of service, and as soon as Ocean Sky brought the issue to LIMU's attention.[3] Accordingly, the court does not find that any of the remedies available under Rule 37(c), including those incorporated from Rule 37(b)(2), e.g., entry of default judgment, is appropriate or warranted.

Ocean Sky also seeks an order requiring LIMU to immediately produce all testimonials that were removed and/or altered from its website, on the grounds that LIMU has abused its discovery obligations by not being forthright in its responses. However, Ocean Sky has failed to establish that LIMU acted in bad faith, see discussion, supra, and therefore, this relief is neither appropriate, nor available as a sanction under the court's inherent authority. Of course, if LIMU possesses any responsive testimonials that it has failed to produce, then it is under an ongoing obligation to produce same. See Fed.R.Civ.P. 26(e)(1).[4]

*5 For the above-assigned reasons,

IT IS ORDERED that the motion for sanctions [doc. # 65] filed by plaintiff/defendant-in-counterclaim, Ocean Sky International, Inc., is DENIED.

In Chambers, Monroe, Louisiana, this 15th day of October 2019.

As this motion is not one of the motions excepted in 28 U.S.C. ‘ 636(b)(1)(A), nor dispositive of any claim on the merits within the meaning of Rule 72 of the Federal Rules of Civil Procedure, this ruling is issued under the authority thereof, and in accordance with the standing order of this court. Any appeal must be made to the district judge in accordance with Rule 72(a) and LR 74.1(W).

LIMU is a multi-level marketing company – otherwise known as an “MLM” company – that manufactures and distributes dietary supplements worldwide.

A party need not supplement its discovery response if the additional information has been made to the other parties during the discovery process. See Fed.R.Civ.P. 26(e)(1)(A); Reed v. Iowa Marine & Repair Corp., 16 F.3d 82, 85 (5th Cir.1994).

In addition, LIMU's assertion that it is unable to produce all testimonials that were present on its blog as of December 23, 2017, because it does not have an image of its website appears to be a questionable explanation for its professed inability to comply with the discovery request. Ocean Sky adduced evidence of internal emails from LIMU that listed testimonials or stories that were selected for editing in December 2017. See Suppl. Decl. of Chris Wellman, Exh. B. Furthermore, it stands to reason that the digital files where the testimonials are stored should indicate when they were saved or altered, especially since LIMU represented that it preserved the original testimonials for purposes of this litigation. Finally, while LIMU asserts that its proposed approach to the request for production was proportional to the value of Ocean Sky's breach of contract claim, that does not square with Ocean Sky's estimate of damages for this claim which it appraises at not less than $5.8 million. See Decl. of Shannon Pardue; M/TRO, Exh.). Clearly, the parties should re-double their efforts to accommodate this discovery request to thwart the need for further motion practice.