Waddell v. HW3 Inv. Grp., LLC
Waddell v. HW3 Inv. Grp., LLC
2021 WL 9781801 (N.D. Fla. 2021)
December 23, 2021

Frank, Michael J.,  United States Magistrate Judge

Cloud Computing
Possession Custody Control
Text Messages
Sanctions
Bad Faith
Proportionality
Failure to Produce
Cost Recovery
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Summary
The court found that Defendants had not conducted a comprehensive search of their record systems, including their iCloud account, for emails and text messages that were responsive to Plaintiffs' requests. The court granted Plaintiffs' motion to compel and ordered Defendants and their attorney to pay Plaintiff $1,500 as attorney's fees and costs. The court also noted that parties must act diligently and thoughtfully when searching for ESI, and that information technology professionals should be employed to ensure that document searches cull from all available sources.
TYRELL WADDELL and KENDREALL FINKLEA, Plaintiffs,
v.
HW3 INVESTMENT GROUP, LLC, and HOWARD WOLF, Defendants
Case No. 5:21-cv-55-AW/MJF
United States District Court, N.D. Florida
Filed December 23, 2021

Counsel

Benjamin Scott Briggs, Adams and Reese LLP, Tampa, FL, Gabriel Damian Pinilla, Adams & Reese LLP, Denver, CO, for Plaintiffs.
Brian John Morrissey, Ragsdale Beals Seigler et al LLP, Atlanta, GA, for Defendants.
Frank, Michael J., United States Magistrate Judge

ORDER

*1 This matter is before this court on Plaintiffs' motion to compel. Doc. 41. Defendants filed a response. Doc. 44. For the reasons set forth below, this court will grant Plaintiffs' motion to compel.
 
I. FACTUAL BACKGROUND[1]
On September 14, 2021, Plaintiffs propounded interrogatories and requests for production of documents on Defendants. On October 18, 2021, Defendants provided their responses. Because Defendants' responses were insufficient, the parties conferred and agreed that Defendants would make supplemental productions and provide amended responses.
 
Defendants supplemented their production of documents and provided amended responses. In the supplemental production, however, Defendants failed to provide emails and text messages that were exchanged between Defendants and Plaintiffs. Plaintiffs' counsel informed Defendants' counsel that documents appeared to be missing, and Defendants' counsel stated that he had instructed his client to conduct additional searches for responsive documents.
 
On the morning of Defendants' depositions, Defendants produced an additional 27 pages of previously unproduced emails that were responsive to Plaintiffs' requests. During the course of the depositions, Plaintiffs' counsel ascertained that Defendants had not conducted a comprehensive search of Defendant HW3 Investment Group, LLC's (“HW3”) record systems. As a result, the deposition was adjourned so that HW3 could search its systems and provide to Plaintiffs additional responsive documents. The corporate representative for HW3 indicated that Monica Aquino, a managing partner at HW3, was knowledgeable concerning HW3's systems and record-keeping facilities. Additionally, the representative indicated that Ms. Aquino would be able to search and compile all responsive documents.
 
On December 2, 2021, Defendants' counsel produced additional documents and noted that HW3 had advised that “[a] thorough search was made and no additional documents, including e-mails were found.” On December 6, 2021, Plaintiffs' counsel requested that HW3 provide a detailed description of the efforts undertaken to search for responsive materials. In response, HW3 stated that Ms. Aquino had “searched all records,” but that Ms. Aquino would double check.
 
On December 8, 2021, Plaintiffs took the depositions of Defendant HW3's corporate representative, Defendant Wolf, and Ms. Aquino. Although the deposition testimony was not provided to this court,[2] Defendant Wolf testified that a full search had been conducted by HW3 through Ms. Aquino, who purportedly had the greatest knowledge of where and how to search HW3's systems for emails and text messages that were responsive to Plaintiffs' requests.
 
*2 During Ms. Aquino's deposition, however, Ms. Aquino testified that she had very little knowledge of HW3's storage and records systems. Doc. 41 ¶ 19. Additionally, Ms. Aquino testified that she is not an “IT person” and had searched only her own personal laptop, tablet, and phone device for responsive documents. Id. ¶ 20. Ms. Aquino had not searched HW3's record-keeping systems, “which span not less than 4 cloud-based storage platforms and numerous individual devices, for emails and text messages, including apparently HW3's Google Mail service.” Id. ¶ 21.
 
Although Ms. Aquino searched her personal devices for relevant documents, Defendants concede that no one searched Defendants' iCloud account, a cloud-storage and cloud-computing service provided by Apple, Inc. According to Defendants, “no one had thought to” search Defendants' iCloud account. Doc. 44 at 2. Plaintiffs, therefore, filed this motion to compel, motion for sanctions, and motion for an extension of discovery and dispositive-motion deadlines. Doc. 41. Specifically, Plaintiffs seek to compel Defendants to update their discovery responses and pay the fees associated with this motion.
 
Defendants, for their part, agree that the court should enter an order compelling discovery and permitting Plaintiffs to reschedule depositions. Defendants, however, dispute that Plaintiffs are entitled to attorney's fees and contend that any such award is not warranted in this case.
 
II. DISCUSSION
“The production of documents ... is governed by Federal Rule of Civil Procedure 34(a).” Hernandez v. Results Staffing, Inc., 907 F.3d 354, 361 (5th Cir. 2018). Rule 34 permits a party to “serve on any other party” a request to produce or allow inspection of documents or tangible items that are “in the responding party's possession, custody, or control.” Fed. R. Civ. P. 34(a)(1). “A party has an obligation to conduct a reasonable inquiry into the factual basis of his responses to discovery.” Nat'l Acad. of Recording Arts & Scis., Inc. v. On Point Events, LP, 256 F.R.D. 678, 680 (C.D. Cal. 2009); Rogers v. Giurbino, 288 F.R.D. 469, 485 (S.D. Cal. 2012). Under Rule 26(g)(1)(A), a party or an attorney signing a discovery response “certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry” the responses are complete and correct. Fed. R. Civ. P. 26(g)(1)(A). Taken together these Rules place a burden on a party and the party's counsel “to ensure that a reasonable and complete search is conducted and that all responsive material is either produced or withheld under a proper objection.” Kellgren v. Petco Animal Supplies, Inc., No. 13-CV-644 L (KSC), 2016 WL 4097521, at *3 (S.D. Cal. May 26, 2016).
 
Defendants concede that they did not diligently search all of their records, including HW3's iCloud account, for discoverable emails and text messages. Obviously, then, Defendants' search fell short of the standard set by the Federal Rules of Civil Procedure. Defendants contend, however, that they did not search their iCloud account because they did not think to do so.
 
As for this excuse, it is simply inadequate under the Federal Rules of Civil Procedure. If parties justifiably could evade their discovery obligations simply by not thinking about locations of possibly discoverable materials, the discovery process quickly would become a farce. The Federal Rules require parties—guided by their counsel—to act diligently and thoughtfully. Discovery procedures of information-technology systems typically entail employing information “technology professionals to ensure that document searches cull from all available sources, not just those non-experts know about.” Venator v. Interstate Res., Inc., No. CV415-086, 2016 WL 1574090, at *10 (S.D. Ga. Apr. 15, 2016) (emphasis added). Defendants did not explain what steps—if any—were taken to ensure that they had searched all available sources for the discovery, including their iCloud account.
 
*3 Defendants also argue that “it is reasonably believed that information relevant to this search are on” electronic devices that Plaintiffs already possess. Doc. 44 at 2. The fact that some discovery materials may be contained on devices that Plaintiffs possess does not negate Defendants' duty to conduct a diligent search for discoverable materials that are in Defendants' possession, custody, or control. True, Rule 26 limits the scope of discovery and makes the parties' relative access to the relevant information and the burden on the responding party factors to consider in determining the scope of discovery. But it is unclear whether Defendants raised this objection at any point in their response to Plaintiffs' discovery requests. Indeed, Defendants make only a passing reference to this argument in their memorandum. Id. This court, therefore, cannot conclude that any searches conducted by Defendants were “reasonable” or that they acted with due diligence in searching for responsive documents. Accordingly, this court must grant Plaintiffs' motion to compel.
 
Plaintiffs also seek the costs associated with bringing their motion to compel. Defendants contend that they did not intentionally withhold discoverable materials. But lack of bad faith is not an impregnable defense against sanctions for violating one's discovery obligations under the Federal Rules. “[E]ven an innocent failure [to answer discovery] is subject to sanctions, though the reason for the failure is relevant in determining what sanction, if any, to impose.” King v. Dillon Transp., Inc., No. CV411-028, 2012 WL 592191, at *1 (S.D. Ga. Feb. 22, 2012) (quoting 8B CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2281 (3d ed. 2010)); see Venator, 2016 WL 1574090, at *12-14. Federal Rule of Civil Procedure 37(a)(5)(A) provides in relevant part:
(A) If the Motion Is Granted (or Disclosure or Discovery Is Provided After Filing). If the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed—the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. But the court must not order this payment if:
(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action;
(ii) the opposing party's nondisclosure, response, or objection was substantially justified; or
(iii) other circumstances make an award of expenses unjust.
Fed. R. Civ. P. 37(a)(5)(A).
 
Here, it appears that Plaintiffs attempted in good faith to obtain the discovery materials without court action, and there is no indication that Defendants' nondisclosure was substantially justified. Because this court is granting Plaintiffs' motion to compel, Plaintiffs are entitled to reimbursement for reasonable expenses incurred in litigating their motion to compel, including attorney's fees. Defendants have not identified any circumstances that would make an award of expenses unjust, nor have they shown that their nondisclosure was substantially justified. Therefore, Plaintiffs are entitled to reasonable expenses, including attorney's fees. To avoid unnecessary expense in determining the amount of the fee award, this order sets an amount, subject to redetermination.
 
III. CONCLUSION
Accordingly, it is ORDERED:
 
1. Plaintiffs' motion to compel, Doc. 41, is GRANTED.
 
2. On or before December 31, 2021, Defendants shall conduct a search of their iCloud account(s) and produce to Plaintiffs any discoverable materials. To the extent that no discoverable materials are discovered in Defendants' search of their iCloud accounts, Defendants shall provide Plaintiffs an affidavit stating that Defendants conducted a diligent search and a reasonable inquiry. The affidavit must state what steps were undertaken in such search.
 
3. Defendants and their attorney, jointly and severally, must pay Plaintiff $1,500 as attorney's fees and costs. If a party asserts that this is not the amount of fees reasonably incurred by Plaintiff on the motion to compel, the party may move within fourteen days to redetermine the amount, and the matter will be reconsidered de novo. Attorney's fees may be assessed against the party who loses any such motion to redetermine. The fees assessed under this order, or based on it, must be paid by January 6, 2022 (if no motion to redetermine is filed) or within fourteen days after the entry of an order on any motion to redetermine.
 
*4 3. To the extent it becomes necessary in light of new materials produced by Defendants, Plaintiffs shall reschedule and conduct depositions no later than January 21, 2022.
 
4. Any dispositive motions must be filed on or before February 4, 2022.
 
SO ORDERED this 23rd day of December, 2021.

Footnotes
These facts are taken primarily from Plaintiffs' motion to compel insofar as “Defense counsel is in general agreement with the facts stated in connection with the documents as set forth in Plaintiffs' Motion.” Doc. 44 at 1.
For purposes of Plaintiffs' motion to compel, Defendants do not dispute the accuracy of Plaintiffs' synopsis of this deposition testimony.