OPINION

I. Introduction

*1 This matter is before the Court on the motion of AdvanSix Inc. (“AdvanSix”) seeking Rule 37 sanctions against the fourteen insurer defendants (“Defendants”) (ECF No. 158). The motion is fully briefed and has been referred to the undersigned by the Honorable Madeline Cox Arleo.[1] The Court has carefully considered the parties’ submissions and decides the matter without oral argument per FED. R. CIV. P. 78(b) and Local Civil Rule 78.1. For the reasons stated below, AdvanSix's motion is granted in part and denied in part.

II. Background

As the parties are aware, this case has been beset by discovery disputes almost since its inception. Most of these disputes have concerned AdvanSix's attempts to obtain discovery from Defendants. The Court and parties have dedicated considerable resources to such matters, most of which have been resolved in AdvanSix's favor. AdvanSix now seeks to recover the expenses incurred in obtaining the disputed discovery.[2]

III. Legal Standard

Under FED. R. CIV. P. 37(a)(5),

[i]f [a] motion [to compel disclosure or discovery] 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,[3] 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.

Further,

[i]f the motion is granted in part and denied in part, the court ... may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.

FED. R. CIV. P. 37(a)(5)(A), (C).

IV. Analysis

a. Pre-Motion Letters

Before turning to the relevant discovery dispute narrative, the Court must address a preliminary issue. AdvanSix's current application references — in addition to its three discovery motions — seven letters it filed with the Court in connection with its efforts to obtain discovery from Defendants. These letters present a two-pronged question. First is whether disputes raised though such letters and resolved without necessitating motion practice fall within the scope of Rule 37(a). The second is whether, with respect to matters ultimately resolved by motion, Advansix can recover the costs incurred in drafting the letters that preceded such applications.

*2 The Court answers the first question in the negative. By its terms, the relevant portions of Rule 37(a) are triggered only when a party files a motion to compel. The starting point is Rule 37(a)(1), which provides that “a party may move for an order compelling disclosure or discovery” and describes what “[t]he motion must include”. Growing from here is subsection (a)(5)(A), which comes into play “[i]f the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed”. Similarly, subsection (5)(C) arises where “the motion is granted in part and denied in part”. This language binds the Court to assess costs only where discovery motions have actually been filed.

Although there is little case law on this discrete question, district courts to have considered it appear to be in accord. See, e.g., SiteLock LLC v. GoDaddy.com LLC, 2020 U.S. Dist. LEXIS 172703, at *3 n.1 (D. Ariz. Sep. 21, 2020) (where no motion to compel filed, “Rule 37(a)(5) ... is inapplicable”); La Piel, Inc. v. Richina Leather Indus. Co., 2013 U.S. Dist. LEXIS 46328, at *61-62 (E.D.N.Y. Mar. 29, 2013) (“[D]efendants never actually made a motion with respect to the [disputed discovery]; rather, defendants simply wrote a letter in which they informally requested [certain relief] .... [B]ased upon this record, the Court does not believe that [defendants’] letters constitute a ‘motion’ that triggers Rule 37(a)(5) ....”). Consistent with these decisions, the Court concludes that a discovery dispute resolved short of a motion to compel fails to activate Rule 37(a). The Court will therefore limit the possible award of costs to disputes that culminated in AdvanSix filing discovery motions.[4]

As noted, though, this is only half the battle. The issue remains as to whether costs can be recovered for the pre-motion letters that preceded AdvanSix's motions to compel. The Court is of the view that they can.

The starting point here is that the Court's Individual Practices direct parties to raise discovery disputes in writing before filing discovery motions, as well as prohibit such motions without leave of Court. The Local Rules similarly provide that discovery disputes “shall be presented by telephone conference call or letter to the Magistrate Judge. This presentation shall precede any formal motion.” L. CIV. R. 37.1(a)(1). Pre-motion letters (and their attendant Court conferences) are therefore best viewed as prerequisites to discovery motions, geared toward obviating the need for — and the costs arising from — full-fledged motion practice. Cf. Heller v. Wofsey, Certilman, Haft, Lebow & Balin, 1989 U.S. Dist. LEXIS 7765, at *25 (S.D.N.Y. July 11, 1989) (observing that “one of the principal purposes of informal procedures for the resolution of discovery disputes, is to minimize the expense and delay attendant upon formal motions pursuant to Rule 37”).

*3 Turning again to the language of the Rule, the question thus becomes whether these preconditional efforts constitute part of “making [a] motion”. The available case law, albeit limited, indicates that they do. See, e.g., Edge Sys. LLC v. Ageless Serums LLC, 2022 U.S. Dist. LEXIS 106098, at *25 (C.D. Cal. Feb. 1, 2022) (“[C]osts incurred in preparing for and participating in an informal discovery conference, the purpose of which is to avoid motion practice, seemingly appear to fall outside the purview of Rule 37(a)(5), unless the conference is a lead-up to a formal motion and effectively functions as a pre-filing conference of counsel under Local Rule 37-1.”) (second emphasis added); U.S. Aprons, Inc. v. R-Five, Inc., 2009 U.S. Dist. LEXIS 15564, at *4-5 (D. Neb. Feb. 27, 2009) (“Since the conferences required by Rule 37(a) (1) and NECivR 7.1(i) are prerequisites to the filing of a motion to compel discovery, the expense in meeting those requirements is part of ‘making the motion.’ I therefore shall include such time in the [Rule 37(a)(5)] calculations.”); cf. Mason Tenders Dist. Council v. Phase Constr. Servs., 2017 U.S. Dist. LEXIS 61663, at *4-5 (S.D.N.Y. Apr. 20, 2017) (“Plaintiffs are entitled ... to the reasonable expenses ‘incurred in making the motion.’ ... Accordingly, Plaintiffs are ... entitled to the fees and costs incurred for work on the pre-motion letter and filing the motion to compel ....”).[5] Such an approach embraces the general purpose of Rule 37 sanctions, which is to award “fees and expenses flowing from an abuse of the discovery process.” Stillman v. Edmund Sci. Co., 522 F.2d 798, 801 (4th Cir. 1975) (citing cases). The Court therefore concludes that, where AdvanSix wrote pre-motion letters that preceded motions to compel, AdvanSix can recover the costs incurred in connection with that correspondence.

The Court thus arrives at what it views as a commonsense approach that is both loyal to the language of Rule 37(a)(5) and reflective of the realities of modern litigation practice. Namely: the preliminary and obligatory steps preceding a motion to compel discovery serve as a barrier to entry for motion practice; geared toward, among other things, reducing costs. If an issue is resolved at this stage, it should not qualify for a sanctions award. But if a dispute advances past this barrier to the point of requiring resolution by motion, all time spent with the Court in resolving it should so qualify. It is, in other words, an all-or-nothing proposition: if a discovery dispute is resolved short of a motion to compel, nothing relating to it is compensable. If not, everything is fair game.

Turning, then, to the four areas of dispute raised in AdvanSix's motion, the bad faith discovery raised in AdvanSix's January 20, 2022 letter (ECF No. 63) was resolved short of motion practice. See ECF No. 67 (“Defendant will produce discovery on ... the bad faith claim ....”).[6] The same is true of the subjects raised in AdvanSix's June, July, and August 2022 letters (ECF Nos. 90, 97, 99, 101, 110, and 114), which likewise were resolved without motion practice by Order dated August 30, 2022. See ECF No. 122. However, the disputes pertaining to Defendants’ (i) underwriting materials; and (ii) claims handling guidelines and responses to interrogatories 2, 8, and 9 (“Claims Handling Materials/Interrogatories 2, 8, 9”) were resolved only after AdvanSix filed motions to compel. The Court therefore denies AdvanSix's request for sanctions as to the former categories and proceeds to analyze the latter.

b. Underwriting Materials

*4 In its January 2022 letter, AdvanSix alerted the Court of a dispute regarding its efforts to obtain “documents related to the underwriting of the Policies, including but not limited to the Defendants’ underwriting files.” ECF No. 63 at 4-5. Following a telephone conference, the Court entered an Order stating “Defendant will produce discovery on both the bad faith claim and breach claim[7].... In the event defendant does not produce those documents, plaintiff may file a Motion to Compel.” ECF No. 67.

Defendants continued to withhold the underwriting materials, and AdvanSix moved to compel. ECF No. 76. The Court resolved the motion by directing Defendants to produce a sampling of underwriting files for AdvanSix's review “to determine relevance and proportionality with respect to turning over the remaining files.” ECF No. 77.[8] AdvanSix did so, determined (in their view) that the remaining files were relevant, and moved to compel production of the complete files. ECF No. 79.[9] After oral argument, the Court ordered the parties to “brief the issues of production of the underwriting guidelines and production of underwriting files”. ECF No. 86. AdvanSix then filed a motion to compel the underwriting materials, which the Court resolved in AdvanSix's favor. See ECF No. 88, 98, 107, 115, 150 (the “Opinion”), 151 (the “Order”).

The grant of AdvanSix's motion places this dispute squarely in the Rule 37(a) arena. The threshold question thereunder is whether the Court must award costs (under Rule 37(a)(5)(A)’s “If the Motion Is Granted” prong) or may do so (under Rule 37(a)(5)(C)’s “If the Motion Is Granted in Part and Denied in Part” prong). Defendants argue for the latter on the ground that the Opinion and Order denied (without prejudice) the request for sanctions included in AdvanSix's motion. The Court disagrees. While, technically, part of AdvanSix's application was denied, “the portion of AdvanSix's motion seeking to compel discovery [was] granted”. Opinion at 1. Defendants’ argument requires too mechanical a read of Rule 37(a)(5), which, as discussed above, centers on the outcome of “the motion,” a phrase that, in context, relates solely to a motion to compel discovery. Denials of ancillary matters such as requests for sanctions do not count as partial denials for Rule 37 purposes. Defendants present no case law supporting their contrary interpretation, and a review of “granted in part and denied in part” cases shows this subsection to address situations where requests for disclosure were partially granted and partially denied.

The Court therefore assesses this portion of AdvanSix's motion under Rule 37(a)(5)(A), which, as noted, requires the Court to award expenses unless, as relevant here, Defendants’ objections were substantially justified. Substantial justification exists where “the motion raised an issue ‘about which reasonable [minds] could genuinely differ on whether a party was bound to comply with a discovery rule.’ ” Rhodes v. Marix Servicing, LLC, 2013 U.S. Dist. LEXIS 169586, at *9 (D.N.J. Dec. 2, 2013) (quoting 8 C. Wright & A. Miller, Federal Practice and Procedure 790 (1970); citing Pierce v. Underwood, 487 U.S. 552, 553, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988) (“substantially justified” means “justified to a degree that could satisfy a reasonable person”)); see also Decision Insights, Inc. v. Sentia Group, Inc., 311 Fed. Appx. 586, 599 (4th Cir. 2009) (“A legal position is ‘substantially justified’ if there is a ‘genuine dispute’ as to proper resolution or if ‘a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.’ ”) (quoting Pierce, 487 U.S. 552, 565-66 n.2).

*5 The Court finds no substantial justification here. A review of the parties’ correspondence reveals that after AdvanSix presented Defendants with substantial legal and factual support for the underwriting materials’ discoverability, see ECF No. 76-1 at 3-4; 88-2 at 5-7, Defendants responded with ipse dixit contentions that those materials are “neither relevant to the claims or defenses at issue in this litigation nor proportional to the needs of the case, even if there were a remote possibility of relevance.” ECF No. 88-3 at 4; see also ECF No. 76-2 at 3 (“Defendants maintain their objections that underwriting files are not relevant or otherwise discoverable under F.R.C.P. 26.”). Defendants’ position, as it turned out, was flatly wrong. In the Opinion, the Court noted that “courts in this circuit consistently hold that underwriting materials are relevant to bad faith claims such as the one asserted here.” Opinion at 7-8 (citing cases). It found Defendants’ primary argument to the contrary to be a “red herring” as to which “the case law appears to indicate the very opposite.” Id. at 8. It similarly found Defendants’ argument premised upon the purported drafting of the policies by AdvanSix's insurance broker to be “directly refute[d]” by “myriad examples” in the underwriting samples. Id. at 9.[10]

To recap: AdvanSix requested underwriting materials; Defendants refused. AdvanSix brought this to the Court's attention; an order was issued directing discovery on the bad faith claim, which, as would later be explained in the Opinion, encompasses underwriting materials. Defendants nonetheless continued to resist production on vague and flimsy grounds. The Court then directed Defendants to provide sample underwriting files. After producing what appears to be partial sample files, see ECF No. 88-3 at 4, that nonetheless further demonstrated the underwriting materials’ relevance, Defendants continued to withhold production. As a result, AdvanSix had to resort to filing (and the Court had to address) a formal motion to compel, upon which the Court unambiguously held that, given AdvanSix's bad faith claim, the underwriting materials were discoverable. This chronology compels a finding of lack of reasonable justification. See, e.g., Schurosky v. Hollywood Entm't Corp., 2006 U.S. Dist. LEXIS 1162, at *4-5 (W.D. Wash. Jan. 4, 2006) (awarding expenses where party delayed production without any “ ‘substantially justified’ reason — legal or otherwise”); Pearce v. Club Med Sales, Inc., 172 F.R.D. 407, 411 (N.D. Cal. Apr. 16, 1997) (issuing sanctions where “Defendants’ motion was not substantially justified, since the vast bulk of legal authority was against their position, and there are no circumstances evident which would make an award of expenses unjust.”).

Defendants’ present argument in opposition only further demonstrates the paucity of their position. They write that in the Opinion, “the Court even acknowledged that, ordering production of underwriting materials [was] based solely on the fact that Plaintiff pleaded a ‘bad faith’ claim.” ECF No. 162 at 7 (citing Opinion's rejection of “AdvanSix's argument that the underwriting materials are discoverable to aid in contract interpretation and therefore relevant to its breach of contract claim”). But all this means is that the Court found one theory of liability (bad faith) to render the underwriting materials discoverable, while rejecting another (breach of contract). A position is not substantially justified just because there is only one reason why it's wrong. To the contrary, and as explicated in the Opinion, there simply was no “reasonable basis in law and fact” for Defendants’ persistent objections to producing the underwriting materials. See Decision Insights, supra.

For these reasons, the Court finds Defendants were not substantially justified in opposing disclosure of the underwriting materials (nor that an award of costs would otherwise be unjust).[11] It will therefore award sanctions in connection with AdvanSix's efforts to obtain these materials.

c. Claims Handling Materials/Interrogatories 2, 8, 9

*6 In its January 2022 letter, AdvanSix advised the Court that it had been unable to obtain from Defendants (i) claims handling materials concerning the construction, application, interpretation, and/or calculation of the policy provisions in dispute; and (ii) responses to its interrogatories 2, 8, and 9, which sought, respectively, the identities of individuals involved in underwriting the subject policies; Defendants’ period of recovery position in the related PES litigation; and the identities of experts consulted by Defendants in the PES litigation. See ECF No. 63 at 4-5, 10-11. Following the Court's Order directing Defendants to produce discovery on the bad faith and breach claims, ECF No. 67, Defendants agreed to certain supplementation of their interrogatory responses, and conditionally agreed to produce claims handling guidelines. ECF No. 92-1 at 4-6. AdvanSix then moved to compel, inter alia, claims handling guidelines and responses to interrogatory 2. ECF No. 76. The Court ordered Defendants to produce the former and directed continued conferral on the latter. See ECF No. 77; footnote 8, supra.

AdvanSix then filed another motion to compel, claiming that (i) Defendants had produced piecemeal and improperly redacted claims handling guidelines; and (ii) Defendants’ responses to interrogatory 2 and amended responses to interrogatories 8 and 9 remained outstanding. ECF No. 79 at 5-7, 15. After oral argument, the Court directed Defendants to produce complete and unredacted claims handling files and to respond to interrogatories 2, 8, and 9 by a date certain. ECF No. 86, 102.

Turning first to the claims handling materials, Defendants now argue that they had agreed to produce these items before AdvanSix moved to compel them in April and May of 2022. The record demonstrates otherwise. To wit: in March 2022, Defendants offered a compromise by which they would produce the claims handling materials, so long as AdvanSix would agree not to pursue what Defendants called “the wholly irrelevant underwriting guidelines” (a characterization later squarely refuted by the Opinion and Order). ECF No. 76-2 at 4. The Court rejects the notion that such a conditional concession constitutes a meaningful agreement to produce discovery. What's more, Defendants have stated that they plenarily agreed to produce claims handling guidelines only after AdvanSix's first motion was filed on April 13, 2022. See ECF No. 83 at 2 (“On April 14, 2022, Defendants advised that they would voluntarily produce their claims handling guidelines over their long-standing objections and without reciprocal compromise from the Plaintiff.”). Defendants’ argument that they agreed to produce claims handling materials before AdvanSix moved to compel therefore fails,[12] and the Court will award expenses in connection with AdvanSix's efforts to procure this discovery.

As to Defendants’ redactions, the Court finds Defendants’ position substantially justified. As stated in AdvanSix's own cited authority, Engage Healthcare Commc'ns, LLC v. Intellisphere, LLC, 2017 U.S. Dist. LEXIS 135101, (D.N.J. Apr. 25, 2017), “[t]he unilateral redaction of irrelevant information has been the subject of many recently decided cases. To date, however, ... neither the Supreme Court nor the Third Circuit Court of Appeals has ruled on this issue, and thus there's no binding authority that controls in the District of New Jersey. Moreover, there is case law that says one can unilaterally redact, and there are cases that say that one cannot.” Id. at *8, report and recommendation adopted, 2017 U.S. Dist. LEXIS 134572 (D.N.J. Aug. 23, 2017). As Defendants’ decision to redact portions of the claims handling guidelines is thus a matter as to which reasonable minds can disagree, the Court will not sanction Defendants for doing so.

*7 Concerning the interrogatory responses, Defendants’ present opposition addresses only interrogatory 9, as to which the Court finds Defendants’ opposition to AdvanSix's request — agreeing to identify testifying experts, but not “consulting” or “non-testifying” experts protected by FED. R. CIV. P. 26(b)(4)(D) — to constitute substantial justification. Cf. FED. R. CIV. P. 26(b)(4)(D) (“Ordinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial.”). Interrogatories 2 and 8, however, fall squarely within Rule 37(a)(5)(A), and the Court finds no applicable exception thereto. The Court will therefore award AdvanSix sanctions in connection with its efforts to obtain responses to interrogatories 2 and 8.

d. Insurance Reserves

After the instant motion was briefed, a dispute arose as to Defendants’ redactions of insurance reserve figures. The matter was resolved (in AdvanSix's favor) after the parties wrote letters to the Court; no motion to compel was filed. See ECF No. 165, 167, 171. However, the matter of insurance reserve redactions was raised in AdvanSix’ second motion to compel, see ECF No. 79 at 6-7, which, under the analysis stated above, exposes it to the prospect of Rule 37(a) sanctions.

Notwithstanding, the Court will deny AdvanSix's request for costs relating to this matter. The Court's Letter Order on this issue noted that the dispute presented “a close question, as ‘District Courts within the Third Circuit are split on the question of whether reserves are discoverable in bad faith cases.’ To this end, each party presents the Court with ample case law supporting its respective position.” ECF No. 171 at 1 (citation omitted). This places Defendants’ objections squarely within the definition of substantial justification — “[i]ndeed, not every discovery dispute evidences misconduct.” Charter Oak Fire Ins. Co. v. Am. Capital, Ltd., 2015 U.S. Dist. LEXIS 43109, at *19 (D. Md. Apr. 1, 2015) (citing Big Dipper Entm't, LLC v. City of Warren, 641 F.3d 715, 719 (6th Cir. 2011) (“[t]hat two persons disagree does not mean that one of them has bad motives.”)). AdvanSix's request for fees in connection with Defendants’ redaction of insurance reserve information is therefore denied.[13]

e. Additional Sanctions

AdvanSix's motion includes a request to preclude Defendants from producing evidence on summary judgment or at trial on those matters “where they have continuously failed or refused to produce documents.” ECF No. 158 at 13. The Court will not grant this extreme sanction, which would effectively preclude resolution of this matter on the merits. See, e.g., Scarborough v. Eubanks, 747 F.2d 871, 878 (3d Cir. 1984) (“[D]oubts should be resolved in favor of reaching a decision on the merits, and alternative [i.e. non-dispositive] sanctions should be used.”) (internal citation omitted). While, to be clear, the Court does not condone what it views as Defendants’ questionable, evasive, and — in some instances — sanctionable litigation conduct, it does not find a penalty this harsh to be warranted. Indeed, the case primarily relied upon by AdvanSix on this point was one where the “Court [was] hard-pressed to find a worse case of litigation abuse”. Wachtel v. Health Net, Inc., 239 F.R.D. 81, 101 (D.N.J. 2006). Defendants’ actions, while problematic, do not quite rise to this level. The Court therefore denies this request.

f. Scope of Sanctions Award

Having determined the items in connection with which Defendants’ actions are sanctionable — i.e., underwriting materials, claims handling materials, and interrogatories 2 and 8 (the “Compensable Topics”) — the Court must determine what expenses AdvanSix can recover in connection therewith. In doing so, the Court bears in mind that it “should endeavor to impose a sanction that will restore the parties to the position they would have occupied but for the breach of discovery obligations and deter future misconduct.” In re September 11th Liab. Ins. Coverage Cases, 243 F.R.D. 114, 131-32 (S.D.N.Y. 2007) (citing Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 437 (S.D.N.Y. 2004)); see also Roadway Express, Inc. v. Piper, 447 U.S. 752, 763-64, 65 L. Ed. 2d 488, 100 S. Ct. 2455 (“Rule 37 sanctions must be applied diligently both to penalize those whose conduct may be deemed to warrant such a sanction, and to deter those who might be tempted to such conduct in the absence of such a deterrent.”) (quoting National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 49 L. Ed. 2d 747, 96 S. Ct. 2778 (1976)), superseded by statute on other grounds, Pub. L. 96-349, 94 Stat. 1154 (Sept. 12, 1980).

*8 The Compensable Topics were discussed in AdvanSix's January 2022 letter (ECF No. 63), its April 2022 motion (ECF No. 76), its May 2022 motion (ECF No. 79), and its June 2022 motion (ECF No. 88, 107). As set forth above, the fact that, after being raised in the January 2022 letter, these matters were ultimately resolved by motion renders compensable the costs associated with that correspondence. The Court will therefore grant expenses incurred in connection with the portions of ECF No. 63 (and the related February 9, 2022 telephone conference) that concerned the Compensable Topics.[14]

The Court will not award sanctions in connection with ECF No. 76 or the related April 14, 2022 telephone conference. First, this motion lacked the required “certification that the movant has in good faith conferred or attempted to confer with [Defendants] in an effort to obtain [discovery] without court action.” FED. R. CIV. P. 37(a)(1); cf. Plascencia v. BNC Mortg. (In re Plascencia), 2012 Bankr. LEXIS 2855, at *40 (Bankr. N.D. Cal. June 12, 2012) (“Plaintiff cannot recover fees and expenses for filing Plaintiff's earlier motions to compel, which this Court denied for inadequate conferral.”). More important, ECF No. 76 is largely duplicative of ECF No. 79, and the Court will award sanctions in connection with the portions of the latter (and the related June 14, 2022 telephone conference) that concerned the Compensable Topics.

As AdvanSix's June 23, 2022 motion (ECF No. 88) and its Reply (ECF No. 107) concerned underwriting materials, costs incurred in connection thereto are compensable. The Court will also grant costs arising from the reopening of depositions to inquire into underwriting matters — however, any such award will include only the efforts expended in doing so, not the cost of the subsequent depositions.

Finally, “[s]ince this Court is not certain whether the defendant[s’] disregard of discovery requests and orders is the fault of the client or counsel, said sanction is imposed jointly [and severally] on both.” Cf. Armamburu v. Healthcare Fin. Servs., 2007 U.S. Dist. LEXIS 49039, at *15 (E.D.N.Y. July 6, 2007) (citing Apex Oil Co. v. Belcher Co. of New York, Inc., 855 F.2d 1009, 1014 (2d Cir. 1988)); see also FED. R. CIV. P. 37(a)(5) (permitting sanctions against “the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both”).

V. Conclusion

For the reasons stated, AdvanSix's motion for sanctions (ECF No. 158) is granted in part and denied in part. An appropriate Order follows.

Footnotes

[1]

This case has since been reassigned to the Honorable Michael E. Farbiarz.

[2]

AdvanSix also seeks sanctions in the form of precluding Defendants from producing certain evidence on summary judgment or at trial. As discussed below, the Court denies this request.

[3]

This verbiage was changed from the original “after opportunity for hearing” in order “to make clear that the court can consider such questions on written submissions as well as on oral hearings.” See FED. R. CIV. P. 37, Notes of Advisory Committee on 1993 amendments. The Court therefore resolves this matter without oral argument.

[4]

The fact that some courts in this district have equated, for Rule 37 purposes, informal requests to compel discovery with formal motions does not compel a different conclusion. See, e.g., Jumpp v. Jerkins, 2011 U.S. Dist. LEXIS 127180, at *5 (D.N.J. Nov. 3, 2011) (“Plaintiff first contends that the application of Rule 37 sanctions is inappropriate since Defendants did not file a formal motion to compel .... However, this Court has not required such a formal motion where the end result of an informal procedure is the same as a formal motion to compel.”) (citing Wachtel v. Health Net. Inc., 239 F.R.D. 81, 94 n.29 (D.N.J. 2006)). This distinction between formal and informal motions is not inconsistent with the notion that Rule 37(a)’s trigger point is an application to compel discovery (whether formal or informal), as opposed to the filing of a dispute letter.

[5]

While some courts have concluded that time spent satisfying prerequisites to a motion to compel fall outside Rule 37’s ambit, those decisions excluded time spent among the parties before bringing discovery disputes to the court. See, e.g., Bland v. Booth, 2020 U.S. Dist. LEXIS 269729, at *6-7 (E.D.N.C. Mar. 23, 2020) (“Booth seeks 8.9 hours of Attorney Weston's time for work he performed in an effort to resolve the dispute over Booth's discovery requests without court intervention. The court finds that such time is not properly compensable because such efforts are a prerequisite to filing a motion to compel and therefore lie outside its scope.”) (citing Holmes v. Gen. Dynamics Ordnance & Tactical Sys., Inc., 2019 WL 5704291, at *6 (W.D. Va. 17 June 2019)); Spirit Realty, L.P. v. GH&H Mableton, LLC, 319 F.R.D. 474, 477 n.3 (S.D.N.Y. Jan. 2, 2017) (“The Court notes further that plaintiff is entitled only to its reasonable expenses ‘in making the motion,’ Rule 37(a)(5)—not for expenses relating to its communications with defendant regarding the discovery dispute before the motion was made.”). To this end, the Court will not award expenses incurred by AdvanSix in connection with its conferral efforts with Defendants.

[6]

AdvanSix has contended that this bad faith discovery encompasses the underwriting and claims handling materials. The Court separately addresses these categories below.

[7]

AdvanSix would later argue that the underwriting materials fall within both bad faith and breach of contract discovery. See ECF No. 76 at 5. As discussed later in this section, the Court ultimately agreed on the former but not the latter. See infra.

[8]

This order also provided “Defendant shall turn over claims underwriting files.” This is a scrivener's error; the order was intended to state “claims handling files.”

[9]

This motion was later mistakenly terminated. See ECF No. 80; 102 at 5.

[10]

The Court likewise rejected Defendants’ proportionality arguments. Opinion at 9-10.

[11]

The Court also rejects Defendants’ argument that it would be premature to award attorneys’ fees now because AdvanSix also seeks them in its complaint. Any subsequent judgment in AdvanSix's favor can readily take the instant award into consideration.

[12]

While it is unclear whether Defendants’ April 14, 2022 concession came before or after the Court's Order of the same date, what matters for present purposes is that AdvanSix's motion preceded both. Cf. FED. R. CIV. P. 37(a)(5)(A) (mandating sanctions “[i]f the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed”).

[13]

The Court likewise denies AdvanSix's attendant request for fees in connection with bringing this motion.

[14]

The Court appreciates the inherent difficulty in parsing which portions of these and other proceedings concerned which topics. It nonetheless expects AdvanSix (and to the extent necessary, Defendants) to do so in good faith.

AdvanSix Inc. v. Allianz Global Risks US Ins. Co.

Citation: 2023 WL 6297845 (D.N.J. 2023)

Summary: The Court awarded sanctions to AdvanSix in connection with their efforts to obtain ESI from Defendants, including underwriting materials, claims handling materials, and responses to interrogatories. The Court found that Defendants were not substantially justified in opposing disclosure of the underwriting materials and denied AdvanSix's request for costs relating to the redactions of insurance reserve figures. This serves as a reminder that parties must comply with their discovery obligations or face sanctions.

Court: United States District Court, D. New Jersey

Date decided: June 20, 2023

Judge: Waldor, Cathy L.

ADVANSIX INC., Plaintiff, v. ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, et al., Defendants Civil Action No. 2:21-cv-07962-MEF-CLW United States District Court, D. New Jersey Filed June 20, 2023 Counsel Kevin Vincent Small, Hunton Andrews Kurth LLP, New York, NY, for Plaintiff. Peter N. Billis, Foran Glennon Palandech Ponzi & Rudloff PC, New York, NY, for Defendant. Waldor, Cathy L., United States Magistrate Judge OPINION I. Introduction *1 This matter is before the Court on the motion of AdvanSix Inc. (“AdvanSix”) seeking Rule 37 sanctions against the fourteen insurer defendants (“Defendants”) (ECF No. 158). The motion is fully briefed and has been referred to the undersigned by the Honorable Madeline Cox Arleo.[1] The Court has carefully considered the parties’ submissions and decides the matter without oral argument per FED. R. CIV. P. 78(b) and Local Civil Rule 78.1. For the reasons stated below, AdvanSix's motion is granted in part and denied in part. II. Background As the parties are aware, this case has been beset by discovery disputes almost since its inception. Most of these disputes have concerned AdvanSix's attempts to obtain discovery from Defendants. The Court and parties have dedicated considerable resources to such matters, most of which have been resolved in AdvanSix's favor. AdvanSix now seeks to recover the expenses incurred in obtaining the disputed discovery.[2] III. Legal Standard Under FED. R. CIV. P. 37(a)(5), [i]f [a] motion [to compel disclosure or discovery] 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,[3] 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. Further, [i]f the motion is granted in part and denied in part, the court ... may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion. FED. R. CIV. P. 37(a)(5)(A), (C). IV. Analysis a. Pre-Motion Letters Before turning to the relevant discovery dispute narrative, the Court must address a preliminary issue. AdvanSix's current application references — in addition to its three discovery motions — seven letters it filed with the Court in connection with its efforts to obtain discovery from Defendants. These letters present a two-pronged question. First is whether disputes raised though such letters and resolved without necessitating motion practice fall within the scope of Rule 37(a). The second is whether, with respect to matters ultimately resolved by motion, Advansix can recover the costs incurred in drafting the letters that preceded such applications. *2 The Court answers the first question in the negative. By its terms, the relevant portions of Rule 37(a) are triggered only when a party files a motion to compel. The starting point is Rule 37(a)(1), which provides that “a party may move for an order compelling disclosure or discovery” and describes what “[t]he motion must include”. Growing from here is subsection (a)(5)(A), which comes into play “[i]f the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed”. Similarly, subsection (5)(C) arises where “the motion is granted in part and denied in part”. This language binds the Court to assess costs only where discovery motions have actually been filed. Although there is little case law on this discrete question, district courts to have considered it appear to be in accord. See, e.g., SiteLock LLC v. GoDaddy.com LLC, 2020 U.S. Dist. LEXIS 172703, at *3 n.1 (D. Ariz. Sep. 21, 2020) (where no motion to compel filed, “Rule 37(a)(5) ... is inapplicable”); La Piel, Inc. v. Richina Leather Indus. Co., 2013 U.S. Dist. LEXIS 46328, at *61-62 (E.D.N.Y. Mar. 29, 2013) (“[D]efendants never actually made a motion with respect to the [disputed discovery]; rather, defendants simply wrote a letter in which they informally requested [certain relief] .... [B]ased upon this record, the Court does not believe that [defendants’] letters constitute a ‘motion’ that triggers Rule 37(a)(5) ....”). Consistent with these decisions, the Court concludes that a discovery dispute resolved short of a motion to compel fails to activate Rule 37(a). The Court will therefore limit the possible award of costs to disputes that culminated in AdvanSix filing discovery motions.[4] As noted, though, this is only half the battle. The issue remains as to whether costs can be recovered for the pre-motion letters that preceded AdvanSix's motions to compel. The Court is of the view that they can. The starting point here is that the Court's Individual Practices direct parties to raise discovery disputes in writing before filing discovery motions, as well as prohibit such motions without leave of Court. The Local Rules similarly provide that discovery disputes “shall be presented by telephone conference call or letter to the Magistrate Judge. This presentation shall precede any formal motion.” L. CIV. R. 37.1(a)(1). Pre-motion letters (and their attendant Court conferences) are therefore best viewed as prerequisites to discovery motions, geared toward obviating the need for — and the costs arising from — full-fledged motion practice. Cf. Heller v. Wofsey, Certilman, Haft, Lebow & Balin, 1989 U.S. Dist. LEXIS 7765, at *25 (S.D.N.Y. July 11, 1989) (observing that “one of the principal purposes of informal procedures for the resolution of discovery disputes, is to minimize the expense and delay attendant upon formal motions pursuant to Rule 37”). *3 Turning again to the language of the Rule, the question thus becomes whether these preconditional efforts constitute part of “making [a] motion”. The available case law, albeit limited, indicates that they do. See, e.g., Edge Sys. LLC v. Ageless Serums LLC, 2022 U.S. Dist. LEXIS 106098, at *25 (C.D. Cal. Feb. 1, 2022) (“[C]osts incurred in preparing for and participating in an informal discovery conference, the purpose of which is to avoid motion practice, seemingly appear to fall outside the purview of Rule 37(a)(5), unless the conference is a lead-up to a formal motion and effectively functions as a pre-filing conference of counsel under Local Rule 37-1.”) (second emphasis added); U.S. Aprons, Inc. v. R-Five, Inc., 2009 U.S. Dist. LEXIS 15564, at *4-5 (D. Neb. Feb. 27, 2009) (“Since the conferences required by Rule 37(a) (1) and NECivR 7.1(i) are prerequisites to the filing of a motion to compel discovery, the expense in meeting those requirements is part of ‘making the motion.’ I therefore shall include such time in the [Rule 37(a)(5)] calculations.”); cf. Mason Tenders Dist. Council v. Phase Constr. Servs., 2017 U.S. Dist. LEXIS 61663, at *4-5 (S.D.N.Y. Apr. 20, 2017) (“Plaintiffs are entitled ... to the reasonable expenses ‘incurred in making the motion.’ ... Accordingly, Plaintiffs are ... entitled to the fees and costs incurred for work on the pre-motion letter and filing the motion to compel ....”).[5] Such an approach embraces the general purpose of Rule 37 sanctions, which is to award “fees and expenses flowing from an abuse of the discovery process.” Stillman v. Edmund Sci. Co., 522 F.2d 798, 801 (4th Cir. 1975) (citing cases). The Court therefore concludes that, where AdvanSix wrote pre-motion letters that preceded motions to compel, AdvanSix can recover the costs incurred in connection with that correspondence. The Court thus arrives at what it views as a commonsense approach that is both loyal to the language of Rule 37(a)(5) and reflective of the realities of modern litigation practice. Namely: the preliminary and obligatory steps preceding a motion to compel discovery serve as a barrier to entry for motion practice; geared toward, among other things, reducing costs. If an issue is resolved at this stage, it should not qualify for a sanctions award. But if a dispute advances past this barrier to the point of requiring resolution by motion, all time spent with the Court in resolving it should so qualify. It is, in other words, an all-or-nothing proposition: if a discovery dispute is resolved short of a motion to compel, nothing relating to it is compensable. If not, everything is fair game. Turning, then, to the four areas of dispute raised in AdvanSix's motion, the bad faith discovery raised in AdvanSix's January 20, 2022 letter (ECF No. 63) was resolved short of motion practice. See ECF No. 67 (“Defendant will produce discovery on ... the bad faith claim ....”).[6] The same is true of the subjects raised in AdvanSix's June, July, and August 2022 letters (ECF Nos. 90, 97, 99, 101, 110, and 114), which likewise were resolved without motion practice by Order dated August 30, 2022. See ECF No. 122. However, the disputes pertaining to Defendants’ (i) underwriting materials; and (ii) claims handling guidelines and responses to interrogatories 2, 8, and 9 (“Claims Handling Materials/Interrogatories 2, 8, 9”) were resolved only after AdvanSix filed motions to compel. The Court therefore denies AdvanSix's request for sanctions as to the former categories and proceeds to analyze the latter. b. Underwriting Materials *4 In its January 2022 letter, AdvanSix alerted the Court of a dispute regarding its efforts to obtain “documents related to the underwriting of the Policies, including but not limited to the Defendants’ underwriting files.” ECF No. 63 at 4-5. Following a telephone conference, the Court entered an Order stating “Defendant will produce discovery on both the bad faith claim and breach claim[7].... In the event defendant does not produce those documents, plaintiff may file a Motion to Compel.” ECF No. 67. Defendants continued to withhold the underwriting materials, and AdvanSix moved to compel. ECF No. 76. The Court resolved the motion by directing Defendants to produce a sampling of underwriting files for AdvanSix's review “to determine relevance and proportionality with respect to turning over the remaining files.” ECF No. 77.[8] AdvanSix did so, determined (in their view) that the remaining files were relevant, and moved to compel production of the complete files. ECF No. 79.[9] After oral argument, the Court ordered the parties to “brief the issues of production of the underwriting guidelines and production of underwriting files”. ECF No. 86. AdvanSix then filed a motion to compel the underwriting materials, which the Court resolved in AdvanSix's favor. See ECF No. 88, 98, 107, 115, 150 (the “Opinion”), 151 (the “Order”). The grant of AdvanSix's motion places this dispute squarely in the Rule 37(a) arena. The threshold question thereunder is whether the Court must award costs (under Rule 37(a)(5)(A)’s “If the Motion Is Granted” prong) or may do so (under Rule 37(a)(5)(C)’s “If the Motion Is Granted in Part and Denied in Part” prong). Defendants argue for the latter on the ground that the Opinion and Order denied (without prejudice) the request for sanctions included in AdvanSix's motion. The Court disagrees. While, technically, part of AdvanSix's application was denied, “the portion of AdvanSix's motion seeking to compel discovery [was] granted”. Opinion at 1. Defendants’ argument requires too mechanical a read of Rule 37(a)(5), which, as discussed above, centers on the outcome of “the motion,” a phrase that, in context, relates solely to a motion to compel discovery. Denials of ancillary matters such as requests for sanctions do not count as partial denials for Rule 37 purposes. Defendants present no case law supporting their contrary interpretation, and a review of “granted in part and denied in part” cases shows this subsection to address situations where requests for disclosure were partially granted and partially denied. The Court therefore assesses this portion of AdvanSix's motion under Rule 37(a)(5)(A), which, as noted, requires the Court to award expenses unless, as relevant here, Defendants’ objections were substantially justified. Substantial justification exists where “the motion raised an issue ‘about which reasonable [minds] could genuinely differ on whether a party was bound to comply with a discovery rule.’ ” Rhodes v. Marix Servicing, LLC, 2013 U.S. Dist. LEXIS 169586, at *9 (D.N.J. Dec. 2, 2013) (quoting 8 C. Wright & A. Miller, Federal Practice and Procedure 790 (1970); citing Pierce v. Underwood, 487 U.S. 552, 553, 108 S. Ct. 2541, 101 L. Ed. 2d 490 (1988) (“substantially justified” means “justified to a degree that could satisfy a reasonable person”)); see also Decision Insights, Inc. v. Sentia Group, Inc., 311 Fed. Appx. 586, 599 (4th Cir. 2009) (“A legal position is ‘substantially justified’ if there is a ‘genuine dispute’ as to proper resolution or if ‘a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.’ ”) (quoting Pierce, 487 U.S. 552, 565-66 n.2). *5 The Court finds no substantial justification here. A review of the parties’ correspondence reveals that after AdvanSix presented Defendants with substantial legal and factual support for the underwriting materials’ discoverability, see ECF No. 76-1 at 3-4; 88-2 at 5-7, Defendants responded with ipse dixit contentions that those materials are “neither relevant to the claims or defenses at issue in this litigation nor proportional to the needs of the case, even if there were a remote possibility of relevance.” ECF No. 88-3 at 4; see also ECF No. 76-2 at 3 (“Defendants maintain their objections that underwriting files are not relevant or otherwise discoverable under F.R.C.P. 26.”). Defendants’ position, as it turned out, was flatly wrong. In the Opinion, the Court noted that “courts in this circuit consistently hold that underwriting materials are relevant to bad faith claims such as the one asserted here.” Opinion at 7-8 (citing cases). It found Defendants’ primary argument to the contrary to be a “red herring” as to which “the case law appears to indicate the very opposite.” Id. at 8. It similarly found Defendants’ argument premised upon the purported drafting of the policies by AdvanSix's insurance broker to be “directly refute[d]” by “myriad examples” in the underwriting samples. Id. at 9.[10] To recap: AdvanSix requested underwriting materials; Defendants refused. AdvanSix brought this to the Court's attention; an order was issued directing discovery on the bad faith claim, which, as would later be explained in the Opinion, encompasses underwriting materials. Defendants nonetheless continued to resist production on vague and flimsy grounds. The Court then directed Defendants to provide sample underwriting files. After producing what appears to be partial sample files, see ECF No. 88-3 at 4, that nonetheless further demonstrated the underwriting materials’ relevance, Defendants continued to withhold production. As a result, AdvanSix had to resort to filing (and the Court had to address) a formal motion to compel, upon which the Court unambiguously held that, given AdvanSix's bad faith claim, the underwriting materials were discoverable. This chronology compels a finding of lack of reasonable justification. See, e.g., Schurosky v. Hollywood Entm't Corp., 2006 U.S. Dist. LEXIS 1162, at *4-5 (W.D. Wash. Jan. 4, 2006) (awarding expenses where party delayed production without any “ ‘substantially justified’ reason — legal or otherwise”); Pearce v. Club Med Sales, Inc., 172 F.R.D. 407, 411 (N.D. Cal. Apr. 16, 1997) (issuing sanctions where “Defendants’ motion was not substantially justified, since the vast bulk of legal authority was against their position, and there are no circumstances evident which would make an award of expenses unjust.”). Defendants’ present argument in opposition only further demonstrates the paucity of their position. They write that in the Opinion, “the Court even acknowledged that, ordering production of underwriting materials [was] based solely on the fact that Plaintiff pleaded a ‘bad faith’ claim.” ECF No. 162 at 7 (citing Opinion's rejection of “AdvanSix's argument that the underwriting materials are discoverable to aid in contract interpretation and therefore relevant to its breach of contract claim”). But all this means is that the Court found one theory of liability (bad faith) to render the underwriting materials discoverable, while rejecting another (breach of contract). A position is not substantially justified just because there is only one reason why it's wrong. To the contrary, and as explicated in the Opinion, there simply was no “reasonable basis in law and fact” for Defendants’ persistent objections to producing the underwriting materials. See Decision Insights, supra. For these reasons, the Court finds Defendants were not substantially justified in opposing disclosure of the underwriting materials (nor that an award of costs would otherwise be unjust).[11] It will therefore award sanctions in connection with AdvanSix's efforts to obtain these materials. c. Claims Handling Materials/Interrogatories 2, 8, 9 *6 In its January 2022 letter, AdvanSix advised the Court that it had been unable to obtain from Defendants (i) claims handling materials concerning the construction, application, interpretation, and/or calculation of the policy provisions in dispute; and (ii) responses to its interrogatories 2, 8, and 9, which sought, respectively, the identities of individuals involved in underwriting the subject policies; Defendants’ period of recovery position in the related PES litigation; and the identities of experts consulted by Defendants in the PES litigation. See ECF No. 63 at 4-5, 10-11. Following the Court's Order directing Defendants to produce discovery on the bad faith and breach claims, ECF No. 67, Defendants agreed to certain supplementation of their interrogatory responses, and conditionally agreed to produce claims handling guidelines. ECF No. 92-1 at 4-6. AdvanSix then moved to compel, inter alia, claims handling guidelines and responses to interrogatory 2. ECF No. 76. The Court ordered Defendants to produce the former and directed continued conferral on the latter. See ECF No. 77; footnote 8, supra. AdvanSix then filed another motion to compel, claiming that (i) Defendants had produced piecemeal and improperly redacted claims handling guidelines; and (ii) Defendants’ responses to interrogatory 2 and amended responses to interrogatories 8 and 9 remained outstanding. ECF No. 79 at 5-7, 15. After oral argument, the Court directed Defendants to produce complete and unredacted claims handling files and to respond to interrogatories 2, 8, and 9 by a date certain. ECF No. 86, 102. Turning first to the claims handling materials, Defendants now argue that they had agreed to produce these items before AdvanSix moved to compel them in April and May of 2022. The record demonstrates otherwise. To wit: in March 2022, Defendants offered a compromise by which they would produce the claims handling materials, so long as AdvanSix would agree not to pursue what Defendants called “the wholly irrelevant underwriting guidelines” (a characterization later squarely refuted by the Opinion and Order). ECF No. 76-2 at 4. The Court rejects the notion that such a conditional concession constitutes a meaningful agreement to produce discovery. What's more, Defendants have stated that they plenarily agreed to produce claims handling guidelines only after AdvanSix's first motion was filed on April 13, 2022. See ECF No. 83 at 2 (“On April 14, 2022, Defendants advised that they would voluntarily produce their claims handling guidelines over their long-standing objections and without reciprocal compromise from the Plaintiff.”). Defendants’ argument that they agreed to produce claims handling materials before AdvanSix moved to compel therefore fails,[12] and the Court will award expenses in connection with AdvanSix's efforts to procure this discovery. As to Defendants’ redactions, the Court finds Defendants’ position substantially justified. As stated in AdvanSix's own cited authority, Engage Healthcare Commc'ns, LLC v. Intellisphere, LLC, 2017 U.S. Dist. LEXIS 135101, (D.N.J. Apr. 25, 2017), “[t]he unilateral redaction of irrelevant information has been the subject of many recently decided cases. To date, however, ... neither the Supreme Court nor the Third Circuit Court of Appeals has ruled on this issue, and thus there's no binding authority that controls in the District of New Jersey. Moreover, there is case law that says one can unilaterally redact, and there are cases that say that one cannot.” Id. at *8, report and recommendation adopted, 2017 U.S. Dist. LEXIS 134572 (D.N.J. Aug. 23, 2017). As Defendants’ decision to redact portions of the claims handling guidelines is thus a matter as to which reasonable minds can disagree, the Court will not sanction Defendants for doing so. *7 Concerning the interrogatory responses, Defendants’ present opposition addresses only interrogatory 9, as to which the Court finds Defendants’ opposition to AdvanSix's request — agreeing to identify testifying experts, but not “consulting” or “non-testifying” experts protected by FED. R. CIV. P. 26(b)(4)(D) — to constitute substantial justification. Cf. FED. R. CIV. P. 26(b)(4)(D) (“Ordinarily, a party may not, by interrogatories or deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial.”). Interrogatories 2 and 8, however, fall squarely within Rule 37(a)(5)(A), and the Court finds no applicable exception thereto. The Court will therefore award AdvanSix sanctions in connection with its efforts to obtain responses to interrogatories 2 and 8. d. Insurance Reserves After the instant motion was briefed, a dispute arose as to Defendants’ redactions of insurance reserve figures. The matter was resolved (in AdvanSix's favor) after the parties wrote letters to the Court; no motion to compel was filed. See ECF No. 165, 167, 171. However, the matter of insurance reserve redactions was raised in AdvanSix’ second motion to compel, see ECF No. 79 at 6-7, which, under the analysis stated above, exposes it to the prospect of Rule 37(a) sanctions. Notwithstanding, the Court will deny AdvanSix's request for costs relating to this matter. The Court's Letter Order on this issue noted that the dispute presented “a close question, as ‘District Courts within the Third Circuit are split on the question of whether reserves are discoverable in bad faith cases.’ To this end, each party presents the Court with ample case law supporting its respective position.” ECF No. 171 at 1 (citation omitted). This places Defendants’ objections squarely within the definition of substantial justification — “[i]ndeed, not every discovery dispute evidences misconduct.” Charter Oak Fire Ins. Co. v. Am. Capital, Ltd., 2015 U.S. Dist. LEXIS 43109, at *19 (D. Md. Apr. 1, 2015) (citing Big Dipper Entm't, LLC v. City of Warren, 641 F.3d 715, 719 (6th Cir. 2011) (“[t]hat two persons disagree does not mean that one of them has bad motives.”)). AdvanSix's request for fees in connection with Defendants’ redaction of insurance reserve information is therefore denied.[13] e. Additional Sanctions AdvanSix's motion includes a request to preclude Defendants from producing evidence on summary judgment or at trial on those matters “where they have continuously failed or refused to produce documents.” ECF No. 158 at 13. The Court will not grant this extreme sanction, which would effectively preclude resolution of this matter on the merits. See, e.g., Scarborough v. Eubanks, 747 F.2d 871, 878 (3d Cir. 1984) (“[D]oubts should be resolved in favor of reaching a decision on the merits, and alternative [i.e. non-dispositive] sanctions should be used.”) (internal citation omitted). While, to be clear, the Court does not condone what it views as Defendants’ questionable, evasive, and — in some instances — sanctionable litigation conduct, it does not find a penalty this harsh to be warranted. Indeed, the case primarily relied upon by AdvanSix on this point was one where the “Court [was] hard-pressed to find a worse case of litigation abuse”. Wachtel v. Health Net, Inc., 239 F.R.D. 81, 101 (D.N.J. 2006). Defendants’ actions, while problematic, do not quite rise to this level. The Court therefore denies this request. f. Scope of Sanctions Award Having determined the items in connection with which Defendants’ actions are sanctionable — i.e., underwriting materials, claims handling materials, and interrogatories 2 and 8 (the “Compensable Topics”) — the Court must determine what expenses AdvanSix can recover in connection therewith. In doing so, the Court bears in mind that it “should endeavor to impose a sanction that will restore the parties to the position they would have occupied but for the breach of discovery obligations and deter future misconduct.” In re September 11th Liab. Ins. Coverage Cases, 243 F.R.D. 114, 131-32 (S.D.N.Y. 2007) (citing Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 437 (S.D.N.Y. 2004)); see also Roadway Express, Inc. v. Piper, 447 U.S. 752, 763-64, 65 L. Ed. 2d 488, 100 S. Ct. 2455 (“Rule 37 sanctions must be applied diligently both to penalize those whose conduct may be deemed to warrant such a sanction, and to deter those who might be tempted to such conduct in the absence of such a deterrent.”) (quoting National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 49 L. Ed. 2d 747, 96 S. Ct. 2778 (1976)), superseded by statute on other grounds, Pub. L. 96-349, 94 Stat. 1154 (Sept. 12, 1980). *8 The Compensable Topics were discussed in AdvanSix's January 2022 letter (ECF No. 63), its April 2022 motion (ECF No. 76), its May 2022 motion (ECF No. 79), and its June 2022 motion (ECF No. 88, 107). As set forth above, the fact that, after being raised in the January 2022 letter, these matters were ultimately resolved by motion renders compensable the costs associated with that correspondence. The Court will therefore grant expenses incurred in connection with the portions of ECF No. 63 (and the related February 9, 2022 telephone conference) that concerned the Compensable Topics.[14] The Court will not award sanctions in connection with ECF No. 76 or the related April 14, 2022 telephone conference. First, this motion lacked the required “certification that the movant has in good faith conferred or attempted to confer with [Defendants] in an effort to obtain [discovery] without court action.” FED. R. CIV. P. 37(a)(1); cf. Plascencia v. BNC Mortg. (In re Plascencia), 2012 Bankr. LEXIS 2855, at *40 (Bankr. N.D. Cal. June 12, 2012) (“Plaintiff cannot recover fees and expenses for filing Plaintiff's earlier motions to compel, which this Court denied for inadequate conferral.”). More important, ECF No. 76 is largely duplicative of ECF No. 79, and the Court will award sanctions in connection with the portions of the latter (and the related June 14, 2022 telephone conference) that concerned the Compensable Topics. As AdvanSix's June 23, 2022 motion (ECF No. 88) and its Reply (ECF No. 107) concerned underwriting materials, costs incurred in connection thereto are compensable. The Court will also grant costs arising from the reopening of depositions to inquire into underwriting matters — however, any such award will include only the efforts expended in doing so, not the cost of the subsequent depositions. Finally, “[s]ince this Court is not certain whether the defendant[s’] disregard of discovery requests and orders is the fault of the client or counsel, said sanction is imposed jointly [and severally] on both.” Cf. Armamburu v. Healthcare Fin. Servs., 2007 U.S. Dist. LEXIS 49039, at *15 (E.D.N.Y. July 6, 2007) (citing Apex Oil Co. v. Belcher Co. of New York, Inc., 855 F.2d 1009, 1014 (2d Cir. 1988)); see also FED. R. CIV. P. 37(a)(5) (permitting sanctions against “the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both”). V. Conclusion For the reasons stated, AdvanSix's motion for sanctions (ECF No. 158) is granted in part and denied in part. An appropriate Order follows. Footnotes [1] This case has since been reassigned to the Honorable Michael E. Farbiarz. [2] AdvanSix also seeks sanctions in the form of precluding Defendants from producing certain evidence on summary judgment or at trial. As discussed below, the Court denies this request. [3] This verbiage was changed from the original “after opportunity for hearing” in order “to make clear that the court can consider such questions on written submissions as well as on oral hearings.” See FED. R. CIV. P. 37, Notes of Advisory Committee on 1993 amendments. The Court therefore resolves this matter without oral argument. [4] The fact that some courts in this district have equated, for Rule 37 purposes, informal requests to compel discovery with formal motions does not compel a different conclusion. See, e.g., Jumpp v. Jerkins, 2011 U.S. Dist. LEXIS 127180, at *5 (D.N.J. Nov. 3, 2011) (“Plaintiff first contends that the application of Rule 37 sanctions is inappropriate since Defendants did not file a formal motion to compel .... However, this Court has not required such a formal motion where the end result of an informal procedure is the same as a formal motion to compel.”) (citing Wachtel v. Health Net. Inc., 239 F.R.D. 81, 94 n.29 (D.N.J. 2006)). This distinction between formal and informal motions is not inconsistent with the notion that Rule 37(a)’s trigger point is an application to compel discovery (whether formal or informal), as opposed to the filing of a dispute letter. [5] While some courts have concluded that time spent satisfying prerequisites to a motion to compel fall outside Rule 37’s ambit, those decisions excluded time spent among the parties before bringing discovery disputes to the court. See, e.g., Bland v. Booth, 2020 U.S. Dist. LEXIS 269729, at *6-7 (E.D.N.C. Mar. 23, 2020) (“Booth seeks 8.9 hours of Attorney Weston's time for work he performed in an effort to resolve the dispute over Booth's discovery requests without court intervention. The court finds that such time is not properly compensable because such efforts are a prerequisite to filing a motion to compel and therefore lie outside its scope.”) (citing Holmes v. Gen. Dynamics Ordnance & Tactical Sys., Inc., 2019 WL 5704291, at *6 (W.D. Va. 17 June 2019)); Spirit Realty, L.P. v. GH&H Mableton, LLC, 319 F.R.D. 474, 477 n.3 (S.D.N.Y. Jan. 2, 2017) (“The Court notes further that plaintiff is entitled only to its reasonable expenses ‘in making the motion,’ Rule 37(a)(5)—not for expenses relating to its communications with defendant regarding the discovery dispute before the motion was made.”). To this end, the Court will not award expenses incurred by AdvanSix in connection with its conferral efforts with Defendants. [6] AdvanSix has contended that this bad faith discovery encompasses the underwriting and claims handling materials. The Court separately addresses these categories below. [7] AdvanSix would later argue that the underwriting materials fall within both bad faith and breach of contract discovery. See ECF No. 76 at 5. As discussed later in this section, the Court ultimately agreed on the former but not the latter. See infra. [8] This order also provided “Defendant shall turn over claims underwriting files.” This is a scrivener's error; the order was intended to state “claims handling files.” [9] This motion was later mistakenly terminated. See ECF No. 80; 102 at 5. [10] The Court likewise rejected Defendants’ proportionality arguments. Opinion at 9-10. [11] The Court also rejects Defendants’ argument that it would be premature to award attorneys’ fees now because AdvanSix also seeks them in its complaint. Any subsequent judgment in AdvanSix's favor can readily take the instant award into consideration. [12] While it is unclear whether Defendants’ April 14, 2022 concession came before or after the Court's Order of the same date, what matters for present purposes is that AdvanSix's motion preceded both. Cf. FED. R. CIV. P. 37(a)(5)(A) (mandating sanctions “[i]f the motion is granted—or if the disclosure or requested discovery is provided after the motion was filed”). [13] The Court likewise denies AdvanSix's attendant request for fees in connection with bringing this motion. [14] The Court appreciates the inherent difficulty in parsing which portions of these and other proceedings concerned which topics. It nonetheless expects AdvanSix (and to the extent necessary, Defendants) to do so in good faith.