*1 The above-referenced cause of action was referred to the undersigned United States Magistrate Judge for pretrial purposes in accordance with 28 U.S.C. § 636. The following pending motion is before the Court:

After considering the relevant briefing arguments of counsel, Dexon's motion is DENIED.

On April 27, 2022, Plaintiff Dexon Computer, Inc. (“Dexon”) filed the above antitrust case against Cisco Systems, Inc. (“Cisco”) and CDW Corporation (“CDW”) (collectively, “Defendants”). Dkt. No. 1. On September 7, 2022, the Court conducted a scheduling conference and entered a Docket Control Order (Dkt. No. 55) and an Order denying Cisco's motion for a stay of discovery (Dkt. No. 56), and shortly thereafter entered a Discovery Order (Dkt. No. 65) and an E-Discovery Order (Dkt. No. 66).

The Discovery Order provided additional disclosures, including “a copy of all documents, data compilations, and tangible things,” shall be provided by the date set in the Docket Control Order. Dkt. No. 65 at 3. The Docket Control Order provided a January 6, 2023 deadline for the Parties to “substantially complete document production.” Dkt. No. 55 at 3. In the E-Discovery Order, the Court ordered the parties to produce ESI “on a rolling basis up to the deadline for substantial completion of document discovery,” and “shall not delay the production of documents until the deadline for substantial completion.” Dkt. No. 66 at 5 (further stating that with respect to ESI other than e-mail, the parties would meet and confer in good faith regarding reasonable and proportional limitations to the production of such data, including the number of custodians to be searched, search terms, and time period); see also id. at 6 (stating that with respect to e-mail ESI, the parties shall cooperate to identify the proper custodians, proper search terms, and proper time frame). The parties were obligated to produce e-mails from up to a total of eight custodians with a total of ten search terms per custodian; however, a party could bring a contested request for additional custodians or for additional search terms per custodian “upon showing a distinct need based on the size, complexity, burden, and issues of this specific case.” Id. at 6-7.

Between October 2022 and early January 2023, Dexon filed three motions to compel, two of which required Court resolution: a motion to compel Cisco to timely produce critical data and documents (Dkt. No. 87) and a motion to compel and for sanctions against Cisco, seeking relevant files from missing witnesses/custodians and requesting monetary sanctions “associated with the fact that [it] had to discover” additional custodians (Dkt. No. 97). See Dkt. No. 114 (Transcript) at 6:21-7:3. During argument concerning the second motion, Cisco argued it not only complied with the E-Discovery Order (which limited the parties to eight custodians), but it also went “far beyond” its obligations by searching for “Dexon” on 12,000 custodians and producing relevant e-mails from more than 3,000 custodians. Id. at 29:4-17 (further stating Dexon, after reading those e-mails, requested an additional ten custodians). Ultimately, Cisco's arguments were rejected, and the Court granted Dexon's request to expand the ESI custodians to include eight additional custodians but denied Dexon's request for monetary sanctions. Dkt. No. 117 at 6-7. Additionally, the Court ordered Cisco to produce, within four weeks from the February 8, 2023 Order, “the portion of the 155,000 documents it ha[d] already identified that [was] not privileged and d[id] not require contacting third parties.” Id. at 7.

*2 On March 29, 2023, Dexon filed its current motion for discovery sanctions against Cisco pursuant to Federal Rule of Civil Procedure 37. According to Dexon, since February 8, 2023, Cisco has produced more than 570,000 documents from custodians in response to the Court's order. Dkt. No. 146 at 1. Asserting these “productions reveal that Cisco was improperly withholding key documents from discovery and refusing to identify and/or collect from custodians intimately involved in the anticompetitive misconduct alleged by Dexon,” id., Dexon requests the Court sanction Cisco by ordering Cisco to reimburse Dexon for its attorneys' fees that it incurred in drafting and filing all three previous motions to compel (Dkt. Nos. 70, 87, and 97), as well as the current motion for discovery sanctions (Dkt. No. 146). Referencing Rule 37(b) and (c), Dexon argues “[s]ince at least September 2022, Cisco has had an obligation under the Court's Local Rules and Orders to timely produce relevant evidence, and instead Cisco obstructed the process by slow rolling its productions and hiding critical evidence and witnesses. Only after the Court ordered the relief that Dexon requested did Cisco finally agree to reasonable search terms, which revealed the evidence to which Dexon has been long entitled.” See Dkt. No. 146 at 1, 4-6.

A. Rule 37(b)

Federal Rule of Civil Procedure 37(b) concerns a “Failure to Comply with a Court Order,” and Rule 37(b)(2)(C) provides that “the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Mary Kay Inc. v. Reibel, No. 3:17-CV-2634-D, 2019 WL 1128959, at *17 (N.D. Tex. Mar. 11, 2019) (quoting FED. R. CIV. P. 37(b)(2)(C)). “A party's discovery conduct is found to be ‘substantially justified’ under Rule 37 if it is a response to a ‘genuine dispute, or if reasonable people could differ as to the appropriateness of the contested action.’ ” Id. (citation omitted). “The burden rests on the party who failed to comply with the order to show that an award of attorney's fees would be unjust or that the opposing party's position was substantially justified.” Id. (quoting Kiselak Capital Grp., L.L.C., 2012 WL 369450, at *3 (footnote omitted in Mary Kay)).

Although the district court has broad discretion under Rule 37(b) to fashion remedies suited to the misconduct, this discretion is limited. Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 488 (5th Cir. 2012). A finding of bad faith or willful misconduct is usually required to support the severest remedies under Rule 37(b)—striking pleadings or dismissal of a case. Id. Lesser sanctions do not require a finding of willfulness. Id. (citing Chilcutt v. United States, 4 F.3d 1313, 1323 n. 23 (5th Cir. 1993), cert. denied, 513 U.S. 979 (1994)). Ultimately, “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.’ ” O'Bryant v. Walgreen Co., 802 Fed. Appx. 826, 833 (5th Cir. 2020) (quoting Roadway Exp., Inc. Piper, 447 U.S. 752, 763-64 (1980) (quoting Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643 (1976))). The sanctions “must be both just and specifically related to the claim at issue in the discovery order.” Mary Kay, 2019 WL 1128959, at *18 (quoting Vicknair v. La. Dep't of Pub. Safety & Corr., 555 Fed. Appx. 325, 332 (5th Cir. 2014)). The sanction imposed should be the least severe sanction adequate to achieve the proper functions of Rule 37(b)(2) under the particular circumstances. Id. (citing Smith & Fuller, 685 F.3d at 488-90).

B. Rule 37(c)

Federal Rule of Civil Procedure 37(c) concerns a party's “Failure to Disclose, to Supplement an Earlier Response, or to Admit.” Rule 37(c)(1) allows for several possible sanctions, including ordering “payment of the reasonable expenses, including attorney's fees, caused by the failure.” Edwards v. Junior State of Am. Found., Civil Action No. 4:19-CV-140-SDJ, 2021 WL 1600282, at *5 (E.D. Tex. Apr. 23, 2021) (quoting FED. R. CIV. P. 37(c)(1)(A)).

*3 Dexon does not claim in its current motion that Cisco failed to comply with the Court's February 8, 2023 Order granting as modified two of Dexon's prior motions to compel. However, Dexon makes two arguments as to why Cisco should now be ordered to reimburse Dexon for having to file four motions (including this one): (1) Cisco made misrepresentations to the Court during the February 8 hearing which are “independently sanctionable,” but especially warrant sanctions when combined with all of Cisco's acts that served to delay and increase the burden and cost on Dexon; and (2) Cisco's productions pursuant to the Court's February 8, 2023 Order “reveal plainly relevant evidence” which should have been produced earlier in this litigation without Dexon's having to file its motions to compel. Dkt. No. 146 at 6.

First, Dexon asserts Cisco argued against any further discovery of Cisco-Dexon documents during the February 8 hearing, “reiterating its claim that the withheld files are irrelevant and its productions are substantially complete.” Id. Second, and relatedly, Dexon contends certain documents contained in Cisco's post-February 8, 2023 productions should have been included as part of Cisco's basic discovery obligations – and produced at the very latest by the January 6, 2023 substantial completion deadline – because they “strike at the heart of this litigation and demonstrate Cisco's efforts to hinder competition from Dexon.” Id. at 3. As examples, Dexon identifies an internal chat from Cisco's February 21, 2023 document production in which Cisco employees were “bragging about having Dexon ‘booted’ from doing business with a former Dexon customer,” as well as evidence about the “prepared e-mails Cisco sends to customers to try to dissuade them from using Dexon.” Id. Dexon asserts the “belated productions confirm [Cisco] hid relevant witnesses until after the January 6, 2023, substantial completion deadline for the production of documents.” Id. at 4. According to Dexon, despite the “Court's Local Rules and Orders,” the documents were only produced because of “Dexon's persistence” in filing the motions to compel. Id. at 1. Therefore, Dexon requests the Court order Cisco to repay Dexon the attorneys' fees it incurred in having to file each of its motions to compel, including the current motion.

In its response, Cisco asserts the representations its counsel made to the Court on February 8 about Cisco's then-current production were accurate and the position it took – which was consistent with the E-Discovery Order in this case which limited the parties to eight ESI custodians each – was reasonable. Dkt. No. 158 at 1. Even though the Court rejected Cisco's positions and ordered Cisco to produce additional documents, Cisco argues it should not be sanctioned because it lost a good-faith discovery dispute in complex litigation. Id. at 2, 4. Cisco states it has “dedicated substantial resources to complying with this Court's orders.” Id. at 4.

The Court does not find, as urged by Dexon in its motion, that Cisco's counsel's statements during the February 8 hearing independently warrant sanctions under Rule 37. Cisco argued why it should not have to make additional productions, the Court rejected those reasons, and Cisco has since complied.[1] To be sure, those productions included relevant documents. But being wrong is not necessarily the same as making misrepresentations.

*4 Similarly, Dexon has not shown Cisco intended to hide ESI custodians or documents. Cisco's pre-February 8th behavior appears to be more consistent with an overly narrow view of Dexon's claims or a desire to (improperly) delay discovery while it had a merit motion pending rather than an intent to hide specific evidence. In determining whether to impose Rule 37 sanctions for such conduct, including monetary sanctions, courts consider: (1) the fairness of the sanction; (2) the substantial relationship between the sanction and the claim; and (3) if the sanction meets “the Rule 37 goals of punishing the party which has obstructed discovery and deterring others who would otherwise be inclined to pursue similar behavior.” Pruco Life Ins. Co. v. Villarreal, No. CV H-17-2795, 2022 WL 14915624, at *2 (S.D. Tex. Oct. 25, 2022) (quoting Chilcutt v. United States, 4 F.3d 1313, 1321 (5th Cir. 1993)). The Court has carefully considered these factors, the history of the discovery disputes between the parties, the relevant briefing, the oral argument, and Cisco's recent efforts concerning discovery. The Court does not find Cisco disobeyed a court order or failed to provide information or identify a witness as required by Rule 26(a) or (e) such that sanctions should be awarded under either Rule 37(b) or 37(c). Accordingly, it is

ORDERED that Dexon Computer, Inc.'s Motion for Discovery Sanctions Against Cisco Systems, Inc. (Dkt. No. 146) is DENIED.

SIGNED this the 2nd day of June, 2023.

Cisco maintains, without challenge from Dexon, that it expended considerable resources to comply with the resulting order (“e.g., producing hundreds of millions of line of data, files from 17 separate ESI custodians, and all non-privileged ‘Dexon’ hits across 125,000 email repositories”). Dkt. No. 158 at 7; see also id. at 1 (“To be sure, the Court rejected Cisco's positions and ordered Cisco to produce additional documents. Cisco promptly did so, incurring hundreds of thousands of dollars in vendor costs.”).