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Thompson v. Fajerstein

November 8, 2010

RICHARD THOMPSON, TRUSTEE OF THE THOMPSON FAMILY TRUST, PLAINTIFF,
v.
RONALD FAJERSTEIN, FAJERSTEIN DIAMOND IMPORTERS, & CUTTERS, INC., AND ANTWERP DIAMOND IMPORTERS & CUTTERS, INC., DEFENDANTS.



The opinion of the court was delivered by: Michael T. Mason United States Magistrate Judge

Mag. Judge Michael T. Mason

Michael T. Mason, United States Magistrate Judge

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff Richard Thompson's ("Thompson" or "Plaintiff") motion for an award of fees against Defendants' counsel (the "Motion"). [120] Specifically, Plaintiff requests that this Court order Defendants' counsel, The Nathanson Law Firm ("Defendants' counsel"), to provide payment to Thompson's counsel for their improper conduct during discovery. This matter was referred to this Court in accordance with 28 U.S.C. § 636(b)(1)(A) and Local Rule 72.1. For the following reasons, this Court grants Plaintiff's motion for an award of fees against Defendants' counsel [120] in part.

I. Background

In his Amended Complaint, Plaintiff alleges that Defendants defrauded him out of $150,000 in connection with the purchase of an eleven-carat diamond. [26]. The District Court has dismissed this case with leave to reinstate pending further proceedings in the U.S. Bankruptcy Court because Defendants filed for bankruptcy. [109]. Prior to the District Court's dismissal of this case, this Court granted in part and denied in part Plaintiff's motion to compel production [63]. [105]. As part of our ruling, we granted Plaintiff's request for fees and expenses "incurred in connection with this discovery dispute in part" (the "Sanctions") and ordered Plaintiff to submit certain billing records. Specifically, we ordered Plaintiff to submit the billing records of his counsel setting forth the expenses and costs incurred in connection with "(1) Plaintiff's prior motion to compel [42]; (2) attendance at the 2/19/09 and 3/5/09 hearings before the District Court; and (3) Plaintiff's counsel's 3/13/09 email correspondence with Defendants' counsel." [105]. We later vacated that portion of the order [111] after all three Defendants filed notices of bankruptcy petitions and the District Court dismissed the case.

After the dismissal, the District Court granted Plaintiff's motion to reinstate the case for the limited purpose of enforcing this Court's ruling regarding the Sanctions. [115]. The District Court re-referred the case to this Court as follows: "for determination of whether [defense] counsel is liable with respect to the Magistrate Judge's sanctions order, and if so, to allow counsel time to respond and for ruling by the Magistrate Judge." Id.

In briefing this Motion, Plaintiff seeks attorneys' fees of $17,580 and costs of $140.30, totaling $17,720.30. Since the briefing on the Motion, Plaintiff filed a motion for leave to supplement his fees and costs submission. [161]. This Court granted Plaintiff's motion and allowed Plaintiff to submit his additional fees and costs for review by this Court. [164].

II. Standard

Federal Rule of Civil Procedure 37 permits the Court to award fees against either the party whose conduct necessitated the motion to compel or the attorneys advising that conduct, or both. Fed.R.Civ.P. 37(a)(5)(A). When a party's attorney is at fault for a discovery violation, "the appropriate remedy is to shift costs to the party's counsel." Orgler Homes, Inc. v. Chicago Regional Council of Carpenters, No. 06 C 50097, 2008 WL 5082979, at *3 (N.D. Ill. Nov. 24, 2008) citing Chappel v. SBC-Ameritech, No. 05 C 7003, 2007 WL 2076028 (N.D. Ill. July 13, 2007)(decision modified in Orgler Homes, Inc. v. Chicago Regional Council of Carpenters, No. 06 C 50097, 2009 WL 899741 (N.D.Ill. Mar. 26, 2009) based on additional facts presented to the court).

Because Rule 37 "does not allow for expenses and fees as a matter of course, district judges have almost absolute discretion when awarding them." Orgler Homes, Inc, 2008 WL 5082979, at *3 citing Ins. Benefit Adm'r v. Martin, 871 F.2d 1354, 1360 (7th Cir.1984). "[Rule 37] Sanctions exist, in part, to remind attorneys that service to their clients must co-exist with their responsibilities to the court, toward the law, and toward their brethren at the bar." DeVaney v. Continental Am. Ins. Co., 989 F.2d 1154, 1162 (11th Cir. 1993).

A court may assess expenses incurred by discovering parties, against an attorney, resulting from the failure to fully answer to interrogatories or comply with court orders. See Sun v. Board of Trustees of the University of Ill., 473 F.3d 799, 812 (7th Cir. 2007) (stating that in situations of attorneys who cause discovery delay, the district court should impose monetary sanctions instead of entering default judgment). Thus, where it is determined that a failure to comply with discovery is the fault of counsel, he or she may be ordered to personally pay the costs of a motion to compel discovery. Magnus Electronics, Inc. v. Masco Corp. of Indiana, 871 F.2d 626, 631 (7th Cir. 1989).

Federal Rule of Civil Procedure 37 does not require the court to make a specific finding that an attorney instigated discovery misconduct before imposing sanctions upon the attorney; rather, the Rule identifies attorneys advising or overseeing discovery as possible subjects of sanctions, along with their clients, and vests the trial ...


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