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David Mizer Enterprises, Inc. v. Nexstar Broadcasting, Inc.

United States District Court, C.D. Illinois

August 31, 2016




         Before the Court is Plaintiff David Mizer Enterprises, Inc.'s (Plaintiff) Motion for Sanctions (d/e 39) against Nexstar Broadcasting, Inc. (Defendant). For the reasons stated below, Plaintiff's Motion is allowed in part and denied in part.


         Plaintiff filed its Complaint (d/e 1) in this case on August 11, 2014. The Plaintiff's Complaint alleges that Plaintiff entered into a contract with the Defendant which operates television stations throughout the country. The contract provided that the Defendant would utilize Plaintiff's proprietary software and business model for car locating for a period of three years in exchange for certain fees as outlined in Appendix A of the contract (d/e 1, pg 3). The Plaintiff alleges that Plaintiff allowed Defendant to host proprietary copyrighted pages owned by Plaintiff on Defendant's server, giving Defendant the ability and autonomy to add and remove the software from its station websites as it so desired (d/e 1, pg 3). The contract did not specify an automatic extension beyond the termination date of December 31, 2010. The Plaintiff alleges, however, that Defendant continued to use Plaintiff's product after the term expired from January 1, 2011 until early February, 2013, and failed to pay Plaintiff for its usage of the car locating software and business model (d/e 1, pg 4).

         Based upon these facts, the Plaintiff asserts claims of Breach of Contract (Count I) (d/e 1, pg 5); Conversion (Count II) (d/e 1, pg 7); Quantum Meruit (Count III) (d/e 1, pg 9); and, Copyright Infringement (Count IV) (d/e 1, pg 10).

         Defendant filed a Motion to Dismiss Counts I and II (d/e 6). The motion to dismiss was granted in part and denied in part, with the Court striking the request for punitive damages in Count I (d/e 15). Defendant has answered all counts of the Complaint (d/es 10, 19).

         On January 21, 2015, Plaintiff filed a Motion to Compel Initial Disclosures and Discovery Responses (d/e 14). The Court ruled on the motion to compel on February 4, 2015, ordering the Defendant to respond to discovery in accordance with Federal Rules of Civil Procedure by February 28, 2015, and finding that no award of fees was appropriate.

         On February 12, 2015, the Court entered a Scheduling Order (d/e 18) governing discovery and trial settings.

         On September 16, 2015, Plaintiff filed a Motion to Compel (d/e 24) and a Motion for Sanctions Due to Spoliation of Evidence (d/e 25). Plaintiff's motion for sanctions due to spoliation of evidence was based upon the “reimaging” of a hard drive on the computer of Todd Hartsell (a potential witness in this case) after the Plaintiff had issued interrogatories and requests to produce which specifically requested information that could have existed on Hartsell's hard drive (d/e 26, pg 5). The Defendant had responded to one of Plaintiff's interrogatories stating “Mr. Hartsell's computer was reimaged in November or December of 2014 and Mr. Hartsell lost all documents and data saved by him to his computer's hard drive during the reimaging” (d/e 30-3, pg 17).

         On October 7, 2015, Plaintiff's Motion to Compel (d/e 24) was denied as moot because the Defendant indicated it was providing the requested discovery. On November 20, 2015, the Court denied Plaintiff's Motion for Sanctions Due to Spoliation of Evidence (d/e 25) without prejudice with leave to re-file.

         On November 25, 2015, Plaintiff filed another Motion to Compel (d/e 30). Defendant responded (d/e 31) to this motion to compel. The Court set an evidentiary hearing on this motion to compel on March 9, 2016. The Defendant filed a motion to continue (d/e 36) the hearing on the motion to compel in order to present live testimony at the hearing. On March 3, 2016, the Court allowed the motion to continue the hearing and set the hearing for March 30, 2016. During a telephone conference with the parties regarding the nature of evidence to be presented at the evidentiary hearing, an oral motion to continue the hearing was allowed and the hearing was reset for April 26, 2016 in open court.

         The Court conducted the evidentiary hearing in open court on April 26, 2016. At the conclusion, the Court ruled upon the objections and granted in part and denied in part Plaintiff's Motion to Compel (d/e 30). The Court found that most of the discovery responses which Plaintiff questioned in the Motion to Compel were either insufficient or non-responsive and ordered the Defendant to search for documents and provide proper responses. The Court's ruling on Plaintiff's motion to compel was transcribed and filed of record (d/e 37). The specific rulings of the Court will be discussed in the analysis of the Court's ruling on the instant motion.

         On June 10, 2016, the Plaintiff filed the Motion for Sanctions (d/e 39) currently before the Court. On June 27, 2016, Defendant filed its Memorandum in Opposition to the Plaintiff's Motion for Sanctions (d/e 42). On July 12, 2016, the Court entered a revised scheduling order.


         As noted above, the Plaintiff filed a Third Motion to Compel (d/e 30) on November 25, 2015. On April 26, 2016, the Court ruled on the pending motion to compel. The pending Motion for Sanctions (d/e 39) is filed under Rule 37 of the Federal Rules of Civil Procedure based upon the Court's granting in part the motion to compel on April 26, 2016.

         Plaintiff seeks sanctions under Rule 37 of the Federal Rules of Civil Procedure. Rule 37(a)(5) provides that the Court must assess, against the party whose conduct necessitated the motion to compel, the movant's reasonable expenses incurred in making the motion, including attorney's fees, unless the opposing party's response was substantially justified. If the motion is granted in part and denied in part, the court may apportion reasonable expenses of the motion between the parties.

         At the April 26, 2016, hearing, the Court ruled that the submissions of the parties showed sufficient good-faith attempts to confer regarding discovery compliance to satisfy the certification provisions of Rule 37(a)(1) (d/e 37, pg 3). At the hearing, the Court reviewed with the parties the requirements for compliance concerning Rules 33 and 34 of the Federal Rules of Civil Procedure regarding responding to interrogatories and requests for production.

         The Court stated that the party responding to a Request for Production must state in writing, for each category requested, that inspection will be permitted as requested, or if the responding party rejects the request, the basis of the objection to the request. The Court noted that objections are valid only if they specifically apprise the opposing party and the Court about the nature of the otherwise non-responsive documents the responding party will not produce and that general objections made without elaboration, whether placed in a separate section or repeated by rote, are not objections at all.

         The Court indicated that a party has the obligation to seek appropriate extensions from the Court if it can't conduct a careful and thorough search for responsive documents. The Court noted that a party responding to a Rule 34 production request is under an affirmative duty to seek the information reasonably available to it from its employees or agents or subject to their control to satisfactorily answer the interrogatories or requests to produce. The requirements noted by the Court were set forth in Novelty, Inc. v. Mountain View Marketing, Inc., 265 F.R.D. 370, 375-376 (S.D.Ind. 2009).

         The requirements for searches for information sufficient to answer interrogatories are substantially the same as the requirements for responding to requests for production. The answers to interrogatories must be responsive, full, complete, and unevasive. The answering party cannot limit answers to matters within his or her own knowledge and ignore information available to the individual answering the interrogatory or to persons or sources under that individual's control. If an appropriate interrogatory is propounded, the answering party is required to give information available to the answering party, if any, through his attorney, investigators employed by him, or on his behalf or other agents or representative, whether personally known, to the answering party or not. If the answering party lacks the necessary information to make a full and specific answer to the interrogatory, the individual answering the interrogatory should state under oath the reason for the lack of information and should set forth in detail efforts made to obtain the information. Miller v. Doctor's General Hospital, 76 F.R.D. 136, 140 (W.D.Okla. 1977)

         The court in Fautek v. Montgomery Ward & Co., Inc., 96 F.R.D. 141 (N.D.Ill. 1982) summarized the duty of a party responding to discovery and the standard for imposing sanctions. The court noted as follows: . . .

[A] culpable failure to produce documents in response to a request to produce can be the basis for sanctions under Fed.R.Civ.P. 37(d). Parties are required to respond to requests to produce in a complete and accurate fashion. (citations omitted) This in turn requires that parties take reasonable steps to ensure that their responses to requests to produce are complete and accurate. (citations omitted) Ultimate production of the material in question does not absolve a party where it has failed to produce the material in a timely fashion. (citations omitted) Once a failure to comply with the discovery rules is established, sanctions are appropriate; the degree of culpability is only a factor in determining the severity of the sanctions to be applied. (citations omitted) Thus, a failure to make discovery, even if occasioned by simple negligence, may justify the imposition of sanctions. (citations omitted)

Id. at pg. 145, 146.

         The record before the Court clearly shows that the Defendant either made little or no attempt to find the information or documents responsive to the Plaintiff's discovery requests or was aware of responsive information and did not want to disclose it.

         Defendant Nexstar is a large publicly traded corporation whose primary business is owning and operating television stations in mid-size markets throughout the United States. Nexstar owns, operates, and programs sales and other services to over 100 separate television stations in 62 market districts in the United States. While Nexstar has a corporate headquarters, most of its actual business activities take place in television stations it owns, operates, or services. During the time at issue in this lawsuit, individual mail service at the stations that form Nexstar were not linked to the corporate servers (d/e 31, pgs 2-3).

         In Plaintiff's Requests for Production, which were the subject of the Motion to Compel for which sanctions are sought, Plaintiff asked for information concerning the formation and operation of the limited liability corporation, Performance Team, LLC, by any personnel of Nexstar Broadcasting, Inc. In its Request for Production 15 (d/e 30-4, pg 14) and Request for Production 20 (d/e 30-4, pg 17), Plaintiff asked for any documents relating or reflecting any business dealerships, or relationship between Nexstar Broadcasting, Inc. and any of the affiliate stations or personnel with or about Performance Team, LLC. The answer to both requests for production was the same. The answer given was as follows:

Performance Team, LLC was not formed and is not associated with, affiliated with, controlled by or under the control of Defendant and prior to Plaintiff's Complaint, Defendant had no knowledge of this entity whatsoever. Therefore, Defendant does not have any documents which respond to this request.

         In an attempt to resolve the discovery disputes regarding the responses to its requests for production set forth above, counsel for the Plaintiff wrote a detailed letter to defense counsel seeking additional responses to the interrogatories and requests to produce (d/e 30-5). Plaintiff's counsel requested responses to Requests for Production 15 and 20, and indicated that there were at least four high level Nexstar employees with knowledge of Performance Team, LLC. Plaintiff again requested the documents described in Requests for Production 15 and 20 (d/e 30-5, pgs 6, 7).

         Defense counsel sent a letter replying to each of the requests of Plaintiff's counsel for additional information which were not provided in the responses to the interrogatories and requests to produce at issue in the Motion to Compel. The response to the request for additional information concerning knowledge of Performance Team, LLC was the ...

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