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Continental Vineyard LLC v. Vinifera Wine Co., LLC

United States District Court, N.D. Illinois, Eastern Division

April 27, 2017

VINIFERA WINE CO., LLC, et al., Defendants.

          Arthur J. Howe, Howe Law LLC

          Michael R. Turco Brooks Wilkins Sharkey & Turco PLLC pro hac vice One of the Attorneys for Defendants Vinifera Wine Co., LLC and Randy Dzierzawski


          Milton I. Shadur Senior United States District Judge.

         This Court pleads guilty to having allowed a long-pending motion in this case to wither on the judicial vine for lack of decision -- precisely the opposite of its normal practice of staying on top of the varying aspects of cases assigned to its calendar. There is really no justification for such delay (indeed, at the end of last month this Court maintained its unbroken record of nearly 37 years of never having had to report any pending motion called for either (1) under the standard set by the so-called Biden Bill or (2) before that, under the reporting requirements established by the Administrative Office of the U.S. Courts).

         But no useful purpose would be served by recounting the overwhelming paper blizzard that, since the filing of the motion at issue here, this Court has encountered in multiple cases involving time deadlines or even emergency treatment -- the factors that have given rise to the delay here. Instead it should be made clear as a matter of principle that no litigant should gain or lose substantively in consequence of a judge's difficulties, and that principle of fairness necessarily causes the motion involved here, defendants' effort to obtain sanctions under Fed.R.Civ.P. ("Rule") 37 (Dkt. No. 159), to be addressed from the perspective of the litigants as of the close-of-discovery date.[1]

         Defendants' Rule 37 motion is sufficiently brief to justify its attachment as Ex. 1 to this opinion, rather than this Court's substituting its own description of the motion. Defendants have then filed a more detailed description in an 18-page "Brief in Support of Rule 37 Motion for Discovery Sanctions" (Dkt. No. 163) that provided chapter and verse as to plaintiffs --principally but not solely co-plaintiff Continental Vineyard LLC ("Continental") -- having withheld, in response to defendants' numerous discovery requests throughout the three year discovery period, information that was essential to defendants' ability to deal with plaintiffs' contentions as to the asserted breach or breaches of fiduciary obligations by co-defendant Randy Dzierzawski. That obstructionism on plaintiffs' part persisted for a period of more than seven months after the extended fact discovery deadline.[2]

         In support of defendants' assertion that plaintiffs never varied from their promise of things to come in their July 27, 2012 initial disclosure statement in which they referred only to "[c]ompensatory damages in an amount to be determined" (and, more importantly, that plaintiffs never delivered -- until much too late -- on that promise), defendants' 18-page Brief in Support has provided detailed information as to (1) plaintiffs' September 25, 2012 response to defendants' first set of document requests, (2) their April 5, 2013 response to defendants' second set of document requests, (3) their July 29, 2013 response to defendants' first interrogatories and third set of document requests, (4) their August 20, 2014 response to defendants' fourth document requests and (5) their November 30, 2015 supplement to defendants' first interrogatories and third document requests -- but in every instance those responses were really nonresponses, either objecting to the requests as purportedly "premature, " or objecting because "Plaintiffs' damages will be subject to expert testimony, and the parties are not yet at that stage of the case, " or objecting that the requested records were purportedly irrelevant -- and the list goes on.

         But the bottom line is that it was not until April of this year -- months too late -- that plaintiffs produced a report from their opinion witness and concurrently sought to supplement their discovery responses by a first-time production of hundreds of pages as to which defendants have obviously had no opportunity to engage in any necessary discovery. That belatedly tendered documentation includes Continental's Quickbooks data from 2009 to 2016 and other operational records, as well as information regarding claimed lost sales and financial performance from plaintiffs' corporate designee -- information that had previously been represented as unavailable.

Rule 37(c)(1) prescribes the consequences of such conduct in these terms:
If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. In addition to or instead of this sanction, the court, on motion and after giving an opportunity to be heard:
(A) may order payment of the reasonable expenses, including attorney's fees, caused by the failure;
(B) may inform the jury of the party's failure; and
(C) may impose other appropriate sanctions, including any of the orders listed in Rule 37(b)(2)(A)(i)-(vi).

         It is unsurprising (though regrettable) that this is not the first time that conduct of the sort evidenced by plaintiffs here has had to be dealt with by a District Judge or, more rarely, by a Court of Appeals. Because District Court opinions (including those by this Court) are nonprecedential, this opinion will not advert to the District Court opinions cited by defendants, though they strongly buttress defendants' motion. Nor will it draw upon Court of Appeals opinions from other circuits, even though they too provide strong support for defendants' ...

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