COMMUNITY VOICE LINE, LLC, a Maryland Limited Liability Company, Plaintiff,
GREAT LAKES COMMUNICATION CORP., an Iowa Corporation, Defendant.
LEONARD T. STRAND, UNITED STATES MAGISTRATE JUDGE.
This case is before me on plaintiff's motion for sanctions (Doc. No. 73) against defendant based on its alleged failure to comply with my discovery order (Doc. No. 64) of January 10, 2013. Defendant has filed a resistance (Doc. No. 76) and plaintiff has filed a reply (Doc. No. 80). I conducted a hearing on June 6, 2013. Daniel Hartnett, David Sellman and Tammy Cohen appeared for plaintiff. Anthony Osborn appeared for defendant. I directed defendant to file additional materials after the hearing, which it did on June 17, 2013. I then permitted plaintiff to file a response to the additional materials, which it did on July 1, 2013. The motion is fully submitted.
Plaintiff Community Voice Line, LLC (CVL), filed this case as a diversity action on May 15, 2012, against Great Lakes Communications Corporation (GLCC), an Iowa competitive local exchange carrier. CVL provides conference call services, recorded content, audio streams and other business services. It contends GLCC has failed to pay commissions owed to CVL out of revenues GLCC collected from originating carriers for calls from CVL’s customers to CVL’s telephone numbers hosted by GLCC.
GLCC denies liability and asserts various affirmative defenses. It has also asserted a counterclaim against CVL and third-party claims against two other parties. Those claims are based, at least in part, on GLCC’s allegation that certain agreements impose indemnification obligations on CVL and the third-party defendants.
CVL filed a motion to compel discovery and request for expenses (Doc. No. 44) on November 27, 2012, alleging that GLCC had been deficient in responding to various document requests served by CVL in August 2012. CVL included, as an exhibit to its motion, a letter from its counsel to GLCC’s counsel dated November 8, 2012 (Doc. No. 44-10), itemizing the alleged deficiencies. GLCC resisted the motion.
I conducted a telephonic hearing on the motion to compel on January 10, 2013, and filed the discovery order (Doc. No. 64) the same day. The order included the following requirements:
a. On or before January 25, 2013, [GLCC] shall serve supplemental written responses to each of the document requests addressed in the November 8, 2012, letter (Doc. No. 44-10), except requests 35 and 37. For each request, the supplemental response shall state whether GLCC has responsive documents in its possession, custody or control. If so, the response shall describe the status of GLCC’s production of those documents (for example, all such documents were previously produced or additional documents will be produced). If GLCC has no responsive documents in its possession, custody or control, the supplemental response shall expressly so state.
b. On or before January 25, 2013, GLCC shall produce any responsive documents in its possession, custody or control as to each of the document requests addressed in the November 8, 2012, letter (Doc. No. 44-10), except requests 35 and 37, to the extent GLCC has not previously produced those documents.
See Doc. No. 64 at 2. I denied CVL’s request for expenses. Id.
The Present Dispute
CVL filed its motion for sanctions on April 17, 2013. It contends that GLCC has not complied with the January 10, 2013, order. CVL states that while GLCC did produce certain additional materials on January 25, 2013, serious deficiencies still exist with regard to two categories of documents: (1) financial documents necessary to calculate commissions and damages and (2) documents relating to GLCC’s affirmative defenses and counterclaims. CVL also complains that with regard to documents GLCC did not produce, it did not affirmatively state that it has no such documents in its possession, custody or control. Instead, GLCC qualified its response by stating that it has produced all documents it had “located after a reasonable investigation.”
At the hearing, CVL focused primarily on the first category of documents, presenting evidence and arguments concerning GLCC’s alleged failure to produce all records necessary to verify and/or calculate the commissions allegedly owed to CVL. During their business relationship, GLCC provided CVL with reports summarizing the revenues GLCC received from various originating carriers for calls made to CVL numbers. Now that this dispute is in litigation, CVL seeks underlying data, such as bank statements, invoices from GLCC to the carriers and proof of payment to GLCC from the carriers. CVL identified various carriers for whom GLCC had yet to produce invoices, proof of payment or both. CVL further argued that with regard to certain “Quick Reports” produced by GLCC, the information is provided only through part of the year 2012, not the entire year as requested. Finally, CVL highlighted examples of what it believes to be discrepancies or inaccuracies in the GLCC reports and argued that these alleged problems illustrate the importance of obtaining underlying records and financial data. Among the exhibits CVL submitted at the hearing was its Exhibit 2, a spreadsheet listing GLCC’s carriers and indicating, for each, whether GLCC had provided certain types of records.
GLCC’s response during the hearing focused primarily on a suggestion that it was being “ambushed” and that the issues CVL raised during the hearing could have been resolved informally if CVL would have presented them to GLCC before the hearing. Based on those concerns, I directed GLCC’s counsel to confer with his client after the hearing and submit a supplemental response in light of the information CVL presented during the hearing.
GLCC’s supplemental response, filed June 19, 2013, is in the form of two declarations – one from its counsel and one from Josh Nelson, GLCC’s owner. See Doc. Nos. 96 and 96-1. In his declaration, GLCC’s counsel states that GLCC was supplementing its document production to include certain documents depicted as missing in CVL’s Exhibit 2. He further states that the Quick Reports contained information only through May 2012 because that is what he directed his client to provide. He also indicates that he produced various email and text messages on April 4, 2013, that he had previously withheld based on a belief that they were irrelevant.
Counsel further states that certain other documents do not exist. As for bank statements, he explains that he had never asked his client to provide them, even though CVL’s document requests include them, because it was his understanding based on discussions with CVL’s counsel that CVL did not actually seek bank statements. According to counsel, CVL is now changing its position. As such, he states, GLCC would be producing the bank statements to CVL.
Nelson’s declaration basically mimics that of GLCC’s counsel, particularly with regard to which of the missing documents exist, and were being produced, and which do not. He also confirms that GLCC’s counsel never previously asked GLCC to provide copies of its bank statements. According to both declarations, if CVL would have prepared and provided its summary of missing documents (Exhibit 2) to GLCC before filing its motion for sanctions, all issues could have been resolved informally.
In its response to the GLCC declarations, CVL takes issue with several statements. For example:
a. Quick Reports: CVL again points out that its document requests sought this data through the entire year 2012, not just part of the year. CVL contends that GLCC intentionally limited the report parameters to only part of the year so the reports would not reflect all payments GLCC received from carriers with regard to CVL traffic.
b. Bank statements: CVL denies that it ever withdrew its request for bank statements and references meet-and-confer letters sent to GLCC’s counsel in November 2012 and March 2013 as evidence that CVL ...