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Nachurs Alpine Solutions, Corp. v. Banks

United States District Court, N.D. Iowa, Western Division

June 22, 2017

NACHURS ALPINE SOLUTIONS, CORP., Plaintiff,
v.
BRIAN K. BANKS and NUTRA-FLO COMPANY, Defendants.

          ORDER

          C.J. WILLIAMS, CHIEF UNITED STATES MAGISTRATE JUDGE

         TABLE OF CONTENTS

         I. INTRODUCTION ............................................................................ 1

         II. BACKGROUND ............................................................................. 2

         III. PLAINTIFF'S MOTION TO COMPEL ................................................. 3

         A. The Standard ............................................................................. 3

         B. Defendants' Answers to Discovery v. ESI Documents ............................ 4

         IV. PLAINTIFF'S MOTION FOR SANCTIONS ........................................ 14

         V. CONCLUSION ............................................................................. 19

         I. INTRODUCTION

         This matter is before the Court pursuant to plaintiff's resisted motion to compel and impose sanctions. (Doc. 98). Plaintiff argues that defendants' discovery responses were deficient and in some cases misleading and false, and seeks sanctions in the form of attorneys' fees and other sanctions. On June 12, 2017, the Court heard oral argument from the parties on plaintiff's motion. For the reasons that follow, the Court grants plaintiff's motion to compel and impose sanctions.

         II. BACKGROUND

         On March 10, 2015, plaintiff filed suit against defendants in this Court. (Doc. 2). Plaintiff and defendant Nutra-Flo Company (“Nutra-Flo”) are competitors engaged in the business of manufacturing and selling fertilizer. Plaintiff's complaint alleged, generally speaking, that its former employee, defendant Brian Banks (“Banks”), took confidential, proprietary, and trade secret information from plaintiff and provided that information to his new employer, defendant Nutra-Flo. After litigation regarding a preliminary injunction, defendants filed an answer on April 15, 2015, generally denying all allegations. (Doc. 27).

         Discovery followed during which plaintiff propounded interrogatories and requests for production of documents seeking to discover, among other things, what information Banks took from it, what information he provided to Nutra-Flo, what role Banks had in research and development of products at Nutra-Flo, and requesting the production of documents reflecting all this. The parties also entered into a stipulated preliminary injunction that, among other things, required defendants to return to plaintiff any confidential or trade secret documents Banks removed from plaintiff.

         Eventually, in March and April of this year, defendants produced a significant amount of electronically stored information (ESI). In combing through those tens-of-thousands of pages of documents, plaintiff states it found documents that demonstrate that defendants' answers to interrogatories were, at best, deficient. Plaintiff argues that defendants had an obligation to supplement their answers and provide the information plaintiff obtained only after incurring the expense of obtaining and examining the ESI documents. Defendants argue that their answers to discovery were not deficient, and alternatively that sanctions are inappropriate because plaintiff obtained the information through production of the ESI documents in any event, and because defendants acted in good faith and exercised reasonable efforts to comply with plaintiff's discovery requests.

         III. PLAINTIFF'S MOTION TO COMPEL

         A. The Standard

         In analyzing the merits of plaintiff's motion to compel, the Court begins with looking at the Federal Rules of Civil Procedure regarding the scope of discovery and the obligation of the parties. Rule 26(b)(1) of the Federal Rules of Civil Procedure provides:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

Fed. R. Civ. P. 26(b)(1). Rule 26(b) is widely acknowledged as “liberal in scope and interpretation, extending to those matters which are relevant and reasonably calculated to lead to the discovery of admissible evidence.” Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992) (internal citation omitted). Parties must answer interrogatories as fully and completely as possible. Motorola, Inc. v. Alexander Mfg. Co., No. 90-3062, 1991 WL 325499 (N.D. Iowa Dec. 30, 1991). In the event a party is unable to supply a complete answer, the party is required to furnish any relevant information available. Id.

         Furthermore, parties have an ongoing obligation to supplement discovery answers in a timely manner. Federal Rule of Civil Procedure 26(e) provides, in pertinent part:

(e) Supplementing Disclosures and Responses.
(1) In General. A party who has made a disclosure under Rule 26(a)- or who has responded to an interrogatory, request for production, or request for admission-must supplement or correct its disclosure or response:
(A) in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing; or
(B) as ordered by the court.

Fed. R. Civ. P. 26(e)(1).

         B. Defendants' Answers to Discovery v. ESI Documents

         In this case, plaintiff alleges that a number of defendants' answers to interrogatories and requests for production of documents were inaccurate, misleading, or false and that defendants failed in their duty to supplement discovery ...


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