United States District Court, W.D. Washington, Seattle
ORDER RE: MOTION TO COMPEL FULL COMPLAINCE WITH
COURT'S DISCOVERY ORDER
RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendant U.S. Bank National
Association (“U.S. Bank”)'s Motion to Compel
Full Compliance with Court's Discovery Order and a later
Motion by the same party to file a supplemental brief. Dkts.
#169 and #201. In addition to moving to compel discovery,
U.S. Bank is seeking discovery sanctions against some
Plaintiffs for their failure to comply with the Court's
prior discovery Orders, Dkt. #125 and #147.
initial matter, U.S. Bank has also attempted to submit a
supplemental brief to keep the Court updated on discovery.
Dkt. #201. Plaintiffs oppose the filing of the brief. The
Court finds that this briefing is unnecessary for the Court
to resolve this Motion, that it essentially provides
duplicative evidence, and that the Court would reach the same
conclusion even if the facts contained therein were
considered. The Court will deny the Motion as moot.
general background facts of this case have already been set
forth by the Court in a prior Order. See Dkt. #66 at
2. Plaintiffs are individual citizens and residents of the
People's Republic of China. Dkt. #3 at 2. Plaintiffs
utilized the U.S. EB-5 immigration program, requiring
investments of $500, 000 in this country. On or about April
16, 2012, Plaintiffs entered into an escrow agreement with
certain other Defendants related to these investments;
Defendant U.S. Bank was the “Escrow Agent.”
Id. at 3. Plaintiffs plead that none of their visa
petitions were approved, and that U.S. Bank then improperly
disbursed their investment funds. See Dkt. #108 at
5-6. On December 3, 2015, Plaintiffs filed the instant
lawsuit in the United States District Court for the District
of Utah related to alleged losses from the actions of U.S.
Bank. On July 11, 2016, the Utah Court granted a Motion to
Transfer Venue and transferred to the Western District of
Washington. Dkt. #40.
case has been plagued by significant discovery issues. The
Court agrees with this summary of the procedural situation
from U.S. Bank:
After Plaintiffs failed to comply with this Court's
initial order requiring discovery by February 2019 (Dkt.
#125), this Court's June 28, 2019, Order was very
specific concerning the Plaintiffs' obligation to
complete their document production. The Order states:
“Plaintiffs shall produce all non-privileged documents
responsive to U.S. Bank's Requests for Production of
Documents contained in its First Set of Interrogatories and
Requests for Production (reissued November 8, 2019) no later
than 30 days from the date of this Order.” Dkt. #147
(emphasis added). The order specifically included materials
in the possession of their agents or counsel. Id. It
also acknowledged the ongoing significant prejudice to U.S.
Bank of noncompliance. Id.
Dkt. #169 at 6. U.S. Bank now contends that certain
Plaintiffs did not comply with these deadlines, and that
Plaintiffs have failed to search for relevant documents,
failed to obtain documents in the possession of their
immigration agents or counsel, failed to submit proper
interrogatory answers, and failed to preserve relevant
information. Id. Defense counsel states via
declaration that “[w]hile nearly all Plaintiffs did
make at least some document productions by the [Court's]
deadline, some did not, ” and that “[t]he vast
majority (approximately 75%) of the Plaintiffs have continued
to produce documents after the deadline…. There is no
way for U.S. Bank to know how many Plaintiffs have failed to
complete their production of documents.” Dkt. #172 at
3-4. U.S. Bank cites to numerous deposition transcripts where
Plaintiffs admitted they failed to produce all requested
documents and failed to properly search their own records for
responsive documents. Id. at 7-12.
Response to the instant Motion, Plaintiffs argue that this
case is unusually complex, and that “[n]o one has set
out to violate orders of the Court.” Dkt. #182 at 2.
Plaintiffs' counsel state that they “will continue
producing the documents they receive until the backlog is
cleared.” Id. Plaintiffs argue that U.S. Bank
is attempting to impose unilateral timeframes for discovery
to be produced. Id. at 4. Plaintiffs raise several
irrelevant points, e.g. that “Plaintiffs as a
group have responded to the Court's orders by producing
to date 248, 471 pages of documents, compared to about 9, 000
pages by U.S. Bank, ” id. at 3, and
“Plaintiffs have provided discovery responses that are
far more revealing than those of the moving party, U.S. Bank,
” id. at 7. The Court is not shocked by the
amount of paper generated by this case nor interested in
this record, it is clear to the Court that certain Plaintiffs
have failed to comply with the Court's prior Order.
Plaintiffs essentially admit this much. These were not
“unilateral timeframes” imposed by U.S. Bank. The
Court will thus move on to a discussion of the appropriate
governs discovery sanctions. Rule 37(a) outlines the
procedure for a Motion to Compel Discovery. Rule 37(b)
provides sanctions for failure to comply with a Discovery
Order. Rule 37(b)(2)(A) lists several available sanctions,
which include “directing that the matters embraced in
the order or other designated facts be taken as established
for purposes of the action, as the prevailing party claims,
” “prohibiting the disobedient party from
supporting or opposing designated claims or defenses, or from
introducing designated matters in evidence, ”
“staying further proceedings until the order is obeyed,
” and “dismissing the action or proceeding in
whole or in part.” In evaluating the propriety of
sanctions, the Court looks at all incidents of a party's
misconduct. Henry v. Gill, 983 F.2d 943, 947 (9th
U.S. Bank argues that “counsel cannot merely tell their
clients to find responsive documents, ” and that
“Plaintiffs and counsel have a duty to work together to
“understand how and where electronic documents, records
and emails are maintained and to determine how best to
locate, review, and produce responsive documents.” Dkt.
#169 at 13 (citing Orbit One Communs. v. Numerex
Corp., 271 F.R.D. 429, 437 (S.D.N.Y. 2010); Al Otro
Lado, Inc. v. Nielsen, 328 F.R.D. 408, 418 (S.D. Cal.
2018)). Defendants argue that the Court's prior Orders
gave Plaintiffs “unequivocal notice that a court has
asked that certain documents be produced.” Id.
at 12 (citing Dreith v. Nu Image, Inc., 648 F.3d
779, 787 (9th Cir. 2011)). U.S. Bank contends that, because
“[d]ozens of Plaintiffs have produced documents long
after this Court's second deadline, with no end in
sight… [d]ismissal would be appropriate for the
Non-Compliant Plaintiffs, and thus they each should be
required to show cause why their claims should not be
dismissed.” Id. at 13-14. U.S. Bank
proposes Plaintiffs should have 14 days to submit such a show
cause response. Dkt. #169-1 at 2. U.S. Bank also seeks
monetary sanctions of $5, 000 “given the many thousands
in extra expenses being incurred by U.S. Bank, ” and
for all Plaintiffs who require a second day of deposition to
be ordered to pay the associated fees and costs. Dkt. #169 at
14. Of course, U.S. Bank also seeks fees and costs associated
with filing this Motion as proper under Rule 37(b)(2)(C).
Fees and costs are appropriate “unless the failure of
the disobedient party was substantially justified or other
circumstances make an award of expenses unjust.”
Response, Plaintiffs strongly oppose being forced to pay
additional monetary sanctions, having already been sanctioned
by the Court to the tune of $24, 000. Plaintiffs argue that
“it is facially not feasible for Plaintiffs'
attorneys to contact all their Plaintiffs, write show cause
responses, explain circumstances the Bank demands, and write
a 24-page brief within 14 days.” Dkt. #182 at 6. The
Court finds these points persuasive to a certain extent.
Plaintiffs suggest that the Court order a hearing to ask
questions about the status of discovery, appoint a discovery
master to more closely supervise the proceedings, or grant a
continuance of trial. Id. at 7. Plaintiffs call the
remedies sought by U.S. Bank “extremely
punitive.” Id. at 10.
discovery problems at issue here are significant. They have
prejudiced U.S. Bank's ability to depose Plaintiffs and
prepare for its case. Whether or not Plaintiffs' contract
claims against U.S. Bank are as simple as they allege, U.S.
Bank is entitled to obtain relevant discovery proportional to
this multi-million-dollar case. To the extent Plaintiffs note
that some of the discovery requests at issue are improper or
seek irrelevant information, they have not moved for a
protective order. As such, the Court is left with the
distinct impression that Plaintiffs are dragging their feet
on turning over relevant information, or oblivious to the
consequences of doing so.
Court's goal here is not to punish Plaintiffs but to
resolve this discovery dispute in a way that allows U.S. Bank
to adequately defend itself, promotes respect for this
Court's prior Orders, and allows for adjudication of this
case on the merits. Accordingly, having reviewed the relevant
pleadings, the declarations and ...