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Court Declines to Impose Default Judgment, But Orders Searchable Production and Extends Deadlines – eDiscovery Case Law


In Kwan Software Engineering, Inc. v. the defendant Technologies, LLC, No. C 12-03762 SI (N.D. Cal. Oct. 1, 2013), California District Judge Susan Illston denied the plaintiff’s motion for terminating sanctions against the defendant for late, non-searchable productions, but did order the defendant to produce documents in a searchable format with metadata and extended the pretrial schedule so that the plaintiff would not be prejudiced by the late productions.

After being court-ordered to produce documents by August 20, 2013, the defendant produced the majority of the documents (over 200,000 pages) after the deadline on September 13 and September 25.  As a result, the plaintiff filed a motion for terminating sanctions against the defendant pursuant to Federal Rule of Civil Procedure 37(b), based on the defendant's untimely production of documents. In the alternative, the plaintiff sought the following sanctions:

(1)   that within three business days, the defendant must produce all documents responsive to the plaintiff's requests in searchable electronic format with metadata included;

(2)   that the plaintiff's non-expert and expert discovery cut-offs be unilaterally extended to December 15, 2013;

(3)   that the defendant be precluded from using any documents produced after August 20, 2013, for any purpose; and

(4)   that the defendant be required to pay monetary sanctions in the amount of $2,880 to reimburse the plaintiff for the costs of its motion.

The plaintiff also requested that the Court leave the trial date unaltered.

Noting that a terminating sanction should only be imposed in “extreme circumstances”, Judge Illston described the factors to be considered, as follows:

(1)   the public's interest in expeditious resolution of litigation;

(2)   the court's need to manage its docket;

(3)   the risk of prejudice to the other party;

(4)   the public policy favoring the disposition of cases on their merits; and

(5)   the availability of less drastic sanctions.

After consideration of the above factors, Judge Illston declined to impose a terminating sanction, noting that a “sanction less drastic than default is available to remedy any potential prejudice” to the plaintiff.  She did order the defendant to produce the documents in a searchable format with metadata and amend the pretrial schedule for both parties for non-expert and expert discovery cut-offs and deadlines to designate expert witnesses.  In its response, the defendant stated that “it can produce the documents in a searchable format with metadata in a week”.

So, what do you think?  Should the request for terminating sanctions have been granted?   Please share any comments you might have or if you’d like to know more about a particular topic.

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