Opinion
02 Civ. 6441 (LAK)
January 17, 2003
ORDER
This is an action by freelance photographers and authors who contributed to the National Geographic Magazine and who now claim that the use of their contributions in a CD-ROM version called The Complete National Geographic goes beyond the rights they licensed and thus infringes their copyrights. It is a companion to other actions pending in this Court, the opinions in which afford a fuller overview of the controversy, thus eliminating the need to provide additional background here. See Faulkner v. Nat'l Geographic Soc'y, 220 F. Supp.2d 237 (S.D.N.Y. 2002); Ward v. Nat'l Geographic Soc'y, 208 F. Supp.2d 429 (S.D.N.Y. 2002). The matter is before the Court on the motion of defendants ProQuest Company and ProQuest Information and Learning Company ("ProQuest"), pursuant to Fed.R.Civ.P. 37(b)(2), 28 U.S.C. § 1927, and the inherent power of the Court, for sanctions against plaintiffs and their attorney, Surjit P. Soni, Esq., a member of the California Bar, who followed this case here when it was transferred from the Central District of California, for alleged violation of this Court's order of October 28, 2002, which required the plaintiffs to produce certain documents.
Facts The Dispute and the Order to Produce Documents
The history of the discovery controversies in this action is long. As it is not material to the disposition of this motion, the Court will not recount the sad tale save to say that it repeatedly has found a substantial degree of obstructionism, an almost complete lack of cooperation, and a good deal of evasion and what can be described only as pettifoggery.
The current controversy arose out of defendants' efforts to conduct discovery with respect to plaintiffs' motion to certify a class. After much squabbling, ProQuest, by letter dated October 11, 2002, narrowed its remaining document requests — which in its view had not been complied with over a period of months — to three: (1) documents relating to the licensing of each allegedly infringed work, (2) original versions of each allegedly infringed work submitted to National Geographic, and (3) contingency fee agreements between each plaintiff and The Soni Law Firm or any of its agents or representatives. Cirino Decl. Ex. 17. A few days later, Mr. Soni responded that plaintiffs would provide documents relating to licensing of the works at issue and allow inspection of original works if they had them, but — in what appears to be a common form of delay and evasion — asked ProQuest to identify which plaintiffs had such documents, apparently in preference to asking his own clients for the documents. He indicated also that plaintiffs believed that they had produced all of the fee agreements and asked ProQuest to advise him as to which ones ProQuest did not have. Id. Ex. 18.
Mr. Soni's response was unsatisfactory to ProQuest. By letter dated October 17, 2002, ProQuest sought the Court's intervention. Id. Ex. 19. Among other things, it explained — quite reasonably — that it could not be expected to tell which of the plaintiffs had documents relating to the licensing of their works to others, that it certainly was in no position to tell plaintiffs which of them had original versions of their works submitted to National Geographic, and that Mr. Soni's assertion that he had produced all of the requested fee agreements was demonstrably inaccurate. Id.
ProQuest listed a number of plaintiffs by name in respect of whom they had received no fee agreements.
On October 28, 2002, the Court held a hearing on this and other discovery disputes among the parties. The following colloquy and order ensued:
These included the refusal of one of the plaintiffs to appear for a deposition at the office of a court reporter in Napa, California, because Mr. Soni insisted that he be deposed at his home elsewhere in Napa. See Tr., Oct. 28, 2002, at 35-37.
"THE COURT: * * * We go to Mr. Cirino's [counsel for ProQuest] happy circumstances, ProQuest's [sic] requests. It seems to me there were the following issues:
"First of all, there were document requests to the plaintiffs, the first being documents pertaining to the licensing of each allegedly infringed work; that is, licensing to others original versions of each [of the] allegedly infringing [sic — infringed] works submitted to the National Geographic and fee agreements with the plaintiffs' firm.
"Now, my understanding was that there was no relevancy or other substantive objection to this. Is that right, Mr. Soni?
"MR. SONI: I don't believe there is objections to any of those three [i.e., the three document requests set forth in Mr. Cirino's October 17, 2002 letter, Cirino Decl. Ex. 19].
"THE COURT: As to those three, the plaintiffs are directed to produce any responsive documents no later than 10 calendar days from today." Tr., Oct. 28, 2002, at 37-38.
The date for compliance thus was November 7, 2002.
Plaintiffs' Response to the Order
By the close of business on November 7, 2002, plaintiffs had not produced any documents pursuant to the order save for copies of two fee agreements that they had produced previously. On November 11, 2002, ProQuest wrote to Mr. Soni, noted the failure to comply with the October 28 order (the "Order"), and requested compliance by the end of the following day. Cirino Decl. Ex. 20.
On November 12, 2002, Peter Marcus, Esq., of Mr. Soni's firm wrote to ProQuest's counsel. While the letter addressed a number of other discovery disputes between the parties, it ignored the Order and ProQuest's demand that plaintiffs comply with it. Instead, it concluded with the following sentence: "If there are any other documents that you believe are still outstanding, please advise so that we can determine whether their production is warranted." Cirino Decl. Ex. 21. This bit of stonewalling caused ProQuest again to request the Court's intervention by letter dated November 13, 2002, which the Court endorsed as follows: "Defendants may move for sanctions." Id. Ex. 22.
On November 15, 2002, Mr. Soni wrote to the Court. He denied ProQuest's accusation that he was ignoring the Court's order. He went on to assert that "[d]efendants appear intent on continuing to keep Plaintiffs in the dark as to what they are seeking" and that he was "aware of no written order" from the October 28 hearing and then suggested lack of recollection regarding any discussion on that occasion of the requested documents. Id. Ex. 23. Later in his letter, however, he specifically addressed the three categories of documents that the Court ordered produced. He professed his belief that he had produced all fee agreements with his firm, although he did not respond to ProQuest's statement that no agreements had been produced for a number of plaintiffs whom ProQuest had identified by name. He claimed that he was doing his best to obtain the licensing documents and original works. Id. at 2. But he made no effort to explain why these documents — which had been requested many months earlier — had not been produced as ordered apart from a conclusory suggestion that some of them "would be 20-30 years old" and that some plaintiffs "are sick and have been hospitalized." Id. These excuses have turned out to be poor indeed. In fact, although plaintiffs submitted a number of affirmations in response to the motion for sanctions, not one of them repeated these purported justifications.
On November 26, 2002, defendants took the deposition of plaintiff Kris Lee, who testified as follows:
"Q. * * * Have you ever been asked to search for documents or other materials in connection with this case? A. No.
"Q. Directing your attention to page 4 of Kris Lee Exhibit 8, do you see a heading entitled `Request Number 5?' A. Yes.
"Q. And that request says, `Provide a copy of the version of each of your allegedly infringed works that you actually submitted to National Geographic prior to any changes, edits or publication/distribution by National Geographic.' My question is, you testified earlier about the two slides that depict the photographs in your published article in Kris Lee Exhibit 5; correct? A. Yes, sir.
"Q. So you are in possession of the copies of the versions of these photographs that you actually submitted to National Geographic; isn't that correct? A. Yes.
"Q. How long would it take you to locate those slides? A. If I were at home?
"Q. Yes. A. About three minutes.
"Q. Has anyone ever asked you to locate and gather those slides? A. No."
* * *
"Q. Can you explain how that sentence ended up in this document entitled, `Plaintiff Kris Lee's Response to Request for Production of Documents Propounded by the Proquest Defendants, Set One?' A. No. I can't answer that." Id. Ex. 26, at 58-60.
Nor was Ms. Lee alone. Plaintiffs Carlo Bertelli, Klaus Guldbrandsen and Jay Maisel testified in mid-November 2002 — after the date of the Order — that they had not gathered, searched for, or been asked to search for, respectively, any documents since earlier sessions of their depositions, all of which antedated the Order. Id. Ex. 27.
The Present Motion
ProQuest moved for sanctions on December 6, 2002, on the basis of the showing summarized above. Plaintiffs' response takes a number of tacks, but may be summarized as follows:
First, plaintiffs maintain that all written fee agreements between plaintiffs and The Soni Law Firm have been produced. Soni Aff. ¶ 14.
Second, Mr. Soni admits that he never sent the document requests to his clients. He claims, instead, that in July 2002 he "distill[ed] the very extensive requests by Defendants into understandable questions and requests for documents" and communicated this distillation. Id. ¶ 4; see also id. ¶¶ 10-11 (addressing deposition testimony given by plaintiffs who did not recall seeing the formal responses to the documents requests). He invoked the attorney-client privilege, however, to preclude any inquiry into just what he communicated to his clients. Pl. Mem. at 1.
Third, Mr. Soni does not contend that he communicated the Order to his clients or made any effort, beyond whatever he had done previously, to produce the documents that were the subject of the Order.
Fourth, plaintiffs admit that ten of their number are in possession of original versions of photographs submitted to the National Geographic — the production of which was required by the Order — and that those photographs had not been produced by the time plaintiffs filed their opposition to the motion for sanctions. Soni Aff. ¶ 19. One states that he has turned original works over to Mr. Soni's office. Sebastian Aff. ¶ 7. Even these have not been produced.
Fifth, approximately half of the plaintiffs have submitted affirmations in support of Mr. Soni and The Soni Law Firm. The affirmations attest that The Soni Law Firm, in July 2002, sent a list of questions and requested documents and that the affiants provided the requested information to the extent they could do so. All but one, however, are silent as to what was requested and provided. Several admit that the affiants possess original works that were submitted to the National Geographic — the production of which was required by the Order — and now, belatedly, offer to make them available. Kenny Aff. ¶ 6; Sebastian Aff. ¶ 7; Ursillo Aff. ¶ 5; Menzel Aff. ¶ 6; Starck Aff. ¶¶ 6-7; Stone ¶ 6. Further, not one of the affirmations indicates that Mr. Soni or his firm ever communicated the substance of the Order to the affiants or sought any documents from the affiants at any point after the summer of 2002.
Kris Lee stated that she and her husband were asked for original works submitted to the National Geographic. K. Lee Aff. ¶ 8. This contradicted her deposition testimony.
Most of these plaintiffs stated that they remembered that they have originals of works they submitted to the National Geographic when asked about that at their depositions. This implies that they were not asked for originals by Mr. Soni or his firm, as none of them has offered any reason why he or she would not have remembered possessing originals if the lawyers had so inquired.
Sixth, the record with respect to plaintiffs' possession of unproduced documents regarding licensing of the works is a mess. Mr. Soni claims that twenty of the plaintiffs "have not had the originals and could not license them as a result; have not licensed the works at issue; or have not been able to locate documents showing licensing history either because documents no longer exist, are lost or cannot be compiled" and that "[i]t is believed that Stone also does not have [such] documents. . . ." Soni Aff. ¶ 16. But the basis of Mr. Soni's alleged knowledge with respect to most of these plaintiffs is unclear. Also unclear is why works could not have been licensed without originals as long as the photographers had duplicate slides or negatives or why some of the plaintiffs cannot "compile" the documents, whatever that means.
Discussion The Relevant Standards
Plaintiffs seek sanctions on three grounds: (1) Rule 37(b)(2), (2) 28 U.S.C. § 1927, and (3) the inherent power of the court. It is useful to set out the standards governing these possible bases for action.
Rule 37(b)(2) permits the imposition of sanctions when a party "fails to obey an order to provide or permit discovery." Such sanctions may be imposed for noncompliance with a court's oral orders. Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1363 (2d Cir. 1991); Jones v. Uris Sales Corp., 373 F.2d 644, 647-48 (2d Cir. 1967); 7 MOORE'S FEDERAL PRACTICE § 37.42[3] (2000). Noncompliance brings Rule 37 into play notwithstanding a lack of wilfulness or bad faith, although such factors "are relevant . . . to the sanction to be imposed for the failure." 8A CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2283, at 608 (1994). See generally Societe Internationale v. Rogers, 357 U.S. 197 (1958) (involving the determination of the proper penalty where a party does not comply with a production order); FED. R. CIV. P. 37, advisory committee note, 1970 amendment; 7 MOORE'S FEDERAL PRACTICE § 37.50[2][b] (stating that a "finding of willfulness or contumacious conduct is not necessary to support sanctions that are less severe than dismissal or entry of a default judgment"). Rule 37 sanctions, moreover, may be imposed on counsel as well as on parties. Id. § 37.41; see FED. R. CIV. P. 37(b)(2).
To impose sanctions under either 28 U.S.C. § 1927 or the inherent power of the court, the trial court must find that the offending party or attorney "acted in bad faith, vexatiously, wantonly, or for oppressive reasons." Revson v. Cinque Cinque, P.C., 221 F.3d 71, 78 (2d Cir. 2000) (internal quotation marks and citation omitted). Its behavior must lack any colorable basis. Id. at 78-79.
In any case, the district court enjoys broad discretion in determining whether to impose sanctions and, if so, their nature.
Application
Although the record on this motion is substantial and plaintiffs' papers confused and confusing, several pertinent facts are clear and, indeed, undisputed:
1. Mr. Soni never sent ProQuest's document request to his clients, and he has refused to produce whatever "distillation" he did send. He thus has left us guessing as to just what the clients were asked to produce in the first place.
2. Whatever justification there may have been for furnishing a "distillation" when ProQuest first served its document request did not exist with respect to the Court's October 28, 2002 order. That order required plaintiffs to produce, on or before November 7, 2002, the three groups of documents enumerated in ProQuest's October 17 letter:
(a) "[A]ll documents relating to the licensing of each work."
(b) "[T]he original versions of each work submitted to National Geographic."
(c) "[T]he fee agreements between each plaintiff and The Soni Law Firm or any of its agents or representatives." Cirino Decl. Ex. 19.
There was nothing complex or difficult about the direction.
3. Neither Mr. Soni nor the plaintiffs suggest that Mr. Soni or his firm communicated the Court's order to the plaintiffs between October 28 and the filing of the motion for sanctions, if indeed they did so thereafter.
4. A number of the plaintiffs possessed original versions of works submitted to National Geographic, the production of which was required by the Order. None was produced prior to the filing of the motion for sanctions. Indeed, ProQuest has represented, without contradiction, that none had been produced by the date of ProQuest's reply brief, January 3, 2003. ProQuest Reply Mem. at 8.
5. The record still is not clear as to whether plaintiffs possess or control unproduced documents falling into categories (b) and (c) enumerated above in paragraph 2.
Sanctions Against Individual Plaintiffs
In considering the sanctions question, it is important to keep in mind that the basis for ProQuest's motion is the failure to comply with the Order, not whatever went before. There is no evidence that Mr. Soni even communicated the Order to his clients. Thus, there is no present basis for concluding that there was any wilful or bad faith noncompliance with the Order by these plaintiffs. This precludes any sanctions under Section 1927 or the inherent power of the Court, as well as dispositive sanctions under Rule 37(b)(2), against them. Moreover, in all the circumstances, it appears that the responsibility for the noncompliance rests predominantly and perhaps entirely on Mr. Soni and his firm. So lesser sanctions against the individual plaintiffs, in the Court's view, are not called for on the present record.
Sanctions Against Counsel
Mr. Soni presents a different case. There is no evidence that he communicated the Court's order to his clients, much less that he made any serious effort between the date of the Order and the filing of the sanctions motion to comply with it. Indeed, his response to ProQuest's efforts to secure compliance was the sort of "rope-a-dope" technique that helped make Muhammad Ali famous. First, his associate, Mr. Marcus, responded to ProQuest's demand for compliance with the entirely disingenuous request that ProQuest advise the Soni firm "[i]f there are any other documents that you believe are still outstanding" so it could "determine whether their production is warranted," this in the face of a clear and uncomplied with court order requiring production. Then Mr. Soni told the Court, also quite disingenuously, that he was unaware of any "written order." But, later in his letter, he betrayed clear awareness of the exact terms of the oral order, and he finally offered the excuse that some of the documents were old and some of the plaintiffs had been hospitalized. This excuse was not borne out by the affirmations that he subsequently submitted in opposition to the sanctions motion and in any case would have been preposterous if, as Mr. Soni evidently would have the Court believe, he had asked the plaintiffs for these documents months before in the "distillation" that he has refused to produce.
In all the circumstances, the Court finds Mr. Soni responsible for the plaintiffs' failure to comply with the Order because the failure to produce the original works in plaintiffs' possession pursuant to the Order was the product of Mr. Soni's failure to communicate the Order to his clients. The Court, for the present, declines to rely on its impression that Mr. Soni has acted in bad faith and willfully, as such a finding is unnecessary under Rule 37(b)(2) and the Court believes that a further inquiry into state of mind, a sine qua non for sanctions under Section 1927 or the inherent power of the court, would be a time consuming and collateral sideshow, the need for which is not clear at this time. The remedial and punitive purposes of sanctions would be served adequately for the present by requiring Mr. Soni to pay the reasonable attorney fees and costs incurred by ProQuest in obtaining the Order and in bringing this motion. Moreover, the Court will take appropriate steps to ensure that the Order now is complied with.
The full scope of noncompliance is not entirely clear in light of the unsatisfactory state of the record with respect to the licensing documents and fee agreements.
Conclusion
For the foregoing reasons, ProQuest's motion for sanctions is granted to the following extent and otherwise denied:
1. Surjit P. Soni, Esq., shall pay to ProQuest the reasonable attorney fees and costs incurred by ProQuest in obtaining the Order and in bringing this motion. If ProQuest and Mr. Soni cannot agree on the amount, ProQuest may file a motion, not later than February 17, 2003, before the Magistrate Judge assigned to fix the amount.
2. Each plaintiff is directed to produce to defendants, on or before February 17, 2003, each previously unproduced document the production of which was required by the Order together with an affidavit stating that he or she has received and read this order, has made a diligent search for documents called for by the October 28, 2002 order, that he or she turned all responsive documents over to Mr. Soni and the date or dates on which that was done, and that he or she understands that any future failure to comply with any discovery request or court order may result in the dismissal of his or her case and the imposition of other sanctions.
The Court wishes also to make clear that it will not tolerate any further discovery abuse by any party or attorney. It will not hesitate to impose sanctions, which may be case dispositive, if sanctions are warranted. Further, while the Court has declined at this time to undertake additional proceedings that might be appropriate if it were to contemplate making definitive findings with respect to the motives and good or bad faith of the relevant individuals, it is likely to regard such an inquiry as worthwhile should other difficulties arise. Counsel are admonished also that leave to appear pro hac vice in this Court is a privilege, not a right, and the Court may revoke such leave in appropriate circumstances. See, e.g., United States v. Gutierrez, No. 94 Crim. 565 (LAK), 1994 WL 593773 (S.D.N.Y. Oct. 28, 1994). Finally, the Court notes that this resolution of the motion has made it unnecessary to consider the propriety of the invocation of the attorney-client privilege to block inquiry into precisely what Mr. Soni told his clients was to be produced, whether M r. Soni and his clients had conflicting interests as to whether to invoke the privilege — in that concealment of that information may have been in the interest of one but against the interest of the other — and, if so, the consequences of such a conflict.