Dragon Yu Bag Mfg. Co. v. Brand Science, LLC
2012 U.S. Dist. LEXIS 51864
S.D.N.Y.2012Background
- Dragon moves to sanction BSL for failing to produce its CEO Abe Chehebar and former president Morris Chehebar for noticed depositions and for not making a Rule 30(b)(6) witness available; seeks preclusion of Chehebars’ testimony, Rule 30(b)(6) witness testimony, and post-Discovery Documented evidence.
- depositions were noticed in Oct 2011 for Nov 1 and Nov 30, 2011; dates fixed for Jan 2012 after 5 communications with BSL; no production or attendance confirmations by BSL.
- Dragon repeatedly sought deposition dates and document production before the Jan 6, 2012 fact-discovery deadline and after; BSL remained largely unresponsive.
- BSL argues Chehebars’ noncompliance was not willful due to personal hardship and business distress; Chehebars provided affidavits and indicated willingness to appear later; BSL had ceased operations and shifted assets.
- Court finds Rule 37(d) sanctions appropriate; orders Chehebars and any Rule 30(b)(6) witness to be deposed before hearing, awards expenses to Dragon, and limits documentary evidence at the May 3 hearing; outlines potential further sanctions if noncompliance persists.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sanctions under Rule 37(d) are warranted | Dragon argues willful noncompliance by Chehebars/BSL | BSL asserts nonwillful hardship and scheduling issues | Yes, sanctions warranted under Rule 37(d) |
| Whether preclusion of testimony is appropriate | Preclusion would prevent Dragon from challenging merits | Preclusion is too harsh given centrality of testimony | Preclusion not imposed; lesser sanctions preferred |
| What specific sanctions should apply | Monetary expenses and deposition of Chehebars prior to hearing | Monetary sanctions and compelled deposition are sufficient | Monetary sanctions plus compelled depositions ordered; limits on late-produced documents |
| Whether Rule 30(b)(6) deposition should be allowed or limited | A Rule 30(b)(6) witness is required for BSL’s positions | Chehebars may serve as Rule 30(b)(6) witnesses due to reliance on them | Rule 30(b)(6) witness to be deposed if designated; Chehebars may sit for deposition as witnesses |
| Whether deadlines and restrictions on documents are proper | Depositions and production must occur before hearing; late documents barred | Document production already partially completed; some late documents addressed | Documents not produced before Jan 6, 2012 may be excluded at hearing; depositions to occur before hearing |
Key Cases Cited
- Outley v. City of New York, 837 F.2d 587 (2d Cir. 1988) (limits on preclusion as a drastic sanction require careful consideration of consequences)
- Nieves v. City of New York, 208 F.R.D. 531 (S.D.N.Y. 2002) (factors for sanctions include willfulness, efficacy of lesser sanctions, duration, warnings)
- Reilly v. Natwest Markets Grp., Inc., 181 F.3d 253 (2d Cir. 1999) (preclusion considerations and sanctions for non-compliance with discovery)
- Update Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67 (2d Cir. 1988) (purpose of sanctions includes deterrence and ensuring compliance)
- New York v. Green, 420 F.3d 99 (2d Cir. 2005) (strong preference for resolving disputes on the merits; avoid unjust results)