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Helmly v. Wyndham Worldwide Operations, Inc.

United States District Court, E.D. Tennessee, Knoxville

May 15, 2019



          Debra C. Poplin j United States Magistrate Judge

         This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court, and Standing Order 13-02.

         Now before the Court is Defendants' Motion for Discovery Sanctions [Doc. 19].[1] Plaintiff filed a Response [Doc. 21], and Defendants filed a Reply [Doc. 24]. The Motion is ripe for adjudication.

         By way of background, Defendants' request for sanctions relates to Plaintiff's Initial Disclosures, wherein Plaintiff identified approximately 340 individuals who are likely to have discoverable information. These individuals, all represented by Plaintiff's counsel, are included in a tolling list-a list of individuals whose claims have been tolled pursuant to an agreement by the parties. In Plaintiff's Initial Disclosures, she identified, “Every person on the tolling list between our attorneys and Wyndham, ” stating that such persons “have knowledge of the common scheme and the tactics, misrepresentations, and lies told by sales agents to get people to buy and upgrade.” Defendants request sanctions for Plaintiff's inclusion of the tolling list in their Initial Disclosures. Accordingly, for the reasons more fully explained below, the Court hereby DENIES Defendants' Motion [Doc. 19].


         Defendants move for sanctions against Plaintiff pursuant to Federal Rules of Civil Procedure 26 and 37. Defendants state that if the Court declines to award sanctions pursuant to Rules 26 or 37, they request that the Court utilize its inherent authority to sanction Plaintiff.

         For grounds, Defendants state that on September 11, 2018, Plaintiff served them with her Initial Disclosures, naming approximately 340 individuals as “witnesses likely to have discoverable information.” Defendants assert that they served notices of deposition and issued subpoenas upon many of the individuals who were identified. Defendants state that they incurred substantial costs related to the preparation and service of the numerous notices and subpoenas, including attorney's fees. The subpoenas were issued in twelve cases pending in this Court, two cases pending in the United States District Court for the Middle District of Tennessee, and three cases pending in the Chancery Court of Sevier County, Tennessee.

         Defendants submit that the subpoenas were issued and depositions were noticed for many witnesses and that the subpoenas were in the hands of the process server but had not been served when Plaintiff belatedly amended her Initial Disclosures. Defendants argue that in Plaintiff's amended Initial Disclosures, she continued to list a broad identification of potential witnesses, such as “any person identified in any deposition, answer to an interrogatory, or document produced in this action, ” and Plaintiff reserved “the right to amend the[ir] disclosures to add additional witnesses.” Defendants state that they asked Plaintiff to confirm that she would not call as witnesses any person listed on the tolling agreement who is not already a plaintiff in a lawsuit against Defendants. Plaintiff replied that she does “not and will not include persons on the Tolling Lists who have not filed suit as of this date, as they have no pertinent or discoverable information in the above-referenced cases and will not be called as witnesses in the trial of these actions.” Defendants state that based on these affirmative representations, they agreed to withdraw the subpoenas.

         Defendants argue that they are entitled to their attorney's fees and costs pursuant to Rules 26(g)(3) and 37(c). Defendants submit that Plaintiff's overbroad identification of witnesses likely to have discoverable information was intended to harass Defendants and needlessly increase the cost of litigation by forcing them to incur costs associated with investigating these witnesses and determining the nature and extent of their knowledge, if any. Defendants argue that in reliance upon Plaintiff's signed disclosures, Defendants incurred substantial attorney's fees and expenses to prepare and serve notices of deposition and subpoenas. Defendants submit that the total fees and expenses incurred in issuing 106 subpoenas in seventeen cases is $40, 098.65, which represents a “per subpoena” expense of $378.28.[2]

         Defendants also contend that sanctions are warranted under Rule 37(c) because Plaintiff did not timely supplement her Initial Disclosures upon learning in some material respect that the disclosures were incomplete or incorrect. Finally, Defendants request that the Court issue sanctions under its inherent authority, stating that they relied on Plaintiff's Initial Disclosures and have incurred substantial costs based on their reliance.

         Plaintiff responds that in her Complaint, she alleges that Defendants created a common scheme and practice to misrepresent material facts and/or made omissions to timeshare purchasers and current owners. Plaintiff states that in her Initial Disclosures, she included the tolling list, identifying every client of her counsel, which was compiled when plaintiffs began filing lawsuits against Defendants. Plaintiff states that Defendants did not want the negative publicity, so they asked Plaintiff's counsel to stop filing lawsuits, and Defendants agreed to toll the statute of limitations for such individuals. Plaintiff states that after she served her Initial Disclosures, Defendants randomly picked five to seven individuals on the tolling list to depose in each case where Plaintiff's counsel had lawsuits pending. Plaintiff states that Defendants noticed 106 depositions, spanning six (6) months with at least two months booked on almost every single business day. Plaintiff states that some of the individuals were subpoenaed more than one hundred (100) miles away from their home.

         Plaintiff submits that Defendants included a cover letter with the subpoenas, wherein Defendants acknowledged that the subpoenaed witnesses do not have relevant information. In response to this cover letter, Plaintiff told Defendants that she deems it appropriate to remove these individuals named in the subpoenas from the discovery disclosures and that Plaintiff would not call such individuals at trial. Plaintiff states that the parties also conferred via telephone on October 4, 2018, wherein Plaintiff told Defendants that none of the witnesses named on the tolling list would be called at trial and that the disclosures would be revised accordingly. Subsequently, Plaintiff amended her Initial Disclosures. Plaintiff states that despite serving her amended disclosures, Defendants continued to serve subpoenas. Plaintiff asked Defendants why they continued to set depositions and later told Defendants that Plaintiff's counsel had conflicts with the deposition dates. Plaintiff states that subsequently, Defendants sent a letter stating that Plaintiff's retractions and revisions were not good enough because they contained catch-all provisions. After additional letters were exchanged, Defendants proposed using certain language in the Initial Disclosures, which Plaintiff adopted.

         Plaintiff argues that Defendants' Motion should be denied. Plaintiff states that in Defendants' cover letter, Defendants acknowledge that they were not aware of any relevant information that the subpoenaed witnesses possessed. Plaintiff states that Defendants never participated in a meet and confer to discuss Plaintiff's Rule 26 disclosures and that Plaintiff amended her Initial Disclosures. Plaintiff argues that the subpoenas were sent to current clients of her attorneys and that Defendants are not permitted to address these individuals without consultation from Plaintiff's counsel. Further, Plaintiff states that had Defendants consulted with Plaintiff's counsel, an agreement to produce the witness may have been reached. Plaintiff states that Defendants' request for fees is unsupported and that it does not comply with Tennessee law. Further, Plaintiff maintains that she timely supplemented her Initial Disclosures. Finally, Plaintiff states that Defendants' Motion should be denied as there was no good-faith conferral regarding this issue.

         Defendants filed a Reply, arguing that they are entitled to seek discovery from witnesses identified by Plaintiff. Further, Defendants assert that they are entitled to recover expenses incurred for preparing and serving the subpoenas and notices of depositions.

         II. ANALYSIS

         The Court has considered the parties' filings in this matter, and for the reasons further explained below, the Court finds the Motion [Doc. 19] not well taken, and it is DENIED.

         Given that the parties' dispute relates to Plaintiff's Initial Disclosures, the Court will begin with Rule 26(a)(1). Specifically, Rule ...

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