United States District Court, E.D. Tennessee, Knoxville
MEMORANDUM AND ORDER
C. Poplin, United States Magistrate Judge.
case is before the undersigned pursuant to 28 U.S.C. §
636, the Rules of this Court, and Standing Order 13-02.
before the Court is Defendants' Motion for Discovery
Sanctions [Doc. 18]. Plaintiffs filed a Response [Doc. 20], and
Defendants filed a Reply [Doc. 23]. The Motion is ripe for
of background, Defendants' request for sanctions relates
to Plaintiffs' Initial Disclosures, wherein Plaintiffs
identified approximately 340 individuals who are likely to
have discoverable information. These individuals, all
represented by Plaintiffs' counsel, are included in a
tolling list-a list of individuals whose claims have been
tolled pursuant to an agreement by the parties. In
Plaintiffs' Initial Disclosures, they 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 Plaintiffs' inclusion of the tolling list
in their Initial Disclosures. Accordingly, for the reasons
more fully explained below, the Court hereby
DENIES Defendants' Motion [Doc.
POSITIONS OF THE PARTIES
move for sanctions against Plaintiffs 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 Plaintiffs.
grounds, Defendants state that on September 11, 2018,
Plaintiffs served them with their 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.
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
Plaintiffs belatedly amended their Initial Disclosures.
Defendants argue that in Plaintiffs' amended Initial
Disclosures, they 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 Plaintiffs reserved
“the right to amend the[ir] disclosures to add
additional witnesses.” Defendants state that they asked
Plaintiffs to confirm that they would not call as witnesses
any person listed on the tolling agreement who is not already
a plaintiff in a lawsuit against Defendants. Plaintiffs
replied that they “do 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.
argue that they are entitled to their attorney's fees and
costs pursuant to Rules 26(g)(3) and 37(c). Defendants submit
that Plaintiffs' 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 Plaintiffs' 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
also contend that sanctions are warranted under Rule 37(c)
because Plaintiffs did not timely supplement their 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 Plaintiffs'
Initial Disclosures and have incurred substantial costs based
on their reliance.
respond that in their Complaint, they allege that Defendants
created a common scheme and practice to misrepresent material
facts and/or made omissions to timeshare purchasers and
current owners. Plaintiffs state that in their Initial
Disclosures, they included the tolling list, identifying
every client of Plaintiffs' counsel, which was compiled
when plaintiffs began filing lawsuits against Defendants.
Plaintiffs state that Defendants did not want the negative
publicity, so they asked Plaintiffs' counsel to stop
filing lawsuits, and Defendants agreed to toll the statute of
limitations for such individuals. Plaintiffs state that after
they served their Initial Disclosures, Defendants randomly
picked five to seven individuals on the tolling list to
depose in each case where Plaintiffs' counsel had
lawsuits pending. Plaintiffs state that Defendants noticed
106 depositions, spanning six (6) months with at least two
months booked on almost every single business day. Plaintiffs
state that some of the individuals were subpoenaed more than
one hundred (100) miles away from their home.
submit 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, Plaintiffs told Defendants
that they deem it appropriate to remove these individuals
named in the subpoenas from the discovery disclosures and
that Plaintiffs would not call such individuals at trial.
Plaintiffs state that the parties also conferred via
telephone on October 4, 2018, wherein Plaintiffs 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, Plaintiffs amended
their Initial Disclosures. Plaintiffs state that despite
serving their amended disclosures, Defendants continued to
serve subpoenas. Plaintiffs asked Defendants why they
continued to set depositions and later told Defendants that
Plaintiffs' counsel had conflicts with the deposition
dates. Plaintiffs state that subsequently, Defendants sent a
letter stating that Plaintiffs' 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 Plaintiffs adopted.
argue that Defendants' Motion should be denied.
Plaintiffs state that in Defendants' cover letter,
Defendants acknowledge that they were not aware of any
relevant information that the subpoenaed witnesses possessed.
Plaintiffs state that Defendants never participated in a meet
and confer to discuss Plaintiffs' Rule 26 disclosures and
that Plaintiffs amended their Initial Disclosures. Plaintiffs
argue that the subpoenas were sent to current clients of
their attorneys and that Defendants are not permitted to
address these individuals without consultation from
Plaintiffs' counsel. Further, Plaintiffs state that had
Defendants consulted with Plaintiffs' counsel, an
agreement to produce the witness may have been reached.
Plaintiffs state that Defendants' request for fees is
unsupported and that it does not comply with Tennessee law.
Further, Plaintiffs maintain that they timely supplemented
their Initial Disclosures. Finally, Plaintiffs state that
Defendants' Motion should be denied as there was no
good-faith conferral regarding this issue.
filed a Reply, arguing that they are entitled to seek
discovery from witnesses identified by Plaintiffs. Further,
Defendants assert that they are entitled to recover expenses
incurred for preparing and serving the subpoenas and notices
Court has considered the parties' filings in this matter,
and for the reasons further explained below, the Court finds
the Motion [Doc. 18] not well taken, and it
that the parties' dispute relates to Plaintiffs'
Initial Disclosures, the Court will begin with Rule 26(a)(1).
Specifically, Rule 26(a)(1) provides, in pertinent part, as
(1) Initial Disclosure.
(A) In General. Except as exempted
by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by
the court, a party must, without awaiting a discovery