Naviant Marketing Solutions, Inc v. Larry Tucker, Inc. Jeffrey W. Herrmann

PRECEDENTIAL
Filed August 8, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-3201
NAVIANT MARKETING SOLUTIONS, INC.
v.
LARRY TUCKER, INC.
JEFFREY W. HERRMANN; ROBERT D. ZATORSKI;
COHN LIFLAND PEARLMAN HERRMANN & KNOPF LLP,
Appellants
Appeal from the United States District Court
For the District of New Jersey
D.C. No.: 00-cv-6036
District Judge: Honorable Eduardo C. Robreno
Argued: July 15, 2003
Before: McKEE, BARRY, and ROSENN, Circuit Judges.
(Filed: August 8, 2003)
Peter S. Pearlman, Esq. (Argued)
Audra DePaolo, Esq.
Cohn Lifland Pearlman Herrmann &
Knopf LLP
Park 80 Plaza West One
Saddle Brook, NJ 07663
Counsel Pro Se For Appellants

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George B. Randolph, III, Esq.
(Argued)
Riley Riper Hollin & Colagreco
240 Daylesford Plaza
Suite 240
Paoli, PA 19301
Counsel for Appellee
OPINION OF THE COURT
ROSENN, Circuit Judge.
This case demonstrates the importance of collegiality and
professionalism among members of the Bar. Collegiality and
professionalism can obviate unnecessary court intervention,
needless expense and fees for clients, and protracted legal
proceedings. Zealous advocacy on behalf of one’s client
does not excuse a belligerent and uncompromising
approach to the discovery process. This appeal arises out of
discovery proceedings that enveloped the underlying
dispute and eventually led to sanctions against defendant
Larry Tucker, Inc. (Tucker) and its attorneys Robert
Zatorski, Esq., and Jeffrey Herrmann, Esq., of Cohn,
Lifland, Pearlman, Herrmann & Knopf, LLP (Appellants).
The District Court made no explicit findings of misconduct
by defense counsel and the record does not support such a
finding. Moreover, the District Court found that counsel for
plaintiff Naviant Marketing Solutions (Naviant) was
overzealous and unreasonable in his approach to discovery.
At no time did plaintiff ’s counsel confer with defense
counsel in good faith prior to a motion to compel discovery,
or motion for contempt or sanctions. Accordingly, we
reverse the District Court’s order sanctioning defense
counsel.
I.
Tucker is a business engaged in direct mail advertising.
Naviant sold a mailing list to Tucker. In November 2000,
Naviant sued Tucker in the U.S. District Court for the
Eastern District of Pennsylvania for $150,000 alleging
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breach of contract.1 Tucker filed various defenses and a
counterclaim, asserting that the list was not supplied on a
timely basis and that it was deficient in quantity and
quality.
On March 2, 2001, Naviant served Tucker with two sets
of interrogatories. Tucker, on the verge of bankruptcy,
informed appellants that it would be unable to provide the
information necessary within thirty days. Cf. Fed. R. Civ. P.
33. Appellants asked Naviant for additional time to comply.
On March 30, 2001, Naviant responded by faxed letter that
it would not consent to any extension of time.2 Tucker
objected to many but not all of the interrogatories and
provided no responsive information before the thirty day
period expired on April 2, 2001. On the next day, Naviant
moved to compel an answer to the interrogatories. Tucker
responded that a shortage of employees had prevented it
from complying, but that it would be able to do so if given
a short additional time period. On April 24, the District
Court granted Tucker ten additional days and declined to
impose sanctions.
On May 3, 2001, Tucker provided answers to the
interrogatories. On May 8, 2001, Naviant faxed appellants
a twenty-page letter demanding more complete answers.
Plaintiff threatened to bring a motion for sanctions the
morning after the next business day unless Tucker
responded to plaintiff ’s satisfaction immediately. On May
10, 2001, Naviant moved for contempt, alleging that Tucker
failed to comply with the Court’s April 24 order. This
1. The District Court had diversity jurisdiction over this suit because the
amount in controversy exceeds $75,000 and the parties are citizens of
different states. 28 U.S.C. § 1332. Naviant is a Delaware Corporation
with its headquarters and principal place of business in Newtown
Square, Pennsylvania. Defendant Larry Tucker, Inc. is a New Jersey
Corporation with its principal place of business in Saddle River, New
Jersey. This Court has appellate jurisdiction because the District Court’s
order sanctioning Tucker and appellants dated July 26, 2002 is a final
order. 28 U.S.C. § 1291.
2. Plaintiff explains that its reason for rejecting Tucker’s request for an
extension of time to respond to the interrogatories was “due to the short
discovery period dictated by the Court.” The court allowed six months for
discovery.
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motion resulted in the sanctions that are addressed in this
appeal.
After the motion was filed, the discovery disputes
continued, focusing mostly on Naviant’s April 24, 2001
document production requests. On June 1, 2001, the Court
directed counsel for both parties to meet to resolve in good
faith Naviant’s discovery requests. This meeting took place
on June 18, 2001, but the parties were unable to reach an
accord. On July 12, the Court scheduled a hearing on the
discovery disputes and ordered Naviant to file a specific list
of its concerns by July 18. The Court gave Tucker until
July 23 to respond. On July 19, 2001, Tucker served
supplemental answers to interrogatories and produced
additional documents. Naviant alleged that the answers
were non-responsive, particularly as to the contention
interrogatories, and also alleged that Tucker’s answer to
Naviant’s document production request was non-
responsive.
The District Court heard the discovery disputes on July
26, 2001. Appellants explained that the delay in answering
Naviant’s interrogatories resulted from Tucker’s serious
financial difficulties. The District Court accepted this
explanation, stating that “I don’t think there’s going to be a
trial here. I think that this organization is going out of
business and it’s going to file a bankruptcy.” The District
Court observed that “it appears that the defendant is either
unwilling or unable to comply with the discovery requests
concerning the counterclaim.” The Court severed the
counterclaim, a move it described as “the least severe
sentence that can be imposed here.” The District Court did
not discuss the manner in which Tucker’s answers to the
interrogatories were insufficient. The District Court was
sympathetic to appellants’ assertion that defendant, rather
than defense counsel, was to blame for Tucker’s failure to
comply with the Court’s discovery orders. The District
Court acknowledged that “I guess counsel is saying that
you don’t have the resources in the organization to come up
with these documents, that you can’t get blood out of a
stone. . .”
The District Court granted in part Naviant’s motion for
contempt. Trial on Naviant’s complaint was scheduled for
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October 1, 2001. The Court held Naviant’s request for
financial sanctions against Tucker and appellants in
abeyance until the end of the trial. The Court gave Tucker
ten days to supplement its answers to the contention
interrogatories. On August 3, Tucker submitted its third set
of answers to the contention interrogatories and withdrew
some of its affirmative defenses. On August 13, 2001,
Naviant again filed a motion for contempt. Appellants filed
a certification that the requested documents had been
produced but complained that Naviant had not made good
faith efforts to work out discovery disputes with defense
counsel prior to filing its motions for contempt.
On August 22, 2001, the District Court considered
Naviant’s second motion for contempt and sanctions and
found that Tucker acted in bad faith by failing to comply
with the Court’s April 24 and July 25 orders regarding
document production. Accordingly, the District Court
granted Naviant’s second motion for contempt and
sanctions.3 The District Court’s ruling does not expressly
find any misconduct by defense counsel. On September 12,
2001, as the rest of the nation paused to mourn the tragic
events of the prior day, Naviant filed a third contempt
motion and a motion for attorneys’ fees under Rule 11 and
the Court’s August 22 order.
On September 20, appellant Herrmann wrote a letter to
Naviant’s counsel, stating that Larry Tucker would be in
Colorado on September 24, 2001 and requested that he
reschedule a deposition scheduled for that date. In the
letter, appellants suggested two possible alternative dates
for the deposition. On September 20, Naviant responded by
letter stating that unless Tucker obtained a protective
order, the deposition would proceed as planned
notwithstanding Herrmann’s letter stating that Tucker
would not be able to attend at that time. On September 24,
2001, Naviant’s counsel made various statements about
Larry Tucker not arriving and not having called. However,
the transcript of the abortive September 24, 2001
deposition makes no mention of Herrmann’s September 21,
3. The Court stated that its authority was based on Fed. R. Civ. P. 16
and 37 and the Court’s inherent power.
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2001 letter or Naviant’s response. Likewise, Naviant made
no mention of this exchange of letters in its appellate briefs
and conspicuously failed to mention the letters during oral
argument before this Court. On September 27, Naviant
supplemented its third motion for contempt to include its
objection that Larry Tucker had not attended the scheduled
deposition.
In early October, Tucker sought leave to amend its
answer to Naviant’s complaint and the Court postponed
trial until December. By order dated October 2, the Court
struck Tucker’s remaining affirmative defenses and
permitted Naviant to serve additional interrogatories. On
October 24, 2001, the Court granted in part and denied in
part Naviant’s third motion for contempt and sanctions. On
November 27, the Court awarded “attorneys’ fees and costs
caused by the failure of defendant’s 30(b)(6) deponent to
appear.” That order does not make any specific findings
regarding inappropriate or sanctionable conduct on the part
of Tucker’s attorneys.
The underlying case was tried on the merits in early
December 2001. The court awarded Naviant $165,203.66.
Appellants sought leave to withdraw from the case and the
prosecution of the counterclaim, which had been severed
and was still pending. Naviant opposed appellants’ motion
to withdraw and the Court denied appellants’ request. On
June 26, 2002, the Court permitted appellants to withdraw
from the case and dismissed Tucker’s counterclaim with
prejudice because it had failed to retain substitute counsel
and could not prosecute the counterclaim pro se. The issue
of sanctions still remained. On July 16, 2002, the District
Court adjudicated Naviant’s claims and then revisited its
July 25, 2001 order. The Court did not make any additional
findings regarding sanctionable conduct by appellants.
However, the Court awarded sanctions against both Tucker
($10,087) and appellants, its lawyers ($6076).
These figures represented a 50% reduction in the amount
of the award requested by Naviant because of Naviant’s
overzealous approach to discovery. Appellants timely
appealed the sanctions as to themselves, but not as to
Tucker.
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II.
The sole issue in this appeal is whether the District Court
abused its discretion in imposing sanctions against defense
counsel. Naviant argues that $6076 in sanctions against
attorneys is a light sanction and, therefore, the District
Court’s discretion is particularly broad here. Because the
District Court could have summarily dismissed defendant’s
case, Naviant reasons, the Court’s decision “merely [to]
sanction[ ] the Appellant, as well as their client, for certain
counsel fees incurred by Plaintiff Naviant” should be
reviewed deferentially. However, any sanctions imposed on
attorneys is a matter of serious concern that extends well
beyond the monetary issues involved.
This Court reviews a District Court’s decision on a
motion for sanctions under Rule 37 for abuse of discretion.
In re TMI Litig., 193 F.3d 613, 721 (3d Cir. 1999). A District
Court must make factual findings that are sufficient to
support its conclusions of law. See Ripley v. United States,
220 U.S. 491, 496 (1911) (explaining that trial courts have
a clear duty to make explicit findings and cannot merely
offer “ambiguous expression[s] susceptible of being
construed one way or another”). Naviant’s unpersuasive
argument that the District Court was not required to make
explicit findings hinges largely on Naviant’s extreme and
unsupported interpretation of the abuse of discretion
standard of review.
Under Rule 37, an attorney may only be sanctioned for
personally violating a discovery order or for advising a client
to do so. The District Court did not make any explicit
statements describing misconduct by defense counsel
rather than the defendant. If anything, the District Court
expressed sympathy for appellants’ circumstances when it
stated that “it may be that a lawyer can’t represent a party
that — who will not cooperate and you are — I’ll give you
the benefit of the doubt here, that you’re trying to do your
best under very difficult circumstances.”
We are unpersuaded by Naviant’s assertion that “the trial
court repeatedly noted its findings regarding the Appellants’
sanctionable conduct.” In response to our inquiry at oral
argument for the District Court’s specific findings of
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appellants’ sanctionable conduct, George B. Randolph,
Naviant’s counsel, pointed to the District Court’s opinion
wherein it stated that “defendant and counsel’s conduct
during the discovery phases was not substantially justified
and there are no circumstances which make this fee award
unjust.” This conclusory statement does not describe any
particular acts or omissions by appellants that constituted
misconduct and Randolph could point to none of record.
The discovery phase of this trial involved multiple
documents, phone calls, hearings, and orders. We are not
provided with any details as to when and in what way
counsel’s conduct justified sanctions.
Naviant suggests that when the District Court awarded
attorneys’ fees to Naviant for Larry Tucker’s failure to
appear at a scheduled deposition, the District Court meant
to imply that defense counsel acted improperly. In its brief,
plaintiff ’s counsel inserted “[i.e. Appellants’]” after the word
“Defendant’s” in reference to the Court’s opinion in the
expectation that the word “defendant’s” would be read to
mean “defense counsel’s.” This interpolation is baseless and
beguiling.4 Counsel unpersuasively argues also that the
District Court’s order granting Naviant’s motion for
contempt and sanctions due to Tucker’s failure to comply
with the April 24 and July 25 court orders was tantamount
to a finding of defense counsel’s misconduct. He further
suggests that the Court’s July 25, 2001 decision to hold in
abeyance consideration of financial penalties against
Tucker and appellants somehow implies a finding of
possible misconduct by appellants. None of the examples
cited by Naviant’s counsel suffice as findings of
sanctionable conduct by appellants.
The District Court also failed to make any findings with
regard to the specific deficiencies of Tucker’s discovery
responses. In the absence of specific findings as to which
answers were deficient and in what way, it is impossible to
discern whether the deficiencies resulted from defense
counsel’s sanctionable acts or omissions.
4. Also, the District Court did not sanction defense counsel for failure to
attend the deposition. This was a separate and distinct discovery motion.
The Court awarded sanctions against appellants solely with regard to the
interrogatory answers.
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III.
Rule 37(a) requires that a party moving to compel
discovery sanctions must submit to the court “a
certification that the movant has in good faith conferred or
attempted to confer with the party not making the
disclosure in an effort to secure the disclosure without
court action.” Fed. R. Civ. P. 37(a)(2)(A). Thus, before
moving to compel discovery, “a party must first prove that
it sought discovery from its opponent.” Petrucelli v.
Bohringer & Ratzinger, 46 F.3d 1298, 1310 (3d Cir. 1995).
Local Rule 26.1(f) states that “No motion or other
application pursuant to the Federal Rules of Civil Procedure
governing discovery or pursuant to this rule shall be made
unless it contains a certification of counsel that the parties,
after reasonable effort, are unable to resolve the dispute.”
E.D. Pa. R. 26.1(f). Naviant’s counsel failed to make a good
faith effort to resolve discovery disputes prior to invoking
court intervention.
Naviant’s counsel contended at oral argument and in his
brief that he “repeatedly” conferred with defense counsel in
an effort to resolve the discovery dispute. We are unable to
discover in the record before us that he ever made a good
faith effort to confer with defense counsel to resolve
discovery disputes. When defense counsel initially
requested an extension of time to answer Naviant’s
interrogatories, Naviant’s counsel summarily refused. The
day after the thirty-day period expired, Naviant moved the
Court to compel compliance. The Court granted an
additional ten days for Tucker to comply.
On May 3, 2001, Tucker provided answers to the
interrogatories. At 4:30 p.m. on Tuesday, May 8, 2001,
Naviant’s counsel faxed appellants a twenty-page letter
demanding more complete answers. The letter contained
the following ultimatum: “If Naviant cannot get those full
and complete answers by the end of this week (and even
more importantly, your written confirmation by end of day
tomorrow, May 9, 2001 to provide those full and complete
answers by the end of this week), then Naviant will file a
Motion for Contempt with the Court.” In other words, at the
end of the day on Tuesday, Naviant gave Tucker until the
end of the day Wednesday to inform Naviant whether it
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would respond to its twenty-page list of concerns by Friday.
Moreover, the twenty-page list of demands themselves may
not have been reasonable and it may have been impossible
for Tucker to comply within the timetable imposed by
Naviant’s counsel. The District Court found that “plaintiff ’s
counsel, in its zeal, at times proliferated and complicated
the discovery disputes through numerous and lengthy
submissions and with an approach best-characterized as
‘shoot first and find out later.’ ”
There was hardly a “good faith . . . attempt[ ] to confer
with the party not making the disclosure in an effort to
secure the disclosure without court action.” Fed. R. Civ. P.
37(a)(2)(A). In Cannon v. Cherry Hill Toyota, 190 F.R.D. 147
(D. N.J. 1999), the Court held that sending a fax and
demanding a response by the next business day and
threatening to file a motion to compel is a token effort
rather than a sincere effort. Id. at 153. Likewise, the
District Court here explicitly found that “plaintiff and its
counsel’s responses [were] not always commensurate with
defendant’s violations.” The District Court also found that
“on several occasions, plaintiff ’s counsel refused to discuss
matters on the telephone with defendant’s counsel and
sought the intervention of the court without first seeking to
work out the conflict with defense counsel.”
Naviant’s counsel’s alternative argument that good faith
conferral was not required after the District Court’s April
24, 2001 order was in place also fails. This argument is
based on the difference in language between Rule 37(a) and
(b). Rule 37(a) deals with motions for orders compelling
disclosure and contains an explicit requirement that the
moving party certify its good faith efforts at conferral. Rule
37(b) addresses failure to comply with discovery orders and
does not contain an explicit certification requirement.
There may be circumstances in which a party’s clear
failure to comply with a Court order to turn over a specific
item by a date previously specified by the Court obviates
the requirement that the moving party confer with its
contumacious adversary prior to moving for contempt or
sanctions. See, e.g., Royal Maccabees Life Ins. Co. v.
Malachinski, 2001 U.S. Dist. LEXIS 3362, at *28 (N.D. Ill.
March 19, 2001); Get-A-Grip, II, Inc. v. Hornell Brewing Co.,
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2000 U.S. Dist. LEXIS 11961, at *9-*10 n.5 (E.D. Pa. Aug.
8, 2000). However, in the instant case, Tucker’s compliance
was open to interpretation because it timely responded to
the court-ordered interrogatories and Naviant’s objection
was that the answers were not sufficiently full and
complete. Moreover, Naviant never made a good faith effort
to confer with counsel before or after the District Court’s
April 24, 2001 order. Finally, the language of Local Rule
26.1(f) is broader than that of Federal Rule 37(b) because it
applies generally to discovery motions and applications.
E.D. Pa. R. 26.1(f). Thus, the Local Rule also required
certification of conferral here.
IV.
The District Court’s July 26, 2002 order sanctioning
appellants will be reversed. Cost taxed against appellee.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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