Quiktech LLC v. H & R Block Enterprise LLC

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IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
QUIKTECH, LLC, §
§
Plaintiff, §
§
V. § No. 3:24-cv-1672-S-BN
§
H&R BLOCK ENTERPRISES LLC, §
§
Defendant. §
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
Background
Through a Motion for Sanctions Pursuant to Rule 37(b)(2)(A) for Failure to
Comply with Court Order [Dkt. No. 38], Defendant H&R Block Enterprises LLC
sought an order under Federal Rule of Civil Procedure 37(b)(2) imposing sanctions
against Plaintiff Quik Tech, LLC for willful failure to comply with this Court’s
September 24, 2025 Electronic Order [Dkt. No. 31] granting Defendant H&R Block
Enterprises LLC’s Motion to Compel Discovery Responses and Request for Sanctions
[Dkt. No. 24]. See Dkt. No. 38.
In that September 24, 2025 Electronic Order, the Court explained that H&R
Block reported that it served its First Set of Interrogatories to Quik Tech, LLC and
First Requests for Production of Documents on Quik Tech on May 5, 2025 and that
Quik Tech has not served any response to these discovery requests. See Dkt. No. 31.
The Court ordered Plaintiff Quik Tech, LLC to, by Thursday, October 2, 2025,
serve on H&R Block’s counsel complete responses (without objections) to all of the
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requests for production in H&R Block’s First Requests for Production of Documents
and produce all unproduced documents and electronically stored information that are
responsive to the requests and that are in Quik Tech’s possession, custody, or control,
in compliance with Federal Rule of Civil Procedure 34(b)’s requirements. See id.
The Court also ordered Quik Tech to, by Thursday, October 2, 2025, serve on
H&R Block’s counsel complete answers (without objections) to all interrogatories in
H&R Block’s First Set of Interrogatories to Quik Tech, LLC, in compliance with
Federal Rule of Civil Procedure 33’s requirements. See id.
Quik Tech did not comply with any of those requirements by October 2, 2025
or, for that matter, October 6, 2025 (when H&R Block filed this sanctions motion) or
October 23, 2025 (when H&R Block filed its reply in support of the sanctions motion)
or November 7, 2025 (when H&R Block filed a Motion for Extension of Time to File
Dispositive Motion [Dkt. No. 45]) or December 15, 2025 (when H&R Block filed a court-
order status report [Dkt. No. 49] and Quik Tech later filed its own status report [Dkt.
No. 50]).
Through its sanctions motion, H&R asked the Court (1) to (a) establish as fact
for purposes of this action that Quik Tech has no evidence to support its claims, under
Rule 37(b)(2)(A)(i), or, in the alternative, (b) prohibit Quik Tech from supporting its
claims or presenting evidence, under Rule 37(b)(2)(A)(ii), or, in the alternative, (c)
strike Quik Tech’s Complaint, under Rule 37(b)(2)(A)(iii), or, in the alternative, (d)
dismiss the action, under Rule 37(b)(2)(A)(v), or, in the alternative, (e) enter default
judgment in favor of H&R Block, under Rule 37(b)(2)(A)(vi), and (2) to award H&R
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Block its reasonable expenses, including attorneys’ fees, caused by Quik Tech’s failure
to comply with the Court’s September 24, 2025 Electronic Order [Dkt. No. 31] and
necessitating both the Motion to Compel Discovery Responses and Request for
Sanctions [Dkt. No. 24] and the Motion for Sanctions Pursuant to Rule 37(b)(2)(A) for
Failure to Comply with Court Order [Dkt. No. 38], under Rule 37(b)(2)(C) and Federal
Rule of Civil Procedure 37(a)(5). See Dkt. No. 38.
The Court, in its December 16, 2025 Memorandum Opinion and Order [Dkt.
No. 52], granted in part and denied in part H&R Block’s Motion for Sanctions
Pursuant to Rule 37(b)(2)(A) for Failure to Comply with Court Order under Federal
Rule of Civil Procedure 37(b)(2) [Dkt. No. 38] and ordered,
under Rule 37(b)(2)(A) and (C), that
1. Plaintiff Quik Tech, LLC must, by Wednesday, December 23, 2025,
serve on H&R Block’s counsel complete responses (without objections) to
all of the requests for production in H&R Block’s First Requests for
Production of Documents and produce all unproduced documents and
electronically stored information that are responsive to the requests and
that are in Quik Tech’s possession, custody, or control, in compliance with
Federal Rule of Civil Procedure 34(b)’s requirements;
2. Plaintiff Quik Tech, LLC must, by Wednesday, December 23, 2025,
serve on H&R Block’s counsel complete answers (without objections) to
all interrogatories in H&R Block’s First Set of Interrogatories to Quik
Tech, LLC, in compliance with Federal Rule of Civil Procedure 33’s
requirements;
3. if Plaintiff Quik Tech, LLC fails to fully comply with these first
two obligations (to fully respond to the discovery requests) by
Wednesday, December 23, 2025, it must, by Thursday, December 24,
2025, file a status report explaining why it and its counsel should not be
subject to any litigation-ending or other sanctions under Federal Rule of
Civil Procedure 37(b);
4. if Plaintiff Quik Tech, LLC fails to fully comply with the first two
obligations (to fully respond to the discovery requests) by Wednesday,
January 7, 2026, it must, by Thursday, January 8, 2025, file a second
status report again explaining why, at that point, it and its counsel
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should not be subject to any litigation-ending or other sanctions under
Federal Rule of Civil Procedure 37(b); and
5. Plaintiff Quik Tech, LLC must reimburse Defendant H&R Block
Enterprises LLC for its reasonable expenses and attorneys’ fees incurred
in having its attorneys draft and file its Motion for Sanctions Pursuant
to Rule 37(b)(2)(A) for Failure to Comply with Court Order [Dkt. No. 38]
and reply [Dkt. No. 44] and exhibits or appendices in support.
These sanctions appropriately address and remediate Quik Tech’s
discovery violations and the resulting prejudice to H&R Block. Requiring
Quik Tech to pay these expenses itself appropriately imposes this burden
on – and properly incentivizes future compliance by – the party itself in
this instance, particularly where its principal testified on October 3, 2025
to being aware of Quik Tech’s discovery obligations.
The Court directs the parties’ counsel to confer by telephone or
videoconference or in person about the amount of these reasonable
expenses and attorneys’ fees to be awarded under Rules 37(b)(2)(C) and
37(a)(5). By no later than Tuesday, January 20, 2026, the parties must
file a joint report notifying the Court of the results of the conference.
If all disputed issues as to the amount of reasonable expenses and
attorneys’ fees to be awarded to H&R Block have been resolved, H&R
Block’s counsel must also send an agreed proposed order to the Court at
Horan_Orders@txnd.uscourts.gov by Tuesday, January 20, 2026.
If the parties do not reach an agreement as to the amount of
reasonable expenses and attorneys’ fees to be awarded, H&R Block must,
by no later than Tuesday, February 3, 2026, file an application for
reasonable expenses and attorneys’ fees that is accompanied by
supporting evidence establishing the amount of the reasonable expenses
and attorneys’ fees to be awarded under Rules 37(a)(5). The fee
application must be supported by documentation evidencing the
“lodestar” calculation, including affidavits and detailed billing records,
and citations to relevant authorities and must set forth the itemized
number of hours expended in connection with the recoverable attorneys’
fees described above as well as the reasonable rate(s) requested. See
Tollett v. City of Kemah, 285 F.3d 357, 367 (5th Cir. 2002).
If an application is filed, Quik Tech must file a response by
Tuesday, February 17, 2026, and H&R Block must file any reply by
Tuesday, March 3, 2026.
Dkt. No. 52 at 4, 13-15.
On December 29, 2025, H&R Block filed a Notice of Plaintiff Quik Tech’s Non-
Compliance with Court Memorandum Opinion and Order Setting Deadline to Serve
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Discovery Responses [ECF 52], see Dkt. No. 56, reporting that Quik Tech “has failed
to comply with [the Court’s December 16, 2025 Memorandum Opinion and Order], by
serving on H&R Block (a) any responses to H&R Block’s First Request for Production
of Documents and electronically stored information or (b) any answers to all
interrogatories in H&R Block’s First Set of Interrogatories to Quik Tech, LLC,” Dkt.
No. 56 at 2. And H&R Block reports that Quik Tech “has failed to comply with [the
Court’s December 16, 2025 Memorandum Opinion and Order] to file a status report
by December 24, 2025, explaining why it and its counsel should not be subject to any
litigation-ending or other sanctions under F.R.C.P. 37(b).” Id. H&R Block reported
that, “[a]s of the date of this filing, counsel for H&R Block has not received any
responses to H&R Block’s Discovery Requests and has not received any
communications from Plaintiff regarding the [the Court’s December 16, 2025
Memorandum Opinion and Order] or Plaintiff’s required status report [ECF 52].” Id.
Quik Tech then filed a Motion to Dismiss [Dkt. No. 57] under Federal Rule of
Civil Procedure 41(a)(2), in which Quik Tech explained (among other things) that
• Quik Tech “seeks voluntary dismissal without prejudice of the instant
case in order for Plaintiff to proceed with a new lawsuit in Texas district
court, adding the two additional Texas defendants that should have been
in the litigation all along, before the applicable statute of limitations runs
for the breach of contract cause of action”;
• Quik Tech “seeks dismissal of this federal action in order to preserve
Plaintiff’s available rights to seek recovery from all available defendants,
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and Plaintiff is currently prevented from doing so in this federal action
because the deadline to amend the pleadings and add parties was nearly
a full year ago, on January 13, 2025, approximately 5 months before
Plaintiff’s current counsel was brought into this case”;
• Quik Tech “intends to refile this case in Dallas County District Court and
add the following Texas defendants: 1. Roy P. Edwards …. 2. Bryan
David French”;
• “[t]he four-year statute of limitations for Plaintiff’s breach of contract
claims will run in a matter of days, as Plaintiff believes the accrual of the
breach of contract occurred with the failure to properly file Plaintiff’s 4th
Quarter 2021 taxes that were due in mid-January 2022”; and
• “[p]revious counsel for Plaintiff failed to name Mr. Edwards and Mr.
French as defendants when this case was originally filed in Texas district
court, and continued to fail to do so while the pleadings could be amended
in this case before the January 13, 2024 deadline to amend the pleadings
or add parties”; and
• “[t]he failure to do so has placed Plaintiff in the current position of
needing to file the state court claims immediately to preserve these
claims.”
Dkt. No. 57 at 2-3.
The Court denied Quik Tech’s Rule 41(a)(2) Motion to Dismiss. See Dkt. No. 60.
In doing so, the Court explained that, “[w]hile Quik Tech’s request would carve
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out certain sanctions-related issues from dismissal, Doc. 57, Mot., 1, Quik Tech does
not address the possibility that its most recent noncompliance with court orders could
result in litigation-ending sanctions” and that, “[s]pecifically, Judge Horan’s
Memorandum Opinion and Order, entered in December 2025, ordered Quik Tech to
serve certain discovery responses on H&R Block, and further ordered that if Quik Tech
failed to serve those responses by Juge Horan’s imposed deadline’s, Quik Tech must
file status reports explaining why it should not be subject to ‘litigation-ending or other
sanctions.’” Dkt. No. 60 at 2 (quoting Dkt. No. 52 at 13).
The Court noted that “[t]hose imposed deadlines have since passed, and Quik
Tech has not served the requisite discovery responses nor filed any status reports
indicating why it should not be subject to further, potentially litigation-ending,
sanctions.” Dkt. No. 60 at 2 (citing Dkt. No. 56 at 1-2).
And the Court explained that “Quik Tech’s request for dismissal without
prejudice would result in plain legal prejudice to H&R Block, and suggests a bad faith
attempt by Quik Tech to avoid potential dismissal with prejudice as a result of its
repeated failures to comply with court orders” and that, “[w]ere the Court to grant
Quik Tech’s requested relief, the Court would relieve Quik Tech of the threat of
litigation-ending sanctions despite Quik Tech entirely disregarding prior court orders
and failing to explain why it should not be subject to those sanctions.” Id.
On January 9, 2026, H&R Block filed a second Notice of Plaintiff Quik Tech’s
Non-Compliance with Court Memorandum Opinion and Order Setting Deadline to
Serve Discovery Responses [ECF 52], see Dkt. No. 61, reporting that Quik Tech “has
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failed to comply with [the Court’s December 16, 2025 Memorandum Opinion and
Order] by serving on H&R Block (a) any responses to H&R Block’s First Request for
Production of Documents and electronically stored information or (b) any answers to
all interrogatories in H&R Block’s First Set of Interrogatories to Quik Tech, LLC”;
that Quik Tech “has failed to comply with [the Court’s December 16, 2025
Memorandum Opinion and Order] to file a status report by January 8, 2026,
explaining why it and its counsel should not be subject to any litigation-ending or
other sanctions under F.R.C.P. 37(b)”; and that, “[a]s of the date of this filing, counsel
for H&R Block has not received any responses to H&R Block’s Discovery Requests and
has not received any communications from Plaintiff regarding [the Court’s December
16, 2025 Memorandum Opinion and Order] or Plaintiff’s required status report [ECF
52].” Dkt. No. 61 at 2.
Senior United States District Judge Jane J. Boyle then referred H&R Block’s
two Notices of Plaintiff’s Non-Compliance [Dkt. Nos. 56 & 61] to the undersigned
United States Magistrate Judge for hearing, if necessary, and recommendation or
determination under 28 U.S.C. § 636(b). See Dkt. No. 62.
The undersigned then, on January 20, 2026, entered an Order to Show Cause,
directing Plaintiff Quik Tech, LLC to, by Wednesday, February 4, 2026, file a response
to that order and show cause why the Court should not, at this point, impose litigation-
ending or other sanctions on Plaintiff Quik Tech, LLC and its counsel under Federal
Rules of Civil Procedure 37(b)(2) and 41(b) for Plaintiff Quik Tech, LLC’s repeated
failures to comply with the requirements imposed by the Court’s December 16, 2025
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Memorandum Opinion and Order [Dkt. No. 52] – including the requirements to comply
with its discovery obligations in response to H&R Block’s First Set of Interrogatories
to Quik Tech, LLC and First Requests for Production of Documents that the Court has
previously imposed through its September 24, 2025 Electronic Order [Dkt. No. 31].
Quik Tech did not do so, as the docket reflects and as reported in Defendant
H&R Block Enterprises LLC’s Notice of Plaintiff QuikTech’s Non-Compliance with
Order to Shaw Cause [ECF 63]. See Dkt. No. 72.
But H&R Block, two days before Quik Tech’s February 4, 2026 response
deadline, filed a Motion for Injunction or, in the Alternative, for an Order Directing
Quik Tech, LLC to Immediately Dismiss the State Court Action. See Dkt. No. 65. That
motion is not yet ripe for decision, and the Court will separately address it as
necessary.
But the Court notes that H&R Block reports that Quik Tech, LLC on January
20, 2026 filed in a Dallas County, Texas state court a lawsuit styled Quik Tech, LLC
v. LEC Management, Inc., et al., Cause No. DC-26-01067 (134th Judicial District
Court, Dallas County, Texas), in which Quik Tech (according to H&R Block) “asserts
substantially identical claims against H&R Block arising from the same facts and
transactions at issue in this federal action.” Dkt. No. 65 at 1. And the original petition
filed in that action (and attached as an exhibit to H&R Block’s Motion for Injunction)
reflects that Quik Tech is represented by the same counsel, D. Shawn Stevens, as in
this case and has named as defendants LEC Management, Inc., David Bryan French,
and H&R Block Enterprises, LLC. See Dkt. No. 65-1.
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Legal Standards
Although H&R Block has not filed another sanctions motion under Federal Rule
of Civil Procedure 37, Federal Rule of Civil Procedure 37(b)(2)(A) does not require a
motion for the Court to impose sanctions. See FED. R. CIV. P. 37(b)(2)(A).
Federal Rule of Civil Procedure 37(b)(2)(A) provides that, “[i]f a party ... fails to
obey an order to provide or permit discovery, ... the court where the action is pending
may issue further just orders. They may include the following:
(i) directing that the matters embraced in the order or other
designated facts be taken as established for purposes of the action,
as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing
designated claims or defenses, or from introducing designated
matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except
an order to submit to a physical or mental examination.
FED. R. CIV. P. 37(b)(2)(A)(i)-(vii).
Rule 37(b)(2)(C) further requires that, “[i]nstead of or in addition to the orders
[described under Rule 37(b)(2)(A)], the court must order the disobedient party, the
attorney advising that party, or both to pay the reasonable expenses, including
attorney’s fees, caused by the failure, unless the failure was substantially justified or
other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(b)(2)(C).
“A party’s discovery conduct is found to be ‘substantially justified’ under Rule
37 if it is a response to a ‘genuine dispute, or if reasonable people could differ as to the
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appropriateness of the contested action.’’” S.E.C. v. Kiselak Capital Grp., LLC, No.
4:09-cv-256-A, 2012 WL 369450, at *5 (N.D. Tex. Feb. 3, 2012) (quoting Devaney v.
Continental Am. Ins. Co., 989 F.2d 1154, 1163 (11th Cir. 1993) (in turn quoting Pierce
v. Underwood, 487 U.S. 552, 565 (1988))). “The burden rests on the party who failed
to comply with the order to show that an award of attorney’s fees would be unjust or
that the opposing party’s position was substantially justified.” Id. at *3 (cleaned up).
Rule 37(b) “is designed to empower the court to compel production of evidence
by the imposition of reasonable sanctions.” Dorsey v. Acad. Moving & Storage, Inc.,
423 F.2d 858, 860 (5th Cir. 1970). “Sanctions under Rule 37 serve the dual function of
reimbursing the moving party and deterring the violator of the discovery orders (as
well as other potential violators).” Day v. Allstate Ins. Co., 788 F.2d 1110, 1114 (5th
Cir. 1986).
Rule 37(b)(2) “empowers the courts to impose sanctions for failures to obey
discovery orders. In addition to a broad range of sanctions, including contempt, [Rule]
37(b)(2) authorizes the court to impose a concurrent sanction of reasonable expenses,
including attorney’s fees, caused by the failure to obey a discovery order.” Smith &
Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 488 (5th Cir. 2012) (cleaned
up); see also Chilcutt v. United States, 4 F.3d 1313, 1322 n.23 (5th Cir. 1993) (“Rule
37(b) clearly indicates that district courts have authority to grant a broad spectrum of
sanctions.”).
“The district court has broad discretion under Rule 37(b) to fashion remedies
suited to the misconduct.” Smith, 685 F.3d at 488 (cleaned up). “This discretion,
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however, is limited” based on the type of sanctions imposed. Id.
The United States Court of Appeals for the Fifth Circuit has explained that its
“caselaw imposes a heighted standard for litigation-ending sanctions (sometimes
called ‘death penalty’ sanctions). For a lesser sanction, we broadly require the district
court to determine the sanctions are ‘just’ and ‘related to the particular ‘claim’ which
was at issue in the order to provide discovery.’” Law Funder, L.L.C. v. Munoz, 924 F.3d
753, 758 (5th Cir. 2019) (cleaned up).
The sanction imposed should be the least severe sanction adequate to achieve
the proper functions of Rule 37(b)(2) under the particular circumstances. See Smith,
685 F.3d at 488-90.
And the Fifth Circuit recently repeated its guidance that, “to levy a litigation-
ending sanction for a discovery violation, the court must make four findings. First, the
violation reflects bad faith or willfulness. Second, the client, not counsel, is responsible
for the violation. Third, the violation substantially prejudiced the opposing party.
Fourth, a lesser sanction would not substantially achieve the desired deterrent effect.”
Vikas WSP, Ltd. v. Econ. Mud Prod. Co., 23 F.4th 442, 454 (5th Cir. 2022) (cleaned
up); accord Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300, 1304 (5th Cir. 1988) (“We
have repeatedly emphasized that a dismissal with prejudice is a ‘draconian’ remedy,
or a ‘remedy of the last resort,’ to be employed only when the failure to comply with
the court’s order results from wilfullness or bad faith rather than from an inability to
comply. Nevertheless, deliberate, repeated refusals to obey discovery orders have been
held to warrant the use of this ultimate sanction.” (cleaned up)); Batson v. Neal Spelce
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Assocs., Inc., 765 F.2d 511, 514 (5th Cir. 1985) (“[D]ismissal is authorized only when
the failure to comply with the court’s order results from willfulness or bad faith, and
not from the inability to comply.”).
But “[l]esser sanctions do not require a finding of willfulness.” Smith, 685 F.3d
at 488. “Of course, the flagrancy of a party’s behavior must be directly proportionate
to the severity of the sanction imposed,” but “the lack of willful, contumacious, or
prolonged misconduct [does not] prohibit[] all sanctions.” Chilcutt, 4 F.3d at 1322 n.23.
Even where a party was “unable to comply with the discovery requests, the district
court still ha[s] broad discretion to mete out a lesser sanction than dismissal.”
Id. (cleaned up).
That is because “the type of conduct displayed by a party had no bearing on
whether sanctions should be imposed, but only on the type of sanctions imposed,” and
“[t]he willfulness or good faith of [a party], can hardly affect the fact of noncompliance
and [is] relevant only to the path which the District Court might follow in dealing with
[the party’s] failure to comply.” Id. (cleaned up).
Federal Rule of Civil Procedure Rule 41(b) “authorizes the district court to
dismiss an action sua sponte for failure to prosecute or comply with [a Federal Rule of
Civil Procedure or] a court order.” Griggs v. S.G.E. Mgmt., L.L.C., 905 F.3d 835, 844
(5th Cir. 2018); accord Nottingham v. Warden, Bill Clements Unit, 837 F.3d 438, 440
(5th Cir. 2016) (failure to comply with a court order); Rosin v. Thaler, 450 F. App’x
383, 383-84 (5th Cir. 2011) (per curiam) (failure to prosecute); see also Campbell v.
Wilkinson, 988 F.3d 798, 800-01 (5th Cir. 2021) (holding that the text of Rule 41(b)
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does not extend to a failure to comply with a court’s local rule insofar as that violation
does not also qualify as a failure to prosecute (discussing Berry v. CIGNA/RSI-
CIGNA, 975 F.2d 1188 (5th Cir. 1992))).
This authority “flows from the court’s inherent power to control its docket and
prevent undue delays in the disposition of pending cases.” Boudwin v. Graystone Ins.
Co., Ltd., 756 F.2d 399, 401 (5th Cir. 1985); see also Lopez v. Ark. Cnty. Indep. Sch.
Dist., 570 F.2d 541, 544 (5th Cir. 1978) (“Although [Rule 41(b)] is phrased in terms of
dismissal on the motion of the defendant, it is clear that the power is inherent in the
court and may be exercised sua sponte whenever necessary to achieve the orderly and
expeditious disposition of cases.” (cleaned up)); Campbell, 988 F.3d at 800 (“It is well
established that Rule 41(b) permits dismissal not only on motion of the defendant, but
also on the court’s own motion.”).
And the Court’s authority under Rule 41(b) is not diluted by a party proceeding
pro se, as “[t]he right of self-representation does not exempt a party from compliance
with relevant rules of procedural and substantive law.” Wright v. LBA Hospitality, 754
F. App’x 298, 300 (5th Cir. 2019) (per curiam) (cleaned up).
A Rule 41(b) dismissal may be with or without prejudice. See Long v. Simmons,
77 F.3d 878, 879-80 (5th Cir. 1996).
Although [l]esser sanctions such as fines or dismissal without prejudice
are usually appropriate before dismissing with prejudice, ... a Rule 41(b)
dismissal [with prejudice] is appropriate where there is a clear record of
delay or contumacious conduct by the plaintiff and when lesser sanctions
would not serve the best interests of justice.
Nottingham, 837 F.3d at 441 (cleaned up); see also Long, 77 F.3d at 880 (a dismissal
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with prejudice is appropriate only if the failure to comply with the court order was the
result of purposeful delay or contumacious conduct and the imposition of lesser
sanctions would be futile); cf. Nottingham, 837 F.3d at 442 (noting that “lesser
sanctions” may “‘include assessments of fines, costs, or damages against the plaintiff,
conditional dismissal, dismissal without prejudice, and explicit warnings’” (quoting
Thrasher v. City of Amarillo, 709 F.3d 509, 514 (5th Cir. 2013))).
“When a dismissal is without prejudice but ‘the applicable statute of limitations
probably bars future litigation,’” that dismissal operates as – that is, it is reviewed as
– “a dismissal with prejudice.” Griggs, 905 F.3d at 844 (quoting Nottingham, 837 F.3d
at 441); see, e.g., Wright, 754 F. App’x at 300 (affirming dismissal under Rule 41(b) –
potentially effectively with prejudice – where “[t]he district court had warned Wright
of the consequences and ‘allowed [her] a second chance at obtaining service’” but she
“disregarded that clear and reasonable order”).
Analysis
The Court, in its December 16, 2025 Memorandum Opinion and Order, ordered
Plaintiff Quik Tech, LLC to, “by Wednesday, December 23, 2025, serve on H&R Block’s
counsel complete responses (without objections) to all of the requests for production in
H&R Block’s First Requests for Production of Documents and produce all unproduced
documents and electronically stored information that are responsive to the requests
and that are in Quik Tech’s possession, custody, or control, in compliance with Federal
Rule of Civil Procedure 34(b)’s requirements.” Dkt. No. 52 at 13.
Quik Tech reportedly has not done so. See Dkt. No. 61 at 1-2.
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The Court, in its December 16, 2025 Memorandum Opinion and Order, also
ordered Plaintiff Quik Tech, LLC to, “by Wednesday, December 23, 2025, serve on
H&R Block’s counsel complete answers (without objections) to all interrogatories in
H&R Block’s First Set of Interrogatories to Quik Tech, LLC, in compliance with
Federal Rule of Civil Procedure 33’s requirements.” Dkt. No. 52 at 13.
Quik Tech reportedly has not done so. See Dkt. No. 61 at 1-2.
And Quik Tech’s failure to comply with these first two obligations that the
Court’s December 16, 2025 Memorandum Opinion and Order ordered comes after the
Court found that “Quik Tech violated the Court’s September 24, 2025 Electronic Order
[Dkt. No. 31],” in which the “Court ordered Plaintiff Quik Tech, LLC to, by Thursday,
October 2, 2025, serve on H&R Block’s counsel complete responses (without objections)
to all of the requests for production in H&R Block’s First Requests for Production of
Documents and produce all unproduced documents and electronically stored
information that are responsive to the requests and that are in Quik Tech’s possession,
custody, or control, in compliance with Federal Rule of Civil Procedure 34(b)’s
requirements” and “also ordered Quik Tech to, by Thursday, October 2, 2025, serve on
H&R Block’s counsel complete answers (without objections) to all interrogatories in
H&R Block’s First Set of Interrogatories to Quik Tech, LLC, in compliance with
Federal Rule of Civil Procedure 33’s requirements.” Dkt. No. 52 at 9-11 (citing Dkt.
No. 31).
The Court, in its December 16, 2025 Memorandum Opinion and Order, also
ordered that, “if Plaintiff Quik Tech, LLC fails to fully comply with these first two
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obligations (to fully respond to the discovery requests) by Wednesday, December 23,
2025, it must, by Thursday, December 24, 2025, file a status report explaining why it
and its counsel should not be subject to any litigation-ending or other sanctions under
Federal Rule of Civil Procedure 37(b).” Dkt. No. 52 at 13.
Quik Tech still has not done so.
The Court, in its December 16, 2025 Memorandum Opinion and Order, also
ordered that, “if Plaintiff Quik Tech, LLC fails to fully comply with the first two
obligations (to fully respond to the discovery requests) by Wednesday, January 7,
2026, it must, by Thursday, January 8, 2025, file a second status report again
explaining why, at that point, it and its counsel should not be subject to any litigation-
ending or other sanctions under Federal Rule of Civil Procedure 37(b).” Dkt. No. 52 at
13.
The Court regrets the typographical error, but the December 16, 2025
Memorandum Opinion and Order clearly intended to impose a future-looking deadline
of January 8, 2026. And Quik Tech still has not filed any status report in response to
the Court’s December 16, 2025 Memorandum Opinion and Order.
And neither has Quik Tech filed a response to the Order to Show Cause –
although, through its counsel of record in this case, Quik Tech apparently has filed a
state court lawsuit against H&R Block and others, as it previewed in its now-denied
Rule 41(a)(2) Motion to Dismiss.
In sum, Quik Tech has, since October 2, 2025 (over four months ago), violated
the Court’s discovery-related and other orders in at least seven ways: failing to comply
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with the two discovery requirements in the September 24, 2025 Electronic Order;
failing to comply with the two discovery requirements and the two status report
requirements in the Court’s December 16, 2025 Memorandum Opinion and Order; and
failing to comply with the January 20, 2026 Order to Show Cause.
The Court previously found that “[t]he record evidence here supports a finding
that Quik Tech itself – through its principal – knew about its obligations to answer
H&R Block’s discovery requests and produce responsive documents” but that “the
record does not support a finding that Quik Tech, rather than its outside counsel, is
responsible for the ongoing violations.” Dkt. No. 52 at 11. The Court explained that
“[a]sserting that, being the party to the lawsuit and the client of one’s attorney entails
being deemed bound by the acts of the party’s lawyer-agent is not the same as showing
– as the Fifth Circuit requires in this Rule 37(b)(2)(A) context – that the client, not
counsel, is responsible for the violation of the discovery order.” Id. at 11-12.
But the Court also found that “Quik Tech’s and its attorneys’ arguments against
sanctions fail to persuade,” where “[t]hose assertions and excuses amount, in short, to
documenting the revolving cast of contract attorneys at Quik Tech’s outside counsel’s
firm who worked on this case; complaining of alleged mistakes by Quik Tech’s former
attorneys; arguing that H&R Block’s alleged conduct that gives rise to Quik Tech’s
claims caused or at least contributed to Quik Tech’s ongoing failure to comply with
Quik Tech’s obligations to respond to discovery that H&R Block seeks to defend
against those claims; and asserting Quik Tech is a small company whose principals
could not timely compile the requested discovery materials and responsive documents,
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particularly after the Court ordered that Quik Tech must fully respond to all the
requests without objections.” Id. at 12. The Court found that “[n]one of those
arguments or assertions immunizes Quik Tech from appropriate sanctions for its
ongoing failure to comply with the Court’s discovery order.” Id.
And now Quik Tech itself – with notice of the Court’s December 16, 2025
Memorandum Opinion and Order’s requirements and findings on Quik Tech’s
violations of the Court’s December 16, 2025 Memorandum Opinion and Order – has
continued to delay discovery and ignore or disregard its court-ordered obligations,
seeking instead (unsuccessfully) to dismiss its case without prejudice rather than
comply with its ongoing obligations under the Court’s December 16, 2025
Memorandum Opinion and Order.
And those requirements included requiring that – if Quik Tech continued to fail
to comply with its court-ordered discovery obligations – Quik Tech must file a report
explaining why, at that point, it and its counsel should not be subject to any litigation-
ending or other sanctions under Federal Rule of Civil Procedure 37(b). And Quik Tech
has not even done that.
The Court’s December 16, 2025 Memorandum Opinion and Order also
explained that, under Federal Rule of Civil Procedure 37(b)(2)(C), the Court is
requiring Quik Tech itself (and not its counsel) to pay H&R Block’s reasonable
expenses and attorneys’ fees incurred in having its attorneys draft and file its Motion
for Sanctions Pursuant to Rule 37(b)(2)(A) for Failure to Comply with Court Order
[Dkt. No. 38] and reply [Dkt. No. 44] and exhibits or appendices in support.
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The Court explained that doing so “appropriately imposes this burden on – and
properly incentivizes future compliance by – the party itself in this instance,
particularly where its principal testified on October 3, 2025 to being aware of Quik
Tech’s discovery obligations.” Dkt. No. 52 at 13-14.
As matters currently stand – rather than respond to the Court’s order to show
cause why the Court should not impose litigation-ending or other sanctions on Quik
Tech and its counsel under Rules 37(b)(2) and 41(b) – Quik Tech is apparently
attempting to abandon this federal case altogether in favor of its newly filed state
court action, after unsuccessfully asking the Court to allow it to dismiss this action
without prejudice.
In the Rule 37(b)(2) context, although a litigation-ending sanction for a
discovery violation is subject to a heightened standard, “deliberate, repeated refusals
to obey discovery orders have been held to warrant the use of this ultimate sanction,”
Nissho-Iwai, 845 F.2d at 1304 (cleaned up), and dismissal with prejudice under Rule
37(b)(2) is authorized “when the failure to comply with the court’s order results from
willfulness or bad faith,” Batson, 765 F.2d at 514.
And the Fifth Circuit has explained that “discovery delays are serious,
especially when they are part of a pattern,” and that “[k]nowingly ignoring an
obligation, especially multiple times, may alone be enough to find bad faith.” Calsep
A/S v. Dabral, 84 F.4th 304, 314 (5th Cir. 2023). And “noncompliance is doubly
problematic when the lower court issues – like it did here – a warning.” Id. (citing Bell
v. Texaco, Inc., 493 F. App’x 587, 593 (5th Cir. 2012) (holding that “Plaintiffs’ repeated
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failure to comply with discovery orders, even after being warned of the possibility of
sanctions and personally instructed on how to comply, constituted willful
noncompliance” justifying litigation-ending sanctions)).
Likewise, a Rule 41(b) dismissal with prejudice “is appropriate where there is
a clear record of delay or contumacious conduct by the plaintiff and when lesser
sanctions would not serve the best interests of justice.” Nottingham, 837 F.3d at 441
(cleaned up). “Contumacious” conduct is “stubborn resistance to authority,” McNeal v.
Papasan, 842 F.2d 787, 792 (5th Cir. 1988) (cleaned up), or “a willful disobedience of
a court order,” In re Deepwater Horizon, 805 F. App’x 262, 265 (5th Cir. 2020) (cleaned
up).
On this record and in the face of this authority, Plaintiff Quik Tech, LLC is
properly subject to dismissal of its claims against H&R Block with prejudice under
Rules 37(b)(2) and 41(b) for its willful disobedience of the Court’s September 24, 2025
Electronic Order and December 16, 2025 Memorandum Opinion and Order and clear
record of delay in complying with its discovery obligations.
Quik Tech’s “repeated failure to comply with discovery orders, even after being
warned of the possibility of sanctions,” constitutes willful noncompliance and
disobedience justifying litigation-ending sanctions under Rules 37(b)(2) and 41(b).
Bell, 493 F. App’x at 593; Nottingham, 837 F.3d at 441.
Here, lesser sanctions – including dismissal without prejudice – would not serve
the best interests of justice. The Court already granted lesser sanctions under Rule
37(b)(2), and Quik Tech’s responded not by complying but by seeking to abandon the
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case without prejudice – and then going dark in this case when that request for
voluntary dismissal without prejudice was rejected precisely because Quik Tech
should not be allowed to avoid possible litigation-ending sanctions.
And, as H&R Block persuasively explained in opposing Quik Tech’s Rule
41(a)(2) motion to voluntarily dismiss without prejudice, imposing sanctions short of
dismissing with prejudice would allow Quik Tech to “to escape and/or mitigate the
consequences of its misconduct” and adverse rulings in this action that “has been
pending for nineteen months, has proceeded through extensive discovery disputes,
multiple motions, and was set for trial before being recently vacated due to Plaintiff’s
discovery violations.” Dkt. No. 59 at 1-2, 8, 11. As H&R Block noted, “[i] plaintiffs could
simply dismiss their cases without prejudice whenever they face sanctions for
discovery violations, the discovery rules would be rendered meaningless. Defendants
would have no effective recourse against discovery abuse because plaintiffs could
always avoid sanctions by dismissing and refiling.” Id. at 11-12.
There is no credible evidence that Quik Tech was unable to comply with its
discovery obligations after all this time, and the Court’s December 16, 2025 sanctions
order put Quik Tech itself on notice that it would be held responsible for ongoing
violations and tried to “properly incentive[ Quik Tech’s] future compliance” – and, yet,
Quik Tech did nothing to comply with the Court’s orders. Dkt. No. 52 at 13-14.
And Quik Tech’s discovery order violations have substantially prejudiced H&R
Block, where it has been deprived of the materials that it seeks through discovery from
a plaintiff that has been pursuing claims against H&R Block since 2024 and has now
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been found to have waived its objections to H&R Block’s discovery requests. Accord
Dkt. No. 59 (“Plaintiff filed this action in Texas state court on May 28, 2024. H&R
Block removed the case to this Court on June 25, 2024, and filed its Answer on August
1, 2024. Since that time, H&R Block has invested substantial time, effort, and expense
litigating this matter, including extensive discovery efforts that Plaintiff has
repeatedly obstructed.”).
For all these reasons, the record at this point supports all four required findings
for the Court to levy a litigation-ending Rule 37(b)(2) sanction and the related findings
required for a Rule 41(b) dismissal with prejudice. Accord Vikas, 23 F.4th at 454;
Wright, 754 F. App’x at 300; Nottingham, 837 F.3d at 441-42; Long, 77 F.3d at 880.
And Quik Tech’s repeated violations of the Court’s discovery-related and other
orders – which themselves stem from Quik Tech’s violations of its discovery obligations
under the Federal Rules of Civil Procedure – result from wilfullness or bad faith and
warrant litigation-ending sanctions. Accord Calsep, 84 F.4th at 314; Deepwater
Horizon, 805 F. App’x at 265; Nissho-Iwai, 845 F.2d at 1304; Batson, 765 F.2d at 514.
Recommendation
The Court should, under Federal Rules of Civil Procedure 37(b)(2) and 41(b),
dismiss Plaintiff Quik Tech, LLC’s claims against Defendant H&R Block Enterprises
LLC with prejudice.
A copy of these findings, conclusions, and recommendation shall be served on
all parties in the manner provided by law. Any party who objects to any part of these
findings, conclusions, and recommendation must file specific written objections within
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14 days after being served with a copy. See 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72(b).
In order to be specific, an objection must identify the specific finding or
recommendation to which objection is made, state the basis for the objection, and
specify the place in the magistrate judge’s findings, conclusions, and recommendation
where the disputed determination is found. An objection that merely incorporates by
reference or refers to the briefing before the magistrate judge is not specific. Failure
to file specific written objections will bar the aggrieved party from appealing the
factual findings and legal conclusions of the magistrate judge that are accepted or
adopted by the district court, except upon grounds of plain error. See Douglass v.
United Servs. Auto. Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996).
DATED: February 10, 2026
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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