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Current Developments in the Commercial Divisions of the
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Posted: October 5, 2014

Court Orders Conditional Dismissal for Failure to Provide Discovery

On September 8, 2014, Justice Whelan of the Suffolk County Commercial Division issued a decision in 595393 Alberta Ltd. v. Fossil Industries, Inc., 2014 NY Slip Op. 32406(U), conditionally dismissing a complaint for failure to provide discovery.

In 595393 Alberta Ltd., the plaintiff moved to sanction the defendant for its failure to produce relevant e-mails. The court conditionally granted the plaintiff’s motion, explaining:

Pursuant to CPLR 3126(3), this court is authorized to strike the pleadings of or to preclude the presentation of trial evidence by any and all parties who refuse to obey an order for disclosure or who willfully fail to disclose information which the court finds ought to have been disclosed. The general rule is that a court must impose a sanction commensurate with the particular disobedience it is designed to punish. Before a court invokes the drastic remedy of striking a pleading, or even of precluding evidence, there must be a clear showing that the failure to comply with court-ordered discovery was willful and contumacious. Willful and contumacious conduct can be inferred from a party’s repeated failure to respond to demands or to comply with discovery orders and the absence of any reasonable excuse for such failures.

The failure to comply with court ordered deadlines and to provide good-faith responses to discovery demands impairs the efficient functioning of the courts and the adjudication of claims. While it has been held that substantial compliance, even where tardy, militates against a finding of a willful and contumacious default in responding to outstanding discovery demands, such compliance must indeed be substantial and represent a good faith response to the outstanding demands. Accordingly, substantial compliance may not necessarily defeat a motion for sanctions under CPLR 3126, particularly where there has been a failure to obey prior court orders directing disclosure, party demands stipulated to, or where the responses furnished or items produced do not constitute good faith responses.

(Internal quotations and citations omitted). The court went on to find

that the defendant’s response is inadequate under the circumstances of this case and that such inadequacy warrants the drawing of an inference of willful conduct on the part of the defendant which frustrated the schedule of discovery agreed to by counsel and fixed in an order of the court. Accordingly, the answer served by the defendant shall be dismissed unless it furnishes the e-mails in the format agreed to and full and complete responses to the discovery┬ádemands of the plaintiff that are subject of this motion on or before October 15, 2014.

The issue of whether the conditional dismissal of the answer herein directed shall have abated or been converted into one that is absolute in nature shall be the subject of an inquiry by the court at the conference now scheduled . . . .

This decision is a win for the movants, but the conditional nature of the order means that maybe all that happened is that the court gave the defendant one last chance to provide discovery. This gives the plaintiff the evidence it sought, but imposes no real penalty on the defendant.

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