Commercial Division Blog

Posted: December 20, 2014 / Categories Commercial, Discovery/Disclosure

Complaint Struck for Failure to Comply With Discovery Obligations

On December 11, 2014, the Third Department issued a decision in BDS Copy Inks, Inc. v. International Paper, 2014 NY Slip Op. 08692, affirming the striking of a plaintiff's complaint as a sanction for failing to provide discovery.

In BDS Copy Inks, the plaintiffs sued the defendants in connection with a contract to "perform certain printing and copying services for the state." However, the plaintiffs did not fully respond to the defendants' discovery demands. The Third Department affirmed the trial court's decision to sanction the plaintiffs by striking their complaint, explaining:

Where a trial court determines that a party has failed to comply with its discovery obligations, it has broad discretion to remedy the violation, and the sanction imposed is not disturbed in the absence of a clear abuse of discretion. Because the remedy of preclusion is drastic, especially where, as here, it has the effect of preventing a party from asserting its claim, it is reserved for those instances where the offending party's lack of cooperation with disclosure was willful, deliberate, and contumacious.

In our view, Supreme Court did not abuse its discretion by striking plaintiffs' complaint. The record confirms that from June 2010 until February 2012 the court met with counsel at least six times and issued at least two orders extending plaintiffs' time to comply with their discovery obligations. During this time, the primary issue was the adequacy of plaintiffs' response. Although plaintiffs now claim that defendants' document demand was overly broad, no objection to the demand was ever made. Rather, plaintiffs maintained that responsive documents would be found if defendants searched through the 60 to 80 banker's boxes stored in a warehouse. Plaintiffs remained steadfast with this response even after the court made it clear, following defendants' first motion, that the court did not consider this to be reasonable compliance with plaintiffs' discovery obligations.

We recognize that plaintiffs provided certain documents and that Maltz appeared at a deposition. This limited cooperation does not necessarily preclude a finding of willful and contumacious behavior. Plaintiffs had the burden to prove damages and defendants were entitled to review documents supporting the damages claim prior to trial. Notably, plaintiffs were able to create and provide annual sales summaries, but never provided the documents that were used to calculate the sales figures. The record confirms that despite Supreme Court's frequent intervention and direction to produce the documents in a more organized fashion, plaintiffs continued to insist that their offer to have defendants sift through 60 to 80 boxes of miscellaneous business records was adequate. Indeed, plaintiffs refused to respond otherwise even after defendants narrowed their document request following Maltz's deposition. Even if, as plaintiffs claim, Supreme Court overlooked Maltz's affidavit in opposition to defendants' motion, it is of no moment. Maltz did not offer to organize the documents. Rather, though he makes no claim that he went to the warehouse to inspect the documents held in the likely "well over 60 or could be up to, or more than, 80 boxes," he continued to maintain that each document in each of the unspecified number of boxes was responsive to defendants' demand.

In our view, the record demonstrates a pattern of noncompliance sufficient to support Supreme Court's finding that plaintiffs' conduct was willful.

(Internal quotations and citations omitted) (emphasis added). Sometimes parties who stonewall on discovery get away with it. This decision shows how badly things can go wrong when they do not.