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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Purposes of Rule 37 Sanctions — Factors — Importance of Bad Faith and Prejudice in Assessing Apt Sanction

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First Mariner Bank v. Resolution Law Group, 2013 U.S. Dist. LEXIS 153299 (D. Md. Oct. 24, 2013):

Courts have broad discretion to impose punitive measures on any party who fails to obey a discovery order. Fed R. Civ. P. 37(b)(2)(B); Mut. Fed. Sav. & Loan Ass'n v. Richards & Assocs., 872 F.2d 88, 92 (4th Cir. 1989);  8B Charles Alan Wright, et al., Federal Practice & Procedure § 2289 (3d ed. 2010). It is generally recognized that Rule 37 sanctions are intended to: (1) penalize culpable parties; (2) deter others from engaging in similar conduct; (3) compensate the Court and other parties for expense caused, and (4) compel discovery. Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse, § 49 (2013) (citing Carlucci v. Piper Aircraft Corp., 775 F.2d 1440, 1453 (11th Cir. 1985)). As such, Rule 37 sanctions are both punitive and remedial, and may be used to discourage bad behavior and make the aggrieved party whole.

Courts in the Fourth Circuit must consider four factors in determining what sanctions to impose: (1) whether the non-complying party acted in bad faith; (2) the amount of prejudice that noncompliance caused the adversary; (3) the need for deterrence of the particular sort of non-compliance; and (4) whether less drastic sanctions would have been effective. Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th Cir. 2003). The presence or absence of any one of these factors is generally not decisive: "[t]he harshest of sanctions" may be imposed "when . . . culpability is minimally present, if there is a considerable showing of prejudice, or, alternatively, the prejudice is minimal but the culpability is great." Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 533 (D. Md. 2010). Ultimately, a court must "make whatever disposition is just in the light of the facts of the particular case." Bethesda Softworks LLC v. Interplay Entm't Corp., No. 09-2357, 2011 U.S. Dist. LEXIS 44397 (D. Md. Apr. 25, 2011)(citations omitted).

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Footnote 5.  Rule 37 provides a nonexclusive range of sanctions. The most severe is dismissal or default judgment. Hathcock v. Navistar Int'l Transp. Corp., 53 F.3d 36, 40 (4th Cir. S.C. 1995). Slightly lower in the continuum are preclusion orders, recognized as "strong sanctions, although not as drastic as dismissals or defaults."  Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse, § 49 (2013). As such, courts have set a high bar for parties seeking preclusion. Some decisions have focused on the curative nature of the sanction: recent district court opinions in the Fourth Circuit have declined to grant requests for preclusion absent a strong showing of prejudice. See Bethesda, at *18-19 (D. Md. Apr. 25, 2011)(preclusion "typically requires some strong evidence of prejudice"); Hastings v. OneWest Bank, No. 10-3375, 2013 U.S. Dist. LEXIS 52331 at *10-11 (D. Md. Apr. 11, 2013)(same); see also Life Techs. Corp. v. Biosearch Techs., Inc., No. C-12-00852, 2012 U.S. Dist. LEXIS 63974, 37-38 (N.D. Cal. May 7, 2012)("When a court excludes evidence under Rule 37, the Court should do so only where there is a finding of prejudice to the nonoffending party.").

 

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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