Brief Fact Summary. The Plaintiff, Cine Forty-Second Street Theatre Corp (Plaintiff), brought an antitrust lawsuit against a rival theatre. The Plaintiff was extremely negligent with respect to following orders to compel discovery. As a result, the Magistrate Gershon (Magistrate) recommended Plaintiff be precluded from introducing evidence with respect to damages.
Synopsis of Rule of Law. Grossly negligent failure to obey orders compelling discovery justifies the severest disciplinary measures available under the Federal Rules of Civil Procedure Rule 37 (FRCP Rule 37).
Issue. Whether a grossly negligent failure to obey an order compelling discovery may justify the severest disciplinary measures available under FRCP Rule 37.
Held. Yes. The judge’s order declining to adopt the magistrate’s recommendation that proof of damages be precluded was reversed. In light of the fact Plaintiff, through its undeniable fault, had frozen this litigation in the discovery phase for nearly 4 years, the Magistrate’s original recommendation stood.
Concurrence. Circuit Court Judge Oakes would not punish the Plaintiff for the sins of its counsel absent the client’s knowledge, condonation, compliance, or causation.
Discussion. FRCP Rule 37 has a threefold purpose: (1) preclusionary orders make sure no party will benefit from its own failure to comply, (2) specific deterrents seek to ensure compliance, and (3) drastic sanctions may not serve as mere penalties.
Courts are free to consider the deterrent effect of their orders on the instant case and on other litigation, as long as the party is at fault in some sense. When a party makes a good faith effort to comply and is affected by circumstances out of his control, this is not a good enough reason to impose sanctions.
In this case, the court had to decide whether gross negligence amounting to a “total dereliction of professional responsibility,” but not a conscious disregard of court orders, constituted “fault.” Negligence, no less than an intentional wrong, is a fit subject for general deterrence. Where gross professional negligence has been found, the full range of sanctions may be marshal