Brief Fact Summary. Cine Forty-Second Street Theatre Corporation (Appellee) operated a movie theatre in New York City. Appellee failed to comply with numerous court orders regarding the answering of Allied Artists Pictures Corporations (Appellants) interrogatories on the issue of damages.
Synopsis of Rule of Law. A grossly negligent failure to obey a court order compelling discovery is sufficient to substantiate severe disciplinary measures under Rule 37 of the Federal Rules of Civil Procedure.
Issue. Whether a grossly negligent failure to obey a court order compelling discovery may justify the severest disciplinary measures?
Held. Yes. Sanctions serve a threefold purpose: 1) ensure that a party will not be able to profit from its own failure to comply; 2) secure compliance with the particular order; and 3) courts are free to consider the general deterrent effect the order may have on instant case and on other litigation. If a party makes a good faith effort to comply with an order, dismissing the complaint would deprive the party of a property interest without due process of law. Bad faith or gross negligence on the part of a party a default judgment can be imposed. Rule 37 states that negligent wrongs are fit for general deterrence and gross professional incompetence may be responsible for the interminable delays. In this case, Appellee caused this litigation to be frozen and the judge’s order declining to adopt the magistrate’s recommendation that proof of damages be barred is reversed.
Discussion. Rule 26(g) of the Federal Rules of Civil Procedure states that an attorney’s signature on discovery paper certifies that the papers are supported by good and existing law; proper purpose; and require or response is reasonable given the needs of the case. The rule authorizes the court to impose sanctions on the person signing the paper and the party on whose behalf the paper was submitted, if a paper is signed in violation of this r