UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA
QSGI, INC.,
Plaintiff,v.
IBM GLOBAL FINANCING andINTERNATIONAL BUSINESSMACHINES CORPORATION,
Defendants.
§§§§§§§§§§
Case No. 9:11-cv-80880-KLR
DEFENDANTS’ OPPOSITION TO PLAINTIFF’S OBJECTIONS TOMAGISTRATE JUDGE ANN E. VITUNAC’S ORDER, DATED MAY 22, 2012,
ON DEFENDANTS’ MOTION TO COMPEL
International Business Machines Corporation and IBM Global Financing
(collectively, “Defendants” or “IBM”) submit this opposition to QSGI, Inc.’s (“Plaintiff”
or “QSGI”) Objections to Magistrate Judge Ann E. Vitunac’s Order, Dated May 22,
2012, on Defendants’ Motion to Compel (“Objections”).
PRELIMINARY STATEMENT
In good faith, IBM has sought to move discovery forward without intervention of
the Court. IBM granted QSGI five extensions of its time to respond to IBM’s Document
Requests and Interrogatories. When QSGI still failed to respond, IBM was forced to seek
judicial relief. On March 16, 2012, Magistrate Judge Vitunac ordered QSGI to provide
complete responses to IBM’s discovery requests by April 2. QSGI failed to do so. QSGI
then ignored IBM’s communications concerning QSGI’s noncompliance, forcing IBM to
file another motion. Magistrate Judge Vitunac’s May 22 Order noted frustration with
QSGI’s inaction, and ordered QSGI to comply fully by June 4, including by completing
its document production in the agreed format. QSGI did not comply with the June 4
deadline, either. Nor did QSGI seek a stay of Magistrate Judge Vitunac’s orders. Instead
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it filed the instant Objections. Accordingly, QSGI stands in present violation of both
orders.
QSGI’s Objections are unfounded. As a threshold matter, these Objections are
untimely. The obligations to which QSGI objects arise out of the March 16 Order, which
is final and not reviewable. As to the follow-up May 22 Order itself, QSGI presents no
argument that the Order is based on clearly erroneous factual findings or legal error.
QSGI admits that the parties agreed to produce electronic documents in a specified
format. QSGI merely contends that producing documents in that format would be
inconvenient for QSGI. Needless to say, QSGI’s convenience is no grounds for
overturning Magistrate Judge Vitunac’s Order.
QSGI also fails to present any argument that Magistrate Judge Vitunac erred in
ordering QSGI to respond fully to IBM’s Interrogatories. QSGI’s Interrogatory
responses are nonresponsive and inadequate. QSGI has not contended otherwise in the
briefing before Magistrate Judge Vitunac. QSGI now argues that it should be able to
stand on its inadequate responses because it objected therein to the breadth of the
Interrogatories. But QSGI’s objections were waived due to its failure to serve timely
responses, as well as its failure to raise any objections whatsoever before Magistrate
Judge Vitunac. Furthermore, purported “overbreadth” objections cannot excuse QSGI’s
failure to provide substantive responses. Therefore, the Court should deny QSGI’s
Objections.
BACKGROUND
A. The Parties’ Agreement Concerning Electronically Stored Information.
QSGI filed this lawsuit in August 2011. In October 2011, QSGI and IBM met
and conferred to develop the Joint Scheduling Report. (June 21, 2012 Declaration of
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Benjamin H. Diessel (“June 21, 2012 Diessel Decl.”) ¶ 2.) As required by Local Rule
16.1(b), the parties discussed discovery of electronically stored information (“ESI”), and
included their stipulation on such discovery (“ESI Agreement”) in their Joint Scheduling
Report. (Joint Scheduling Report ¶ L (Nov. 4, 2011, ECF No. 27).) The parties agreed:
to provide as part of their electronic document productions certain technicalfiles (“load files”) necessary to load and review these documents (id. ¶ L.v);
to provide unique identifiers (“Bates numbers”) on each page of eachelectronic document (id.); and
to provide certain information fields (“metadata”) describing each electronicdocument (i.e., the custodian, author, recipients, creation date, modificationdate, and other relevant data) (id. ¶ L.vii).
B. QSGI Repeatedly Ignored Deadlines For Discovery Responses.
In November and December 2011, IBM served QSGI with its First Request for
the Production of Documents (“Document Requests”) and First Set of Interrogatories
(“Interrogatories”), respectively. (Mot. to Compel Pl.’s Resps. to Defs.’ Disc. Reqs. and
Mem. of Law in Supp. of Defs.’ Mot., Feb. 15, 2012, Declaration of Laura Besvinick
(“Feb. 15, 2012 Besvinick Decl.”), Exs. A, B (Feb. 15, 2012, ECF No. 40-1).) QSGI’s
responses to the Document Requests and Interrogatories (collectively, “Discovery
Requests”) were due in December 2011 and January 2012, respectively.
Although IBM in good faith granted QSGI five extensions of the deadlines for
QSGI’s responses, QSGI still failed to provide the requested discovery.1 IBM’s
communications to QSGI on this subject thereafter went unreturned. (Feb. 15, 2012
Besvinick Decl. ¶¶ 15-17.) IBM was thus forced to move the Court to compel QSGI to
1 Specifically, IBM granted QSGI extensions to these deadlines on December 7, 2011, January 5,2012, January 19, 2012, January 27, 2012, and February 8, 2012. Feb. 15, 2012 Besvinick Decl.¶¶ 4-15.
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provide this discovery. (Mot. to Compel Pl.’s Resps. to Defs.’ Disc. Reqs. and Mem. of
Law in Supp. of Defs.’ Mot. (“Motion to Compel”) (Feb. 15, 2012, ECF No. 40).)
QSGI opposed the Motion to Compel, asking that the Court excuse its failure to
respond on the purported basis that QSGI’s documents were in the possession of
McDonald Hopkins LLC (counsel QSGI retained to respond to a subpoena from the
Securities and Exchange Commission (“SEC”)), and because certain of QSGI’s hardcopy
documents produced to the SEC had not been returned. (See Pl.’s Resp. to Defs.’ Mot. to
Compel Resps. to Defs.’ Disc. Reqs. ¶¶ 4-5 (Mar. 2, 2012, ECF No. 43).) QSGI
represented to the Court that its electronic production would be complete by the first
week of April. (See id. ¶ 6.) QSGI said nothing about its failure to respond to IBM’s
Interrogatories. (See id.)
C. QSGI Ordered To Respond Completely By April 2, 2012.
On March 16, 2012, U.S. Magistrate Judge Ann E. Vitunac granted IBM’s
Motion to Compel in relevant part and ordered QSGI to respond completely to IBM’s
Discovery Requests by April 2, 2012. (March 16, 2012 Order (“March 16 Order”) at 1
(Mar. 16, 2012, ECF No. 50).) QSGI filed no objections and sought no stay of this
Order.
D. QSGI’s Noncompliance With The March 16 Order.
1. Failure to provide complete Interrogatory Responses
On April 2, 2012, QSGI served its unverified response to IBM’s Interrogatories.
(Pl.’s Unverified Resp. to Defs.’ IBM and IBM Global Financing’s First Set of Interrogs.
(“Unverified Interrogatory Response”), IBM’s Mot. to Compel Compliance with March
16, 2012 Order and for Sanctions for Noncompliance (“Mot. to Compel Compliance”),
May 1, 2012, Declaration of Benjamin Diessel (“May 1, 2012 Diessel Decl.”), Ex. 8
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(May 1, 2012, ECF No. 64-2).) In this document, QSGI essentially failed to provide
substantive responses to the Interrogatories. For example:
IBM Interrogatory No. 1 requests QSGI’s factual bases for its centralcontentions that IBM changed a policy in 2007 relating to sales of upgradesand downgrades for used IBM mainframe computers and applied that policyin a disparate fashion. (See Unverified Interrogatory Resp. No. 1, May 1,2012 Diessel Decl., Ex. 8.) In response to Interrogatory No. 1, QSGI refersIBM to a single document: a 2007 IBM pricing guide. This IBM document inrelevant part simply restates a long-standing policy. It contains noinformation about a policy change or IBM applying such a policy in adisparate fashion. (See id.; see also Mot. to Compel Compliance at 5.)
IBM Interrogatories Nos. 2-6 request information concerning QSGI’s primarycontentions in this lawsuit that its business of buying and reselling used IBMmainframe computers was adversely impacted by the alleged IBM policychange in 2007. (See Unverified Interrogatory Resp. Nos. 2-6.) As to each,QSGI states that “it does not have all the information requested within itscustody or control” to provide complete answers and, without furtherexplanation, refers IBM to two exhibits that do not provide the informationcalled for. (Id.; see also Mot. to Compel Compliance at 5-6.)
IBM Interrogatory No. 7 requests information concerning QSGI’s damagescalculations. QSGI provides only vague references to its public filings andcertain employees, along with a meritless objection. (See UnverifiedInterrogatory Resp. No. 7.)
Finally, IBM Interrogatory No. 8 requests information concerning QSGI’sdocument destruction. Although QSGI originally provided a partial response,QSGI’s counsel effectively withdrew it when QSGI’s corporate representativeon this issue contradicted it. (See Unverified Interrogatory Resp. No. 8; seealso IBM’s Reply in Supp. of its Mot. to Compel Compliance with Mar. 16,2012 Order and for Sanctions for Noncompliance (“Reply in Supp. of Mot. toCompel Compliance”) at 3 n.3 (May 11, 2012, ECF No. 77).)
2. QSGI’s untimely and incomplete document production
On January 27, 2012, QSGI produced a limited number of documents to IBM.
(See Feb. 15, 2012 Besvinick Decl. ¶ 10.) Following the March 16 Order, QSGI
produced no additional documents until March 30, one business day before the Court’s
April 2 deadline. By the Court’s deadline, QSGI had produced only a fraction of its
intended document production. (See Reply in Supp. of Mot. to Compel Compliance,
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May 11, 2012, Declaration of Benjamin H. Diessel (“May 11, 2012 Diessel Decl.”) ¶¶ 6,
9, 11 (May 16, 2012, ECF No. 77-1).)
On April 2, QSGI provided its written response to IBM’s Document Requests.
QSGI flatly refused to produce documents in response to eight of IBM’s requests,
claiming that it did not have responsive documents “at this time”. (See Pl.’s Resp. to
Defs.’ Req. for Produc. of Docs. Nos. 3-4, 9-10, 21, 28-30, May 1, 2012 Diessel Decl.,
Ex. 7.) As to many of IBM’s other requests, QSGI simply pointed to 382 boxes of
documents that QSGI previously produced to the SEC. (Id. at Nos. 1-2, 5-8, 16, 22-27,
31-34, 36-37, 39-40.) In effect, QSGI indicated that responsive documents might be
found somewhere in that collection. QSGI did not review those boxes for responsiveness
to IBM’s specific requests, and did not make them available for IBM to review until May
4. (See May 11, 2012 Diessel Decl. ¶¶ 7-10; Feb. 15, 2012 Besvinick Decl. ¶¶ 11-12, 15-
17.)
On April 3 and April 5, QSGI produced additional documents. (May 1, 2012
Diessel Decl. ¶¶ 9, 13.) On May 10, QSGI served its most recent and most voluminous
electronic document production. (IBM’s Reply in Supp. of IBM’s Mot. for Sanctions for
Failure to Attend a Rule 30(b)(6) Dep. and Individual Dep., June 8, 2012 Declaration of
Benjamin H. Diessel ¶¶ 5-6 (June 8, 2012, ECF No. 90-1).) QSGI still has not completed
its document production. (Objs. at 16.) Nor has QSGI ever asked the Court to extend
the ordered April 2 deadline.
3. QSGI’s failure to comply with ESI Agreement
When QSGI produced electronic documents, it did so without regard to the
parties’ agreed format for electronic document production. For example, the March 30,
April 3 and April 5, 2012 electronic document productions were effectively unusable as
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produced. (May 1, 2012 Diessel Decl. ¶¶ 7, 13-14.) Specifically, these productions were
provided without the technical files necessary for the documents to be loaded into a
review tool for orderly review. (Id. ¶¶ 7, 13.) Nor was there any apparent systematic
structure to these electronic documents that would make it feasible manually to load these
documents into a review tool. The file structure was disorganized, and QSGI provided no
instructions or guidance as to the contents or organization of these productions. (June 20,
2012 Declaration of Tisha Ladia (“Ladia Decl.”) ¶¶ 4, 6.) Likewise, QSGI’s May 10
electronic production lacked technical files necessary to load many documents. (June 21,
2012 Diessel Decl. ¶ 3.)
Furthermore, many of the documents had no or incomplete “metadata”, impeding
IBM’s ability effectively and efficiently to review these documents. (See May 1, 2012
Diessel Decl. ¶¶ 7, 13; May 29, 2012 Email from B. Diessel to A. Kessler, June 21, 2012
Diessel Decl., Ex. 1.) For example, QSGI produced documents in many instances with
no metadata at all. (May 1, 2012 Diessel Decl. ¶ 7; June 21, 2012 Diessel Decl ¶ 3.)
Although QSGI provided partial metadata for some documents, that metadata was
noncompliant with the parties’ ESI Agreement and failed to include all agreed metadata
fields, such as custodian, date created, date last modified and file name. (Ladia Decl. ¶ 8;
May 1, 2012 Diessel Decl. ¶¶ 7, 13.) Finally, QSGI produced many documents without
text that would be searchable when loaded into a review tool. (See Ladia Decl. ¶ 7.) All
of these issues together made it difficult for IBM systematically to search for and locate
documents electronically.
Many documents in these productions also lack Bates numbers, making it difficult
to identify them uniquely. (See Mar. 31, 2012 Letter from B. Diessel to J. Bauta, May 1,
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2012 Diessel Decl., Ex. 5; June 21, 2012 Diessel Decl., Ex. 1.) Further, to the extent
QSGI provided some documents with Bates numbers, these Bates numbers were often
reused across different productions, making those numbers unreliable and effectively
unusable. (See June 21, 2012 Diessel Decl. ¶ 3.)
IBM immediately advised QSGI of these deficiencies and reminded QSGI of its
obligations under the ESI Agreement. (See April 11, 2012 Letter from B. Diessel to
J. Bauta, May 1, 2012 Diessel Decl., Ex. 10 & ¶ 8.) QSGI refused to produce its
documents in agreed format and advised IBM to make a motion to the Court. (See id.
¶ 10.)
4. IBM’s efforts to remediate QSGI’s productions
QSGI’s noncompliant document productions forced IBM to engage its litigation
services vendor, Document Technologies, Inc. (“DTI”), to attempt to remediate the
foregoing issues. (May 1, 2012 Diessel Decl. ¶ 14; June 21, 2012 Diessel Decl. ¶ 4.)
DTI eventually was able to load these productions into IBM’s review tool, but only after
writing a custom computer program to convert QSGI’s document productions into
suitable format. (See May 1, 2012 Diessel Decl. ¶ 14.) DTI used custom software to
extract the small amount of incomplete and noncompliant metadata that QSGI had
produced. (See Ladia Decl. ¶ 9.) Because QSGI produced many documents in an
unsearchable format, DTI also undertook efforts to make these electronic documents
searchable. (Id. ¶¶ 6-7.)
Although these efforts have allowed IBM, with some difficulty, to review these
documents, they cannot fully address the prejudice to IBM. For example, because QSGI
failed to provide agreed-to metadata, IBM still cannot determine important attributes of
the produced documents, including from whom QSGI collected documents, who authored
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documents, or the date ranges of the documents produced. (See Apr. 11, 2011, Letter
from B. Diessel to J. Bauta, May 1, 2012 Diessel Decl., Ex. 10.) Further, even with
DTI’s substantial efforts, the electronic documents appear in disaggregated format,
making it difficult, if not impossible, for IBM to associate emails with their attachments.
(See June 21, 2012 Diessel Decl. ¶ 4; Ladia Decl. ¶ 4.) DTI could not remediate QSGI’s
failure to include unique identifiers on its documents, which failure continues to
complicate the authentication of documents.2 (See June 21, 2012 Diessel Decl. ¶ 4; Ladia
Decl. ¶ 9.)
5. IBM’s efforts to resolve QSGI’s noncompliance
Six times IBM sought to address QSGI’s noncompliance with the Court’s Order
of March 16. (May 1, 2012 Diessel Decl. ¶¶ 8-21.) Almost all of these letters and phone
calls went unreturned, forcing IBM to file a motion for QSGI to comply with the Order.
(See id. ¶¶ 8-22; see also Mot. to Compel Compliance at 9-10.)
While QSGI opposed this motion, it did not contest the inadequacy of its
Unverified Interrogatory Response or address these deficient responses in any way.
QSGI again blamed its tardy document production on the claim that its documents were
in the possession of QSGI’s SEC counsel, McDonald Hopkins (whom QSGI erroneously
characterizes as a third party). (Pl.’s Resp. to IBM’s Mot. to Compel Compliance with
Mar. 16, 2012 [Order] and Sanctions for Noncompliance (“Resp. to Mot. to Compel
Compliance”) ¶¶ 2, 6, 9 (May 7, 2012, ECF No. 70).) QSGI acknowledged its failure to
2 For example, QSGI’s counsel recently objected to IBM introducing a QSGI-produced documentas a deposition exhibit on the basis that the document lacked a Bates stamp. June 20, 2012Declaration of Andrei Harasymiak ¶ 2.
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comply with the ESI Agreement, but claimed that this Agreement was “gratuitous”. (See
id. at ¶ 4.)
E. QSGI Ordered To Comply By June 4 With The March 16 Order.
On May 22, Magistrate Judge Vitunac ordered QSGI to comply by June 4 with
the Court’s March 16 Order. (May 22, 2012 Order (“May 22 Order”, referred to
collectively with the March 16 Order as “Orders”) at 2 (May 22, 2012, ECF No. 85).) As
to the Unverified Interrogatory Responses, Magistrate Judge Vitunac noted that “QSGI
once again does not attack the substance of the propounded discovery, it only provides
numerous reasons it has failed to comply.” (Id. at 1.) Magistrate Judge Vitunac warned
QSGI that the Court was “frustrated with QSGI’s inaction” concerning its discovery
obligations. (Id. at 2-3.) Further, Magistrate Judge Vitunac admonished QSGI that
sanctions would follow if “QSGI fails to comply with this Order”. (Id. at 3.) Magistrate
Judge Vitunac held that QSGI “agreed to produce the files in a specific format”, that the
ESI Agreement “controls”, and that QSGI must produce documents “in the agreed-upon
electronic format”. (See id. at 2.)
F. QSGI Ignored IBM’s Proposed Compromise Concerning ESI.
During a May 25 conference, IBM proposed to QSGI a compromise on the ESI
issue. (June 21, 2012 Diessel Decl., Ex 1.) IBM offered to waive QSGI’s obligation to
reproduce its prior productions in the agreed format by June 4, if QSGI would agree to
certain stipulations to address IBM’s continuing prejudice3 and pay the reasonable
3 Specifically, IBM requested that QSGI stipulate that: (1) it would not contest the authenticity ofdocuments IBM represents were included in QSGI’s electronic document productions; and(2) QSGI collected the electronic documents from only certain enumerated custodians. June 21,2012 Diessel Decl., Ex 1.
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expenses IBM incurred in partially remediating these issues (approximately $30,0004).
(Id.) QSGI never responded to this proposal. (Id. ¶ 7.)
G. QSGI’s Failure to Comply by June 4 Deadline.
QSGI sought no stay of the Court’s June 4 deadline for compliance with the
March 16 Order. Yet, QSGI undertook no action to comply with the Orders following
the issuance of the May 22 Order. Instead, QSGI waited until the June 4 deadline and
then filed the present Objections.
ARGUMENT
A. Legal Standard.
A party must object to a magistrate judge’s order within 14 days after being
served with a copy of the order. Fed. R. Civ. P. 72(a). The filing of an objection to a
magistrate judge’s discovery order does not operate as an automatic stay of the order.
Myers v. Cent. Fla. Invs., Inc., No. 6:04-cv-1542-Orl-28DAB, 2006 U.S. Dist. LEXIS
9517, at *2 n.1 (M.D. Fla. Feb. 27, 2006); see also Wright, Miller & Marcus, Federal
Practice and Procedure: Civil § 3069 (2d ed. 2012) (“[A] timely objection does not
automatically render the magistrate judge’s ruling invalid until the district court acts on
the objection.”).
A district court judge reviews a magistrate judge’s discovery order for clearly
erroneous factual findings or legal error. Fed. R. Civ. P. 72(a) (a district court judge may
“modify or set aside any part of the order that is clearly erroneous or is contrary to law”);
4 DTI’s charges for these services total approximately $21,057.62 to date. Ladia Decl. ¶ 10(including 20 hours of programming to create custom software totaling $5,000 in fees; 12 hoursof analyst time totaling $3,000 in fees; creation of 43,700 document images from documentsproduced in PDF format, costing $874; and creation of searchable text of 609,181 pages costing$12,183.62). IBM also incurred $8,916 in fees from technical staff and attorneys to direct andassist DTI with this work. June 21, 2012 Diessel Decl. ¶ 4 (including 5.3 hours of attorney timetotaling $2,110 in fees and 30 hours of technical staff time totaling $6,806 in fees).
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28 U.S.C. § 636(b)(1)(A) (“A judge of the court may reconsider any pretrial matter
. . . where it has been shown that the magistrate judge’s order is clearly erroneous or
contrary to law.”). The objecting party may not rely on facts not presented in the record
before the magistrate judge. See In re Seroquel Prods. Liab. Litig., No. 6:06-md-1769-
Orl-22DAB, 2008 U.S. Dist. LEXIS 15394, at *14 (M.D. Fla. Feb. 28, 2008) (“[B]ecause
this Court’s review of the magistrate judge’s order in this instance is not de novo, but
rather is limited to a finding of clear error, the Court finds that it would be improper to
look to anything but the record that existed at the time the magistrate judge issued his
ruling.”). Objections must set forth the error in the magistrate judge’s order and the
“statutory, rule, or case authority” supporting the objecting party’s position. S.D. Fla.
Magis. R. 4(a).
B. QSGI’s Objections Should be Considered Untimely.
At the threshold, QSGI’s Objections should be rejected as untimely. The
March 16 Order obligated QSGI to complete its document production and completely
respond to IBM’s Interrogatories. The May 22 Order, in turn, requires QSGI’s
compliance with these existing obligations. QSGI’s Objections, then, present a challenge
to its obligations arising from the March 16 Order. But QSGI made no timely objection
to the March 16 Order. The Court should not entertain QSGI’s untimely attempt to attack
the March 16 Order. See Jones v. United Space Alliance, L.L.C., 170 F. App’x 52, 54
(11th Cir. 2006) (noting that a party cannot “assign as error a defect in [a] magistrate
judge’s order” where an objection was not timely made under Fed. R. Civ. P. 72(a)).
Even assuming that the Court reaches the merits of QSGI’s Objections, QSGI’s
challenges to its ordered obligations are unavailing, as discussed below.
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C. QSGI Was Properly Ordered To Complete Production in Agreed Format.
QSGI presents no argument that the May 22 Order was premised on an error of
law.5 QSGI also does not dispute the facts underlying Magistrate Judge Vitunac’s Order,
much less that the Court made any clearly erroneous factual finding.6 QSGI admits that it
agreed to the discovery obligations in the ESI Agreement. (See Objs. at 15.) The parties
included these obligations in the Joint Scheduling Report as required by the Local Rules.
S.D. Fla. L. R. 16.1(b)(3). QSGI does not contend otherwise. Accordingly, QSGI is
bound by this agreement, as properly held by Magistrate Judge Vitunac. QSGI’s failure
to present an argument under the proper legal standard alone warrants denial of its
Objections. See, e.g., Dulaney v. Miami-Dade Cnty., No. 09-23259-CIV, 2011 U.S. Dist.
LEXIS 13056, at *4 (S.D. Fla. Feb. 2, 2011) (affirming Magistrate Judge’s Order where
there was no clear error and the “Defendant [did] not point to any clear error on the part
of the Magistrate Judge”).
QSGI nevertheless asks this Court to set aside QSGI’s agreed obligations. QSGI
nowhere states that it cannot comply with the ESI Agreement, just that QSGI’s
noncompliance is cheaper and more convenient for QSGI. As an initial matter, QSGI’s
reliance on the purported burden of reproducing these documents is disingenuous. Prior
to QSGI filing its Objections, IBM offered that it would not require QSGI to reproduce
5 QSGI cites only to discovery rules that are superseded by the parties’ ESI Agreement. See May22 Order at 2 (“QSGI asserts that it produced the documents in the electronic format they werekept in, and that the Civil Rules do not require more. While QSGI would normally be correct, inthis instance it agreed to produce the files in a specific format. The agreement controls.”).6 QSGI’s Objections present a narrative of purported facts concerning discovery in this matter.These contentions are outside of the record that was before Magistrate Judge Vitunac andtherefore should be disregarded. Objs. ¶¶ 5-12, 15-22, 24-26, 29-32, 35-52 (citing to materialoutside of the record); see also In re Seroquel Prods. Liab. Litig., 2008 U.S. Dist. LEXIS 15394,at *14.
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documents in agreed format if QSGI agreed to provide certain stipulations and reimburse
IBM’s reasonable expenses. (June 21, 2012 Diessel Decl., Ex 1.) QSGI ignored this
proposal. (Id. ¶ 7.)
QSGI’s claimed convenience in any event provides no basis to disregard agreed
discovery obligations. The bilateral requirements of the ESI Agreement promote orderly
and efficient discovery by both parties. See, e.g., In re Seroquel Prods. Liab. Litig., 244
F.R.D. 650, 655 (M.D. Fla. 2007) (noting that in complex litigation it is important for
parties to confer and agree regarding the format of electronic discovery production).
IBM undertook substantial effort to provide discovery in compliance with the ESI
Agreement.7 QSGI was properly held to its end of the bargain.8
QSGI’s contention that the ESI Agreement is subject to modification (and that
this somehow relieves QSGI of its agreed obligations) also misses the mark. QSGI has
never sought a modification of the ESI Agreement.9 The ESI Agreement, as originally
negotiated and agreed upon, remains binding. (See May 22, 2012 Order at 2; see also
Scheduling Order ¶ 12 (Nov. 11, 2011, ECF No. 29) (“The parties shall be bound by all
additional representations made in their Joint Scheduling Report.”).) In sum, QSGI has
7 IBM undertook substantial effort to collect, image and process electronic information in thiscase, including from computer hard drives of at least 31 IBM employees; from servers housingemployee emails; and from central electronic repositories of IBM information. June 21, 2012Diessel Decl. ¶ 5. In compliance with the ESI Agreement, IBM’s electronic documentproductions included load files and agreed metadata fields for each electronic document. Id.8 The fact that McDonald Hopkins collected and maintained certain QSGI electronic documentsin certain formats to respond to the SEC’s 2009 subpoena is irrelevant to QSGI’s obligationspursuant to the ESI Agreement.9 As Magistrate Judge Vitunac noted, “[i]f QSGI could not live up to the agreement, it shouldhave written IBM and explained why. Instead, QSGI did nothing except tell IBM to file a motionwith the Court if it wanted the documents in agreed upon form”. May 22, 2012 Order at 2.
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cited no clearly erroneous factual finding, no error of law, and no reason at all why it
should not be required to comply with the ESI Agreement.
D. QSGI Was Properly Ordered To Respond Fully To The Interrogatories.
QSGI’s Unverified Interrogatory Response is inadequate. QSGI has not contested
this point in any briefing before Magistrate Judge Vitunac. QSGI was properly ordered
to provide complete responses.
Despite not objecting to the March 16 Order (or assigning any error to the May 22
Order), QSGI now apparently seeks to avoid providing substantive responses by standing
on purported breadth objections that QSGI included in its Unverified Interrogatory
Response. (See Objs. at 17.) This position is untenable for at least three reasons.
First, QSGI waived these breadth objections when it failed timely to serve
responses to the Interrogatories. S.D. Fla. L. R. 26.1(g)(3)(A) (“Any ground not stated in
an objection [to an interrogatory] within the time provided by the Federal Rules of Civil
Procedure, or any extensions thereof, shall be waived.”).
Second, QSGI waived any possible objections by failing to assert any in response
to either of IBM’s motions to compel. Indeed, QSGI failed to contest either of IBM’s
motions as to the Interrogatories in any way at all. In an objection to a magistrate judge’s
ruling, a party cannot raise any grounds that were not raised before the magistrate judge.
See In re Seroquel Prods. Liab. Litig., 2008 U.S. Dist. LEXIS 15394, at *14. It is simply
too late for QSGI to raise any objection to the Interrogatories.
Third, even assuming QSGI’s breadth objections were not waived, breadth
objections do not excuse a party from providing any answers at all. Vanhorn v.
Behavioral Support Services, Inc., No. 6:07-cv-1696-Orl-22DAB, 2008 WL 4539463,
at *1 (M.D. Fla. Oct. 8, 2008) (“[A]n objection for overbreadth does not relieve the duty
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 15 of 20
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to respond to [an interrogatory to the] extent that is not overbroad . . . .”) (internal
quotation marks and citation omitted). Here, QSGI provided essentially nothing. IBM is
not asking QSGI to provide answers of broader scope or to address irrelevant matters.
IBM simply asks that the Plaintiff provide responses that actually answer the very basic
questions posed about fundamental elements of Plaintiff’s purported claims.
Nor can QSGI excuse its failure to respond by claiming that it has not yet
reviewed its own documents. QSGI has anticipated this action for almost five years.
(See QSGI Inc., Quarterly Report (Form 10-Q) at 12 (Nov. 14, 2007), Defs.’ Mot. to
Dismiss With Prejudice Pl.’s Second Am. Compl., Apr. 16, 2012 Declaration of Laura
Besvinick, Ex. 1 (Apr. 16, 2012, ECF No. 54-1).) The complaint in this case was filed
almost a year ago, and we have almost reached the discovery cut off. At this late date
QSGI cannot hide behind its own failure to investigate its purported claims. If QSGI has
no responsive information, it should have so stated definitively. To the extent that QSGI
has additional responsive information, it should have provided it.
E. QSGI Is In Violation of Both the Court’s Orders.
QSGI’s Objections do not absolve QSGI’s continuing violation of the Orders.
QSGI was ordered to provide complete document production by April 2, a date QSGI
itself proposed in response to IBM’s Motion to Compel. QSGI was also ordered to
provide complete Interrogatory responses by that date.10 Despite two Orders, QSGI
admits that it still has not completed its document production, and indeed had only just
begun reviewing many of the potentially responsive documents as of the date of its
10 See March 16 Order at 1 (“Plaintiff asserts that it is producing discovery on a rolling basis andwill be finished by the first week of April. The Court will hold Plaintiff to it . . . . Plaintiff shallcompletely respond to the pending discovery requests by April 2, 2012.”).
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 16 of 20
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Objections. (Objs. at 16 (“Plaintiff has begun the review [of voluminous amounts of hard
copy documents] and intends to complete it this week.”).)11 Further, QSGI admits that it
has no intention of responding to the Interrogatories or producing its documents in agreed
format. (See id. at pp. 13-17 (“Plaintiff maintains it has responded to the best of its
ability given its objections to the Interrogatories.”; “It would be unduly burdensome for
Plaintiff to reproduce the documents in [the] format” compliant with the ESI
Agreement.).) QSGI’s Objections did not stay its ordered obligations. See Myers, 2006
U.S. Dist. LEXIS 9517, at *2 n.1. Thus, QSGI comes before the Court in willful
violation of both Orders. This fact, in itself, is sufficient to warrant denial of QSGI’s
Objections.
CONCLUSION
For the foregoing reasons, IBM respectfully requests that the Court deny QSGI’s
Objections.
11 As of the date of this Response, QSGI has not produced any additional documents to IBM.June 21, 2012 Diessel Decl. ¶ 8.
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 17 of 20
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Dated: June 21, 2012
Respectfully submitted,
/s/ Laura BesvinickLaura BesvinickFlorida Bar No. 391158HOGAN LOVELLS US LLP200 South Biscayne Blvd.Suite 400Miami, FL 33131Telephone: 305-459-6500Facsimile: [email protected]
Evan R. Chesler*Richard J. Stark*Teena-Ann V. Sankoorikal*CRAVATH, SWAINE & MOORE LLPWorldwide Plaza825 Eighth AvenueNew York, NY 10019Telephone: 212-474-1000Facsimile: [email protected]@[email protected]
Ty Cobb*Eric J. Stock*HOGAN LOVELLS US LLPColumbia Square555 Thirteenth Street, NWWashington, DC 20004Telephone: 202-637-5600Facsimile: [email protected]@HoganLovells.com
*Admitted Pro Hac Vice
Counsel for Defendants IBM GlobalFinancing and International BusinessMachines Corporation
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 18 of 20
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that, on this 21st day of June 2012, I electronically
filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify
that the foregoing document is being served this day on all counsel of record or pro se
parties identified on the attached Service List in the manner specified, either via
transmission of Notices of Electronic Filing generated by CM/ECF or in some other
authorized manner for those counsel or parties who are not authorized to receive
electronically Notices of Electronic Filing.
/s/ Laura BesvinickLaura BesvinickFlorida Bar No. 391158
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 19 of 20
QSGI, INC. SERVICE LIST
Juan Pablo Bauta, IIFerraro Law Firm
4000 Ponce de Leon BlvdSuite 700
Miami, FL 33146Phone: 305-375-0111Fax: 305-379-6222
Melissa Damian ViscontiFerraro Law Firm
4000 Ponce de Leon BlvdSuite 700
Miami, FL 33146305-375-0111
Fax: 305-379-6222Email: [email protected]
Case A. DamFerraro Law Firm
4000 Ponce de Leon BlvdSuite 700
Miami, FL 33146Phone: 305-375-0111Fax: 305-379-6222
Email: [email protected]
Case 9:11-cv-80880-KLR Document 99 Entered on FLSD Docket 06/21/2012 Page 20 of 20
2012-05-29 EMAIL from B. Diessel to J. Bauta re: Summary of May 25 DiscussionBenjamin Diessel to: jpb, aak, ncb 05/29/2012 05:14 PM
Cc:Richard Stark, Teena-Ann Sankoorikal, ty.cobb, laura.besvinick, eric.stock
Bcc: IBM562
Amanda,
I write to summarize our phone conversation on Friday, May 25 concerning QSGI's obligations to comply with the parties' agreement relating to Electronically Stored Information ("ESI") and additional follow-up items.
As you acknowledged, the Court's May 22 Order ("Order") obligates QSGI to reproduce its prior electronic productions in compliance with the parties' ESI agreement. As I stated, QSGI’s electronic productions, including its March 30, April 3, April 5 and May 10 productions, fail to comply with the parties’ ESI agreement -- a point that you did not dispute. Specifically, for example, QSGI's electronic productions, among other deficiencies, lack: (1) agreed metadata (J. Sched. Rpt. ¶ L.vii); (2) load files (id. ¶ L.v); and (3) Bates numbers on TIFF images (id.). Moreover, although QSGI provided Bates numbers for certain PDFs, those Bates numbers overlap in substantial part, rendering them unusable and unintelligible (id.) (for example, the Bates numbers that QSGI assigned to certain PDFs in the May 10 production (QSGI000001-QSGI027812) overlap with Bates numbers that QSGI assigned to documents in prior productions). As I also mentioned, additional deficiencies are discussed in my letters dated March 31 and April 11, 2012 (which I have attached hereto for your reference) as well as in our papers associated with our motion to compel compliance with the Court's March 16 Order.
You did not provide an explanation for QSGI's noncompliance with the ESI agreement, except to state that McDonald Hopkins prepared these document productions. As you know, however, QSGI at all times has had (and continues to have) access to the underlying information sources from which these documents were collected and produced. There is no technological reason precluding QSGI's compliance with the ESI agreement.
Through substantial expense and effort, IBM has been able to load these noncompliant productions. The expenses associated with this effort are approximately $30,000. To be clear, however, even with these efforts, we have not been able fully to (and we understand that we will not be able fully to) remediate QSGI's failure to comply with the ESI agreement. For example, the majority of the electronic documents that QSGI produced lack metadata. Those that include metadata omit agreed fields. QSGI has not provided this information and IBM cannot reproduce it. Thus, for example, IBM cannot match a given document with the custodian from whom it was produced. IBM also cannot locate documents systematically by date, sender, recipient, subject, or file type (among other issues). IBM cannot fix QSGI's failure to provide reliable Bates numbers, either, resulting in documents that have no facially apparent unique identifier. This needlessly complicates IBM's efforts to utilize documents from QSGI's productions. Accordingly, for these and other reasons, IBM has a substantial need for QSGI to reproduce its prior productions in a compliant, intelligible format. IBM is entitled to as much, as held by the Court.
As I stated in our call, without prejudice to and reserving our rights concerning QSGI's obligations pursuant to the Order, we would nevertheless be willing to consider a compromise, provided that QSGI addresses IBM's continuing prejudice resulting from QSGI's noncompliant productions as well as the substantial expenses IBM has had to pay to load these productions. Specifically, we would consider a compromise along the following lines:
QSGI stipulates that it will not contest the authenticity of any document that IBM represents was
included in QSGI's document productions; QSGI stipulates that its document productions include documents from the custodians listed in
Juan Bauta's January 27, 2012 letter (attached hereto) and that no documents from other custodians were included in these productions; and
Case 9:11-cv-80880-KLR Document 99-1 Entered on FLSD Docket 06/21/2012 Page 5 of 6
QSGI immediately repays IBM's expenses associated with remediating QSGI's noncompliant
document productions (approximately $30,000).For avoidance of doubt, this compromise would not discharge QSGI's obligations pursuant to the Order, including its obligation to complete any remaining document production in compliant format and to respond fully to IBM's interrogatories. Please let us know when you are available to discuss this proposal. If QSGI will not agree, we expect QSGI to comply with the Court's Order and to provide complete and compliant production of documents pursuant to the ESI agreement by June 4.
At the end of our call, you also agreed to follow up on outstanding items including the following: whether QSGI will agree to admission of the Micro Focus deposition transcript and recording (I
asked Juan to respond by May 23 but have not heard from him; we would appreciate a prompt response by May 29); the contact information for Seth Grossman and Robert Van Hellemont; and
dates on which David Meynarez is available for deposition.
I look forward to your response on these items.
2012.Jan.27.Letter.from.J.Bauta.PDF
2012-03-31 LETTER from B. Diessel to J. Bauta re Issues with the production of documents received on March 30, 2012.pdf
2012-04-11 LETTER from B. Diessel to J. Bauta re Discovery Issues.pdf
Benjamin DiesselCravath, Swaine & Moore LLP825 Eighth AvenueNew York, NY 10019(212) 474-1177 (direct)(212) 474-3700 (fax)
Case 9:11-cv-80880-KLR Document 99-1 Entered on FLSD Docket 06/21/2012 Page 6 of 6