discovery, thereby removing GAC’s primary objection to the discovery requests, and making the dispute
moot.” Ifthe plaintiffs really believed this, it isnonetheless an unsatisfactory excuse for their inaction. First,
while the motion-to-dismiss objection was “the primary” objection, it was not the only one. Second, when
the ruling from Judge Coar would come could not be foretold, and as the discovery cut-off drew ever
closer it was incumbent upon the plaintiffs to take action, rather than persist in a hope that events had
belied. Third, and most importantly, it was folly to assume that the outcome would probably be in the
plaintiffs’ favor. “Certitude isnot the test of certainty,” Holmes, Natural Law, 32 Harv. L. Rev. 40, 41
(1918); of Newsome v. McCabe, 318 F.3d 301, 305 (7" Cir. 2003), and the outcome of even a sure
winner is never certain. See Kern v. Levolor Lorentzen, Inc., 899 F.2d 772, 781 (o" Cir,
1990)(Kozinski, J., dissenting).

Ofcourse, the plaintiffs had the right to gamble on the timing and outcome of Judge Coar’s ruling,
to persist in their self-deception, and to continue to take the “numerous” depositions without moving to
compel, But as with all rolls of the dice, there are consequences. The heads I win, tails you lose approach
of the plaintiffs is no more acceptable ina court than in acasino, and blinking reality is not an excuse for
inaction under the Federal Rules of Civil Procedure.

(on

Denial of the motion to compel does not, however, leave the plaintiffs remediless, as it does in most
cases where a motion to compel is denied as untimely. In fact, the availability ofa remedy is one of several
factors in the decision to deny the motion to compel. Eachof GAC’s formal objections to all the discovery
requests contained the unambiguous representation that in the event the motion to dismiss were denied,

there would be prompt compliance by GAC. This is an enforceable promise. Cf Tamari v. Bache &

20


that he will consider the motion under Rule 12(b)(6) only.’ See Church of Scientology of San Francisco
y, IRS, 991 F.2d 560, 563 (9" Cir. 1993); Jn re Currency Conversion Fee Antitrust Litigation, No.
MDL 1409, M21-95, 2002 WL 88278, *2(S.D.N. Y, Jan. 22, 2002); Hachette Distrib., Inc. v. Hudson
County News Co., 136 F.R.D. 356, 358 (E.D.N. Y.1991) (factors relevant in stay application include
whether “the issues before the Court are purely questions of law that are potentially dispositive”); 6
Moore's Federal Practice, § 26-105[3][c] (Matthew Bender 3d ed.) (factors relevant in stay application
include “whether it is a challenge as a matter of law or to the sufficiency of the allegations”).

The unacceptability of the plaintiffs’ ipse dixit that discovery is necessary to resolve the pending
Rule 12(b)(6) motion is further evidenced by their purposeful failure to have filed a motion to compel until
the day discovery closed. There was no way to tell when Judge Coar would decide the motion to dismiss.
If he ruled against the plaintiffs, it would be too late to argue that discovery was needed for proper
resolution of the motion. Thus, prompt action was imperative. Yet, the plaintiffs did nothing to bring the
matter to any court’s attention at any time during the period the motion has been pending. This purposeful
inactivity is compelling evidence that the discovery now claimed to be essential to resolution of the motion
is in fact unnecessary to the Rule 12(b)(6) motion..

It misses the mark to say that Delta’s pre-1998 involvement with the remaining defendants is
relevant to show the existence and course of the alleged antitrust conspiracy, and that therefore, even ifthe
motion to dismiss is granted, GAC will have future discovery obligations. The relevancy of the materials

sought is irrelevant to the question of the timeliness of the motion to compel. Discovery closed on July 1,

8 GAC moved for dismissal of plaintiffs’ claims against it with prejudice — or, in the alternative,
for summary judgment. Judge Coar has refused to consider the motion as one for summary judgment.

14


would appear they are not in a position to produce him for deposition, as the plaintiffs have requested.
However, the plaintiffs shall have 30 days to subpoena Mr. Poure and to take his deposition at an
appropriate time and place, consistent with the schedules of other counsel.
CONCLUSION

For the foregoing reasons, the plaintiffs’ motion to compel defendant’ s compliance with outstanding
discovery requests [# 167] is GRANTED in part and DENIED in part. Although GAC’s objection to the
motion to compel Mr. Poure cannot be deemed objectively reasonable, where, as here, a motion to compel
is granted in part and denied in part, a court may apportion the reasonable expenses incurred in relation
to the motion inajust manner. Rule 37(a)(4)(C); 7 Moore’s §37.23 [4][b]. An appropriate resolution
of the competing motions for fees under the circumstances of this case —and one which is faithful to the

discretion to apportion reasonable expenses — is t§ deny the parties’ re:

Ctive motions for fees.

ENTERED:

1A
UNITED STATES MAGISTRATE JUDGE
DATE: September 6, 2005

‘6. continued)
the proposed deponent is not an employee of the opponent and is beyond its control); Lincoln Plaza
Assocs. v. Dow Chem. Co., No. 85-362, 1985 WL 3409, *1 (E.D.Pa. Oct.31, 1985).

24


did it say that counsel’s “understanding” as it pertained to Tim Poure was incorrect, as he had left the
company years earlier.

On March 11, 2005, plaintiffs’ second set of document requests was sent to all newly-named
defendants sought certain electronic records. In its response to the second requests, GAC raised eleven
objections, one of which was that it had moved to dismiss the claims against it. GAC initially refused to
produce responsive documents to that request unless plaintiffs paid the cost to retrieve the data; plaintiffs
offered to pay half of the associated costs. GAC explained that the information was stored on obsolete
computer tapes generated by a proprietary computer system no longer in use at GAC. Subject to the
parties’ agreement on cost-sharing, GAC has forwarded the computer tapes to an outside service for
retrieval of responsive data.

On March 14, 2005, plaintiffs filed a motion to extend the discovery deadline, previously set for
April 29, 2005. The supporting memorandum listed fifteen fact witnesses whose depositions the plaintiffs
planned to take. The only former or current GAC or Delta employee listed was Michael Harmon, whose
deposition has since been completed. The motion was largely based on what the plaintiffs claimed were
the “actions on numerous occasions [that] have delayed plaintiffs’ completion of fact discovery.”
(Memorandum, at 7). The list of culpable defendants did not include GAC. Judge Coar granted the
motion, extending the discovery deadline to July 1, 2005.

Atabout that same time, plaintiffs complained to GAC that there were “gaps” in the grand jury
document production. GAC explained that its Ohio counsel, who had handled the grand jury matter, had
been unable to locate certain documents that had been produced to the grand jury, and it was speculated

that they had not been returned by the government. GAC did, however, produce certain additional


Co.,729 F.2d 469, 472 (7" Cir. 1984)(An attomey’s promise in open court to produce documents could
betreated as the equivalent of an order for Rule 37(b) purposes). Moreover, quite apart from its promise,
if the motion is denied, GAC will be required to comply with the outstanding discovery requests made
months before the close of discovery. Brosted, F.3d_, 2005 WL 2043820.

For this reason, denial of the motion to compel will not leave the plaintiffs in the “untenable position
of having to oppose [a possible future] summary judgment motion by GAC without having been allowed
toconduct full and complete discovery of GAC” —ifsuch a motionisever filed. (Reply at 8).'* In the event
such amotion ismade and the plaintiffs are in some way actually prejudiced by their decision not to have
moved to compel until the last day of discovery — although that appears to be exceedingly unlikely —Rule
56(f) would permit the district court, ifhe felt it appropriate, to allow “depositions to be taken or discovery
to be had or may make such other order as is just where it appears that an opponent of a motion for
summary judgment cannot present by affidavit facts essential to justify the party’s opposition.”

Il
Plaintiffs’ Motion to Compel the Deposition of Mr. Poure

The plaintiffs’ motion to compel the deposition of Tim Poure is a more troubling issue. Plaintiffs first
expressed an interest in deposing Tim and Jim Poure and Barbara Haase in a November 9, 2004 letter in
which plaintiffs’ counsel expressed her “understanding”— she did not say from where it was derived — that
all three were GAC “employees of GAC and under [its] control.” The letter went on: “please let me know

if you will voluntarily produce them or if you will require us to notice their depositions.” (Plaintiffs’

'4 The premise of the argument depends on uncertain events that may not occur as anticipated or
indeed may not occur at all. Consequently, it cannot be said that there is a real and immediate and ripe
threat of harm-at least not sufficient to allow the plaintiffs to avoid the consequences of their intentional
and protracted delays.

21


hardly be heard to complain about continued discovery. Courts ought not to reward those who needlessly
allow confusion to persist or who are the cause of discovery delays. See Johnson v. J.B. Hunt Transport,
280 F.3d at 1132; Seibert v. Bleichman, 306 Ill.App.3d 841, 845, 715 N.E.2d 304, 307 (2TM Dist.
1999). That is what appears to have occurred here. A single sentence in the November 19" letter would
have dispelled any confusion and uncertainty and at no cost and with no burden to GAC, and would have
prevented a needless dispute. GAC’s counsel chose a different mode of response, and in so doing, ran
the risk that the recipient of the letter would be lulled into continuing to believe that her “understanding”
about Poure’s employment status was correct, and that GAC would voluntarily produce him, as other
defendants had done with their employees.

Honesty of purpose prompts frankness of statement, Crosby v. Buchanan, 90 U.S. 420, 457
(1875), not the kind of non-response in GAC’s counsel’s letter of the 1 9" _ a response which “smacks
of gamesmanship.” Saltzman v. Fullerton Metals Co., 661 F.2d 647, 651, n.4 (7" Cir. 1981). Thus,
GAC’s claim that plaintiffs were on notice by virtue of the organizational chart alone that Tim Poure was
nota GAC employee (and thus not within its control) is not particularly compelling. It was not until June
17,2005 — when silence was no longer an option— that GAC finally informed plaintiffs’ counsel that it did
not control Mr. Poure.'°

GAC does not control Mr. Poure, who has not been employed by GAC since 1998, '° Thus, it

'5 On June 27, 2005 plaintiffs’ lawyer claimed in a letter to GAC that she had, in phone
conversations with GAC’s counsel, confirmed Mr. Poure was an employee and in GAC’s control. On
June 28", GAC’s counsel responded in writing and denied the charges.

'© The deposition notice to GAC was ineffectual to compel Mr. Poure’s attendance. See United
States v. Afram Lines (USA), Ltd., 159 F.R.D. 408, 413-14 (S.D.N.Y. 1994) (subpoena required where
(continued...)

23


to know of the wrongdoing, to take reasonable steps to avoid further harm). The underlying rationale of
the principle is as applicable to the kind of inaction in this case as it is in other areas of the law.”

The decision fo take the depositions of Harmon, Dullea, and the “numerous Noranda and
Falconbridge witnesses who [allegedly] had extensive collusive dealings with Deltaand GAC throughout
the class period,” without the requested discovery and without having moved to compel, was as much
a“tactical decision[ |” as was the decision not to take discovery while the motion to dismiss was pending
inthe very case the plaintiffs have relied on, Kanner, 913 F.2d at 1223. And like the defendant in Kanner,
the plaintiffs are stuck with the “consequences of [their] tactical decisions.” Jd, Cf Ridge Chrysler Jeep,
LLC, 2004 WL 3021842 (Plaintiffs “must endure the harsh results of this tactical decision” to wait “until
four days before the close of discovery” to file a motion to compel). “Tf there has been any waiver here,
itis [the plaintiffs’ waiver] of [their] opposition to these depositions by agreeing to let them go forward”
without the responses to discovery that are now claimed to be so indispensable and without filing a motion
to compel. Banks, 2004 WL 723767 at *3.

Acceptance of the plaintiffs’ prejudice argument would absolve the plaintiffs of responsibility for
their own inaction, would extend discovery, and would precipitate a further round of depositions at which
the withheld information could be used. This would result ina nullification of the seven-hour limitation on
depositions in the Federal Rules of Civil Procedure and a likely claim that leads stemming from the

depositions required even more discovery. Sophisticated or oblique, no less than stark, methods of

2 tna tort context, the common law doctrine commonly passed under the name of assumption of
tisk. Coleman v. Ramada Hotels, 933 F.2d 470, 475 (7 Cir. 1991). See also Mesman v. Crane Pro
Services, 409 F.3d 846 (7" Cir, 2005), While the analogy is not perfect, and certainly does not of its own
force govern this case, it is informative.

18


1997 W.L. 12805 (S.D.N.Y. 1997). But such stays are granted with substantial frequency.* Indeed,
some districts have arule that prohibits discovery during the pendency of such a motion,’ and in some
circuits, district courts have been advised to resolve a motion to dismiss before allowing discovery.
Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367 (11" Cir. 1997). Numerous cases in this
circuit have allowed stays in the face of a Rule 12(b)(6) challenge.°

Stays are often deemed appropriate where the motion to dismiss can resolve the case —at least
as to the moving party, Hahn v. Star Bank, 190 F.3d 708, 719 (6TM Cir. 1999); Builders Ass'n of
Greater Chicago, 170 F.R.D. at 437, or where the issue is a threshold one, such as jurisdiction, United
States Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 79-80 (1988),
standing, Builders Ass'n, 170 F.R.D. at 437, or qualified immunity. Saucier v. Katz, 533 U.S. 194,200

(2001).

4 See, e.g., Moore v. Potter, 2005 WL 1600194 at *4 (11" Cir, 2001); Chaudhary v. Mobil Oil
Corp., 186 F.3d 502 (4" Cir. 1999); Gilbert v. Ferry, 401 F.3d. 411 (6" Cir. 2005); In re: Southeast
Banking Corp., 204 F.3d 1322 (11 Cir. 2000): Brever v. Rockwell Internat ’l Corp., 40 F.3d 1119 (10"
Cir. 1994); Institute Pasteur v. Chiron, 315 F.Supp.2d 33, 37 (D.D.C. 2004)(“It is well settled that
discovery is generally considered inappropriate while a motion that would be thoroughly dispositive of the
claims in the Complaint is pending.”).

5 See Brever v. Rockwell Internat'l Corp., 40 F.3d 1119 (10" Cir. 1994). In securities cases,
there is an automatic stay of discovery under the Private Securities Litigation Reform Act of 1995.
Wyser-Pratte Management Co. v. Telxon Corp., 413 F.3d 553, 559 (6" Cir. 2005).

5 See, e.g., Flakes v. Frank, 2005 WL 1276370 (W.D.Wis. 2005); Mossman y. Dental
Enterprises, 2005 WL 1174150 (N.D.Ind. 2005); Nauman v. Abbott Laboratories, 2005 WL 1139480
(N.D.IIl. 2005); Malone v. Clark, 2004 WL 2053284 (W.D.Wis. 2004); Cataldo v. City of Chicago,
2002 WL 91903 (N.D.III. 2002); Hill v. Amoco Oil, 2001 WL 293628 (N.D.III. 2001); Cooper v. Harris,
1999 WL 261742 (N.D.III. 1999); Johnson v. Indopco, Inc., 846 F.Supp. 670 (N.D.II. 1994); RE.
Davis Chemical Corp. v. Nalco Chemical Co., 757 F.Supp. 1499 (N.D.Iil. 1990); DeSmet v. Snyder,

653 F.Supp. 797 (E.D.Wis. 1987); Stokes v. City of Chicago, 1986 WL 12311 (N.D.II. 1986); CBOE,
Inc. v. Connecticut General Life Insurance Co., 95 F.R.D. 524 (N.D.IIL. 1982); Rosas v. Lane, 1985
WL 2906 (N.D.IIl. 1985). Contra Gray v. First Winthrop Corp., 133 F.R.D. 39, 40 (N.D.Cal. 1990).

10


on: “With an impending discovery cut-off date of July 1,2005, Plaintiffs cannot afford to allow discovery
to remain at a halt.” (Emphasis supplied). But still, the plaintiffs did nothing.

By May 23, 2005, GAC had not given plaintiffs any information regarding the electronic data or
the cost of its retrieval and had not produced an index of the missing grand jury documents. Asaresult,
plaintiffs again threatened to file a motion to compel. The next day, GAC indicated by letter that it would
cost $3000 to retrieve the electronic data and provided a rough outline as to the contents of the missing
grand jury documents. Italso restated its position, which had been unwavering from the outset, that it
would not answer interrogatories while its motion to dismiss was pending, and it reminded plaintiffs that
many months had passed since they had raised the issue of GAC’s refusal to answer interrogatories. GAC
also called into question the applicability of Dresser Industries and Kanner. On May 31,2005, plaintiffs
submitted their third set of interrogatories to GAC and all newly-named defendants. On June 8, GAC
responded to the third set of documents requests as it consistently had to its predecessors.

On June 14, 2005, almost eight months after their first expression of interest in Timothy Poure,
plaintiffs noticed his deposition for June 30 in Chicago. Discovery was to close on July 1. Mr. Poure lives
in Ohio and was no longer employed by GAC. Three days later, on June 17, counsel for GAC, for the first
time, told plaintiffs’s counsel that Mr. Poure did not work for GAC, and that he would not be appearing
in Chicago on June 30. GAC’s counsel did attempt to reach him, however, to find out what his availability
might be and where he might be willing to be deposed, and on June 28, gave Mr. Poure’s last known
address to plaintiffs’ counsel.

According to GAC, given plaintiffs’ delay in seeking to depose Mr. Poure, it would prove

impossible to arrange his deposition before the close of discovery. The parties then jousted a bit over the

7


documents that it was able to locate. For their part, plaintiffs indicated they would be willing to work with
GAC to narrow the scope of certain requests where warranted, but wanted information regarding what
documents were being withheld and what burden would be caused by their production. They also
requested an index of the missing grand jury documents.

On April 27, 2005, plaintiffs not only reiterated their request for an index or description of the
missing grand jury documents, they insisted that GAC was obligated to fulfill all its discovery obligations
regardless of the pendency ofits motion to dismiss. The letter cited two cases in support of the claim that
the pendency of the motion to dismiss was nota valid objection to proceeding with the discovery requests.”

On May 5, inaphone conversation, GAC’s lawyer again reiterated its position regarding discovery
and the pendency of the motion to dismiss. On May 6, 2005, plaintiffs served a third set of document
requests to all newly-named defendants, seeking monthly and quarterly billing statements from 1988 through
2003. By this time, as plaintiffs’ counsel’s letter of May 6 to Dylan Smith (GAC’s counsel) notes, “more
than nine months” had elapsed from filing of the motion to dismiss, and she accused GAC of having used

the pendency of the motion to dismiss “as an excuse to delay its discovery obligations.” The letter went

2 SK Hand Tool Corp. v. Dresser Industries, Inc., 852 F.2d 936, 945 (7" Cir. 1988) and Daniel
J. Hartwig Associates, Inc, v. Kanner, 913 F.2d 1213 (7 Cir. 1990). In SK Hand Tool, the court
found that the defendant was entitled to discovery costs incurred in defending against a RICO claim, even
though the claim was dismissed on the pleadings. In so doing , the court noted that there is no
requirement that discovery cease during the pendency of a motion to dismiss unless the district court has
ordered a stay. 852 F.2d at 945. In Daniel J. Hartwig Associates, the defendant chose not to pursue
discovery while his motion to dismiss was pending, because he reasoned any efforts might have been
wasted had his motion been granted. As it happened, the court’s consideration of his motion to dismiss
consumed substantially all of the pretrial calendar. When the court denied the motion a little more than a
month before trial, defendant sought an extension of discovery and a continuance of the trial date. The
Seventh Circuit upheld the court’s decision to deny those motions, calling them “nothing more than a plea
to this court to reverse the consequences of [defendant’s] tactical decisions.” 913 F.2d at 1223.

6


nullification of discovery cut-offs and evasion of the Rules (whether or not intended) are prohibited. '°
B.

Icannot agree that the plaintiffs filed their motion to compel “in as timely a manner as possible,
given the parties’ lengthy and exhaustive efforts to resolve the various disputes.” (Reply at 14). Noram
I persuaded that the approximately eight-month delay stemmed from the plaintiffs’ wish “to bring a single,
focused motion against GAC, and to exclude any extraneous materi als that might burden the Court and
muddle the issues. . . .” (Plaintiffs’ Reply at 14-15). The record tells a different story.

Long before the motion to compel was filed, the plaintiffs were aware that they were not going to
get any answers to interrogatories, and that the document production GAC was willing to make pending
the outcome of the motion to dismiss would never be compliant with their requests. Thus, at any time over
the eight-month period, the plaintiffs could have filed a“single, focused motion” addressing the core issue
of whether GAC’s discovery obligations should be stayed pending ruling on its Rule 12(b)(6) motion.
‘There were during that whole period no “extraneous materials” to “muddle the issues.” Indeed, the salient
issue was far more discrete and infinitely more simple during the eight months of plaintiffs’ quiescence than
itisnow“muddle(d]’ as it is by questions of undue delay, prejudice, who had the burden to make the first
move, waiver, and other related issues.

It is equally unconvincing to say that the plaintiffs took no action before July 1“ because they were

“cognizant of the substantial possibility that GAC’s motion to dismiss might be denied before the close of

3 This is the same ultimate issue that is involved in the plaintiffs’ Motion to Compel Further
Deposition Testimony. There, the plaintiffs allowed certain depositions to be concluded and now claim
that they are entitled to have additional depositions so that notes of the deponents can be read into the
record,

19


Plaintiffs argue that the mere fact that a motion to dismiss is pending is not an excuse to suspend
discovery, that by failing to seek a protective order GAC waived any right to seek a stay, and that it must
now immediately comply with the outstanding discovery requests especially in light of the “severe
prejudice” they have suffered. Fees and costs are sought pursuant to Rules 26(g) and 37, Federal Rules
of Civil Procedure.

ANALYSIS
I
Plaintiffs’ Motion To Compel GAC’s Compliance With Outstanding Document Requests
And Interrogatories And GAC’s Objection Based On Its Pending Motion to Dismiss
A.

District courts enjoy extremely broad discretion in controlling discovery. Crawford-El v. Britton,
523 U.S. 574, 598 (1998); Patterson v. Avery Dennison Corp, 281 F.3d 676, 681 (7" Cir. 2002).
Under Rules 26 (c) and (d), Federal Rules of Civil Procedure, a court may limit the scope of discovery or
control its sequence. Britton, supra. Limitation or postponement of discovery may be appropriate when
adefendant files a motion to dismiss for failure to state a claim on which relief can be granted. The mere
filing of the motion does not automatically stay discovery. SK Hand Tool Corp. v. Dresser Industries,
Inc., 852 F.2d at 945. Nor does it mean that a court will automatically grant a stay pursuant to Rule 26(c)
simply because a defendant asks for one. See Von Drake v. National Broadcasting Co., Inc., 2004 WL

1144142 at *2 (N.D.Tex. Mar. 29, 2004); Builders Ass'n of Greater Chicago v. City of Chicago, 170
F.R.D. 435, 437 (N.D.IIl. 1996); Niederhoffer Intermarket Fund, L.P. v. Chicago Mercantile

Exchange, No. 99 C 3223, 1999 WL 731773, *1 (N.D.II. Aug. 31, 1999); Moore v. Painewebber,


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

)
In Re SULFURIC ACID ANTITRUST) MDL Docket No. 1536
LITIGATION ) Case No. 03 C 4576

)

) Judge David Coar

) Magistrate Judge Jeffrey Cole

)

MEMORANDUM OPINION AND ORDER RE: PLAINTIFFS’ MOTION TO COMPEL
GAC CHEMICAL CO. TO COMPLY WITH CERTAIN DISCOVERY REQUESTS

INTRODUCTION

Throughout the range of the law, there are time limits imposed on litigants at every stage of the case:
some are mandatory and admit of no deviations; others are more flexible. But in each instance, lawyers
who do not pay heed to them do so at substantial peril to their and their clients’ interests. See, e.g.,
Brosted vy. Unum Life Insurance Co. of America, F.3d_, 2005 WL 2043820 (7" Cir. August 26,
2005). Thisis such acase. On July 1, 2005, the day discovery closed — following two prior extensions
of discovery —the plaintiffs filed a series of motions to compel compliance with outstanding discovery. Not
surprisingly, GAC has objected that the motion directed to it is untimely.

The Federal Rules of Civil Procedure place no prescribed time limit on the outside date for filing
amotion to compel discovery. In one regard, however, a line of sorts has been sketched by a series of
decisions: motions to compel filed after the close of discovery are almost always deemed untimely.

Packman y. Chicago Tribune Co., 267 F.3d 628, 647 (7" Cir. 2001).! Greater uncertainty occurs

' But even here the line meanders, and motions made after the close of discovery are not
inevitably out-of-bounds. See e.g., Blanchard v. EdgeMark Fi ‘inancial Corp., 192 F.R.D, 233, 235
(continued...)


Ofcourse, the prospect of a prolonged stasis was delightful to GAC. It should not have been to
the plaintiffs. But by consciously deciding not to file a motion to compel, the plaintiffs acquiesced in what
was functionally a stay. Perhaps a judge would have concluded that there was good cause to issue a stay,
had GAC asked for one. Perhaps, had the plaintiffs brought a motion to compel at an appropriate time,
acourt would have concluded that the objection was improper and that a stay was not warranted. We
shall never know, because the plaintiffs were as content to let the matter languish as was GAC. Since
discovery is now over, there is no discovery to be stayed, and the only question now is whether, under the
circumstances of this case, their motion to compel was timely. There is no legitimate excuse for the plaintiffs
having waited until the last day of discovery to have filed their motion. The plaintiffs knew from the outset
what GAC’s position was, and they had the option to do something about it. They cannot be heard to
complain now about the conscious decision they made not to bring the matter to the court’s attention.

That they did so on the last day of discovery was, perhaps, in their view, tactically preferential to
bringing the matter before the court months earlier. In this way, they could argue that GAC had waived
any right to a stay of discovery and they could argue that discovery was immediately compellable. For the
reasons discussed above, this approach is analytically incorrect. Ifthe motion were to be granted, it would
result in “protracted discovery, the bane of modern litigation.” Rosetto v. Pabst Brewing Co.,217 F.3d
539, 542 (7" Cir, 2000)(Posner, J.). Parties should not be rewarded for the kind of purposeful delay
exemplified by the plaintiffs in this case.

B.
Not surprisingly, the parties here have very different views of GAC’s motion to dismiss. GAC

insists that there are “overwhelming grounds to conclude [it] does not belong in this action,” (GAC 's

12


The plaintiffs argue that by failing to seek affirmative relief through a protective order GAC has
waived any claim to a stay and thus must comply with the outstanding discovery requests. GAC contends
that it had the right to file objections and await a motion to compel rather than engaging in whatit calls
preemptive motion practice and filing a motion to stay discovery.

Although a party objecting to discovery may seek a protective order or stay, it is under no
obligation to do so. Nelson v. Capital One Bank, 206 F.R.D. 499, 500 (N.D.Cal. 2001); Fitzgerald
v. McKenna, No. 95CIV.9075(DAB)(HBP), 1997 WL 563804, (S.D.N.Y. Sept. 9, 1997). The served
party has the option of providing appropriate written objections and leaving it to the party seeking discovery
to file a motion to compel. See Badalamenti v. Dunham's, Inc. ,896 F.2d 1359, 1362 (Fed.Cir. 1990);
Continental Industries, Inc. v. Integrated Logistics Solutions, LLC, 211 F.R.D. 442, 444 (N.D.Okla.
2002). See also Rules 33(b)(4) and (b)(5) and 37, Federal Rules of Civil Procedure and Advisory Committee

Notes To Rules 33 and 34 (1970 Amendment).

Either method brings the disputed matter before the court. Nelson, 206 F.R.D. at 500; Fitzgerald,
1997 WL 563804, *1; 8-8A C. Wright, A.Miller & R.Marcus, Federal Practice & Procedure §§ 2035,
2213 (1994). As the party objecting to discovery, GAC would have had the burden of demonstrating its
objections were proper~had a motion to compel been brought. Dove v Atlantic Corp. , 963 F.2d 15,19
(2TM Cir. 1992); Williams v. Sprint/United Management Co., 2005 WL 731070 at *3 (D.Kan. 2005);
Inre Aircrash Disaster Near Roselawn, Ind. Oct. 31, 1994, 172 F.R.D. 295, 307 (N.D.IIL. 1997). See
also 8A C.Wright, A Miller & R.Marcus, Federal Practice & Procedure § 2214 (1994)(a formal allocation
of the burden of proofs of little significance where the court has so much discretion). But none was filed

until July 1%.


notices of deposition for Mr. Poure, with GAC contending that it had been months since plaintiffs
mentioned Mr. Poure and that they had not listed him in their motion for an extension of the discovery
deadline. The parties also quarreled over whether GAC had ever indicated that Mr. Poure was still in its
employ.

On June 28, 2005, two days prior to the close of discovery, plaintiffs’ counsel sent GAC an email
regarding the missing grand jury documents described in GAC’s May 24" letter a month earlier. She
asked whether GAC would be producing any of the documents — and how many there were — or whether
she “should include them in the motion [to compel].” GAC responded the next day, reminding plaintiff's
that discovery was set to close on July 1 and offering an inspection of the documents before that date at
GAC’s facility in Maine. Plaintiffs then requested an immediate production of the documents and indicated
that they would arrange to send a copying service to the Maine facility.

From October, 2004, through the end of June, 2005, GAC repeatedly voiced its principal
objection to nearly all of plaintiffs’ document requests: it should not be put to the substantial burden of
additional (and duplicative) discovery while its motion to dismiss was pending. Atthe same time, GAC
contended that it had endeavored to cooperate with plaintiffs to the extent that it could do so without
significant burden. And, from the beginning, and without deviation, GAC had refused to respond to
interrogatories on the basis that they were unduly burdensome, and that it should not be put to that burden
pending the outcome of its motion to dismiss? GAC represented in all its written, formal objections that

if it lost the motion, it would promptly respond to discovery.

3 An appropriate factor to consider in weighing whether to grant a stay of discovery is the burden
of responding to the discovery. In re: Currency Conversion Fee Antitrust Litigation, 2002 WL 88278
at *1 (S.D.N.Y. 2002).


Exhibit G ; Plaintiffs’ Reply Memorandum at 10). Plaintiffs also warned GAC that, despite GAC’s
additional document production, they were unwilling to await the resolution of the motion to dismiss before
proceeding with production and again said they would be filing a motion to compel. Unknown to plaintiffs,
Tim Poure had not been an employee of GAC since 1998.

On November 19, GAC’s counsel wrote a four line letter noting that attached to it were an
organizational chart, copies of GAC’s antitrust compliance policy and the GAC/Delta Assert Purchase
Agreement and the exhibits to the Agreement. While the organizational chart listed Jim, itdid not show Tim
Poure. The letter was silent as to the employment status of Tim Poure (or the others) and ignored the
question about voluntary production (which of course is the obverse side of the employment coin).

The concept of trial by ambush has long ago fallen into desuetude in both state and federal courts.
Modem discovery practices seek to facilitate (however haltingly and ineffectively) open and even-handed
development of the relevant facts “so that justicemay be delivered on the merits and not shaped by surprise
or like tactical stratagems.” American Floral Services, Inc. v. Florists’ Transworld Delivery Ass ’n, 107
ER.D.258, 260(N.D.Ill. 1985)(Shadur, J.). Thus, lawyers havea duty to act in good faith in complying
with their discovery obligations and to cooperate with and facilitate forthright discovery. Johnson v. J.B.
Hunt Transport, Inc., 280 F.3d 1125, 11 32 (7" Cir. 2002); Jones v. American General Life &
Accident Insurance Co., 2002 WL 32073037 at *4 (S.D.Ga. 2002); American Reserve Corp. v.
Alexander Grant, 1991 WL 172011 at *3 (N.D.III, 1991)(Kocoras, J.); Ritter v. Diasonics, Inc.,1992
WL 164905 (E.D.Pa. 1992). The November 1 9" letter was not as faithful to these obligations as it should
have been.

Where a party has contributed to a plaintiff's confusion or has caused delays in discovery, it can

22


On November 1, 2004, plaintiffs’ counsel wrote to GAC’s lawyer disagreeing with GAC’s
contention it need not respond to the interrogatories. The letter threatened a motion to compel would be
filed if this was GAC’s final position. The next day, GAC wrote outlining its discovery compliance to date
and renewing its objection to responding to additional discovery. The letter expressed a willingness to
continue talks if plaintiff's would refine its requests. Ifnot, the letter invited plaintiffs’ counsel to fileamotion
to compel. (Plaintiffs’ Exh. G).

On November 8, 2004, by letter, GAC reaffirmed its position that it should not have to “engage
incostly additional discovery.” (Plaintiffs’ Exhibit G). Nonetheless, itagreed to produce, by November 19,
2004, additional documents that could be gathered without substantial burden, including organizational
charts and documents regarding corporate structure, financial reports, documents relating to antitrust
compliance policies, and exhibits from the 1994 GAC-Delta asset purchase agreement. There was no
agreement to answer any interrogatory.

On November 9", plaintiffs’ counsel, by letter, indicated that they were interested in deposing Tim
and Jim Poure and Barbara Haase, whom plaintiff s counsel stated she understood were GAC employees.
She said: “please let me know if you will produce them voluntarily...” Plaintiffs also warned GAC that,
despite GAC’s additional document production, they were unwilling to await the resolution of GAC’s
motion to dismiss before proceeding with production and again said they would be filing a motion to compel
“as to this discovery.”

On November 19", GAC’s counsel wrote a terse four-line letter attaching an organizational chart,
copies of GAC’ s antitrust compliance policy and the GAC/Delta Assert Purchase Agreement with exhibits.

The letter did not respond in words to the question of GAC’s voluntary production of the witnesses, nor

4


2005. The time for securing relevant evidence was during the period allotted for discovery, not afterwards.
Chronology, not relevancy, determines the permissibility of plaintiffs’ hypothesized post-July 1 discovery.

The motion to compel does not lose its untimely quality on the theory that GAC would still have
to respond to the outstanding subpoena served in March 2004 when GAC wasanon-party. The plaintiffs
manifestly considered that subpoena to have been superceded by the discovery requests, as it was never
mentioned in the correspondence between the parties after GAC was added as a defendant. Moreover,
the plaintiffs have never filed any motion under Rule 45 to enforce the subpoena. The subpoena, for
purposes of the present motion, is irrelevant, and any motion to enforce it —if that is what the plaintiffs had
in mind — is untimely.?

Il
The Claimed Prejudice To Plaintiffs Resulting From GAC’S Objections To Discovery

A.
From the beginning, GAC was adamant that it would not respond at all to the interrogatories and
that its response to document requests was going to be restricted while its motion to dismiss was pending.
Thus, the plaintiffs could not possibly have been under any misapprehension that continued negotiations
might moot the controversy, nor was there reasonable reliance on representations of production that
continued through the discovery close date, thereby justifying a late filing ofa motion to compel. See M2
Software, Inc. v. M2 Communications LLC,217F.R.D. 499 (C.D.Cal. 2003). Yet, in the face of these

consistent refusals, the plaintiffs did not bring a timely motion to compel, although they easily could have

° In the fifteen months from the date of service, the plaintiffs did nothing to compel compliance
with the subpoena. That the plaintiffs considered the subpoena superceded by the discovery requests
directed to GAC after it became a party is evidenced by the fact that the latter were narrower than were
the requests in the subpoena. (Plaintiffs’ Reply Memorandum at 3).

15


completion of fact discovery,” (Memorandum, at 7), the list of culpable defendants did not include GAC.
There was not so much as ahint of any past or potential prejudice resulting from GAC’ refusal to comply
with discovery because of the pending motion to dismiss. Cf Banks v. CBOC West, Inc., 2004 WL
723767 at *3 (“At no time did Banks’s counsel — who had set the instant motion today before — inform
me or otherwise mention that . . . there were any outstanding discovery issues to be addressed in the
case.”).

Itis inconceivable that the plaintiffs would have taken the depositions of Harmon and Dullea, let
alone “numerous Noranda and Falconbridge witnesses who had extensive collusive dealings with Delta
and GAC throughout the class period,” if they truly felt they were being or would be “severely prejudiced”
by not having GAC’s responses to the outstanding discovery requests. Rather, they would have moved
to compel and vigorously complained to the court that the depositions could not proceed without the
requested information.'' Ata minimum, they would have raised this concern with GAC. The evidence
before me contains no such complaint.

Beyond the incompatibility of the claim of prejudice with the actual behavior of the plaintiffs, there
is the fundamental, overarching principle that parties cannot proceed in the face of known risks and later
complain that they have been harmed. Cf Arrington v, Merrill Lynch, 651 F.2d 615 (9th Cir. 1981)(in

10b-5 case plaintiffs cannot recover that part of their loss caused by their own failure, once they had reason

"| The plaintiffs’ contention that GAC interfered with discovery is not an excuse for their own
inaction. Alaya-Gerana v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1" Cir. 1996); Furman Lumber,
Inc. v. The Mountbatten Surety Co., Inc., 1997 WL 397496 (E.D.Pa. 1997)(“With respect to the
Plaintiff's claims that Mountbatten initially delayed depositions, the Court notes that Plaintiffs could have
filed motions to compel.”); Suntrust Bank v, Blue Water Fiber, L.P., 210 F.R.D. 196, 201 (D.C.Mich.
2002). More importantly, the interference about which the plaintiffs complain is conduct that the Federal
Rules of Civil Procedure allows, namely raising objections in responses to discovery.

17


in the entire complex of circumstances that gave rise to the motion, and what is untimely in one case may
not be in another.
FACTUAL BACKGROUND

The complaint in this multi-district, antitrust case charges the defendants with having conspired to
raise, fix, maintain, or stabilize the price of sulfuric acid in the United States in violation of Section 1 ofthe
Sherman Act, 15 U.S.C. § 1. A consolidated amended class action complaint was filed on September 5,
2003. Six months later, in March 2004, GAC - then a non-party — was served with a document subpoena
seeking documents relating to Delta Chemicals, Inc.’s decision to shut down its sulfuric acid plant in 1988.
GAC had purchased Delta’s assets six years later in 1994, GAC agreed to produce certain documents
that it had made available to a federal grand jury.

Plaintiffs added GAC as a defendant in their second amended consolidated complaint on May 24,
2004, That complaint alleged that, as part of the purported conspiracy, Delta had shut down its sulfuric
acid plant in 1988 pursuant to an illicit agreement with defendant, Noranda, Inc. On July 30,2004, GAC
produced approximately three boxes of documents that had been produced to the grand jury and
simultaneously filed, pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, a motion to dismiss the
claims against it for failure to state a claim on which relief could be granted. On September 15, 2004,
plaintiffs served GAC —along with all newly-named defendants ~ with its first set of interrogatories and
documents requests. Shortly thereafter, on October 18", GAC formally objected in its responses to
discovery that it did not have to respond to further discovery requests while its motion to dismiss was
pending. (See Objections to First Set of Interrogatories at 7). Italso claimed that the discovery requests

covered the same ground as the grand jury documents it had already produced.


where the motion is made very close to the discovery cut-off date. Some districts by local rule have
imposed time limits within which motions to compel must be brought. See, e.g. United States ex. rel.
Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4" Cir, 2002)(Local Rule 37.01 of
the District of South Carolina requires that motions to compel must be filed within 20 days after receipt of
the discovery response); Sonnino v. University Kansas Hospital Authority, 220 F.R.D. 633, 636
(D.Kan. 2004)(Local Rule 37.1(b) of the District of Kansas requires that the motion to compel be filed
within 30 days after receipt of the discovery response). Most, however, have no such rules, and the matter
is left to the broad discretion possessed by the district courts to control discovery.

Howis that discretion to be exercised? Is a motion to compel filed four days before the close of
discovery too late? At least one court has said it is. Ridge Chrysler Jeep, LLC v. Daimler Chrysler
Services North America, LLC, 2004 WL 3021842 (N.D. Il]. 2004). What ifthe motion had been made
six or perhaps twelve days before the close of discovery? Would the result have been different? Is a week
the proper cut-off point, or perhaps two weeks? To pose the question is to demonstrate that there is no
principled or mathematical way of determining in advance in every case when a motion to compel should
be deemed untimely based upon an arbitrarily prescribed number. As Justice Cardozo said in another
context, “{w]here the line is to be drawn between the important and the trivial cannot be settled by a
formula.” Jacobs & Young v. Kent, 230 N.Y. 239, 243 (1921). Compare, Louisville Gas & Electric

y. Coleman, 277 U.S. 32, 41 (1928)(Holmes, J., dissenting). The answer then must necessarily be found

'(...continued)
(N_D. Ill. 2000)(30 days not too late); Gault v. Nabisco Biscuit Co., 184 F.R.D. 620, 622 (D.Nev.
1999); Shamis v. Ambassador Factors Corp., 34 F.Supp.2d 879 (S.D.N.Y. 1999)(No unreasonable
delay where motion to compel was filed four days after the close of discovery).

2


Memorandum of Law, at 6), while plaintiffs maintain “that there is little likelihood of GAC being dismissed
from this litigation.” (Plaintiffs’ Reply Memorandum, at 1).’ The plaintiffs contend that any stay would
have been improper because discovery was (and is) necessary for proper resolution of the motion to
dismiss. The first flaw in the argument is that by not having moved to compel, the plaintiffs acquiesced in
what was in effect a stay and thus it is too late to undo what plaintiffs’ own inaction allowed to occur. The
second flaw is that the motion to dismiss is a Rule 12(b)(6) motion which by definition excludes
considerations of factual matters outside the complaint.

The motion to dismiss is based ona theory that GAC cannot be held liable for Delta’s conduct that
occurred six years before the asset purchase in 1994. Plaintiffs have advanced certain theories under which
they feel GAC can be held liable. Thus, while discovery should not ordinarily be stayed where the
dispositive motion requires factual elaboration, Chavous v. District of Columbia Financial
Responsibility and Management Assistance Authority, 201 F.R.D. 1,3 (D.D.C. 2001); Feldman v.

Flood, 176 F.R.D. 651, 652 (M.D.Fla. 1997), this is not such a case, since Judge Coar has concluded

7 Of course, it would be improper to make even a preliminary determination about the ultimate
merits of the motion to dismiss. But that does not mean that some cursory review is inappropriate for
limited purposes. See Von Drake v. National Broadcasting Co., Inc., No. 04-CV-0652, 2004 WL
1144142, *2 (N.D.Tex. Mar. 29, 2004)(cursory review to determine whether defendants have substantial
arguments for dismissal); Pacific Lumber Co. v. National Union Fire Ins. Co. of Pittsburgh, PA, 220
F.R.D. 349, 352 (N.D.Cal. 2003)(cursory review to determine whether motion will potentially dispose of
entire case and whether pending motion can be decided absent additional discovery); Chrysler Capital
Corp. v. Century Power Corp., 137 F.R.D. 209, 209-10 (S.D.N.Y.1991)(cursory review to determine
whether motion appears to have substantial grounds or does not appear to be without foundation in law).
Compare Aura Lamp & Lighting, Inc. v. International Trading Corp., 325 F.3d 903 (7" Cir. 2003);
Price v. Code-Alarm, 73 Fed.Appx. 159, 161, 2003 WL 21750812 (7" Cir. 2003); (Although a court of
appeals lacked jurisdiction to decide the merits of a case over which there was no jurisdiction, it could
nevertheless “take a peek” to see whether to transfer the case to the Federal Circuit or dismiss the
appeal); Philips v. Seiter, 173 F.3d 609, 611 (7" Cir. 1999).

13


done so. See Suntrust Bank v, Blue Water Fiber, L.P., 210 F.R.D. 196, 201 (D.C.Mich. 2002).

Inthe meantime, they proceeded with discovery. Now, they vociferously complain that they have
been “severely prejudiced” by having to take the depositions of two of the Delta/GAC witnesses, Mark
Dullea and Michael Harmon, “and numerous Noranda and Falconbridge witnesses who had extensive
collusive dealings with Delta and GAC throughout the class period,” “without the benefit of having received
interrogatory responses or complete document productions from GAC.” Indeed, we are told, the prejudice
is so pervasive that “it is impossible to say just how severely [they] may have been prejudiced, not only
in their case against GAC, but against all of the defendants.” (Reply Memorandum at 7-8)(Emphasis
supplied). Of course alarms are not arguments, and the plaintiffs’ contention is unpersuasive. Speculation
is not enough; the plaintiffs must demonstrate “actual and substantial prejudice resulting from the denial of
discovery.” Packman, 267 F.3d at 647. '° This they cannot do since whatever prejudice they suffered
was the result of their own inaction.

The plaintiffs’ March 14, 2005 motion to extend the discovery deadline listed fifteen fact witnesses
whose depositions the plaintiffs planned to take. The only former or current GAC or Delta employee listed
was Michael Harmon. Mark Dullea’s name was not mentioned. Nor was there even a suggestion that
GAC’ refusal to answer interrogatories or comply with discovery would impact (or had impacted) the
deposition of any witness. Indeed, although the motion to extend the discovery cut-off was largely based

on what the plaintiffs claimed were the “actions on numerous occasions [that] have delayed plaintiffs’

‘© The argument that without the interrogatory responses the plaintiffs were denied information
that “potentially could have led to more depositions of GAC’s current and former employees” and
“might also have led plaintiffs to propound further more targeted discovery requests” (Reply at
7)(Emphasis supplied) is hopelessly speculative.

16