# Quantas Healthcare Management LLC v. Sun City Emergency Room LLC

> District Court, N.D. Texas · April 8, 2024

URL: https://www.frixlaw.com/law-library/cases/10671848

## Case

- **Court:** District Court, N.D. Texas
- **Decided:** April 8, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
QUANTAS HEALTHCARE §
MANAGEMENT, LLC, §
§
Plaintiff/Counter-Defendant, §
§
V. § No. 3:23-cv-891-K
§
SUN CITY EMERGENCY ROOM, §
LLC; and SUN CITY WEST §
EMERGENCY ROOM, LLC, LLC, §
§
Defendants/Counter-Plaintiffs. §
MEMORANDUM OPINION AND ORDER
Defendants and Counter-Plaintiffs Sun City Emergency Room, LLC, d/b/a El
Paso Emergency Room (“El Paso East”) and Sun City West Emergency Room, LLC,
d/b/a El Paso West Emergency Room (“El Paso West”) (collectively, “the ERs”) have
filed an Emergency Motion for Sanctions against Plaintiff and Counter-Defendant
Quantas Healthcare Management, LLC under Federal Rule of Civil Procedure
37(b)(2). See Dkt. No. 66.
The ERs assert that “Quantas has violated [the Court’s] January 29, 2024
Order (the ‘Order’) [Dkt. No. 65]” and ask the Court, as relief,
• “to dismiss with prejudice Quantas’ affirmative claims against
the ERs for trademark infringement, cyberpiracy, unfair
competition, false designation of origin, and unjust enrichment”;
• “order, yet again, that Quantas immediately produce all
non-privileged responsive documents and information requested
by the ERs so that such evidence may be used by the ERs in
connection with their pursuit of their affirmative claims against
Quantas”;
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• “order that Quantas, in defending against the ERs’ claims, is
barred from relying upon any evidence that it failed to produce
by Judge Horan’s February 19, 2024 deadline”;
• “allow the ERs to depose Quantas’ witnesses after the end of the
discovery deadline once it has Quantas’ documents in hand”; and
• “order Quantas to reimburse the ERs for their attorneys’ fees and
costs in bringing their original Motion to Compel (Dkt. 57) and
this Motion for Sanctions.”
Dkt. No. 66 at 4, 5; see also id. at 15.
Quantas filed a response, see Dkt. No. 71, and the ERs filed a reply, see Dkt.
No. 72.
For the reasons and to the extent explained below, the Court grants in part
and denies in part the ERs’ Emergency Motion for Sanctions [Dkt. No. 66].
Background
In the January 29, 2024 Electronic Order granting in part and denying in part
the ERs’ Motion to Compel Discovery [Dkt. No. 65], the Court explained and ordered
that
[t]he ERs ask the Court to overrule Quantas’s discovery objections and
order Quantas to (i) collect and produce non-privileged documents in
response to the ERs’ requests for production, (ii) supplement with
meaningful answers its responses to the ERs’ interrogatories and
requests for admission, and (iii) produce an updated privilege log. More
specifically, the ERs as the Court (1) to compel Quantas to produce
documents responsive to the ERs’ Requests for Production Nos. 1-46; (2)
compel Quantas to fully respond to Interrogatory Nos. 1-2 and 5; and (3)
compel Quantas to fully respond to Request for Admission Nos. 21, 38,
and 39.
The Court has laid out the standards that govern a Federal Rule
of Civil Procedure 37(a) motion to compel as to Federal Rule of Civil
Procedure 34 requests for production and Federal Rule of Civil
Procedure 33 interrogatories, and the Court incorporates and will apply
– but will not repeat – those standards here. See VeroBlue Farms USA
Inc. v. Wulf, ___ F.R.D. ____, No. 3:19-cv-764-X, 2021 WL 5176839, at
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*5-*9 (N.D. Tex. Nov. 8, 2021); Lopez v. Don Herring Ltd., 327 F.R.D.
567, 573-86, 588-90 (N.D. Tex. 2018).
Quantas responded to most, if not all, of the requests at issue
“[s]ubject to and without waiving the foregoing objections” or “[s]ubject
to and without waiving the above general and specific objections.” But
responding “‘subject to’ and ‘without waiving’ objections is improper, as
the undersigned and many other judges in this circuit and elsewhere
have now made clear for several years.” VeroBlue, 2021 WL 5176839, at
*8 (cleaned up).
As for Quantas’s objections to RFP Nos. 1-46, the Court, will, for
efficiency’s sake, address each of the objections by type based on the
Court’s review of the parties’ briefing and Quantas’s original and
supplemental objections and responses.
The Court overrules the objections asserting that “much of the
requested documentation is already in Defendants’ possession” or that
“much of the requested documentation and information is publicly
available and already in Defendants’ possession,” where experience
teaches that the same request for communications or agreements
between individuals or entities may yield different results when
directed to both parties to the communication or agreement. Under the
circumstances of each of the requests to which Quantas objects on this
ground which do not appear to encompass documents that would be
publicly available – the Court finds that Quantas has not established
that the requested discovery should be precluded because it “can be
obtained from some other source that is more convenient, less
burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C)(i). And,
otherwise, “the Federal Rules do not afford a party the option of
refusing to produce discovery on the basis that [it] believes that the
requesting party is already in possession of the requested discovery. “
Henderson v. Wells Fargo Bank, N.A., No. 3:13CV378 (JBA), 2017 WL
684439, at *4 (D. Conn. Feb. 21, 2017); cf. VeroBlue, 2021 WL 5176839,
at *27 (“It has long been a rule of discovery practice that a party can
seek information to which he already knows the answer, and a party is
not automatically precluded from propounding an interrogatory request
to which he already knows the answer, although Federal Rule of Civil
Procedure 26(c) grants this Court the power to protect a party or person
from any unduly burdensome discovery.” (cleaned up)).
The Court overrules the objections asserting that a request “does
not have a temporal limit.” As the ERs explain, their requests include
the instruction that “[u]nless otherwise specifically stated, the relevant
time period for these requests is January 1, 2017, to the present.” And
Quantas raised this objection to, for example, RFP No. 7, which does
otherwise specifically state a time period.
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The Court overrules the objections asserting that requests are
“lacking in ‘reasonable particularity’ as required by Rule 34.” “The test
for reasonable particularity is whether the request places the party
upon reasonable notice of what is called for and what is not. Therefore,
the party requesting the production of documents must provide
sufficient information to enable [the party to whom the request is
directed] to identify responsive documents. The goal is that the
description be sufficient to apprise a man of ordinary intelligence which
documents are required..... A Rule 34(a) request made with reasonable
particularity does not require a reasonable attorney or party attempting
to properly respond to ponder and to speculate in order to decide what
is and what is not responsive.” Lopez, 327 F.R.D. at 575-76, 577
(cleaned up). The requests to which Quantas objects satisfy this
standard.
The Court overrules the objections asserting that the ERs’
“incorporation of the ‘All’ or ‘All documents’ terms into the Requests is
inherently overbroad and not reasonably tailored.” Under the
circumstances of each of the requests to which Quantas objects on this
ground, the Court finds that Quantas has not established that the
discovery request is overbroad considering the context of what is
sought. But the Court agrees with Quantas that some of the requests
seeking documents that “relate to” a location or other matter go too far
to the point of bring overbroad and failing the reasonable particularity
standard. The Court MODIFIES RFP Nos. 7, 11-12, 14-23, 25-28, and
30-32 to change “mention, refer, or relate to” or “mention, refer to, or
relate to” to “mention or refer to”; RFP No. 24 to change “mention, refer
to, relate to, or reflect” to “mention, refer to, or reflect”; and RFP No. 29
to change “refer or relate to” to “refer to.”
The Court overrules the objections on relevance grounds because,
“[u]nder Rule 26(b)(1), [u]nless otherwise limited by court order,...
[p]arties may obtain discovery regarding any nonprivileged matter that
is relevant to any party’s claim or defense and proportional to the needs
of the case. To be relevant under Rule 26(b)(1), a document or
information need not, by itself, prove or disprove a claim or defense or
have strong probative force or value.” Lopez, 327 F.R.D. at 573 (cleaned
up). Quantas has not explained how the objected-to responses seek
documents that are not relevant to its claims or the ERs’ defenses
under this standard, and the burden lies with Quantas to do so to resist
discovery. See Baker v. Walters, 652 F. Supp. 3d 768, 778 (N.D. Tex.
2023).
The Court overrules the objections to RFP Nos. 38 and 46 –
seeking “Quantas’ tax returns for each of the last five years” and “[a]ll
Documents and Communications related to any attempt by Quantas to
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use the Sun City Mark or Sun City Logo in the El Paso market since
April 1, 2023” on the unexplained and apparently inapplicable ground
that each request “is premature in that Plaintiff is still preparing their
case.” A party cannot refuse to comply with an opposing party’s
discovery requests “simply because he believes that the opposing
parties ha[ve] not fully complied with his discovery requests to them.”
Turner v. Nationstar Mortg. LLC, No. 3:14-cv-1704-L-BN, 2015 WL
11120879, at *2 (N.D. Tex. May 14, 2015). Neither can a party delay
responding to discovery requests on the ground that it has not yet
served its own discovery on the requesting parties.
As to Quantas’s objections based on attorney-client privilege or
work product protection, as the Court has explained, by definition,
“[t]he scope of discovery in civil cases under Federal Rule of Civil
Procedure 26(b)(1) does not include privileged information or, absent
the showing that Federal Rule of Civil Procedure 26(b)(3) mandates,
work product protected information.” Jolivet v. Compass Grp. USA,
Inc., 340 F.R.D. 7, 17 (N.D. Tex. 2021) (cleaned up). Quantas, as parties
often do, made specific objections to the ERs’ Rule 34(a) request for
production “to the extent it seeks to invade attorney-client privilege,
work product immunity, or other applicable privileges.” But those
objections do not, alone, fulfill the withholding party’s obligations that
Federal Rule of Civil Procedure 26(b)(5)(A) imposes.
“Because the responding party is entitled to refuse to produce
requested discovery if it is privileged or work product protected, the
rules require that, [w]hen a party withholds information otherwise
discoverable by claiming that the information is privileged or subject to
protection as trial-preparation material, the party must: (i) expressly
make the claim; and (ii) describe the nature of the documents,
communications, or tangible things not produced or disclosed – and do
so in a manner that, without revealing information itself privileged or
protected, will enable other parties to assess the claim, Fed. R. Civ. P.
26(b)(5)(A).” Jolivet, 340 F.R.D. at 20 (cleaned up); accord Heller v. City
of Dallas, 303 F.R.D. 466, 486 (N.D. Tex. 2014) (“To comply with the
requirements to support withholding any responsive document or
information as privileged or protected work product, a privilege log or
equivalent document complying with Federal Rule of Civil Procedure
26(b)(5)(A)’s requirements must be produced for any documents,
communications, or other materials withheld from production on the
grounds of attorney-client privilege, work product, or other privilege,
immunity, or protection. Accordingly, a party may properly raise and
preserve an objection to production of documents in response to a
specific document request or interrogatory by objecting ‘to the extent’
that the requests seeks privileged materials or work product, so long as
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the responding party also provides the information required by Rule
26(b)(5)(A).”).
“This is often accomplished through a privilege log. [A]lthough
Rule 26 does not attempt to define for each case what information must
be provided, a privilege log’s description of each document and its
contents must provide sufficient information to permit courts and other
parties to test[] the merits of the privilege claim. Typically, a privilege
log must identify each document and provide basic information,
including the author, recipient, date and general nature of the
document.” Jolivet, 340 F.R.D. at 20-21 (cleaned up).
The Court orders that Quantas must, by February 19, 2024,
serve on the ERs’ counsel complete responses (without objections) to
Requests for Production Nos. 1-46 (as modified above) and produce all
unproduced documents and electronically stored information that are
responsive to those requests and that are in Quantas’s possession,
custody, or control, consistent with the rulings above and in compliance
with Federal Rule of Civil Procedure 34(b)’s requirements, see Lopez,
327 F.R.D. at 575-79, and serve an updated, supplemental privilege log
that complies with Federal Rule of Civil Procedure 26(a)(5)’s
requirements.
Turning to the interrogatories at issue, Interrogatory No. 1 asks
Quantas to “[i]dentify each category of monetary damage You contend
You suffered as a result of the ERs’ use of the Sun City Word Mark,
including in your answer the exact nature and amount of each category
of harm allegedly suffered”; Interrogatory No. 2 asks Quantas to
“[i]dentify each category of monetary damage You contend You have
suffered as a result of the ERs’ use of the Sun City Logo, including in
your answer the exact nature”; and Interrogatory No. 5 asks Quantas to
“[i]f You contend that Matthew Rinaldi was authorized to execute the
Trademark Assignment on behalf of El Paso East, please identify the
person(s) who authorized Mr. Rinaldi to execute the Trademark
Assignment and the Communication or Document through which such
authorization was provided.” Quantas objected to and answer each of
these interrogatories by “assert[ing] that this Request is premature in
that Plaintiff is still preparing their case; accordingly, Plaintiff will
supplement when necessary and stating that “Plaintiff will supplement
as more information becomes available.”
Under Rule 33, Quantas is required to pull together complete
answers by “reviewing all sources of responsive information reasonably
available to [Quantas] and providing the responsive, relevant facts
reasonably available to” Quantas. Lopez, 327 F.R.D. at 579 (cleaned
up). The Court, after considering the briefing, is persuaded that
Quantas has not done to the extent that it should be able to at this
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point. The Court orders Quantas to, by February 19, 2024, serve on
Defendants’ counsel complete answers – without objections – to
Interrogatory Nos. 1, 2, and 5, consistent with the rulings above and in
compliance with Federal Rule of Civil Procedure 33’s requirements. See
Lopez, 327 F.R.D. at 579-81.
But Federal Rule of Civil Procedure 37 does not provide for a
motion to compel answers to Federal Rule of Civil Procedure 36
requests for admission. See VeroBlue, 2021 WL 5176839, at *4. Once
the answering party has served answers or objections, Rule 36(a)(6)
provides that “[t]he requesting party may move to determine the
sufficiency of an answer or objection” and that, “[u]nless the court finds
an objection justified, it must order that an answer be served” and, “[o]n
finding that an answer does not comply with this rule, the court may
order either that the matter is admitted or that an amended answer be
served.” FED. R. CIV. P. 36(a)(6).
“Where the party to whom a Rule 36 request is directed serves on
the requesting party a written answer or objection, Rule 36(a)(4)
requires that, ‘[i]f a matter is not admitted, the answer must
specifically deny it or state in detail why the answering party cannot
truthfully admit or deny it.’ Fed. R. Civ. P. 36(a)(4). ‘A denial must
fairly respond to the substance of the matter; and when good faith
requires that a party qualify an answer or deny only a part of a matter,
the answer must specify the part admitted and qualify or deny the rest.’
Id. Further, ‘[t]he answering party may assert lack of knowledge or
information as a reason for failing to admit or deny only if the party
states that it has made reasonable inquiry and that the information it
knows or can readily obtain is insufficient to enable it to admit or
deny.’” VeroBlue, 2021 WL 5176839, at *4 (cleaned up).
But “the Court will treat [a Rule 37(a) motion to compel] as
appropriate as a Federal Rule of Civil Procedure 36(a)(6) motion to
determine the sufficiency of answers and objections to Rule 36 requests
for admission” and will do here. Campos v. HMK Mortg., LLC, No.
3:18-cv-1362-X, 2019 WL 7842434, at *2 (N.D. Tex. Dec. 26, 2019)
(cleaned up). The ERs ask the Court to order Quantas to fully respond
to three of the requests for admission. And, under Rule 36(a)(6) if an
objection is not justified or an answer does not comply with Rule 36(a),
the Court may order that an amended answer be served.
RFA No. 21 asks Quantas to “[a]dmit that Dr. Robert Phelan is
the only individual who had access to the ERs’ Google Business profiles
from their inception until April 20, 2023”; RFA No. 38 asked Quantas to
“[a]dmit that Dr. Robert Phelan withdrew funds from the ERs’ bank
account(s) on or after April 10, 2023”; and RFA No. 39 asks Quantas to
“[a]dmit that Dr. Robert Phelan instructed Quantas employees to
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redirect mail from the ERs to Quantas on or after April 10, 2023.”
Quantas objected and responded to each RFA by stating that “[t]he
Request is premature as the Plaintiff is still developing its case;
accordingly, Plaintiff will supplement once discovery has occurred and
more information is known.”
In its response to the MTC, Quantas attempts to justify this
“premature” objection for RFA No. 21 but offers no explanation as to
RFA Nos. 38 or 39. And the Court could not sustain this objection as to
RFA Nos. 38 and 39 in any event, where they each ask only about
conduct by Dr. Phelan.
As for RFA No. 21, “[o]n the Court’s reading of Rule 36(a)(4)’s
text’s plain meaning, a party can sufficiently ‘state in detail why the
answering party cannot truthfully admit or deny it’ by ‘assert[ing] lack
of knowledge or information as [the] reason for failing to admit or deny’
and ‘stat[ing] that it has made reasonable inquiry and that the
information it knows or can readily obtain is insufficient to enable it to
admit or deny.’ Fed. R. Civ. P. 36(a)(4).” VeroBlue, 2021 WL 5176839, at
*18 (cleaned up). “And nothing in Rule 36 requires an answering party
to – after stating that the answering party ‘has made a reasonable
inquiry and that the information it knows or can readily obtain is
insufficient to enable it to admit or deny’ – further ‘state in detail the
efforts made in conducting its ‘reasonable inquiry.’” Id. at *21 (cleaned
up). But Quantas has not done any of that or claimed that it has
already made the required reasonable inquiry.
The Court finds that the objections and responses to RFA Nos.
21, 38, and 39 are not justified or proper under Rule 36 and orders
Quantas to serve amended answers to these requests, in compliance
with Rule 36’s standards, by February 19, 2024.
Finally, the Court finds that, under Federal Rules of Civil
Procedure 36(a)(6) and 37(a)(5), considering all of the circumstances
here and the Court’s rulings, the parties will bear their own expenses,
including attorneys’ fees, in connection with this motion.
Dkt. No. 65.
The ERs explain that they
bring this Motion for Sanctions against Quantas because Quantas has
violated Judge Horan’s January 29, 2024 Order (the “Order”). See Dkt.
No. 65. Indeed, after overruling effectively all of Quantas’ discovery
objections, Judge Horan ordered Quantas to produce, by February 19,
2024, “all unproduced documents and electronically stored information
that are responsive to [the ERs’] requests and that are in Quantas’s
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possession, custody, or control.” The ERs now have no choice but to seek
sanctions because Quantas failed to produce a single additional
document by Judge Horan’s deadline, and that total failure is wreaking
havoc on the ERs’ ability to prepare for and complete multiple essential
depositions by the impending discovery deadline – which is just one
month away.
In addition to failing to collect and produce all responsive
documents, Quantas failed to comply with other aspects of Judge
Horan’s Order too. For example, although Judge Horan ordered
Quantas to produce a privilege log by February 19, 2024, Quantas did
not do so. Further, although Quantas provided “supplemental” answers
to certain Interrogatories, those supplemental answers remain – in
most respects – evasive and unresponsive.
Quantas’ near-total failure to cooperate in the discovery process
has materially impede the ERs’ ability to fairly prepare its claims and
defenses in this case. For instance, the ERs noticed Quantas’ corporate
representative’s deposition for February 28, 2024, but Quantas’
continued delays in producing any responsive documents now make
that date an impossibility. Moreover, as discovery closes entirely next
month, Quantas’ delay tactics have left the ERs with virtually no time
to review whatever documents Quantas may produce in the future,
prepare for the multiple depositions that must be taken, and schedule
and take those depositions with documents in hand. This is
fundamentally unfair to the ERs.
Dkt. No. 66 at 4-5.
As background to their sanctions motion, the ERs explain that
Quantas filed this lawsuit ten months ago (see Dkt. 1), accusing the
ERs of trademark infringement of a brand name and logo that were no
longer in use by either party. See generally Dkts. 17, 53 (opposing
Quantas’ requests for injunctive relief on a similar basis). The ERs also
filed counterclaims against Quantas. Dkt. 13. The ERs’ counterclaims
arise from various acts of self-dealing and breaches of contract
perpetrated by the two principals of Quantas during the time period
when Quantas and those two individuals were also managing the ERs.
See Dkt. 13.
Seeing information relevant to both Quantas’ and the ERs’
competing claims, the ERs promptly propounded discovery to Quantas
in August 2023. Dkt. 57-1 at App. 9-36. One day before Quantas’
deadline to respond to the ERs’ discovery, Quantas requested an
additional onemonth extension to “assemble responsive information and
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documents and prepare [Quantas’] response.” Dkt. 53-1 at App. 379.
This proved to be the first of many extensions the ERs would grant
Quantas. See Dkt. 57 at 3 (summarizing same). Yet, despite the now
over six months Quantas has had to prepare its written responses and
gather responsive documents, Quantas has produced exactly one
responsive email. Dkt. 63 at 2. The remainder of the 620 pages Quantas
has produced thus far have been overwhelmingly irrelevant, including
over 500 pages of documents related to trademarks and emergency
room facilities that are not in dispute in this litigation. Id. at 2-4.
Quantas’ failure to collect relevant communications from its
custodians culminated in the ERs’ First Motion to Compel on December
7, 2023. Dkt. 57. This Court subsequently granted that Motion in
almost all respects on January 29, 2024, and ordered Quantas to, by
February 19, 2024: (1) serve complete responses (without objections) to
the ERs’ Requests for Production Nos. 1-46 (as modified by the Court’s
Order) and produce all unproduced documents and electronically stored
information responsive to those requests in Quantas’ possession,
custody, or control, along with an updated, supplemental privilege log;
(2) serve complete answers (without objections) to the ERs’
Interrogatory Nos. 1, 2, and 5; and (3) serve amended answers to the
ERs’ RFA Nos. 21, 38, and 39. Dkt. 65.
On Quantas’ deadline for compliance, it served supplemental
responses to the ERs’ RFAs and Interrogatories (without a verification).
App. 003-023. Yet Quantas’ supplemental responses to the
Interrogatories remain unresponsive. For example, in response to
Interrogatory No. 2 (which sought a description of the types and
amounts of damages sought by Quantas), Quantas once again refused
to answer, stating that although the information was within its own
possession, it would supplement later as more information becomes
available. App. 021-022. This answer is nothing more than a naked
refusal to comply with Judge Horan’s Order. The supplemental
response to Interrogatory No. 5 is just as bad. Interrogatory No. 5 posits
a critically relevant question in this case: What human being
authorized Quantas’ in-house lawyer to execute the trademark
assignment that is the lynchpin of Quantas’ trademark claims? Yet
Quantas’ answer is classically evasive. It states only: “Matt Rinaldi was
authorized to sign the Trademark Assignment in his role as General
Counsel to El Paso East.” App. 022-023. That statement does not tell
the ERs’ who authorized him to execute it, which is what the
Interrogatory asked.
Beyond these continually evasive Interrogatory answers,
Quantas failed to serve amended responses to the ERs’ Requests for
Production or produce even a single additional page of responsive
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material, citing “collection/processing issues on the responsive
documents.” App. 003. Nor did it provide the required privilege log that
Judge Horan ordered by produced.
Discovery closes in this case in roughly a month. Dkt. 26.
Dispositive motions are due in a month and a half, on April 8, 2024. Id.
Yet, the ERs have been unable to take any depositions because they
have not received any of the substantive evidence they need to take
depositions. Quantas’ dilatory discovery conduct in this case has
significantly prejudiced the ERs, and it should be sanctioned
accordingly.
….
Quantas’ egregious discovery conduct in this case warrants
dismissal of its affirmative claims against the ERs with prejudice.
Quantas has acted willfully in refusing to collect and produce relevant
documents, its conduct has substantially prejudiced the ERs’ ability to
prepare for trial, and, in view of Quantas’ repeated failures to comply
with its discovery obligations, lesser sanctions will not suffice.
But, should the Court determine dismissal is a premature
sanction, the Court should alternatively preclude Quantas from
presenting evidence at trial that it should have produced by February
19, 2024 pursuant to the deadline imposed in the Court’s Order on the
ERs’ Motion to Compel. See Dkt. 65. In either case, the ERs are
additionally entitled to recover their reasonable attorney’s fees incurred
in connection with their First Motion to Compel (Dkt. 57) and this
Motion for Sanctions.
Dkt. No. 66 at 6-7. 9-10.
Quantas responds that the Court should deny the sanctions motion “because:
(1) any alleged nondisclosure is not the result of willful and/or bad faith dealing; (2)
Defendants’ alleged prejudice of any alleged nondisclosure is overstated; and (3) the
sanctions Defendants seek are extraordinary and unjustified.” Dkt. No. 71 at 1.
According to Quantas, the ERs’ sanctions motion
arises from [the ERs’] allegations that Quantas is engaging in conduct
to willfully, and in bad faith, withhold from disclosure responsive
documents and providing unresponsive and/or evasive admissions and
answers to interrogatories.
Defendants brought their original Motion to Compel Discovery on
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December 7, 2023 (Dkt. 57). This Court entered a text order granting in
part and denying in part the relief Quantas requested (Dkt. 65)
(“Order”). Specifically, it found nearly half of Defendants’ Requests for
Production (“RFPs”) overbroad, not stated with particularity, and
modified such requests accordingly. See Dkt. 65. The Order also set a
date of February 19, 2024, for Quantas to provide updated responses to
Defendants’ discovery requests.
On February 19, 2024, Quantas submitted supplemental
responses to Defendants interrogatories (“ROGs”) and requests for
admissions (“RFAs”) in accordance with the Court’s Order. See Dkt. 66,
at App. 3. Particularly, Quantas notified Defendant of
“collection/processing issues” and that such would be resolved and the
documents produced later that week. Id. The very next day, February
20, 2024, Defendants filed this instant Motion seeking sanctions
against Quantas.
Quantas has produced further documents to Defendants since
the filing of this Motion. (See Ex. E, at Appx 019). In its supplemental
response, Quantas produced 385 documents that were responsive to
RFP Nos. 1-12, 18-20, 23-35, 37-38, 40-42, and 45.
Dkt. No. 71 at 1-2.
The ERs reply that,
[s]ince the ERs filed their Emergency Motion for Sanctions (the
“Motion”) (Dkt. 66), Quantas’ discovery failures have worsened. Indeed,
the ERs had long been scheduled to depose Quantas’ corporate
representative on document preservation, collection, and production
issues on Wednesday, February 28 – but when the date finally came,
Quantas failed to make a witness available. As a result, the ERs have
been deprived of the opportunity to test the veracity of the excuses
Quantas now offers for its violations of this Court’s January 29 Order
(Dkt. 65).
There is no mystery as to why Quantas cancelled the deposition.
The truth is that Quantas has still, to this day, not conducted any
meaningful collection of e-mails, text messages, or other types of
documents in this case. It has been seven months since the ERs
requested basic document discovery, and Quantas has produced a grand
total of only seven e-mails. It has produced no text messages or
WhatsApp messages (an app these parties use to communicate with one
another). And it has refused to tell the ERs – much less this Court –
whether it ever will collect and produce such materials, despite having
been ordered to do so. With discovery closing this month, the parties
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have come to the end of the road. Quantas must be held accountable for
its bad faith conduct and its violations of this Court’s Order.
Dkt. No. 72 at 1-2.
Legal Standards
Federal Rule of Civil Procedure 37(b)(2)(A) provides that, “[i]f a party ... fails
to obey an order to provide or permit discovery, ... the court where the action is
pending may issue further just orders. They may include the following:

(i) directing that the matters embraced in the order or other
designated facts be taken as established for purposes of the
action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing
designated claims or defenses, or from introducing designated
matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except
an order to submit to a physical or mental examination.
FED. R. CIV. P. 37(b)(2)(A)(i)-(vii).
Rule 37(b)(2)(C) further requires that, “[i]nstead of or in addition to the orders
[described under Rule 37(b)(2)(A)], the court must order the disobedient party, the
attorney advising that party, or both to pay the reasonable expenses, including
attorney’s fees, caused by the failure, unless the failure was substantially justified or
other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(b)(2)(C).
“A party’s discovery conduct is found to be ‘substantially justified’ under Rule
37 if it is a response to a ‘genuine dispute, or if reasonable people could differ as to
the appropriateness of the contested action.’’” S.E.C. v. Kiselak Capital Grp., LLC,
-13-
No. 4:09-cv-256-A, 2012 WL 369450, at *5 (N.D. Tex. Feb. 3, 2012) (quoting Devaney
v. Continental Am. Ins. Co., 989 F.2d 1154, 1163 (11th Cir. 1993) (in turn quoting
Pierce v. Underwood, 487 U.S. 552, 565 (1988))). “The burden rests on the party who

failed to comply with the order to show that an award of attorney’s fees would be
unjust or that the opposing party’s position was substantially justified.” Id. at *3
(cleaned up).
The undersigned has authority to enter a nondispositive order granting
attorneys’ fees or other nondispositive sanctions under Federal Rule of Civil
Procedure 37(b) or denying a request for what might be considered a dispositive
sanction. See 28 U.S.C. § 636(b); Merritt v. Int’l Bhd. of Boilermakers, 649 F.2d 1013,

1016-17 (5th Cir. Unit A 1981) (per curiam) (a magistrate judge has authority to
enter a nondispositive order granting attorneys’ fees as a sanction under Federal
Rule of Civil Procedure 37); Siegel v. Compass Bank, No. 3:18-cv-1023-X, 2021 WL
4498914, at *1 (N.D. Tex. Jan. 11, 2021) (“To determine whether a referred motion
for sanctions is dispositive or non-dispositive, the sanction chosen by the magistrate
judge, rather than the sanction sought by the party, governs the determination of

whether Rule 72(a) or 72(b) applies. To allow otherwise would permit the party
seeking sanctions to engage in a game of labels that would improperly dictate the
standard of review.” (cleaned up)); Brown v. Bridges, No. 3:12-cv-4947-P, 2015 WL
410062, at *1-*4 (N.D. Tex. Jan. 30, 2015) (explaining that, when a district judge
refers a motion for sanctions to a magistrate judge, the sanction chosen by the
magistrate judge, rather than the sanction sought by the party, governs the
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determination of whether Federal Rule of Civil Procedure 72(a) or 72(b) applies and
that, when the magistrate judge finds that dismissal or another sanction disposing of
a claim or defense is unwarranted, the motions should be characterized as

non-dispositive and may be ruled on by the magistrate judge) (followed in Green
Hills Dev. Co., LLC v. Credit Union Liquidity Servs., LLC, No. 3:11-cv-1885-L-BN,
Dkt. No. 373 at 2 (N.D. Tex. Dec. 1, 2016)).
Rule 37(b) “is designed to empower the court to compel production of evidence
by the imposition of reasonable sanctions.” Dorsey v. Acad. Moving & Storage, Inc.,
423 F.2d 858, 860 (5th Cir. 1970). “Sanctions under Rule 37 serve the dual function
of reimbursing the moving party and deterring the violator of the discovery orders

(as well as other potential violators).” Day v. Allstate Ins. Co., 788 F.2d 1110, 1114
(5th Cir. 1986).
Rule 37(b)(2) “empowers the courts to impose sanctions for failures to obey
discovery orders. In addition to a broad range of sanctions, including contempt,
[Rule] 37(b)(2) authorizes the court to impose a concurrent sanction of reasonable
expenses, including attorney’s fees, caused by the failure to obey a discovery order.”

Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 488 (5th Cir. 2012)
(cleaned up); see also Chilcutt v. United States, 4 F.3d 1313, 1322 n.23 (5th Cir.
1993) (“Rule 37(b) clearly indicates that district courts have authority to grant a
broad spectrum of sanctions.”).
“The district court has broad discretion under Rule 37(b) to fashion remedies
suited to the misconduct.” Smith, 685 F.3d at 488 (cleaned up). “This discretion,
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however, is limited” based on the type of sanctions imposed. Id.
The United States Court of Appeals for the Fifth Circuit has explained that its
“caselaw imposes a heighted standard for litigation-ending sanctions (sometimes

called ‘death penalty’ sanctions). For a lesser sanction, we broadly require the
district court to determine the sanctions are ‘just’ and ‘related to the particular
‘claim’ which was at issue in the order to provide discovery.’” Law Funder, L.L.C. v.
Munoz, 924 F.3d 753, 758 (5th Cir. 2019) (cleaned up).
The sanction imposed should be the least severe sanction adequate to achieve
the proper functions of Rule 37(b)(2) under the particular circumstances. See Smith,
685 F.3d at 488-90.

And the Fifth Circuit recently repeated its guidance that, “to levy a
litigation-ending sanction for a discovery violation, the court must make four
findings. First, the violation reflects bad faith or willfulness. Second, the client, not
counsel, is responsible for the violation. Third, the violation substantially prejudiced
the opposing party. Fourth, a lesser sanction would not substantially achieve the
desired deterrent effect.” Vikas WSP, Ltd. v. Econ. Mud Prod. Co., 23 F.4th 442, 454

(5th Cir. 2022) (cleaned up); accord Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300,
1304 (5th Cir. 1988) (“We have repeatedly emphasized that a dismissal with
prejudice is a ‘draconian’ remedy, or a ‘remedy of the last resort,’ to be employed only
when the failure to comply with the court’s order results from wilfullness or bad
faith rather than from an inability to comply. Nevertheless, deliberate, repeated
refusals to obey discovery orders have been held to warrant the use of this ultimate
-16-
sanction.” (cleaned up)); Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511, 514 (5th
Cir. 1985) (“[D]ismissal is authorized only when the failure to comply with the
court’s order results from willfulness or bad faith, and not from the inability to

comply.”).
But “[l]esser sanctions do not require a finding of willfulness.” Smith, 685 F.3d
at 488. “Of course, the flagrancy of a party’s behavior must be directly proportionate
to the severity of the sanction imposed,” but “the lack of willful, contumacious, or
prolonged misconduct [does not] prohibit[] all sanctions.” Chilcutt, 4 F.3d at 1322
n.23. Even where a party was “unable to comply with the discovery requests, the
district court still ha[s] broad discretion to mete out a lesser sanction than

dismissal.” Id. (cleaned up).
That is because “the type of conduct displayed by a party had no bearing on
whether sanctions should be imposed, but only on the type of sanctions imposed,”
and “[t]he willfulness or good faith of [a party], can hardly affect the fact of
noncompliance and [is] relevant only to the path which the District Court might
follow in dealing with [the party’s] failure to comply.” Id. (cleaned up).

Analysis
I. Quantas violated the Court’s January 29, 2024 Electronic Order.
In the January 29, 2024 Electronic Order, the Court ordered that “Quantas
must, by February 19, 2024,”
• “serve on the ERs’ counsel complete responses (without
objections) to Requests for Production Nos. 1-46 (as modified [by
the Court]) and produce all unproduced documents and
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electronically stored information that are responsive to those
requests and that are in Quantas’s possession, custody, or
control, consistent with the rulings above and in compliance with
Federal Rule of Civil Procedure 34(b)’s requirements, see Lopez,
327 F.R.D. at 575-79, and serve an updated, supplemental
privilege log that complies with Federal Rule of Civil Procedure
26(a)(5)’s requirements,”
• “serve on Defendants’ counsel complete answers – without
objections – to Interrogatory Nos. 1, 2, and 5, consistent with the
rulings above and in compliance with Federal Rule of Civil
Procedure 33’s requirements,” and
• “serve amended answers to [Request for Admission Nos. 21, 38,
and 39], in compliance with Rule 36’s standards.”
Dkt. No. 65.
The ERs contend that Quantas violated the Electronic Order’s requirements
because,
• on February 19, 2024, Quantas “served supplemental responses to the
ERs’ RFAs and Interrogatories (without a verification),” but “Quantas’
supplemental responses to the Interrogatories remain unresponsive”;
• on February 19, 2024, “Quantas failed to serve amended responses to
the ERs’ Requests for Production or produce even a single additional
page of responsive material, citing ‘collection/processing issues on the
responsive documents’”;
• on February 19, 2024, Quantas did not “provide the required privilege
log that Judge Horan ordered by produced”;
• on February 27, 2024, “[e]ight days after the Court-ordered production
deadline, Quantas finally served its Second Supplemental Responses
and Objections to Defendant’s First Requests for Production and a
corresponding document production”;
• “Quantas’s supplemental production contains a mere 42 documents,
only 37 of which were unique” and “[o]nly three of those documents
were emails”;
• “[n]o other communications were produced, even though the ERs have
personal knowledge that the doctors frequently used text and
WhatsApp to communicate prior to their separation from Quantas”;
• “[t]he production otherwise consisted largely of documents that are
already in the ERs’ possession – such as the ERs’ Company Agreement,
Medical Director Services Agreement, and Master Services Agreement
with Quantas – as well as undated screenshots of the ERs’ former
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website and undated photos of the Sun City logo on signage and office
supplies”;
• “Quantas has still, [as of March 4, 2024], not conducted any meaningful
collection of e-mails, text messages, or other types of documents in this
case” or “collected any material number of e-mails, WhatsApps, or text
messages,” where “[i]t has been seven months since the ERs requested
basic document discovery, and Quantas has produced a grand total of
only seven e-mails,” “has produced no text messages or WhatsApp
messages (an app these parties use to communicate with one another),”
and “has refused to tell the ERs – much less this Court – whether it
ever will collect and produce such materials, despite having been
ordered to do so”; and
• “Quantas, by all indications, still has not collected communications
from its own custodians.”
Dkt. No. 66 at 7 (cleaned up); Dkt. No. 72 at 2-5, 10 (cleaned up).
In their reply, the ERs assert that, “[t]aken together, Quantas’ facially
deficient production, Quantas’ refusal to present a Rule 30(b)(6) witness on
document collection issues, Quantas’ refusal to answer questions about its collection
efforts, and the fact that there are no affidavits in the record swearing to same
demonstrate the alleged ‘technical difficulties’ are a distraction.” Dkt. No. 72 at 5.
The undersigned agrees with the ERs’ assessment.
While Quantas provided a complete answer to Interrogatory Nos. 1 and 2 (the
ERs’ motion focuses on the original and not the supplemental answer to
Interrogatory No. 2), Quantas violated the Court’s order to serve a complete answer
to Interrogatory No. 5.
Interrogatory No. 5 asks Quantas, “[i]f You contend that Matthew Rinaldi was
authorized to execute the Trademark Assignment on behalf of El Paso East, please
identify the person(s) who authorized Mr. Rinaldi to execute the Trademark
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Assignment and the Communication or Document through which such authorization
was provided.” Dkt. No. 66-1 at 22 of 29. Quantas’s supplemental answer states:
“Matt Rinaldi was authorized to sign the Trademark Assignment in his role as

General Counsel to El Paso East.” Dkt. No. 66-1 at 23 of 29. As the ERs explain, this
interrogatory asks “[w]hat human being authorized Quantas’ in-house lawyer to
execute the trademark assignment that is the lynchpin of Quantas’ trademark
claims,” but Quantas’ supplemental answer “does not tell the ERs who authorized
him to execute it, which is what the Interrogatory asked.” Dkt. No. 66 at 7. The
Court agrees that this supplemental answer is evasive. Cf. FED. R. CIV. P. 37(a)(4)
(“For purposes of [Federal Rule of Civil Procedure 37](a), an evasive or incomplete

disclosure, answer, or response must be treated as a failure to disclose, answer, or
respond.”).
More significantly, the ERs report Quantas’ ongoing failure to substantially
supplement its document production, reflecting an apparent and ongoing failure to
conduct any meaningful collection of e-mails, text messages, or other types of
documents in this case. See also Dkt. No. 66-1 at 25-26 of 29 (Declaration of Barton

Wayne Cox).
The Court has previously explained that,
[i]n response to a [Federal Rule of Civil Procedure] 34(a)(1) RFP, “a
party cannot produce what it does not have, and so, [c]learly, the court
cannot compel [a party] to produce non-existent documents.” But, “[i]n
responding to [Rule 34] discovery requests, a reasonable inquiry must
be made, and if no responsive documents or tangible things exist, FED.
R. CIV. P. 26(g)(1), the responding party should so state with sufficient
specificity to allow the Court to determine whether the party made a
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reasonable inquiry and exercised due diligence.” And “[t]he fact that a
party may disbelieve or disagree with a response to a discovery request
... is not a recognized ground for compelling discovery, absent some
indication beyond mere suspicion that the response is incomplete or
incorrect” or the requesting party’s belief, without more, believes that a
discovery production is not complete.
As a general matter, “[i]t is not the court’s role to dictate how a
party should search for relevant information absent a showing that the
party has abdicated its responsibility,” and “[a] responding party is best
situated to preserve, search, and produce its own [electronically stored
information],” which “[p]rinciple ... is grounded in reason, common
sense, procedural rules, and common law, and is premised on each
party fulfilling its discovery obligations without direction from the court
or opposing counsel[, and eschewing ‘discovery on discovery,’] unless a
specific deficiency is shown in a party’s production.”
To make this showing of a specific or material deficiency in the
other party’s production to require the responding party to engage in
additional searches or discovery efforts or to obtain “discovery on
discovery” that is “both relevant and proportional to the needs of the
case” under Rule 26(b)(1), the requesting party should make a showing,
including through “the documents that have been produced,” that
allows the Court to make “a reasonable deduction that other documents
may exist or did exist and have been destroyed” or must “point to the
existence of additional responsive material.”
VeroBlue, 2021 WL 5176839, at *9 (cleaned up).
In the motion and reply (as quoted above), the ERs have persuasively shown,
including through the documents that have been produced or that the ERs know
should exist, that additional responsive materials exist that Quantas has not
produced – or apparently collected for production. As only the most stark example,
as of 14 days after the Court-ordered deadline, Quantas had produced only 7 e-mails
and no text messages or WhatsApp messages (an app that the parties use to
communicate with one another).
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Quantas does not deny that it has not conducted a complete collection and
production of all unproduced documents and electronically stored information that
are responsive to Requests for Production Nos. 1-46 (as modified by the Court) and

that are in Quantas’s possession, custody, or control. Quantas instead offers the
following excuses:
• “Quantas noted in its February 19, 2024, email to Defendants’ counsel
technical difficulties it was having for document production” and
“stated that it was having ‘collection/processing issues on the responsive
documents’ and further informed Defendants that it believed it could
have the issues resolved and the responsive documents produced within
the week”;
• “[a]s one example, (Ex. A, at Appx002) shows an email demonstrating
counsels’ firm’s security protocol was not allowing/blocking the transfer
of files from Quantas”;
• “[a]n additional factor causing delay in Quantas’ document collection
and production has been the decentralized nature of Quantas’ records,”
where “Quantas does not utilize a central document server that neatly
stores all corporate records, emails, and files” but “[r]ather, relevant
records are dispersed across individual employee email accounts and
computers” and “Quantas has had to investigate which specific
employees may possess responsive documents, contact each
individually, obtain account and system credentials to access any
relevant files, and manually search emails, folders, and systems for
relevant documents”;
• Quantas’s “decentralized system has added substantial time to
Quantas’ document collection process as it has had to coordinate with
and gather files from multiple sources rather than easily accessing files
from a single, unified system” but “Quantas has diligently undertaken
these efforts promptly after receiving Defendants’ document requests,
but the nature of Quantas’ record system has undoubtedly caused
increased time to pull together all responsive materials compared to an
organization utilizing centralized servers and file storage,” and
“Quantas continues working to locate any final responsive documents
not yet discovered from individual sources and expects to supplement
its production on a rolling basis as needed”;
• “another significant factor impacting the timing of Quantas’ document
production has been an emergency situation that developed
approximately two weeks” before February 28, 2024, in which “two (2)
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emergency room facilities that Quantas provides management services
for in Houston were summarily shut down without any notice to
Quantas,” which “caused substantial managerial and regulatory issues
for Quantas, including but not limited to dealing with leases and lease
payments, payroll and payroll taxes, bank accounts being frozen, and
personnel issues” and which “emerging crisis required Quantas to
devote substantial efforts to handling the fallout from the abrupt
facility closures”;
• “Quantas leadership and limited staff – the same people tasked with
gathering documents – had to shift their focus to mitigating the issues
caused by the unexpected shutdown of the ERs that Quantas supports,”
and, “[a]s a result, Quantas’ resources for records search and collection
have been severely constrained for the past couple weeks,” but, “[n]ow
that Quantas has made some progress addressing that issue, it has
been able to redirect efforts back to compiling documents and
supplementing its production to Defendants,” although “this emergency
situation further explains why Quantas has needed additional time
beyond the Court’s deadline to pull together documents from multiple
sources”; and
• the ERs’ “continued assertion that the responses were ‘due over six
months ago’ is misstated,” where the ERs “do not address that Quantas’
objections to the original RFPs were substantiated for nearly half of the
RFPs and had to modified by this Court” and, “[s]ince the time that
appropriate RFPs were produced to Quantas, a mere twenty-two (22)
days passed before” the ERs filed their sanctions motion.
Dkt. No. 71 at 5-7 (cleaned up).
These explanations and excuses do not account for the facts that
• the Court’s January 29, 2024 Electronic Order ordered the
supplemental production to be complete by February 19, 2024;
• the attached email reflecting that Quantas’s counsels’ firm’s security
protocol was not allowing/blocking the transfer of files from Quantas is
dated February 20, 2024;
• the Court modified the scope of only RFP Nos. 7, 11-12, 14-23, 25-28,
and 30-32 but ordered Quantas to “serve on the ERs’ counsel complete
responses (without objections) to Requests for Production Nos. 1-46 (as
modified [by the Court]) and produce all unproduced documents and
electronically stored information that are responsive to those requests,”
and Quantas should have engaged in substantial document collection
long before the Court’s order, including to account for the nature and
limitations of Quantas’s system;
-23-
• if Quantas required additional time due to an unexpected crisis, it
should have informed the ERs’ counsel and asked for it and, if an
agreement could not be reached, filed a motion to modify the
court-ordered deadline; and
• as the ERs point out, “Quantas offers no explanation [or evidence] for
why the ‘collection/processing issues’ it purportedly experienced could
not have been sorted out over the last seven months or in the weeks
since February 19,” 2024.
Dkt. No. 72 at 2-6. As the ERs’ counsel’s declaration attests:
• “On January 26, 2024, the ERs noticed the 30(6)(6) deposition of
Plaintiff and Counter-Defendant Quantas Healthcare Management,
LLC,” where “[t]he ERs selected February 28, 2024 for the deposition so
that we would hopefully have time to review Quantas’ anticipated
document production prior to the deposition.”
• “On the February 6, 2024 meet and confer regarding the noticed
deposition topics, counsel for Quantas (Mr. Tuck) indicated that
Quantas did not intend to raise any objections to the notice and that a
witness would be available.” “On the February 6, 2024 meet and confer,
I conveyed to counsel for Quantas that the ERs would press ahead with
depositions in view of the imminent close of discovery, but that the ERs
would take appropriate steps if Quantas failed to produce documents on
February 19, 2024 as ordered by the Court. Counsel for Quantas
confirmed on that call that Quantas was aware of the Court’s January
29, 2024 Order (0kt. 65) on the ERs’ First Motion to Compel, but that it
had not provided any additional documents to its counsel for review and
production.” And “Mr. Tuck did not mention any issues with Quantas’
anticipated production related to ‘technical difficulties’ or an emergency
situation with Quantas’ emergency room facilities in Houston.”
• “On February 19, 2024, counsel for Quantas served supplemental
Interrogatory answers and supplemental responses to Requests for
Admission. Quantas did not serve any updated responses to the
Requests for Production, nor did it produce any additional documents
on or before the February 19, 2024 deadline set by the Court. Quantas
also did not provide a privilege log. True and correct copies of the
supplemental discovery responses served by Quantas on February 19
are included within the Appendix to the instant Motion.”
• “On February 20, 2024, when I again held a telephone conference with
Mr. Tuck, he again made no mention of any ‘technical difficulties’ or
emergency situations that prevented Quantas from timely making its
production on February 19, 2024. Rather, he informed me that Quantas
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had yet to provide documents responsive to him that could, in turn, be
produced to the ERs in discovery.”
• “On February 27, 2024, counsel for Quantas (Mr. Tuck) informed us for
the first time that Quantas would not make a Rule 30(b)(6) witness
available on February 28,” and, “[b]y the time Quantas so informed us,
we had already spent time and money preparing for the deposition.”
• “On February 29, 2024, I wrote to Mr. Tuck asking questions about
Quantas’ document collection efforts,” but “Mr. Tuck’s response did not
answer the questions regarding how many e-mails his law firm had
collected, when any such e-mails were collected, or from whom such
e-mails were collected.”
Dkt. No. 66-1 at 25-26 of 29; Dkt. No. 72-1 at 46-47 of 56.
As the ERs’ counsel explains, the ERs attempted, through a Federal Rule of
Civil Procedure 30(b)(6) corporate representative deposition of Quantas, to learn
more about Quantas’s document preservation, collection, and production issues, but,
“when the date finally came, Quantas failed to make a witness available,” and, so,
the ERs were unable “to test the veracity of the excuses Quantas now offers for its
violations of this Court’s January 29,” 2024 Electronic Order. Dkt. No. 72 at 1.
II. The Court cannot find that Quantas’s violations of the Court’s order were
willful or in bad faith.
The Fifth Circuit has explained that “discovery delays are serious, especially
when they are part of a pattern,” and that “[k]nowingly ignoring an obligation,
especially multiple times, may alone be enough to find bad faith.” Calsep A/S v.
Dabral, 84 F.4th 304, 314 (5th Cir. 2023).
The record evidence here supports a finding that Quantas itself knew about
its obligations to supplement its document production and failed to timely do so –
-25-
and that Quantas itself, rather than its outside counsel, appears to be responsible for
the ongoing violations.
But the Court cannot find these are the “extreme circumstances” under which

Rule 37(b)(2) sanctions can and should be used as a “lethal weapon” through
litigation-ending or “death penalty” sanctions. F.D.I.C. v. Conner, 20 F.3d 1376,
1380, 1383 (5th Cir. 1994).
Quantas has not conducted itself in discovery in this case as any party should.
And, for all the reasons that the ERs persuasively explain in their sanctions motion
and reply, Quantas’s ongoing violations of the Court’s discovery order has
significantly prejudiced the ERs’ ability to prepare for trial. See Dkt. No. 66 at 11-12;

Dkt. No. 72 at 6-8.
But the Court finds, under the circumstances, that more would be required to
find willfulness or bad faith.
III. Serious sanctions are needed and appropriate.
Still, “[l]esser sanctions do not require a finding of willfulness.” Smith, 685
F.3d at 488. And, while “the flagrancy of a party’s behavior must be directly

proportionate to the severity of the sanction imposed,” “the lack of willful,
contumacious, or prolonged misconduct [does not] prohibit[] all sanctions.” Chilcutt,
4 F.3d at 1322 n.23.
Quantas’s conduct, as described above, warrants a serious sanction that is just
and related to the claims that were at issue in the order to provide discovery. Here,
the ERs’ alternative requests are, the Court finds, the appropriate, least severe
-26-
sanction adequate to achieve the proper functions of Rule 37(b)(2) under the
particular circumstances.
The Court orders, under Rule 37(b)(2)(A) and (C), that

1. Quantas must, by April 22, 2024, serve on the ERs’ counsel complete
responses (without objections) to Requests for Production Nos. 1-46 (as
modified by the Court) and produce all unproduced documents and
electronically stored information that are responsive to those requests and
that are in Quantas’s possession, custody, or control, consistent with the
rulings above and in compliance with Federal Rule of Civil Procedure 34(b)’s
requirements;
2. Quantas, in defending against the ERs’ claims, is barred from relying upon
any evidence that it failed to produce by the court-ordered February 19, 2024
deadline;
3. the ERs are permitted to depose Quantas’ witnesses on dates of the ERs’
choosing after the end of the discovery deadline once the ERs have Quantas’
documents in hand but, in any event, by no later than May 22, 2024; and
4. Quantas must reimburse the ERs for their reasonable attorneys’ fees and
costs in drafting and filing their Motion for Sanctions [Dkt. No. 66] and reply
[Dkt. No. 72] and appendices in support.
The discovery deadline has now passed, and the dispositive motions deadline
is upon the parties. The time in which Quantas will be allowed to benefit from its
violations of its discovery obligations is at an end.
These sanctions appropriately address and remediate Quantas’s discovery
misconduct and the resulting prejudice to the ERs. Contrary to Quantas’s
suggestion, ordering only that the ERs may take post-discovery-period depositions is
not a sufficient remedy here.
And, although the Court previously declined to award fees for the ERs’ Motion
to Compel Discovery [Dkt. No. 57] under Federal Rule of Civil Procedure 37(a)(5),
Quantas’s failure to comply with the Court’s January 29, 2024 Electronic Order –
-27-
which was not substantially justified notwithstanding Quantas’s excuses, as
explained above – necessitated this sanctions motion. Quantas now should bear the
expense of the ERs’ attorneys’ fees and costs incurred in bringing it.

The Court directs the ERs’ counsel and Quantas’s counsel to confer by
telephone or videoconference or in person about the reasonable amount of these
attorneys’ fees and costs to be awarded under Rule 37(b)(2)(C), as specified above.
By no later than April 29, 2024, the parties must file a joint report notifying
the Court of the results of the conference. If all disputed issues as to the amount of
attorneys’ fees and costs to be awarded to the ERs’ have been resolved, the ERs’
counsel must also send an agreed proposed order to the Court at

Horan_Orders@txnd.uscourts.gov by April 29, 2024.
If the parties do not reach an agreement as to the amount of attorneys’ fees
and costs to be awarded, the ERs’ counsel must, by no later than May 6, 2024, file
an application for attorneys’ fees and costs that is accompanied by supporting
evidence establishing the amount of the reasonable attorneys’ fees (as described
above) to be awarded under Rules 37(b)(2)(C). The fee application must be supported

by documentation evidencing the “lodestar” calculation, including affidavits and
detailed billing records, and citations to relevant authorities and must set forth the
itemized number of hours expended in connection with the recoverable attorneys’
fees described above as well as the reasonable rate(s) requested. See Tollett v. City of
Kemah, 285 F.3d 357, 367 (5th Cir. 2002).

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If the ERs files an application, Quantas must file a response by Wednesday,
May 28, 2024, and Defendants must file any reply by June 11, 2024.
Conclusion
For the reasons and to the extent explained above, the Court grants in part
and denies in part the ERs’ Emergency Motion for Sanctions [Dkt. No. 66].
SO ORDERED.
DATED: April 8, 2024
Jelbo
DAVIDL.HORAN ————<“—i—S™
UNITED STATES MAGISTRATE JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10671848. Public record. Not legal advice.