United States District Court, E.D. Louisiana
LIGHTHOUSE PROPERTY INSURANCE CORPORATION, AS LEGAL AND CONVENTIONAL SUBROGEE OF TYRONNE SCOTT AND LUCRETIA SCOTT
BMW OF NORTH AMERICA, LLC, AND XYZ INSURANCE COMPANY
WELLS ROBY, CHIEF UNITED STATES MAGISTRATE JUDGE.
the Court is a Motion for Contempt and Sanctions (R.
Doc. 100) seeking an order finding BMW North America
(“BMW NA”) in contempt of court, for sanctions in
the form of costs and attorney's fees, and such other
relief as justice requires. Rec. Doc. 100. The motion is
opposed. Rec. Doc. 138.
a subrogation claim filed by Lighthouse Insurance Corporation
(“Lighthouse”) as a result of its payment to its
insureds, the Scotts, for damages to their home. The
Scotts' garage was damaged when their BMW caught fire
while inside. Rec. Doc. 100-1. Lighthouse contends that the
fire was caused by a design defect in the BMW. Id.
August 4, 2017, Lighthouse took the Federal Rule of Civil
Procedure (“Rule”) 30(b)(6) deposition of BMW NA
and requested documents pursuant to Rule 34. Lighthouse
forwarded a list of twenty-one (21) proposed topics to which
BMW objected, and which was reviewed by the court as a result
of an earlier filed Motion to Compel. Rec. Doc. 50. The
undersigned overruled BMW NA's objections on all but one
topic and ordered the deposition to go forward as noticed on
the twenty (20) remaining items of inquiry. Rec. Doc. 68.
The Current Dispute
contends that BMW NA's representative had no substantive
knowledge, was unable to answer basic questions, and made no
attempts to gain knowledge before the deposition on several
issues. Lighthouse also contends that BMW NA did not produce
any documents during the deposition despite receiving the
Rule 34 Request for Production of Documents. Lighthouse,
therefore, seeks an order of contempt for BMW's failure
to comply with this court's order to produce a
knowledgeable corporate deponent and produce the requested
documents. Lighthouse also seeks costs and attorney's
contends that it is not in violation of the Court's order
because during the hearing it expressed a desire to produce
the most knowledgeable employee regarding the case, Mark
Yeldham but that he was unexpectedly unavailable due to a
family emergency. Rec. Doc. 71, p. 4. BMW NA contends that
Lighthouse knew that if it went forward with the deposition
as scheduled, despite the unavailability of the most
knowledgeable witness, then there would be topics that the
witness was not familiar with.
also contends that Peter Baur, the alternate designated
corporate representative, did prepare to testify on behalf of
the company. BMW NA contends that Bauer investigated the
noticed topics and reached out to several BMW NA employees to
educate himself based on the corporation's knowledge,
information, and records in its control. BMW NA contends that
Lighthouse has not tried to resolve the issues that are the
subject of this motion, yet it seeks to hold them in
contempt. Further, BMW NA contends that Baur consulted with
Yeldham and Sophia Roughgarden, both BMW NA employees. Rec.
Doc. 121. BMW NA also argues its corporate representative
investigated information known and reasonably available to
the organization and had no obligation to investigate facts
or information outside of the corporation's knowledge to
prepare for the Rule 30(b)(6) deposition. Fed. R. Civ. Proc.
argument regarding the motion was heard on October 4, 2017.
Prior to the issue being submitted, the undersigned issued an
order (Rec. Doc. 145) requiring BMW NA to reproduce Mr. Baur
and required him to provide testimony regarding the following
1. Notice Topic 17 regarding the corporate structure of BMW
NA and its relationship to BMW AG. The Court limited the
testimony to the steps Baur took in order to prepare for the
topic prior to his August 4, 2017 corporate deposition. Baur
was also required to testify about whether he took the time
to figure out the “layers” between BMW NA and BMW
AG, other than BMW Holding, and whether there is a corporate
structure overlap between the two entities.
2. Notice Topic 21 regarding BMW NA's investigation
and/or inspection of the fire incident at issue in this
litigation. The Court limited the testimony to the steps
taken by Baur, such as who he spoke to and what he spoke to
them about regarding the investigation, in order to prepare
for his August 4, 2017 deposition.
3. Notice Topic 15, which sought documents shared between BMW
NA and Peake Motor Co., Inc. d/b/a Peake BMW regarding the
Court further required BMW NA to submit a supplemental
memorandum addressing which of its responses to written
discovery overlapped with Notice Request 15, such that the
witness was not required to reproduce documents already
produced. Further, the Court required Lighthouse to file a
supplemental memorandum regarding Notice Topics 12, 13 and
18, addressing why BMW NA's involvement in the sale of
the vehicle is relevant to the issues in the case.
Standard of Review
Rule of Civil Procedure 26(b)(1) provides that parties may
obtain discovery regarding relevant information to any claim
or defense as long as it is non-privileged. Rule 26(b)(1)
specifies that “[i]nformation within the scope of
discovery need not be admissible in evidence to be
discovered.” Rule 26(b)(1) also specifies that
discovery must be “proportional to the needs of the
case, considering the important of the issues at stake in the
action, the amount in controversy, the parties' relative
access to relevant information, the parties' resources,
the importance of the discovery in resolving the issues, and
whether the burden or expense of the proposed discovery
outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1).
37(b)(2)(A)(vii) provides for sanctions if under Rule
30(b)(6) a witness fails to obey an order to provide or
permit discovery. A party seeking an order of civil contempt
must establish by clear and convincing evidence that: (1) a
court order was in effect; (2) the order required certain
conduct by the respondent; and (3) the respondent failed to
comply with the court's order. Piggly Wiggly
Clarksville, Inc. v. Mrs. Baird's Bakeries, 177 F.3d
380, 382 (5th Cir. 1999).
is, in fact, a central concept of the discovery process. The
duty of disclosure finds expression in the rules of
discovery, and in this Court's Rules of Professional
Conduct, which prohibit an attorney from suppressing any
evidence that he or his client has a legal obligation to
reveal or produce.
may be imposed on a party that, without substantial
justification, fails to disclose information required by Rule
26(a) or 26(e)(2). In re Sept. 11th Liab. Ins., 243
F.R.D. 114, 125 (S.D.N.Y. 2007) (citing Fed.R.Civ.P.
37(c)(1)). A failure to disclose under Rule 37 includes not
only spoliation of evidence, but also a party's untimely
production of documents and information required to be
contends that BMW NA violated the Court's order of
October 11, 2017, requiring Peter Baur to be produced as the
alternate corporate representative. Lighthouse also argues
that BMW NA failed to produce the required documents
according to Rule 34.
1. It did not violate an order of the court;
2. Lighthouse knew that its preferred witness had a family
emergency, but insisted on requiring them to produce a
corporate witness who, while prepared, may not have all of
the answers as required;
3. That its representative's testimony on the only five
topics at issue was sufficient, and the plaintiff only
complains about five of the twenty topics listed in the
notice which its corporate representative provided testimony
4. That plaintiff failed to assert or preserve any objection
regarding the sufficiency of Baur's testimony during the
deposition and therefore plaintiff waived the right to assert
any objection regarding Baur's testimony;
5. That plaintiff also waived its objection to the
witness' testimony regarding the board members because he
acquiesced in the response ...