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McFadden v. Town of Meeker Colorado

United States District Court, D. Colorado

January 23, 2018

MEGAN McFADDEN, et al, Plaintiffs,
TOWN OF MEEKER COLORADO, et al, Defendants.


          Gordon P. Gallagher, United States Magistrate Judge

         This matter comes before the Court on Plaintiffs' motion for emergency hearing on injunctive relief (ECF #303), [1] Defendants' (Meeker Housing Authority, Parker, Buckler, George and Kincher (collectively MHA Defendants)) response (ECF #307), Plaintiffs' reply (ECF #313), and various other related documents and filings which will be discussed herein, the matter having been referred to this Magistrate Judge (ECF #304).[2] The Court has also considered the entire case file, the applicable law, and is sufficiently advised in the premises. Oral argument and testimony were taken on January 18, 2018. I GRANT the motion for the reasons set forth below.

         During the summer of 2017 a discovery dispute arose out of Plaintiffs' belief that they were not being provided with all relevant and required documents by the MHA Defendants. An informal discovery dispute hearing was held pursuant to this Magistrate Judge's procedures on July 10, 2017. During that hearing, Defense Counsel Baity stated “if you think there are documents missing, you can come up and look at our computers, run your metadata search, and see if you can find any documents.” Transcript of July 10, 2017 hearing (ECF #226, p. 13). There followed, during that hearing, some additional discussion on the subject, with the ultimate agreement between Counsel that Plaintiffs would engage in the proffered forensic search. See generally Transcript of July 10, 2017 hearing (ECF #226, pp. 13-19). As the proffer of the search came from the MHA Defendants, it was never Court Ordered. Id., see also Minutes and Orders - Discovery Dispute Hearing on July 10, 2017 (ECF #216).

         On July 25, 2017, following some communications between Counsel on the subject, Forensic Pursuits (a company retained by Plaintiffs to conduct the search) went to Meeker, Colorado and copied the computer hard drive. On October 5, 2017, Plaintiffs produced to the MHA Defendants a report from Forensic Pursuits (Plaintiff's Eighteenth Supplemental Disclosures (the disclosed pages being FP 1-1691) (ECF #303-10). Following that disclosure, a dispute arose over whether Plaintiffs exceeded the scope of the agreed to search, whether Plaintiffs were now in possession of confidential and perhaps irrelevant documents, and whether Plaintiffs were improperly using those documents. Of the approximately 1600 pages collected during the search, the parties agree that only 137 pages are disputed.

         On December 15, 2017 the data breach letter (the letter) (ECF #303-1) was penned claiming:

1. A data breach at Meeker Housing Authority (MHA);
2. There was misappropriation of personal and confidential identifying information;
3. A Court Order and an agreement between Counsel granted Plaintiffs' Counsel limited access to emails, that access was exceeded, and Defense Counsel was not aware of the unauthorized access;
4. The access was just discovered and did not involve MHA management in any way;
5. MHA is unaware of the extent of the dissemination of the information;
6. The actions by the Counsel are a violation of State and Federal law; and
7. There was a lengthy advisement of how to deal with the data breach, e.g., contact credit monitoring services, etc.

         Plaintiffs, who became aware of this letter, filed the instant motion seeking relief (ECF #303). The District Court Ordered the immediate mailing of an interim letter (ECF #309). The pleadings and the circumstances of this dispute raise a number of issues which will be addressed below.

         Plaintiffs argue that sanctions are appropriate for alleged litigation misconduct on the part of Defendants, citing Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (addressing sanctions under 28 U.S.C. § 1927 which allows imposition of costs against counsel personally for unreasonably and vexatiously multiplying the proceedings). By its very terms, § 1927 authorizes sanctions when a party multiplies “the proceedings in any case.” 28 U.S.C. § 1927. Thus, courts are to apply § 1927 “to misconduct by an attorney in the course of proceedings in a case before the court, not misconduct that occurs before the case appears on the federal court's docket.” Bender v. Freed436 F.3d 747, 751 (7th Cir.2006) (original quotes omitted). See also In re Schaefer Salt Recovery, Inc.,542 F.3d 90, 101 (3rd Cir.2008) ...

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