United States District Court, D. Colorado
MEGAN MCFADDEN, LONNIE WHITE, and ANTONIO “A.J.” WHITE, Plaintiffs,
v.
MEEKER HOUSING AUTHORITY, Defendant.
ORDER DISCHARGING ORDER TO SHOW CAUSE AGAINST MR.
STEPHEN L. BAITY
William J. Martinez United States District Judge
Plaintiff
Megan McFadden previously resided in the federally subsidized
Karen Court apartment complex in Meeker, Colorado. Plaintiffs
Lonnie and A.J. White also previously resided in Karen Court.
All Plaintiffs claim that Defendants discriminated against
them in violation of § 504 the Rehabilitation Act of
1973 (“Rehabilitation Act” or “§
504”), 29 U.S.C. § 794, and the Fair Housing Act
(“FHA”), 42 U.S.C. §§ 3601 et
seq., based on Defendants' policy barring them from
keeping therapy pets in their Karen Court apartments absent
onerous conditions. Plaintiffs originally sued Meeker Housing
Authority (“MHA”) and various individual
defendants, but through voluntary dismissals and summary
judgment, the only remaining defendant is MHA. (See
ECF Nos. 242, 244, 443.)
After
two-and-a-half years of discovery disputes, accusations of
wrongdoing, and near-constant motion practice, the parties
have reached a settlement that “will finally and fully
resolve all remaining claims in this action.” (ECF No.
498.) Independent of that settlement, however, is an
outstanding Order to Show Cause why one of Defendants'
former attorneys, Mr. Stephen L. Baity, should not be
required to pay certain costs and fees Plaintiffs incurred as
part of particular discovery efforts that yielded documents
MHA should have produced through its own efforts. See
McFadden v. Meeker Hous. Auth., 2018 WL 3348882 (D.
Colo. July 9, 2018) (ECF No. 376). The Court has reviewed Mr.
Baity's response. (ECF Nos. 398-99.) As the Court will
explain below, the unique timeline of the relevant discovery
dispute demonstrates that Mr. Baity did not act sanctionably.
The Order to Show Cause will therefore be discharged.
I.
LEGAL STANDARD
The
Court's order to show cause arose from Mr. Baity's
apparent failure to supervise his clients' discovery
efforts. (ECF No. 376 at 11, 12.)[1] The basis for sanctions in
such a situation is Federal Rule of Civil Procedure 26(g):
(1) Every disclosure under Rule 26(a)(1) or (a)(3) and every
discovery request, response, or objection must be signed by
at least one attorney of record in the attorney's own
name . . . . By signing, an attorney . . . certifies that to
the best of [his or her] knowledge, information, and belief
formed after a reasonable inquiry:
(A) with respect to a disclosure, it is complete and correct
as of the time it is made . . . .
(3) If a certification violates this rule without substantial
justification, the court, on motion or on its own, must
impose an appropriate sanction on the signer, the party on
whose behalf the signer was acting, or both. The sanction may
include an order to pay the reasonable expenses, including
attorney's fees, caused by the violation.
Commenting
on this rule, the Advisory Committee on Rules of Civil
Procedure stated that
[t]he duty to make a “reasonable inquiry” is
satisfied if the investigation undertaken by the attorney and
the conclusions drawn therefrom are reasonable under the
circumstances. It is an objective standard similar to the one
imposed by Rule 11. In making the inquiry, the attorney may
rely on assertions by the client and on communications with
other counsel in the case as long as that reliance is
appropriate under the circumstances. Ultimately, what is
reasonable is a matter for the court to decide on the
totality of the circumstances.
Rule 26(g) does not require the signing attorney to certify
the truthfulness of the client's factual responses to a
discovery request. Rather, the signature certifies that the
lawyer has made a reasonable effort to assure that the client
has provided all the information and documents available to
him that are responsive to the discovery demand.
Fed. R.
Civ. P. 26 advisory committee's note to 1983 Amendments
(citations omitted).
The
Court need not find bad faith to find a Rule 26(g) violation.
St. Paul Reinsurance Co. v. Commercial Fin. Corp.,
198 F.R.D. 508, 516 (N.D. Iowa 2000). However, “[a]s
with Rule 11 sanctions, the court must avoid hindsight and
resolve all doubts in favor of the signer.”
Bergeson v. Dilworth, 749 F.Supp. 1555, 1566 (D.
Kan. 1990).
Rule
26(g) disputes may be resolved on a summary record.
See Fed. R. Civ. P. 26 advisory committee's note
to 1983 Amendments (“To prevent the proliferation of
the sanction procedure and to avoid multiple hearings,
discovery in any sanction proceeding normally should be
permitted only when it is clearly required by the interests
of justice.”).
II.
FACTUAL FINDINGS
Drawing
from the entire record in this case, including Mr.
Baity's response, the Court makes the following factual
findings.
A.
Early Interactions with MHA
Plaintiffs
filed this lawsuit on September 13, 2016. Mr. Baity, who is
based in Denver, made the approximately 4.5-hour drive to
Meeker on October 5, 2017, and there met with Stacie Kincher,
who was MHA's executive director and property manager at
Karen Court-and who was, at the time, also an individual
defendant in this lawsuit. (ECF No. 398-1 ¶ 14.) Mr.
Baity explained the litigation process and instructed Kincher
to preserve documents and information that might be relevant
to the case. (Id. ¶ 15.) In subsequent phone
calls with Kincher (and sometimes other individual
defendants) on October 10, 13, and 19, and November 1, 2016,
Mr. Baity discussed the defendants' discovery obligations
and the importance of searching diligently for responsive
documents. (Id. ¶¶ 17-20, 22.)
Through
these meetings, Mr. Baity discerned that Kincher “was
the person most familiar with MHA's day-to-day
operations, and that she conducted all of MHA's business
on a single computer located at the MHA offices.”
(Id. ¶ 25.) Given Kincher's role as
executive director and her familiarity with day-to-day
operations, Mr. Baity and his paralegal, Ms. Tia Andrews
Beeby, relied on Kincher as the “point person at MHA
for searching for and gathering relevant documents responsive
to Plaintiffs' discovery requests. . . . Ms. Kincher was
familiar with the computer's contents, and in the best
position to conduct searches on that computer for information
relevant to the lawsuit.” (Id. ¶ 26;
see also ECF No. 398-56 ¶ 14.)
B.
First Disputes
Plaintiffs
and MHA exchanged their Rule 26(a)(1) disclosures and began
serving written discovery requests in the normal course. The
first inkling of a discovery dispute in the record is a
December 20, 2016 letter from one of Plaintiffs'
attorneys, Ms. Laura Wolf, to Mr. Baity, asserting that
MHA's initial disclosures were inadequate compared to
MHA's affirmative defenses and counterclaims, and
demanding that MHA supplement its disclosures with supporting
documents. (ECF No. 301-1.) Similar letters followed on March
6, 2017 (ECF No. 301-2), and April 14, 2017 (ECF No. 301-3).
The April 14 letter also emphasized Plaintiffs' Rule 34
request for production #14 (“RFP-14”), which
Plaintiffs had previously served. (Id. at 2.) RFP-14
sought communications between MHA and two government
agencies, the U.S. Department of Housing & Urban
Development (“HUD”) and the Colorado Housing
& Finance Authority (“CHFA”). MHA had
responded that it “has not had communications with HUD
or CHFA” responsive to RFP-14, and Ms. Wolf asserted,
without elaboration, that “Plaintiffs have every reason
to believe that this unverified statement is
inaccurate.” (Id.)
C.
Allegations of Missing and Altered Documents
By
letter to Mr. Baity dated May 18, 2017, Ms. Wolf raised new
discovery concerns. (ECF No. 301-7.) Ms. Wolf had reviewed
documents disclosed by MHA and noted that those documents
referenced or implied the existence of other documents not
disclosed. (Id. at 1.) Ms. Wolf therefore requested
disclosure of those other documents (e.g.,
“Ms. Kincher's email to Mr. McKenzie prompting the
email found at [the document Bates-labeled] MHA 122”;
“Slideshow attachment referenced in MHA 177-178 as well
as the undisclosed page 3”). (Id.)
In the
same letter, Ms. Wolf announced that Plaintiffs had
“reason to believe that a number of documents [produced
by MHA] in this case have been altered, back-dated, or are
otherwise inauthentic.” (Id. at 2.) Ms. Wolf
provided the Bates numbers for the documents in question.
(Id.) No. party has directly described to the Court
what those documents are, but the Court has gleaned from
later filings that Plaintiffs were disputing the authenticity
at least of violation notices allegedly served on Plaintiffs
by MHA, and of photographs allegedly showing the filthy state
of Plaintiff McFadden's apartment upon move-out.
(See ECF No. 288 at 11-16.) Ms. Wolf requested
“to inspect the devices on which [the disputed]
documents were created and produced in order to obtain
metadata by which to determine the documents' creation
dates and authenticity . . . . Please provide us with dates
in June 2017 on which our forensic team can inspect the
devices.” (ECF No. 301-7 at 2.)
By
letter to Mr. Baity dated May 22, 2017, Ms. Wolf transmitted
supplemental disclosures, including
a lengthy packet of information dated January 23, 2012 that
former MHA Board member Robert Barr provided directly to
[then-]Defendants Buckler, George, and Parker . . . . These
documents establish that MHA Defendants have been on notice
since at least January 2012 of their duties under federal law
with respect to the provision of reasonable accommodations
relating to assistance animals.
(ECF
No. 301-5 at 1.) Ms. Wolf declared it “incredibly
troubling that MHA Defendants never disclosed this document
to Plaintiffs, ” and likened it to the RFP-14 dispute
over communications between MHA and HUD/CHFA. (Id.)
Ms. Wolf referenced MHA's “fail[ure] to disclose
the e-mails exchanged between Mr. McKenzie [MHA's outside
consultant on fair housing requirements] and CHFA [regarding
matters pertaining to the events at issue in the
lawsuit].” (Id.) At some point-it is unclear
precisely when- Plaintiffs themselves obtained these
McKenzie-CHFA e-mails through requests directly to CHFA.
(See ECF No. 190 at 1-2.) Ms. Wolf also re-raised
MHA's failure to disclose information supporting its
defenses and counterclaims. (ECF No. 301-5 at 1.)
The
next day (May 23, 2017), Plaintiffs disclosed more e-mails
between McKenzie and CHFA that Plaintiffs had obtained
through their own efforts. (See ECF No. 301-6.) In
the cover letter accompanying that disclosure, Ms. Wolf also
highlighted a separate document (apparently already
disclosed) that references an e-mail between HUD and Kincher.
(Id. at 1.) Ms. Wolf pointed out that such an e-mail
would be responsive to Plaintiffs' discovery requests but
had never been disclosed. (Id.)
On May
25, 2017, Mr. Baity responded to Ms. Wolf's May 18, 2017
letter. (See ECF No. 399-43.) As to the various
documents that supposedly implied the existence of other
documents, Mr. Baity variously responded that no additional
documents exist, that MHA was still searching, or that
responsive documents had already been disclosed.
(Id. at 2-3.) As for Plaintiffs' request to
forensically inspect MHA's digital devices, Mr. Baity
“object[ed] to this request to the extent that it is
overbroad and unduly burdensome. Plaintiffs' allegation
that documents have been ‘altered, back-dated, or are
otherwise inauthentic' is unfounded.” (Id.
at 3.)
D.
First Hearing Before Judge Gallagher and the Forensic
Protocol
The
parties presented their discovery disputes (including several
disputes not mentioned above, which are irrelevant for
present purposes) to U.S. Magistrate Judge Gordon P.
Gallagher in a hearing held on June 6, 2017. (See
ECF No. 167.) Regarding the RFP-14 dispute, Judge Gallagher
called for briefing on whether the RFP's demand for
communications between MHA and HUD/CHFA imposed an obligation
on MHA to look for communications between McKenzie and those
entities. (Id. at 1.) As for “looking at
meta-data in documents, and only those documents, listed in a
letter from Plaintiffs to Defendants dated May 18, 2017,
” Judge Gallagher announced that the parties were going
to further confer. (Id. at 2.) Thus, that dispute
was “continued to such time as the parties have further
need of the court's assistance.” (Id.)
The
next day (June 7, 2017), Ms. Wolf sent an e-mail to Mr. Baity
that appears to be part of the ongoing conferral Judge
Gallagher noted. (ECF No. 399-44.) She relisted the Bates
numbers of the documents in question, and added an additional
document to that list. (Id. at 2.) The additional
document was an e-mail that appears to have an attachment,
but Mr. Baity had previously represented “that no
attachment can be found.” (Id.) In that light,
Ms. Wolf “request[ed] to inspect this email
[also].” (Id.)
On June
12, 2017, Plaintiffs submitted a brief to Judge Gallagher
regarding the RFP-14 question. (See ECF No. 190 at
12.) Plaintiffs argued that when McKenzie was communicating
on MHA's behalf, he was acting as MHA's agent and
therefore MHA should be considered in the possession,
custody, or control of those e-mails between McKenzie and HUD
or CHFA. (Id. at 4-8.) Plaintiffs also cited the
January 2012 packet they had obtained from Barr (the former
board member) and the attachment-less e-mail as evidence of
MHA's supposed unwillingness to search for responsive
documents. (Id. at 8-10.)
That
same day, the parties conferred in person over their various
disputes. (ECF No. 398-1 ¶ 42.) Concerning
Plaintiffs' desire to forensically inspect digital files,
Mr. Baity apparently withdrew his opposition and agreed to
provide “[d]ates in July” for such inspection,
while Ms. Wolf agreed to “provide the protocol for
[Plaintiffs'] forensic experts' inspection.”
(ECF No. 399-45 at 2.)
Another
of Plaintiffs' attorneys, Mr. Siddartha Rathod, sent that
protocol by e-mail to Mr. Baity on June 21, 2017. (ECF No.
399-46.) In the protocol, Forensic Pursuit (Plaintiffs'
digital forensics vendor) requested that it be permitted to
create a bit-for-bit complete image of the MHA computer's
hard drive so Forensic Pursuit could “examine deleted
space and system files . . . to compare [each] document's
changes over time.” (Id.) Mr. Baity agreed to
this protocol. (ECF No. 398-1 ¶ 123.)
E.
Allegations of Withheld Documents and Second Hearing ...