FARMERS EDGE INC., FARMERS EDGE (US) INC., and FARMERS EDGE (US) LLC, Plaintiffs, v. FARMOBILE, LLC, JASON G. TATGE, HEATH GARRETT GERLOCK, and RANDALL THOMAS NUSS, Defendants 8:16CV191 United States District Court, D. Nebraska Filed: April 19, 2018 Counsel James J. Frost, Jay D. Koehn, Leo A. Knowles, Luke C. Holst, Matthew G. Munro, Patrick E. Brookhouser, Jr., McGrath, North Law Firm, Omaha, NE, for Plaintiffs. Dustin L. Taylor, Pro Hac Vice, Husch, Blackwell Law Firm, Chicago, IL, Joan K. Archer, Pro Hac Vice, Farmobile, LCC, Leawood, KS, Kamron T.M. Hasan, Marnie A. Jensen, Ryann A. Glenn, Husch, Blackwell Law Firm, Omaha, NE, Megan A. Scheiderer, Pro Hac Vice, Sierra J. Faler, Pro Hac Vice, Husch, Blackwell Law Firm, Kansas City, MO, for Defendants. Bazis, Susan M., United States Magistrate Judge ORDER This matter is before the Court on Defendants’ Motion for Sanctions. (Filing No. 206.) Defendants seek to recover legal fees and costs caused by Plaintiffs’ alleged failure to provide complete and prompt discovery responses. Defendants argue that Plaintiffs violated Federal Rule of Civil Procedure 26(e) by failing to timely supplement their document production. Defendants further maintain that Plaintiffs violated Federal Rule of Civil Procedure 26(g) by failing to preserve and locate responsive information. In particular, Defendants claim that Plaintiffs’ counsel was passive in managing their clients’ document preservation activities and did not conduct a reasonable inquiry as to the location and existence of responsive documents. Finally, Defendants claim that sanctions should be imposed under 28 U.S.C. § 1927 and the Court's inherent authority because Plaintiffs’ counsels’ discovery practices increased litigation costs. Having considered each argument presented, the motion will be denied. DISCUSSION 1. Federal Rule of Civil Procedure 26(e) Federal Rule of Civil Procedure 26(e) requires a party to supplement discovery responses “in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect.” Fed. R. Civ. P. 26(e). Sanctions for violations of Rule 26(e) are appropriate “unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). Defendants maintain that sanctions are warranted because Plaintiffs produced responsive documents on a piecemeal basis throughout this litigation in violation of Rule 26(e). Defendants particularly complain that many documents were not provided in advance, or sufficiently in advance, of certain depositions. The Court concludes that sanctions are not appropriate in this case. Throughout this litigation, there have been multiple discovery disputes. For example, Plaintiffs’ former counsel served responses to Defendants’ first set of document production requests on January 10, 2017, asserting multiple objections.[1] (Filing No. 97.) Plaintiffs later amended their responses, removing objections to the production of certain documents. Additionally, the Court conducted a telephone conference with the parties on August 17, 2017 to address a discovery dispute. The parties were directed to further meet and confer to discuss the dispute, which was to include a conversation regarding the existence of certain documents. (Docket No. 168.) The parties ultimately agreed that additional documents would be produced. The Court acknowledges that Plaintiffs have provided numerous rounds of document production in this case. However, Defendants have also made multiple productions. Given the volume of documents produced in this action, and the number of claims involved, it is reasonable to expect that document production would occur on an ongoing basis. Clearly, the parties were each aware that document production was ongoing at the time depositions began. In fact, the issue of continuing document production was discussed at a deposition. To address this issue, counsel specifically agreed to multiple days of deposition testimony for certain witnesses. One of Plaintiffs’ witnesses was made available for four days of depositions. Additionally, counsel agreed to allow depositions to extend past the seven hour period set out in Federal Rule of Civil Procedure 30. The Court finds that any purported violations of Rule 26(e) were substantially justified or harmless. 2. Federal Rule of Civil Procedure 26(g) Rule 26(g) “imposes on counsel and parties an affirmative duty to conduct pretrial discovery in a responsible manner.” St. Paul Reins. Co., Ltd. v. Commercial Fin. Corp., 198 F.R.D. 508, 515 (N.D. Iowa 2000). Rule 26(g) provides, in relevant part, that when an attorney signs discovery responses or objections, the attorney is certifying that “to the best of the [attorney's] knowledge, information, and belief formed after a reasonable inquiry” that the responses and objections are “not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.” Fed. R. Civ. P. 26(g) (emphasis added). “The 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.” Interpreter Services, Inc. v. BTB Technologies, Inc., No. Civ. 10-4007, 2011 WL 6935343, *6 (D.S.D. Dec. 29, 2011). Rule 26(g)(3) mandates that sanctions be imposed if, without substantial justification, the signer's certification fails to meet this standard. Fed. R. Civ. P. 26(g)(3). Defendants argue that Plaintiffs’ counsel violated Rule 26(g) by falsely certifying that they made a reasonable inquiry into the existence of responsive documents. Defendants contend that Plaintiffs’ counsel ignored discovery preservation protocols and improperly allowed several of Plaintiffs’ key custodians to self-select their own productions which resulted in incomplete and delayed production. Defendants further maintain that this incomplete and untimely production resulted in a violation of Federal Rule of Civil Procedure 34(b)(2)(B), which requires that after providing a response, the “production must then be completed no later than the time for inspection specified in the request or another reasonable time specified in the response.” Fed. R. Civ. P. 34(b)(2)(B). The Court finds that Plaintiffs’ counsel acted reasonably and fulfilled their obligations under Rule 26(g). At the time Defendants’ first set of document production requests were served, Plaintiffs were represented by different counsel. Plaintiffs’ former counsel served written objections and responses to Defendants’ document production requests on January 10, 2017. (Filing No. 97.) Plaintiffs’ current counsel entered an appearance on February 8, 2017. (Filing No. 105.) Before serving Plaintiffs’ amended discovery responses, Plaintiffs’ current counsel reviewed the document production made by prior counsel in connection with initial disclosures, as well as other information possessed by former counsel. Information obtained by counsel included information from a computer that was provided in October, 2016. Plaintiffs’ current counsel was also given access to email and other electronic databases. Plaintiffs’ counsel used this additional information, as well as documents received from Defendants, to prepare amended and supplemental discovery responses. The totality of the circumstances shows that Plaintiffs’ counsel made a reasonable inquiry into the existence of responsive documents and, in any event, was substantially justified for any shortcomings. Therefore, sanctions will not be imposed under Rule 26(g). 3. 28 U.S.C. § 1927 Defendants have also moved for sanctions under 28 U.S.C. § 1927, and the inherent authority of the Court, arguing that Plaintiffs’ counsel unnecessarily increased the costs of this litigation. Section 1927 provides that “[a]ny attorney ... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927. “Sanctions are warranted under § 1927 when attorney conduct, viewed objectively, manifests either intentional or reckless disregard of the attorney's duties to the court.” Wood v. Khan Hotels LLC, No. 4:11CV3019, 2013 WL 1867056 (D. Neb. May 3, 2013). “A finding of bad faith is a prerequisite to awarding sanctions under 28 U.S.C. § 1927.” Online Resources Corporation v. Joao Bock Transportation Systems, LLC, No. 8:13CV231, 8:13CV245, 2015 WL 12698383, *2 (D. Neb. Mar. 2, 2015). For the reasons explained above, the Court will not impose sanctions under § 1927, or under the Court's inherent power. Accordingly, IT IS ORDERED that Defendants’ Motion for Sanctions (Filing No. 206) is denied. Dated this 19th day of April, 2018. Footnotes [1] Plaintiffs’ current counsel did not enter an appearance in this action until February 8, 2017 (Filing No. 105).