Tyntec Inc. et al v. Syniverse Technologies, LLC

Middle District of Florida, flmd-8:2017-cv-00591

Memorandum in opposition

Interested in this case?

Current View

Full Text

3 PageID 21678 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION TYNTEC, INC. and TYNTEC GROUP, LTD. f/k/a Phoenix Spring, Ltd., Case No.: 8:17-cv-591-SDM-SPF Plaintiffs, v. SYNIVERSE TECHNOLOGIES, LLC, Defendant. PLAINTIFFS TYNTEC INC. AND TYNTEC GROUP LTD. F/K/A PHOENIX SPRING, LTD.'S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT SYNIVERSE TECHNOLOGIES, LLC'S MOTION FOR SANCTIONS 3 PageID 21679 INTRODUCTION tyntec conducted an exhaustive document collection in this case. This comprehensive search resulted in the production of nearly 60,000 pages of documents. In October 2018, tyntec located two documents it had previously been unable to find despite months of searching for them: TYNT00059467 (the "P2P Spreadsheet") and TYNT00059468 (the "CPaaS Spreadsheet") (together, the "Supporting Spreadsheets"). tyntec quickly and voluntarily produced these documents to Syniverse. And tyntec explained to Syniverse how the Supporting Spreadsheets were discovered and why their late production was the result of inadvertence—not some intentional hiding of the ball. Rather than work with tyntec to erase any prejudice Syniverse could claim it suffered because of this late production, Syniverse instead insisted on filing this motion asking for the harshest of sanctions a court can award. But this case does not warrant the severe sanctions Syniverse proposes. Try as Syniverse might to paint tyntec's production of the Supporting Spreadsheets as "gamesmanship" or "grossly negligent" (Def. Mot. for Sanctions (Dkt. #220) at 13), that simply isn't true. The truth is that tyntec diligently searched for the Supporting Spreadsheets for months and promptly produced the Supporting Spreadsheets upon locating them. Neither the law in the Eleventh Circuit—which Syniverse essentially ignores—nor the facts of this case justify the case-terminating sanctions Syniverse requests. Why would Syniverse file a sanctions motion that cites almost no law and requests sanctions that are completely disproportionate to the facts of this case? It's no mystery: Syniverse's motion is a thinly veiled addendum to its Daubert motion—Syniverse twice reminds the Court that a Daubert hearing is still pending. (Def. Mot. at 8 n.6, 9 n.8). By Syniverse's logic, the Court should strike Dr. Parker Normann's expert report and tyntec's claims for damages even though Dr. Normann has never seen the Supporting Spreadsheets. For good 3 PageID 21680 measure, Syniverse urges the Court to dismiss tyntec's case in its entirety even though Syniverse never sought the Court's assistance in obtaining the Supporting Spreadsheets. Those requests are particularly misplaced because Syniverse's key fact witness, Niaz Alibhai, has admitted that he destroyed critical backup data—and yet Syniverse insists that the proper result here is for the Court to terminate tyntec's case. But ultimately, these are all issues for trial, not for a supplemental Daubert motion cloaked in a Rule 37 sanctions motion. tyntec does not dispute that it produced the Supporting Spreadsheets after fact discovery closed. But the facts demonstrate that tyntec's late production of the Supporting Spreadsheets was inadvertent. And to rectify this late production, tyntec met and conferred with Syniverse and asked if there was a resolution other than Syniverse filing a sanctions motion—for example, making tyntec's witnesses available to be deposed on the Supporting Spreadsheets. Such a compromise would ameliorate any potential claims of prejudice to Syniverse. Syniverse refused to consider anything other than a scorched-earth, death-penalty motion for sanctions. For the reasons that follow, tyntec respectfully requests that the Court deny Syniverse's motion. FACTS I. The Supporting Spreadsheets Syniverse's sanctions motion lumps the Supporting Spreadsheets together. But the P2P Spreadsheet and the CPaaS Spreadsheet are two completely different documents—they contain different data and they were found in different places. Neither was intentionally withheld. And although both of the Supporting Spreadsheets were produced after fact discovery closed, the failure to timely produce each spreadsheet occurred under very different circumstances. A. The P2P Spreadsheet The P2P Spreadsheet is an Excel spreadsheet titled "2016-06-21 US P2P buildup detailed.xlsx." (Wolfram Decl. ¶ 3; Trapp Decl. ¶ 3). The P2P Spreadsheet contains a 2 3 PageID 21681 month-by-month buildup of tyntec's intercarrier vendor ("ICV") business. That buildup provides supporting data for a spreadsheet on which Dr. Normann relied: TYNT00034313, a five-year revenue and cost forecast tyntec provided to a private-equity investor, Cipio Partners GmbH. (See Wolfram Decl. ¶ 13). Dr. Normann has never seen the P2P Spreadsheet. The P2P Spreadsheet was an attachment to an e-mail tyntec CEO Nicola Wolfram and tyntec CTO Thorsten Trapp received at their personal e-mail accounts in June 2016. (Wolfram Decl. ¶ 3; Trapp Decl. ¶ 4). The sender was Kay Buschmann, a third-party consultant who assisted Ms. Wolfram and Mr. Trapp in their buyout of tyntec's old Board of Directors (the "Management Buy-Out"). (Wolfram Decl. ¶ 3; Trapp Decl. ¶ 4). Mr. Buschmann has never worked for tyntec (Wolfram Decl. ¶ 3; Trapp Decl. ¶ 4), and he has never been a document custodian in this case (see Medlock Decl. ¶¶ 20-21, 28). And although Syniverse has known about the Management Buy-Out since the April 2017 TRO hearing (at the latest), Syniverse never requested discovery about the Management Buy-Out. (See id. at ¶¶ 6, 9a-b, 15, 18, 23, 25). As a result, the P2P Spreadsheet was not collected during discovery. (Id. at ¶ 47). B. The CPaaS Spreadsheet The CPaaS Spreadsheet is an Excel spreadsheet titled "CPaaD_draft1_MLA.xlsx." (Wolfram Decl. ¶ 27; Medlock Decl. ¶ 48). The CPaaS Spreadsheet contains a one-year projection of tyntec's Communications Platform as a Service ("CPaaS" or "Cloud") business. (Wolfram Decl. ¶ 28). In the ordinary course of business, the document was inadvertently saved as "CpaaD_draft1_MLA.xlsx" (not "CPaaS_draft1_MLA.xlsx") (emphasis added). Like the Management Buy-Out, tyntec's CPaaS business was not a focus of discovery. It was not until January 31, 2018—just one month before the Court's deadline for substantial completion of document production—that Syniverse requested documents concerning tyntec's CPaaS business. (Medlock Decl. ¶¶ 7, 18). The CPaaS Spreadsheet provides supporting data for 3 3 PageID 21682 another spreadsheet on which Dr. Normann relied: TYNT00034312 (together with TYNT00034313, the "Expert Spreadsheets"), a one-year revenue and cost forecast approved by tyntec's Board of Directors. (Trapp Decl. ¶ 13). Dr. Normann has never seen the CPaaS Spreadsheet. The CPaaS Spreadsheet was created by tyntec employee Dr. Marco Lafrentz, who e-mailed it to Ms. Wolfram's tyntec e-mail account in March 2017. (Wolfram Decl. ¶¶ 27-28; Medlock Decl. ¶ 48). The document was collected from Ms. Wolfram's files in the course of discovery. (Medlock Decl. ¶ 48). But the CPaaS Spreadsheet—which was inadvertently saved as "CPaaD"—was marked "non-responsive" weeks before Syniverse requested CPaaS documents from tyntec. (See id.). As a result, the CPaaS Spreadsheet was not produced to Syniverse. (Id.). II. Fact Discovery A. tyntec employed a sophisticated process to collect, review, and produce documents. Discovery in this case was intensive. Between July 2017 and February 2018, Syniverse served 95 requests for production on tyntec. To handle this onslaught of document requests, tyntec retained FTI Consulting, Inc. ("FTI"), an eDiscovery vendor, to collect, help review, and produce responsive documents. (Id. at ¶ 37). Together, Mayer Brown LLP ("Mayer Brown") and FTI conducted a sophisticated, months-long document search. The discovery process was new to tyntec. Neither Ms. Wolfram nor Mr. Trapp—both of whom are native German speakers—had ever been a party to an American lawsuit. (Wolfram Decl. ¶ 10; Trapp Decl. ¶ 11). Other than this case, neither of them has participated in discovery. (Wolfram Decl. ¶ 10; Trapp Decl. ¶ 11). 4 3 PageID 21683 FTI, Mayer Brown, and tyntec began to collect and review documents in October 2017. (Medlock Decl. ¶ 38). In the months that followed, FTI and Mayer Brown collected documents from every agreed-upon tyntec custodian—a collection that included the personal e-mail accounts of Ms. Wolfram and Mr. Trapp—and every agreed-upon non-custodial document source. (See id. at ¶ 40). Once FTI applied the parties' agreed-upon discovery date range (January 1, 2014 to May 1, 2017) and search terms—none of which touched on the Management Buy-Out or tyntec's CPaaS business—158,753 documents were eligible for review. (See id. at ¶¶ 42-43). FTI and Mayer Brown reviewed those documents in two stages. First, a team of eight FTI reviewers—all of whom were barred attorneys—conducted a first-pass review. (Id. at ¶ 44a). Mayer Brown provided detailed instructions to these reviewers. (Id.). Second, randomized samples of these first-pass documents were selected for second-pass review, which itself consisted of two quality control checks—one conducted by two FTI reviewers, and another conducted by Mayer Brown attorneys. (Id. at ¶ 44b). tyntec spent hundreds of thousands of dollars on this document review and production. (Id. at ¶ 44a). This is simply not a case in which documents were not produced through carelessness or negligence. B. The Management Buy-Out and tyntec's CPaaS business were not the focus of discovery. In its attempt to shoehorn Daubert arguments into its sanctions motion, Syniverse dedicates most of its "Factual Background" to cataloguing its discovery requests about "damages" and "expert" documents. (See Def. Mot. at 2-9). But at the risk of belaboring the point, Dr. Normann has never seen the Supporting Spreadsheets. They played no role in Dr. Normann's calculation of tyntec's damages. And the actual contents of the Supporting 5 3 PageID 21684 Spreadsheets—the Management Buy-Out (the P2P Spreadsheet) and CPaaS (the CPaaS Spreadsheet)—weren't a focus of Syniverse's discovery requests. 1. Syniverse never requested discovery about the Management Buy-Out. Syniverse has known about the Management Buy-Out from the case's outset (if not earlier), but never sought discovery about it. On April 12, 2017, one month after tyntec filed this lawsuit, Ms. Wolfram testified about the Management Buy-Out at the TRO hearing. (Medlock Decl. ¶ 6). Syniverse did not cross-examine Ms. Wolfram about the Management Buy-Out. (Id.). Nor did Syniverse request documents or other information about the Management Buy-Out. Syniverse did not serve a single request for production or interrogatory concerning the Management Buy-Out. (See id. at ¶¶ 9a-b, 15, 18). Indeed, Syniverse's discovery requests explicitly carved out the Management Buy-Out. In its Second Set of Requests for Production, Syniverse sought documents and communications concerning Sphaera Ltd., an entity that was involved in the Management Buy-Out. (Id. at ¶ 15). But Syniverse limited that request to documents and communications about "the sale, transfer, or assignment of any of Iris Wireless's assets to tyntec," which was a completely different transaction from the Management Buy-Out. (Id.). Syniverse's proposed document search terms and document custodians likewise did not encompass the Management Buy-Out. Syniverse never asked tyntec to search for documents containing the term "Management Buy-Out" or any terms related to the Management Buy-Out. (Id. at ¶¶ 25, 27-29). And although Syniverse asked tyntec to collect certain "discrete documents" without using search terms, Syniverse did not ask tyntec to collect documents about the Management Buy-Out. (Id. at ¶ 26). Nor did Syniverse ask tyntec to include as document 6 3 PageID 21685 custodians individuals who assisted with the Management Buy-Out (like Mr. Buschmann). (See id. at ¶¶ 21, 24, 28). 2. Syniverse did not request documents about tyntec's CPaaS business until the tail end of discovery. Likewise, tyntec's CPaaS business simply wasn't a focus of Syniverse's discovery requests. It was not until January 31, 2018—one month before document discovery was set to close—that Syniverse served a request for production concerning CPaaS. (Id. at ¶¶ 7, 18). Syniverse cites that January 31, 2018 request for production in its supporting declaration. (McCarty Decl. (Dkt. #220-1) ¶ 24). But Syniverse omits tyntec's response. tyntec agreed to "make a reasonable effort to search" for CPaaS files. (Medlock Decl. ¶ 19). tyntec was clear, however, that it would only search its "current list of custodial sources [and] non-custodial sources," and would only use the parties' agreed-upon search terms. (Id.). Syniverse had not previously requested that tyntec use search terms like "CPaaS" or "Cloud" to collect responsive documents. (See id. at ¶¶ 25, 27-29). And Syniverse never asked tyntec to collect "discrete documents" concerning its CPaaS business. (Id. at ¶ 26). C. Syniverse incorrectly asserts that tyntec's witnesses testified about the Supporting Spreadsheets during their depositions. Syniverse alleges that three tyntec witnesses—Dr. Lafrentz, Ms. Wolfram, and Mr. Trapp—testified about the Supporting Spreadsheets during their depositions. (Def. Mot. 5-8). Syniverse is wrong. 1. Dr. Lafrentz Dr. Lafrentz was deposed on April 6, 2018. Exhibit 15 of Dr. Lafrentz's deposition was TYNT00034312, one of the Expert Spreadsheets. Syniverse's counsel asked Dr. Lafrentz whether he had "documents that do a build up of expected CPaaS revenues by customer that would show the assumptions that would go into a document like" TYNT00034312. (Dkt. #S117, 7 3 PageID 21686 Ex. 2, at 169:15-19). Dr. Lafrentz responded: "I have a document that has assumptions on CPaaS revenues, partly based on customers, partly based on general assumptions in the market." (Id. at 169:21-22). This is where Syniverse's account of Dr. Lafrentz's deposition ends. (Def. Mot. 5-6; McCarty Decl. ¶ 28). What Syniverse fails to mention is that Dr. Lafrentz could not remember when that document was created. (Dkt. #S117, Ex. 2, at 169:23-25). Nor could he remember the document's name, although he "assume[d]" the document had "something with budget in it" (the CPaaS Spreadsheet—" CPaaD_draft1_MLA.xlsx"—does not contain the word "budget" in its title). (Id. at 170:22-24). And Dr. Lafrentz was clear with Syniverse that he had never spoken with Dr. Normann about any issue in the case. (Id. at 171:20-172:8). What's more, when asked whether he knew "the specific assumptions. . . that went into the revenue figures" in TYNT00034313—the other Expert Spreadsheet—Dr. Lafrentz replied: "No, not without guessing." (Id. at 167:20-25). 2. Ms. Wolfram Ms. Wolfram was deposed on April 10, 2018. (Wolfram Decl. ¶ 12). Exhibit 34 of Ms. Wolfram's deposition was TYNT00034313, one of the Expert Spreadsheets. (Id.). When asked whether she knew of "backup materials that were used to come up with the figures in" TYNT00034313, Ms. Wolfram responded that she remembered "a massive Excel. . . where tons of numbers are aggregated." (Id. at ¶ 13). Ms. Wolfram added that the document was "a massive Excel on business planning" created by Mr. Buschmann, who "was working with us in the management buyout." (Id.). Syniverse insists that the "massive Excel" must be one of the Supporting Spreadsheets. (Def. Mot. 6-7). Syniverse ignores the fact that neither of the Supporting Spreadsheets is 8 3 PageID 21687 particularly "massive"—the P2P Spreadsheet consists of a single Excel worksheet and the CPaaS Spreadsheet consists of two. No matter: The "massive Excel" Ms. Wolfram described at her deposition is not one of the Supporting Spreadsheets. It is in fact "2016-06-20 Financial Model Tyntec v7.0-draft1.xlsx," a multi-tab ("massive") spreadsheet Mr. Buschmann created for purposes of the Management Buy-Out. (See Wolfram Decl. ¶ 16). During her deposition, Ms. Wolfram mistakenly stated that this document contains backup data for TYNT00034313. (Id. at ¶ 17). But the ICV and CPaaS projections in TYNT00034313 and "2016-06-20 Financial Model Tyntec v7.0-draft1.xlsx" are identical. (Id.). Most importantly, "2016-06-20 Financial Model Tyntec v7.0-draft1.xlsx" was produced to Syniverse on March 2, 2018, over one month before Ms. Wolfram's deposition. (Medlock Decl. ¶ 35c). 3. Mr. Trapp Finally, Mr. Trapp was deposed on April 13, 2018. Exhibit 56 of Mr. Trapp's deposition was TYNT00034312, one of the Expert Spreadsheets. (Trapp Decl. ¶ 13). Syniverse's counsel asked Mr. Trapp whether there was "backup behind" TYNT00034312. (Id. at ¶ 14). Mr. Trapp responded that "[t]here is potentially a document. . . that was basically used to derive those data." (Id.). Mr. Trapp did not know whether there was backup for TYNT00034313, the other Expert Spreadsheet. (Id.). Mr. Trapp cannot recall what document he was referring to at his deposition. (Id. at ¶ 15). But after reviewing the P2P Spreadsheet and the CPaaS Spreadsheet, Mr. Trapp is confident that he was not referring to either of those documents. (Id.). 1 1 tyntec's production of the Supporting Spreadsheets is not the only discovery dispute involving backup data that has arisen in this case. On April 23, 2018, tyntec deposed Niaz Alibhai, tyntec's Product Management Director for Global Connectivity. (Dkt. #S117, Ex. 24, at 209:24-210:4). Mr. Alibhai was the principal drafter of Syniverse's January 2017 pricing proposal to Syniverse. That proposal is one of the most important pieces of evidence in this 9 3 PageID 21688 D. tyntec diligently searched for the Supporting Spreadsheets and promptly produced them. tyntec did not locate the Supporting Spreadsheets until late 2018, but that was not for lack of trying. In addition to employing the detailed discovery process discussed above, tyntec specifically searched for data supporting the Expert Spreadsheets three times: in February 2018, in April 2018 (during and after the depositions discussed above), and finally in September-November 2018. And when tyntec located the Supporting Spreadsheets, it promptly produced them. i) February 2018 tyntec's search for supporting data began in February 2018—before Syniverse ever asked tyntec to conduct such a search. At the direction of Mayer Brown, Ms. Wolfram and Mr. Trapp searched their files for backup materials underlying the Expert Spreadsheets. (Medlock Decl. ¶ 32). They found nothing. (Id.). ii) April 2018 tyntec kept searching. Following Dr. Lafrentz's deposition, Syniverse asked tyntec to search for the unnamed, undated CPaaS materials Dr. Lafrentz had described during his testimony. (See Def. Mot. 6; Medlock Decl. ¶ 34). In response, tyntec searched all of the documents collected from Dr. Lafrentz for the term "CPaaS"—even though Syniverse had never asked tyntec to use "CPaaS" as a search term. (Medlock Decl. ¶ 35a). tyntec did not find any un-produced documents matching Dr. Lafrentz's description. (Id. at ¶¶ 35a, 36). case. And the process through which Syniverse drafted that proposal is one of the most important fact issues in this case. Mr. Alibhai is Syniverse's key fact witness. During his deposition, Mr. Alibhai admitted that although he recorded all of his backup calculations for the January 2017 offer in a notebook, he threw away the page containing those calculations. (Id. at 142:22-147:6). Mr. Alibhai could not recall whether Syniverse's outside attorneys or in-house counsel ever asked him to retain those backup calculations. (Id. at 143:24-144:6, 146:11-20). Mr. Alibhai was clear, however, that his written backup calculations were unrecoverable. (See id. at 144:16-19, 147:4-6). 10 3 PageID 21689 Ms. Wolfram and Mr. Trapp searched for supporting data after their depositions, too. Syniverse incorrectly asserts that Ms. Wolfram "apparently" never searched for the "massive Excel" she described during her deposition. (Def. Mot. 7 n.3). Syniverse cites Paragraph 42 of Mr. McCarty's declaration for that proposition. (Id.). But Mr. McCarty's declaration does not mention Ms. Wolfram's post-deposition document search (or lack thereof), and the e-mail the declaration cites states that Ms. Wolfram did search for backup data for TYNT00034313. (See id.; McCarty Decl. ¶ 42). In fact, Ms. Wolfram searched her files for the "massive Excel," found it, and Mayer Brown determined that the document had already been produced as TYNT00038014. (Wolfram Decl. ¶¶ 15-16, 18; Medlock Decl. ¶ 35c). Mr. Trapp searched his files for data supporting TYNT00034312, but found nothing. (Trapp Decl. ¶ 16). Further, FTI and Mayer Brown independently reviewed the Excel spreadsheets collected from Ms. Wolfram and Mr. Trapp to find the "massive Excel." They found no documents matching that description (but Ms. Wolfram did, as explained above). (Medlock Decl. ¶ 35b). iii) September-November 2018 tyntec retained Susman Godfrey LLP ("Susman Godfrey") in September 2018. (Wolfram Decl. ¶ 19). In the course of reviewing documents on which Dr. Normann relied, Susman Godfrey noticed that the Function ("f x") ribbon of a particular Excel spreadsheet— TYNT00017629—indicated that the "Us P2P Hub" data in Row 11, Sheet 2 had been calculated to multiple decimal places. Susman Godfrey further observed that a "screenshot" (i.e., a static image) of this worksheet was included in TYNT00034313, one of the Expert Spreadsheets. Susman Godfrey used this discovery as a springboard for an investigation into whether the figures in TYNT00017629 had been calculated in a separate spreadsheet and imported into TYNT00034313. Susman Godfrey asked tyntec whether such a separate spreadsheet existed. This third round of searches ultimately led to the production of the Supporting Spreadsheets: 11 3 PageID 21690 The P2P Spreadsheet: Pursuant to Susman Godfrey's request, Ms. Wolfram reviewed her files for materials supporting the calculations in TYNT00017629 (which were imported into TYNT00034313), but once again found nothing. (Wolfram Decl. ¶¶ 20-21). Ms. Wolfram then reviewed TYNT00038014 and noticed a comment in one of the document's 11 worksheets: "USA P2P buildup in detailed sheet." (Wolfram Decl. ¶ 22). Ms. Wolfram did not find a document with that title ("USA P2P buildup") in her files. (Id.). So Ms. Wolfram reached out to Kay Buschmann—who was not a document custodian and who has never been a tyntec employee—and Mr. Buschmann directed her to a spreadsheet titled "2016-06-21 US P2P buildup detailed.xlsx." (Id. at ¶ 23). Ms. Wolfram then searched her files for this spreadsheet—including her personal, cloud-based AOL e-mails. (Id. at ¶ 24). She found it as an attachment to a June 2016 e-mail thread about the Management Buy-Out in her personal AOL emails. (Id. at ¶¶ 3, 24). tyntec produced the P2P Spreadsheet on November 2, 2018. The CPaaS Spreadsheet: In her search for supporting data, Ms. Wolfram located an Excel spreadsheet titled "CPaaD_draft1_MLA.xlsx" in her tyntec (not personal) files. (Id. at ¶¶ 27-28). FTI then re-reviewed documents collected during discovery to search for this file, and ultimately located the CPaaS Spreadsheet. The CPaaS Spreadsheet had been previously collected from Ms. Wolfram's files in the course of discovery. (Medlock Decl. ¶ 48). But on January 18, 2018—thirteen days before Syniverse requested CPaaS documents from tyntec—a first-level reviewer from FTI marked the document "non-responsive." (Id.). The document was not randomly selected for second-level review. (Id.). Of note, even if the parties had agreed to use "CPaaS" as a search term—and they never did—that term would not have hit on the CPaaS Spreadsheet (which again, was mistitled 12 3 PageID 21691 "CPaaD"). (Id.). Like the P2P Spreadsheet, the CPaaS Spreadsheet was produced on November 2, 2018. ARGUMENT Syniverse's motion for sanctions is an extreme overreach. Syniverse requests three of the harshest sanctions available under Rule 37: terminating tyntec's case, striking tyntec's damages claims, and striking Dr. Normann's expert report. 2 (Def. Mot. 2, 14). And there is no question that Syniverse is shooting for the moon: Syniverse does not even entertain the possibility of lesser sanctions, and instead argues "that appropriate sanctions here would include at least striking Dr. Normann's expert opinions and tyntec's damages claims." (Id. at 14 (emphasis added)). But all of the sanctions Syniverse requests require patterns of egregious misconduct that are absent from this case. tyntec's production of the Supporting Spreadsheets was belated, but that falls far short of meriting the severe sanctions Syniverse seeks. 2 In a footnote, Syniverse explains that it is seeking sanctions under Rule 37(c) and the Court's inherent powers. (Def. Mot. 12 n.12). But the Supreme Court has cautioned that when an alleged discovery violation falls squarely within Rule 37, relying on inherent powers "can only obscure analysis of the problem." Societe Internationale Pour Participations Industrielles Et Commerciales, S. A. v. Rogers, 357 U.S. 197, 207 (1958); cf. E.E.O.C. v. Jacksonville Shipyards, Inc., 690 F. Supp. 995, 997-98 (M.D. Fla. 1988) (addressing alleged discovery violation under court's inherent powers where both parties agreed that Rule 37 did not apply, because "[c]onduct of the kind which ordinarily would be sanctionable under Rule 37, but falls outside the express terms of the rule, can be sanctioned by proper exercise of th[e] Court's inherent powers"). Just so here. Syniverse alleges that tyntec failed to disclose evidence pursuant to Rule 26, a claim that falls squarely within Rule 37(c)(1). But even if the Court were to rely on its inherent powers, this case does not warrant inherent-powers sanctions. "[T]he Supreme Court has stressed that a court should 'exercise caution in invoking its inherent powers.'" Schwarz v. Villages Charter Sch., Inc., No. 5:12-CV-00177, 2017 WL 88951, at *3 (M.D. Fla. Jan. 10, 2017) (quoting Chambers v. Nasco, Inc., 501 U.S. 32, 50 (1991)). The bar is very high: A "district court may exercise its inherent sanction power where a party 'has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Bldg. Materials Corp. of Am. v. Henkel Corp., No. 615CV548ORL22GJK, 2017 WL 4082440, at *2 (M.D. Fla. Apr. 17, 2017) (quoting Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218, 1223 (11th Cir. 2017)), appeal dismissed as moot sub nom. Bldg. Material Corp. of Am. v. Henkel Corp., No. 16-17323-BB, 2017 WL 5997406 (11th Cir. Aug. 23, 2017). There is no evidence that tyntec acted in bad faith here. To the contrary, tyntec spent months searching for the Supporting Spreadsheets, promptly produced them to Syniverse, then answered Syniverse's multiple questions about the Supporting Spreadsheets (see McCarty Decl. ¶¶ 37-43)—all in good faith. See Henkel Corp., 2017 WL 4082440, at *2 (declining to impose inherent-powers sanctions where defendant's "conduct was careless and costly" but did not demonstrate "bad faith," and noting that "[m]ere recklessness" is insufficient to warrant inherent-powers sanctions). Syniverse's request for this Court to invoke its inherent powers is procedurally infirm and meritless. 13 3 PageID 21692 Syniverse does not address whether lesser sanctions might be warranted—another fatal flaw in its motion. During a meet and confer on December 3, 2018, tyntec asked Syniverse if it would be willing to accept a middle ground that involved anything less than these harsh sanctions. Syniverse refused any alternative—including, for example, taking limited depositions about the Supporting Spreadsheets—other than filing this motion. Finally, Syniverse asks the Court to hold a show cause hearing on Syniverse's sanctions motion. (See Def. Mot. 14). But Syniverse's motion for sanctions is so legally deficient that the Court can dismiss it without holding a hearing. tyntec consistently worked in good faith to locate and produce the Supporting Spreadsheets. And, tyntec has provided sworn declarations illustrating those good-faith efforts so the Court has a complete record of tyntec's conduct. On these facts, an evidentiary hearing would be unnecessary and wasteful. But if the Court determines that such a hearing would be helpful, tyntec would welcome the opportunity to present the evidence outlined in this brief and its supporting declarations. I. The Court should deny Syniverse's motion for sanctions. A. The Court should not dismiss tyntec's case. Syniverse requests the ultimate Rule 37 sanction: Dismissal of tyntec's case. Syniverse does not, however, address the exceptionally high showing that is required for a Rule 37 dismissal—one that is completely at odds with the facts of this case. "The most draconian sanction of default judgment is disfavored and is rarely imposed, and then only where one party willfully, and in bad faith, fails to obey the court's discovery orders such that allowing the case to proceed would be unfair to the innocent party." Schwarz v. Villages Charter Sch., Inc., No. 5:12-CV-00177, 2017 WL 88951, at *3 (M.D. Fla. Jan. 10, 2017). "To support dismissal under Rule 37, there must be a showing of bad faith or willful resistance to discovery orders." Miranda v. Aramark Educ. Servs., No. 3:05-CV-1245-J33HTS, 14 3 PageID 21693 2007 WL 2083578, at *2 (M.D. Fla. July 18, 2007). And the law in this District is clear that the sanction of dismissal "is only proper where lesser sanctions will not suffice." Id. In short, "[d]ismissal under. . . Rule 37 is a harsh sanction, one that should be left as a last resort." Id. But for Syniverse, it is a first resort that should be rejected. First, the record does not "clearly reflect a willful pattern of delay and obstruction of the orderly progress of the case." United States v. One 2004 26' Angler Vessel, No. 206CV-671-FTM-29SPC, 2008 WL 360603, at *1 (M.D. Fla. Feb. 8, 2008) (internal quotation mark omitted) (quoting Nwabeke v. Torso Tiger, Inc., 194 Fed. Appx. 669, 670 (11th Cir. 2006)). There was nothing willful or obstructive about tyntec's conduct. tyntec spent months searching for the Supporting Spreadsheets—two documents out of nearly 160,000 that were collected during a costly, sophisticated document review—then promptly produced the Supporting Spreadsheets upon locating them. tyntec endeavored in good faith to meet its discovery obligations. See Schmonsees v. Care Med. Equip., Inc., No. 3:09-CV-1004-J-34JBT, 2011 WL 4711887, at *1 (M.D. Fla. Oct. 5, 2011) ("Sanctions [under Rule 37(c)(1)] are. . . not ordinarily applied where the defaulting party made a good-faith effort to comply" with its discovery obligations. (citation omitted)). Second, and relatedly, tyntec has not committed a "pattern" of misconduct, in part because Syniverse has never filed a motion—nor had a basis to complain—that tyntec engaged in any discovery abuse. The Eleventh Circuit has "consistently. . . found Rule 37 sanctions such as dismissal or entry of default judgment to be appropriate. . . only 'where the party's conduct amounts to flagrant disregard and willful disobedience of discovery orders.'" United States v. Certain Real Prop. Located at Route 1, Bryant, Ala., 126 F.3d 1314, 1317 (11th Cir. 1997) (emphasis in original) (quoting Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987)) 15 3 PageID 21694 (collecting cases supporting proposition that party must violate one or more discovery orders before court may enter default or dismiss case under Rule 37); see One 2004, 2008 WL 360603, at *1-2 (denying Rule 37 motion to dismiss case where plaintiff violated a single order compelling discovery). That's not the case here. Syniverse cannot point to a single order tyntec has violated by producing the Supporting Spreadsheets. See Sigurdsson v. DiCarlantonio, No. 6:12-CV-920- ORL-TBS, 2013 WL 5954740, at *2 (M.D. Fla. Nov. 7, 2013) (violation of "Case Management and Scheduling Order—which is entered in every civil case in this district," insufficient to dismiss case as a sanction). And because Syniverse did not—and could not—previously complain about tyntec's otherwise extensive discovery efforts, the Court has not had occasion to warn tyntec that "the most drastic sanction of default judgment was a possibility." Schwarz, 2017 WL 88951, at *6. That is another reason to deny tyntec's request for the severe sanction of dismissal. Finally, lesser sanctions would clearly suffice to remedy tyntec's late production of the Supporting Spreadsheets. See Miranda, 2007 WL 2083578, at *2. To fashion an appropriate sanction under Rule 37, courts should "select[ ] the least severe sanction that is effective." Opteum Fin. Servs., LLC v. Kolbe, No. 8:03-CV-355-T-17TBM, 2010 WL 11211155, at *10 (M.D. Fla. Sept. 22, 2010). And for that reason, courts in this District "will not dismiss a case as a sanction[ ] when a more appropriate lesser penalty is available." Satterfield v. CFI Sales & Mktg., Inc., No. 609CV1827ORL28DAB, 2011 WL 13298382, at *3 (M.D. Fla. Oct. 6, 2011). Just so here. Syniverse laments the fact that it did not have the Supporting Spreadsheets ahead of Dr. Normann's deposition. (Def. Mot. 5). But, if Syniverse really believes it is necessary, tyntec is willing to make Dr. Normann available to be deposed on the specific topic of 16 3 PageID 21695 the Supporting Spreadsheets. Holding such a limited deposition will plainly remedy any prejudice Syniverse has suffered—it is a more than adequate lesser sanction. See Schmonsees, 2011 WL 4711887, at *2 (denying plaintiffs' Rule 37(c)(1) motion to limit expert's trial testimony, where motion was filed five weeks before final pretrial conference, and instead ordering plaintiffs to re-depose expert ten days before conference). That, however, is not the relief Syniverse wants. It seeks the death penalty. tyntec's conduct does not come close to meriting Rule 37's "most draconian sanction." Schwarz, 2017 WL 88951, at *3. The Court should reject Syniverse's request for dismissal of tyntec's case. B. The Court should not dismiss tyntec's claims for damages. The same principles govern Syniverse's request to strike tyntec's claims for damages. Striking a party's claim or defense under Rule 37 can be "equally severe" as entering a default judgment or dismissal. Schwarz, 2017 WL 88951, at *6 (denying movant's request for default judgment and request to strike opponent's defense under same Rule 37(c) standards). And as a result, "[t]he decision to dismiss a claim. . . 'ought to be a last resort—ordered only if noncompliance with discovery orders is due to willful or bad faith disregard for those orders.'" Certain Real Prop., 126 F.3d at 1317 (quoting Cox v. American Cast Iron Pipe Co., 784 F.2d 1546, 1556 (11th Cir. 1986)). Syniverse's request to strike tyntec's claims for damages goes the same way as its request for dismissal of tyntec's case: Both are meritless. Striking tyntec's damages claims would gut tyntec's case; it's a draconian sanction that is not warranted based on these facts. tyntec voluntarily produced the Supporting Spreadsheets after the close of discovery—it should not be punished for doing the right thing. 17 3 PageID 21696 C. The Court should not strike Dr. Normann's expert report. Finally, Syniverse moves to strike Dr. Normann's report in its entirety. This sanction— like the other sanctions Syniverse requests—is completely unwarranted under Rule 37(c). "Excluding expert testimony is a 'drastic' sanction requiring careful consideration." In re Disposable Contact Lens Antitrust, 2018 WL 6448948, at *36 (M.D. Fla. Dec. 4, 2018). It is "an extreme remedy." In re Complaint of Fantome, S.A., No. 99-0961-CIV, 2004 WL 5642418, at *1 (S.D. Fla. Dec. 7, 2004). But Syniverse has done nothing to prove that that extreme remedy is merited here. Syniverse does not cite a single case to support its request to strike Dr. Normann's report. See Brooks v. United States, 837 F.2d 958, 961-63 (11th Cir. 1988) (district court abused its discretion by striking expert's trial testimony, where movants did not "cite[ ] any relevant authority"). Nor does Syniverse explain why a lesser sanction would be insufficient. See id. at 963 (identifying trial court's failure to "consider[ ] any lesser sanction than" striking expert as a basis for reversal). And Syniverse's request to strike Dr. Normann's report is all the more improper because Syniverse never sought the Court's assistance in obtaining the Supporting Spreadsheets. See Lake v. Tenneco, Inc., No. 8:06-CV-1462-T24TBM, 2007 WL 5339379, at *1 (M.D. Fla. July 19, 2007) (denying defendant's Rule 37(c) motion to strike plaintiff's untimely disclosed expert, where plaintiff never "sought to compel the expert['s] report," trial was not imminent, "and other remedies [were] available to cure any prejudice"). Legally, Syniverse's request to strike Dr. Normann's expert report is meritless. Tactically, it is a transparent effort to buttress Syniverse's Daubert motion. But when it comes to Rule 37(c)(1), courts in this District "vastly prefer[ ] to decide cases on their merits rather than exclud[e] evidence" such as expert testimony. Schmonsees, 2011 WL 4711887, at *1 (internal quotation marks omitted) (quoting Collins v. United States, 2010 WL 4643279, at *5 (M.D. Fla. 18 3 PageID 21697 Nov. 9, 2010)). So too here. The Court should deny Syniverse's request to strike Dr. Normann's report. II. A hearing on Syniverse's sanctions motion would be unnecessary and burdensome. Syniverse has not come close to showing that an evidentiary (or "show cause") hearing on its death-knell sanctions is warranted. Preliminarily, Syniverse argues that a hearing is appropriate under Rule 37(c), but cites no law justifying that request. This is reason enough to deny Syniverse's request for a hearing. See Ziglar v. GE Capital Retail Bank, No. 3:13-CV- 1081-J-34JBT, 2014 WL 12634276, at *3-4 (M.D. Fla. May 23, 2014) (denying plaintiff's request for "an extensive and burdensome evidentiary hearing," which request plaintiff made "[w]ithout citing any law," and also denying plaintiff's request for Rule 37 sanctions). And the premise of Syniverse's request for a hearing—as far as tyntec can discern it—is also wrong. Rule 37(c) requires a court to hold a hearing before imposing the alternative sanctions listed in Rule 37(b)(2)(A)(i)-(vi). Fed. R. Civ. P. 37(c)(1). Although Syniverse doesn't say as much in its motion, it is seeking those alternative sanctions. See Fed. R. Civ. P. 37(b)(2)(A)(iii) ("striking pleadings"); id. at 37(b)(2)(A)(v) ("dismissing the action or proceeding in whole or in part"). But those sanctions are completely unwarranted here. There is no evidence that tyntec acted in bad faith in producing the Supporting Spreadsheets, there is no record of tyntec violating prior discovery orders, and lesser sanctions will remedy any prejudice Syniverse has suffered. And in the face of tyntec's good-faith litigation conduct, Syniverse— whose star witness, Niaz Alibhai, destroyed crucial evidence—argues that the just outcome is to terminate tyntec's case. That argument is meritless, and an evidentiary hearing will not prove otherwise. tyntec's conduct does not warrant any sanctions, let alone the case-terminating sanctions Syniverse requests. Put simply, there is no need to hold an evidentiary hearing because the 19 3 PageID 21698 sanctions Syniverse is seeking are completely untethered to the facts of this case. Of course, if this Court has any questions after reviewing the declarations and case law on which tyntec relies, then tyntec is more than willing to appear before the Court for an evidentiary hearing. tyntec is confident that its conduct does not merit the severe sanctions Syniverse requests. CONCLUSION In today's age of electronic discovery, hundreds of thousands of documents are collected and reviewed in complex cases. Document production is not a perfect science. In this case, tyntec went to great efforts to find the Supporting Spreadsheets—three different times—finally found them, and promptly produced them. These are not the actions of a party engaging in bad faith or gamesmanship. They are the actions of a party participating in the discovery process in good faith. And tyntec should not be sanctioned for producing documents it was previously unable to locate despite diligently searching for them. tyntec respectfully requests that the Court deny Syniverse's motion for sanctions in its entirety. Dated: January 14, 2019 SUSMAN GODFREY L.L.P. By: /s / Shawn J. Rabin William Christopher Carmody Shawn J. Rabin Jason C. Bertoldi 1301 Avenue of the Americas, 32nd Floor New York, NY 10019 (212) 336-8330 bcarmody@susmangodfrey.com srabin@susmangodfrey.com jbertoldi@susmangodfrey.com Vineet Bhatia 1000 Louisiana, Suite 5100 Houston, TX 77002 (713) 651-9366 20 3 PageID 21699 vbhatia@susmangodfrey.com Amanda Bonn Meng Xi 1900 Avenue of the Stars, Suite 1400 Los Angeles, CA 90067 (310) 789-3100 abonn@susmangodfrey.com mxi@susmangodfrey.com GUNSTER, YOAKLEY & STEWART, P.A. Daniel P. Dietrich Florida Bar No. 934461 401 East Jackson Street, Suite 2500 Tampa, FL 33602 (813) 739-6970 ddietrich@gunster.com MAYER BROWN LLP Stephen M. Medlock 1999 K Street, N.W. Washington, D.C. 20006 (202) 263-3000 smedlock@mayerbrown.com Attorneys for Plaintiffs 21 3 PageID 21700 CERTIFICATE OF SERVICE I hereby certify this 14th day of January, 2019, I electronically filed the foregoing with the Clerk of Court for the United States District Court for the Middle District of Florida by using the CM/ECF system which will send a notice of electronic filing to all CM/ECF registered parties. /s / Shawn J. Rabin Shawn J. Rabin 22