Tyntec Inc. et al v. Syniverse Technologies, LLC

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

Reply to Response to Motion

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PageID 21796 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION TYNTEC INC., a Delaware Corporation and TYNTEC GROUP LTD. f/k/a Phoenix Spring Ltd., a United Kingdom Corporation, Case No. 8:17-CV-00591-RAL-MAP Plaintiffs, v. SYNIVERSE TECHNOLOGIES, LLC, a Delaware Corporation Defendant. SYNIVERSE TECHNOLOGIES, LLC'S REPLY BRIEF IN SUPPORT OF MOTION FOR SANCTIONS FOR DISCOVERY MISCONDUCT AND FALSE TESTIMONY PageID 21797 With its Opposition, tyntec openly acknowledges that some remedy is necessary to cure Syniverse's prejudice from tyntec's failure to produce the Withheld Spreadsheets during discovery.1 So the relevant inquiry is not whether to sanction tyntec for its discovery abuses but what punishment is most appropriate. tyntec proposes a discovery "do over"—that tyntec simply be permitted to fix its problem and litigate the case as if it had actually produced the Withheld Spreadsheets during the discovery period. Yet this proposal ignores the fact that the parties' expert reports, Daubert briefing, dispositive motions, and trial preparation were all predicated on the nonexistence of the Withheld Spreadsheets and the information they contain. Syniverse has litigated a lie surrounding tyntec's damages for nearly a year and has suffered real and pronounced prejudice in significant wasted attorney time and expenses. Nothing in the 100 pages of declarations and exhibits tyntec offered in its Opposition changes that simple fact, and none of it excuses tyntec's conduct. In fact, tyntec's declarations only raise more questions that need to be examined about how the parties ended up at this place on the eve of trial. Only a Court-led hearing can address these questions, assess tyntec's culpability, and then fairly penalize tyntec. I. tyntec's New Declarations and Attempts to Obfuscate its Discovery Responsibilities Raise Questions to be Addressed at a Court-led Hearing To evade any real sanctions, tyntec trivializes its failure to produce the Withheld Spreadsheets, arguing it had the best of intentions, worked hard, but simply failed to locate critical backup information at the core of its damages claims.2 tyntec pins this failure on the 1 Syniverse incorporates the terms defined in its Motion for Sanctions, such as "Syniverse," "tyntec," "Withheld Spreadsheets," and "High-Level Spreadsheets." Dkt. No. 220. 2 tyntec claims that because tyntec's principals speak German and they are new to litigation their conduct should be excused. Dkt. No. 225 at 5. Syniverse is not aware of any precedent that says a plaintiff should be held to a lower standard because its executives are not native English speakers or are unfamiliar with U.S. litigation. 1 PageID 21798 fact that it somehow thought the issues of a "Management Buyout" and "CPaaS" were not important to this case. Dkt. No. 225 at 7-8. But tyntec overlooks that it (not Syniverse) sought $70 million based on alleged CPaaS profits and that tyntec (not Syniverse) chose to use financial projections from its "Management Buyout" as the sole foundation for its damages claim. tyntec can refer to the Withheld Spreadsheets as "CPaaS" documents or "Management Buyout" documents all it wants; the truth is the Withheld Spreadsheets were "damages" documents that were easy to locate and critical to the case. They should have been produced. tyntec's claims that it diligently searched for the Withheld Spreadsheets are not credible. Susman Godfrey quickly located the Withheld Spreadsheets by simply cross- referencing information that was already located in the High-Level Spreadsheets that tyntec's expert relied on. Dkt. No. 225 at 12-13. Susman Godfrey asked precisely the same questions that Syniverse asked of tyntec and its witnesses: whether the figures in the High-Level Spreadsheets had been calculated elsewhere and incorporated into those spreadsheets. Compare id. (describing efforts to locate Missing Spreadsheets) with Dkt. No. 220-1 at 5-6 (describing multiple attempts to determine whether there were underlying data for the High- Level Spreadsheets). Wolfram concedes that she located one of the Withheld Spreadsheets after a single call to Kay Buschmann, whom she identified at her deposition as an author of one of the High-Level Spreadsheets. Dkt. No. 227, ¶ 23. This begs the question why tyntec did not take this step much earlier in the case. More questions about tyntec's actions are raised by the declarations submitted with its Opposition brief. For instance, Thorsten Trapp testified at his deposition that a backup spreadsheet for tyntec's damages model may exist but now swears that he does not recall what 2 PageID 21799 spreadsheet he was referring to although he is sure the Withheld Spreadsheets are not it. Dkt. No. 228, ¶¶ 14-16. What spreadsheet was Trapp referring to then and was that document produced during discovery? But no question looms as large as how and why tyntec's CEO submitted a false declaration seeking to dispel the notion that any backup existed for tyntec's damages model. After testifying in a deposition that a "massive Excel" existed with supporting information for tyntec's damages model, Wolfram submitted a sworn declaration stating that she had "misremembered" and that the Excel file she testified about was not backup for the damages model but was instead wholly irrelevant because it "relate[d] to tyntec's [A2P] messaging business and not its ICV and CPaaS business." Attached as Ex. A. Now, in her declaration submitted with tyntec's Opposition, Wolfram reverses course, stating that the "massive Excel" she recalled at her deposition was actually a spreadsheet that did deal with tyntec's ICV and CPaaS business, but that it had previously been produced.3 Dkt. No. 227, ¶¶ 16-17. Both declarations cannot be true, as they say diametrically opposite things. But the new declaration does raise further questions about what Wolfram or tyntec's lawyers knew and what diligence they could have possibly conducted when she submitted her first, false declaration seeking to dispel the notion that relevant backup data existed for tyntec's damages model. Whether Wolfram intended to mislead the Court and, if so, the appropriate sanctions to be imposed for such false testimony are things a show-cause hearing should explore. See Flextronics Int'l, USA, Inc. v. Sparkling Drink Sys. Innovation Ctr., 230 F. Supp. 3d 896, 912 3 The document referred to by Wolfram in her latest declaration does not actually provide any backup or assumptions for tyntec's lost profits calculations. 3 PageID 21800 (N.D. Ill. 2017) ("When a corporate party's upper management engages in sanctionable conduct in litigation, the corporation itself must bear the consequences."). II. tyntec's Proposal to Reopen Discovery Should Be Rejected Recognizing the severity of its discovery violations, tyntec offers—unprompted—that discovery should be reopened. Dkt. No. 225 at 1-2, 7-18. Yet reopening discovery and allowing further depositions is not the answer for a party's failure to produce relevant documents, particularly where the litigant's actions have tainted large swaths of discovery.4 Mortg. Payment Prot., Inc. v Cynosure Fin., Inc., No. 6:08-CV-1212, 2010 WL 11507658, at *4 (M.D. Fla. Nov. 5, 2010) (rejecting request by party who untimely produced expert material to reopen discovery for another deposition); Weaver v. Lexington Ins. Co., No. 805-CV-1913, 2007 WL 1288759, at *3 (M.D. Fla. May 2, 2007) (ordering sanctions and striking expert testimony when "[l]esser sanctions …are not available without imposing on [defendants] the extraordinary burden of deposing [the expert] at this late date"). More depositions of tyntec's principals and expert would not extinguish the prejudice to Syniverse, would not restore the massive amounts of time and expense Syniverse has spent litigating a lie, and in fact, would create additional time and expense for Syniverse to participate in re-opened discovery due to tyntec's actions. And it would place tyntec right back where it would have been if it had produced the Withheld Spreadsheets during discovery. In short, it would save tyntec from its own misconduct and embolden future litigants to do the 4 tyntec argues repeatedly that it can only be sanctioned under Federal Rule 37 if it has violated a court order. Dkt. No. 225 at 16-17. Not so. Rule 37(c) permits sanctions even where no party has violated a court order, and under this provision the Court may utilize any of the rule's enumerated sanctions to penalize the litigant. Fed. R. Civ. P. 37(c)(1)(A-C). Moreover, tyntec's position makes no sense where, as here, Syniverse did not file a discovery motion based on its reliance on tyntec's false statements. 4 PageID 21801 same. Here, especially since Wolfram has submitted false testimony, sanctions are "necessary to serve the punishment and deterrence goals of the rule and to vindicate the integrity of the Court and discovery process." Bankatlantic v. Blythe Eastman Paine Webber, Inc., 130 F.R.D. 153, 154 (S.D. Fla. 1990). Only with a hearing can the Court be assured that Wolfram will provide a truthful accounting. CONCLUSION More discovery will not cure the prejudice caused by tyntec's conduct. Rather, Syniverse respectfully requests that the Court hold a hearing to address the following issues and others it deems relevant, and that serious sanctions be imposed accordingly:  Who made the decision to exclude Wolfram's and Trapp's "Management Buyout" email folders from discovery and why? And how did tyntec miss one of the Withheld Spreadsheets when it was collected from a custodian and hit on the search terms agreed to by the parties but was marked "non-responsive?"  Did tyntec and Wolfram submit the earlier Wolfram declaration knowing that it was false and what investigation, if any, did she conduct into the "massive excel" before swearing that the "massive excel" was wholly irrelevant?  Why did tyntec not, during the discovery period, take the simple steps Susman Godfrey undertook (including the call to Kay Buschmann) to discover the Withheld Spreadsheets sitting in tyntec's executives' own files all along?  What was the extent of tyntec's investigation into the relevant data, if any, underlying the High-Level Spreadsheets in preparing expert reports, preparing Wolfram to testify as a 30(b)(6) representative about them and tyntec's damages calculations, following up on her testimony about the "massive Excel," and in opposing Daubert? *************************************************************************** Dated: January 25, 2019 Respectfully submitted, /s/ Mark A. McCarty Mark A. McCarty (admitted pro hac vice) John E Stephenson, Jr. (admitted pro hac vice) Valarie C. Williams (admitted pro hac vice) Kara Kennedy (admitted pro hac vice) 5 PageID 21802 James B. Cash (admitted pro hac vice) ALSTON & BIRD LLP 1201 W. Peachtree Street Atlanta, Georgia 30309 Tel.: 404-881-7000 Benjamin H. Hill, III (FBN: 94585) Matthew F. Hall (FBN: 92430) HILL, WARD, HENDERSON, P.A. 101 East Kennedy Blvd. Suite 3700 Tampa, Florida 33602 Tel.: 813-221-3900 6