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Prominent GMBH v. Prominent Systems, Inc.

United States District Court, W.D. Pennsylvania

August 16, 2019

PROMINENT GMBH, et al, Plaintiffs,

         ECF No. 167


          Lisa Pupo Lenihan United States Magistrate Judge.

         This case was filed on October 21, 2016. On June 15, 2018, Plaintiffs filed a Motion for Default Judgment. That Motion was denied. ECF No. 144. On July 1, 2019, Plaintiff filed a Renewed Motion for Default. ECF No. 167. The Motion will be denied for the reasons set forth below.


         This case has a somewhat tortured history. Initial counsel for Defendants missed numerous discovery deadlines and was generally non responsive. In addition, the case was reassigned to visiting Judge Ponsor on September 26, 2017. A Motion to Disqualify Counsel was filed on January 31, 2018. ECF No. 73. A hearing on both motions was held on February 2, 2018. Judge Ponsor ruled that the Court would not impose sanctions at that time but any failure to respond to discovery by April 1, 2018 “may trigger substantial sanctions, including monetary sanctions, or other relief including default judgment.” ECF No. 74. A Certificate of Compliance was filed by Defendant on April 1, 2018. ECF No. 77.

         Shortly thereafter, current counsel entered their appearance and former counsel withdrew. ECF Nos. 79, 80 and 81. The initial Motion for Default followed on June 15, 2018. The case was transferred back to the undersigned July 12, 2018. ECF No. 103. The Court conducted a Poulis analysis and, finding that a majority of the factors weighed in favor of the Defendant, denied the motion. ECF No. 144.

         Since then, discovery has been ongoing and contentious. The present motion was filed while a Second Motion to Compel Answers to Interrogatories and Requests for Admission was pending against Plaintiffs. This Motion was subsequently granted in part and denied in part; with all but 2 of the 14 requests to compel additional and/or satisfactory responses granted in favor of Defendant. ECF No. 186.

         II. ANALYSIS

         Plaintiffs' argument forming the basis for the default begins with a hearing on February 1, 2018 regarding its motion to compel discovery responses from Defendant. Following this hearing, new counsel for Defendant promised production but did not follow through. This caused Plaintiffs to file the first motion for default. They argue first that as of the date of filing this Motion, Defendant has not corrected allegedly false interrogatory responses. Second, at a hearing on March 28, 2018, counsel for Defendant represented that there was no additional evidence to produce. This was followed by a production on June 28 of that year of 2, 600 pages of documents. Plaintiffs aver that a majority of these documents are “irrelevant order forms.” ECF No. 168 at 10. They further aver that the production as made in an attempt to “bulk up” the document production and suggest good faith compliance when in fact, there was bad faith. In sum, Plaintiffs rely upon a continued dilatory nature of Defendant's conduct in renewing their Motion for Default.

         Defendants counter that Plaintiffs have been every bit as “dilatory” if not more so, and cite to various issues in their responsive brief. ECF No. 178. They importantly point out that there are no pending motions to compel discovery, nor are there pending orders compelling discovery that have not been complied with. In addition, discovery is still open and the Court notes that this is in part due to the fact that Plaintiffs did not properly respond to 30(b)(6) questioning and the Court has ordered them to provide additional written discovery responses. In addition, Defendant's Motion to Compel Plaintiffs to provide discovery was recently granted. ECF No. 186.

         The majority of the conduct complained of in this Motion was reviewed by the Court when it decided Plaintiffs' first Motion for Default. That motion was denied, and the reasons set forth in that opinion are incorporated into this opinion. ECF No. 145. The Court will not re-entertain those issues at this time. As to the allegations of dilatoriness in providing discovery responses since, Plaintiffs have chosen to move directly into nuclear option of default, while skipping over the normal preliminary procedures such as motions to compel discovery. See Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 869 (3d Cir. 1984) (“Dismissal must be a sanction of last, not first, resort.”). The Court believes that it could deny this Motion on that basis alone but will conduct a legal analysis nonetheless.

         The Third Circuit in Poulis set forth the following six factors to be weighed in considering whether dismissal is proper:

(1) the extent of the party's personal responsibility; (2) the prejudice to the adversary caused by the failure to meet scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions; and (6) the meritoriousness of the claim or defense.

Id. at 868 (emphasis omitted). These factors must be balanced in determining whether dismissal is an appropriate sanction, although not all need to weigh in favor of dismissal before dismissal is warranted. Hicks v. Feeney, 850 F.2d 152 (3d Cir. 1988). In determining whether a dismissal is warranted, the Court must analyze the factors in light of the “strong policy favoring decisions on the merits.” Hildebrand v. ...

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