The Need for Counsel to Maintain Active Involvement in Discovery: California District Court Sanctions Attorney for Failing to Make “Reasonable Inquiry” as Required by Fed. Rule 26(g)

On June 1, 2020, the District Court for the Northern District of California in Optronic Techs., Inc. v. Ningbo Sunny Elec. Co., issued a strong reminder to counsel: act in accordance with the obligation to manage and oversee the collection of discovery, or risk running afoul of the attorney certification obligations of Federal Rules of Civil Procedure 26(g). In this case, defendant’s attorney signed a certification pursuant to Rule 26(g) as to the completeness of defendant’s responses to discovery requests despite being unaware of what defendant actually did to search for responsive documents. The District Court found the lack of involvement by defendant’s attorney to be worthy of sanctions based on the specific circumstances of the case.

Plaintiff sought sanctions concerning defendant’s responses to its post-judgement document requests in a litigation in which defendant had previously been found to have deliberately withheld documents, contradicting certain representations made to the court. Plaintiff did not seek sanctions pursuant to Rule 37 and/or the court’s inherent authority. Plaintiff claimed, among other issues, that defendant’s production was not complete and that defendant’s counsel “had not taken a sufficiently active role” in supervising the collection and production of documents. In response, defendant admitted that its counsel did not personally collect the documents, and instead provided “guidance” on what should be collected – without conducting an inquiry into the process under which the data was collected. As such, plaintiff argued that defendant’s counsel violated Rule 26(g)(1)(B) of the Federal Rules of Civil Procedure because it “failed to take steps to ensure that [defendant] complied with [plaintiff’s] discovery requests.”

Rule 26(g)(1) provides that every discovery response must be signed by the party’s attorney of record, and that by signing, the attorney certifies that “to the best of [the attorney’s] knowledge, information, and belief formed after a reasonable inquiry” the discovery response is: (i) consistent with these rules and warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law, or for establishing new law; (ii) not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and (iii) neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action. The Advisory Notes accompanying Rule 26(g) further state that the “reasonable inquiry” standard is satisfied “if the investigation undertaken by the attorney and the conclusions drawn therefrom are reasonable under the circumstances.”

In evaluating plaintiff’s motion, the District Court held that defendant’s counsel, particularly in circumstances where its client seemed to be frustrating plaintiff’s efforts to pursue collection of the judgement against it, did not act sufficiently in merely “mak[ing] sure that all documents had been collected” and that counsel should have inquired about the steps that the party took to collect all responsive documents. Indeed, the District Court stated “[i]t is not enough for counsel to provide advice and guidance to a client about how to search for responsive documents, and then not inquire further about whether that advice and guidance were followed.” Accordingly, defendant’s counsel was found to be in violation of its certification obligations under Rule 26(g)(1), particularly with respect to the obligation to make a “reasonable inquiry,” because counsel “[did] not know, and [did] not inquire into, what [defendant] did to search for responsive documents or whether [defendant] followed its advice.”

Additionally, because the District Court found that counsel had not offered a substantial justification to avoid the imposition of sanctions pursuant to Rule 26(g)(3), plaintiff’s motion for sanctions was granted. In imposing sanctions, the District Court noted that the ruling was largely based on the circumstances of the case, and that it “[did] not conclude that counsel must always personally conduct or directly supervise a client’s collection, review, and production of responsive documents.” Despite this limitation, the ruling serves as a reminder that attorneys should be active participants in the discovery collection process. These responsibilities include at the very least: (1) the need to conduct custodian interviews; (2) understanding where and how potentially relevant ESI is maintained by the client; and (3) understanding any limitations as to the client’s ability to fully respond to an adversary’s discovery requests.