Condemning Defendant’s Gamesmanship, Court Orders Production of Database

JPMorgan Chase Bank, N.A. v. Neovi, Inc., 2006 WL 3803152 (S.D. Ohio Nov. 14, 2006)

In this case involving UCC claims stemming from defendant’s internet-based check service, defendant disputed that it did sufficient business with Ohio residents to subject it to the court’s jurisdiction. The court allowed limited discovery on the issue, and plaintiff propounded a number of interrogatories concerning any business contacts between the defendant and the state of Ohio or Ohio residents. Defendant replied “unknown” to the interrogatories, and stated that its customers were not required to provide address information; however, it failed to state whether any customers, despite not being required to provide their addresses’ or their payees’ addresses, had actually done so, or whether customer or payee addresses were available to defendant in its customer database.

The court reviewed the history of the dispute and concluded that defendant had “willfully violated its obligation to act in a responsible fashion in providing discovery on the personal jurisdiction issue raised by its own motion,” and had “engaged in exactly the type of gamesmanship which is expressly prohibited by the Federal Rules of Civil Procedure and universally condemned by the applicable case law.” Among other things, the court noted that it would have been a simple matter for defendant simply to respond by searching its database and providing the requested information. Accordingly, the court granted plaintiff’s motion for sanctions in the form of attorneys’ fees incurred in conducting additional discovery required as a result of defendant’s gamesmanship.

In addition, plaintiff also requested that defendant either be precluded from litigating its motion to dismiss for lack of personal jurisdiction or that it be required to hand over its database so that plaintiff may make the appropriate searches for information relating defendant’s business contacts with the State of Ohio. The court found that the former request was an extreme sanction that was not warranted based upon the circumstances presented. It observed: “If Chase is awarded its costs and expenses for all unnecessary discovery and is given complete access to the database where the information it seeks is contained, it will be placed in the same position as if Neovi had complied with its discovery obligations.” Consequently, the court directed that defendant provide the database, and cautioned:

Should the database prove incomplete or should it have been altered in such a way, either intentionally or otherwise, to prevent Chase from obtaining sufficient information on Neovi’s Ohio contacts to make a meaningful response to the motion to dismiss, the Court will consider at that time whether an additional sanction of preclusion is warranted.