In Re: Oracle Oil, LLC, No. 2:2018cv03674 - Document 126 (E.D. La. 2019)

Court Description: ORDER AND REASONS - IT IS ORDERED that the 112 Motion for Sanctions filed by Defendant EPI is DENIED. Signed by Judge Susie Morgan. (bwn)
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In Re: Oracle Oil, LLC Doc. 126 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A IN RE: ORACLE OIL, LLC CIVIL ACTION N O. 18 -3 6 74 SECTION : “E” ( 5) ORD ER AN D REAS ON S Before the Court is a Motion for Sanctions 1 filed by Defendant EPI Consultants (“EPI”). Plaintiff Oracle Oil, LLC (“Oracle”) opposes the m otion. 2 EPI filed a reply. 3 For the following reasons, the m otion is D EN IED . BACKGROU N D Oracle, a com pany owned solely by Robert Brooks, 4 was the operator of the Lucille Broussard, et al. No. 1 well (“the well”) located in Verm illion Parish. 5 Mr. Brooks is also the sole owner of Delphi Oil, Inc. (“Delphi”) and Doerr Operating, LLC (“Doerr”). 6 Oracle alleges it contracted with EPI for EPI to provide consulting engineering services, on-site supervision, and other services in connection with the reworking of the well. 7 The parties do not dispute that Delphi an d Doerr paid the expen ses related to the well. 8 Oracle alleges that, in connection with the contracted work, EPI used rusty, scaly pipe an d failed to properly inspect or clean the pipe before running it in the well. 9 Oracle further alleges that 1 R. Doc. 112. R. Doc. 118 . 3 R. Doc. 123. 4 R. Doc. 26-2 at ¶ 1; R. Doc. 42-1 at ¶ 1. 5 R. Doc. 1-7 at ¶ 2. 6 See R. Doc. 10 0 -1 at 9; R. Doc. 91 at 1. At deposition, Mr. Brooks con firm ed he is the sole owner of Doerr and Delphi. 7 R. Doc. 1-7 at ¶ 3. 8 R. Doc. 10 0 -2 at ¶ 3; R. Doc. 92 at ¶ 3. 9 R. Doc. 1-7 at ¶ 5. 2 1 Dockets.Justia.com EPI set retainers, bridge plugs, and/ or pokers near joints in the casing, causing a split in the casing. 10 At his re-deposition, Mr. Brooks adm itted (1) there is no docum ent to show that Oracle paid any of the expenses related to the well, (2) there is no written contract between Oracle and Delphi or between Oracle and Doerr for the paym ent of expenses related to the well, and (3) there is no written docum ent to show the Court that Oracle reim bursed Delphi or Doerr for the expenses of the well. 11 However, Mr. Brooks also testified Delphi and Doerr, his other solely owned entities, paid the expenses pursuant to “verbal contracts between m e and m yself.”12 Sim ilarly, Mr. Brooks swore in an affidavit: (1) he directed the solely owned entities to conduct business on behalf of and for the benefit of Oracle, (2) he directed Delphi and Doerr to pay debts associated with the well on behalf of and for the benefit of Oracle, and (3) he bound his com panies via oral contracts to pay bills and conduct operations, all for the exclusive benefit of Oracle. 13 After the re-deposition of Mr. Brooks, EPI filed a Motion in Lim ine and Renewed Motion to Strike, in which, am ong other things, EPI sought “to exclude Oracle’s proposed 10 0 6 sum m ary of the ‘invoices received by Oracle showing costs of drilling and attem pting to recom plete the Well [and] 8 boxes and several CD Rom of raw data’ which have yet to be produced, even though trial is in two weeks.”14 During a status conference held on May 21, 20 19, counsel for Oracle inform ed the Court that Oracle wished to introduce at trial the “Broussard Monthly Expense” report as a sum m ary exhibit under Federal Rule of 10 Id. at ¶¶ 22-24. Doc. 10 0 -3 at 13-15. 12 R. Doc. 91-1 at 2. 13 R. Doc. 91-4 at 1. 14 R. Doc. 83 at 1. 11 R. 2 Eviden ce 10 0 6. 15 “Counsel for Plaintiff acknowledged the report was not provided to the Defendant until May 9, 20 19 at the re-deposition of Robert Brooks.”16 The Court ordered counsel for Oracle to “provide the Court and Counsel for Defendant the specific docum ents supporting each entry and am ount on the ‘Broussard Monthly Expense’ report.”17 The Court further ordered: “Counsel for Plaintiff also will provide the Court and Counsel for Defendant a revised “Broussard Monthly Expense” report, showing when the supporting docum entation for each entry was produced to Plaintiff and in what form the inform ation was produced.”18 On May 24, 20 19, EPI filed a m otion for sum m ary judgm ent, arguing there is no eviden ce in the record to support an essential elem ent of Oracle’s breach of contract claim , specifically, that Oracle sustained dam ages. 19 Oracle argued EPI is not entitled to sum m ary judgm ent because Oracle produced som e evidence—Mr. Brooks’ deposition testim ony and affidavit—to show Oracle did sustain dam ages. 20 On J une 6, 20 19, the Court granted EPI’s m otion for sum m ary judgm ent, 21 and in doing so explain ed: Eviden ce of paym ent of expen ses by an en tity other than the plaintiff is not sufficient to prove the plaintiff sustained dam ages, absent a showing that the plaintiff is legally obligated to reim burse the other entity. . . . . . The evidence from Mr. Brooks alone is not sufficient to show Oracle sustain ed a loss. Pursuant to Louisiana Civil Code article 1846, a contract in excess of $ 50 0 ‘m ust be proved by at least one witness and other corroborating circum stances.’ . . . A party to an action m ay serve as a witness to establish the existence of an oral contract in excess of $ 50 0 , but the other corroborating circum stances m ust com e from a source other than the party . . . In this case, in order to fin d the existence of an oral contract obligating Oracle to reim burse Delphi and Doerr for costs and expen ses related to the well, there m ust be eviden ce to corroborate the testim ony 15 R. Doc. 93. Id. at 1. 17 Id. 18 Id. at 2. 19 R. Doc. 10 0 . 20 R. Doc. 91. 21 R. Doc. 10 4. 16 3 of Mr. Brooks that there is an oral contract. No such corroborating evidence has been pointed to by Oracle. Based solely on the Brooks affidavit an d deposition testim ony, no reasonable trier of fact could find sufficient eviden ce to prove the existen ce of an oral obligation for Oracle to reim burse Delphi and Doerr for costs and expen ses related to the well. 22 On J une 24, 20 19, Oracle filed a notice of appeal. 23 Specifically, Oracle appeals the Court’s Order and Reasons granting EPI’s Motion for Sum m ary J udgm ent 24 and the accom panying J udgm ent entered in favor of EPI against Oracle, 25 as well as the Court’s earlier evidentiary ruling 26 granting EPI’s Motion in Lim ine 27 to exclude testim ony from Plaintiff’s expert, Robert McGowen. 28 On J uly 9, 20 19, EPI filed the instant m otion for sanctions against Oracle pursuant to Federal Rule of Civil Procedure 11 and additionally or alternatively Federal Rule of Civil Procedure 37, “for bringing a claim based on factual contentions without evidentiary support” and “failing to produce evidentiary support despite repeated requests an d orders, causing [EPI] to incur excessive and needless expense in defending this suit.”29 EPI specifically seeks an award of attorneys’ fees and costs. 30 In its reply, EPI clarifies “the sanctions should be assessed against Oracle Oil, LLC for bringing claim s not based in fact rather than its counsel.”31 JU RISD ICTION Considering an appeal has been lodged in this m atter, the Court m ust first address whether it has jurisdiction to hear the pen ding m otion. The Court has an ongoing 22 R. Doc. 10 4 at 9-10 . R. Doc. 10 6. 24 R. Doc. 10 4. 25 R. Doc. 10 5. 26 R. Doc. 98. 27 R. Doc. 20 . 28 R. Doc. 10 6 at ¶ 3. 29 R. Doc. 112-2 at 1. 30 Id. at 8, 9-10 . 31 R. Doc. 123 at 3. 23 4 obligation to ensure that it possesses subject m atter jurisdiction, and it m ay raise the issue of subject m atter jurisdiction sua sponte at any tim e. 32 “The filing of a notice of appeal is an event of jurisdictional significan ce—it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.”33 However, “the district court is nonetheless free to adjudicate m atters that are not involved in that appeal.”34 “[A]n issue before the district court is only an ‘aspect[] of the case involved in the appeal’ if the appeal and the claim s before the district court address the sam e legal question.”35 For instance, in Sandres v. Louisiana Div. of Adm in., the Fifth Circuit held the district court had jurisdiction to rule on a party’s m otion to dism iss for failure to obey a discovery order pursuant to Rule 37. In that case, the district court ruled on the Rule 37 m otion to dism iss while an appeal of the district court’s unrelated discovery order was pending. The Fifth Circuit explain ed: The issue before the district court was not an aspect of the case involved in the appeal before this court. [Appellant’s] appeal concerned whether the district court erred in affirm ing the m agistrate judge's orders denying her exten ded discovery. That question is unrelated to whether a litigant's persistent refusal to subm it to a deposition m erits a dism issal of her claim . Resolving [Appellee’s] motion did not cause the district court to resolve the sam e question that was before this court. Thus, the district court had jurisdiction over [Appellee’s] m otion to dism iss. 36 This case is like Sandres. Oracle has appealed the Court’s order granting EPI’s m otion for sum m ary judgm ent and the Court’s unrelated order granting EPI’s m otion in lim ine to exclude testim ony from Plaintiff’s expert, Robert McGowen. 37 Oracle’s appeal 32 Fed. R. Civ. P. 12(h)(3); M CG, Inc. v. Great W estern Energy Corp., 8 96 F.2d 170 , 173 (5th Cir. 1990 ). Griggs v. Provident Consum er Discount Co., 459 U.S. 56, 58 (198 2) (citing United States v. Hitchm on, 587 F.2d 1357 (5th Cir. 1979)). 34 W eingarten Realty Investors v. Miller, 661 F.3d 90 4, 90 8 (5th Cir. 20 11) (citing Alice L. v. Dusek, 492 F.3d 563 (5th Cir. 20 0 7)). 35 Sandres v . Louisiana Div. of Adm in ., 551 F. App’x 95, 98 (5th Cir. 20 13) (quoting W eingarten Realty Investors, 661 F.3d at 90 9 (internal quotation m arks om itted)). 36 Id. 37 R. Doc. 10 6 at ¶ 3. 33 5 thus concerns whether this Court erred in granting EPI’s m otion for sum m ary judgm ent and m otion in lim ine. Those questions are unrelated to EPI’s motion for sanctions. Because resolving EPI’s m otion for sanctions does not cause this Court to resolve the sam e questions before the Fifth circuit, this Court has jurisdiction over EPI’s m otion. LAW AN D AN ALYSIS I. Ru le 11 San ctio n s EPI argues under Rule 11, “it is appropriate to award attorney’s fees and costs to sanction Oracle Oil for bringing claim s not based in fact.”38 EPI argues Oracle offered only the following evidence to support its factual allegations: “unsupported Rule 10 0 6 executive sum m ary and only [Mr. Brooks’] conclusory statem ents in support of his case.”39 Oracle responds that Rule 11 sanctions are not warranted because: “each allegation and factual contention in the docum ent has evidentiary support or is likely to have evidentiary support after a reasonable opportunity for discovery.”40 Specifically, Oracle argues: “[m ]ultiple depositions taken in this m atter, affidavits and copies of invoices were provided to the court in order to support Oracle’s causes of action against Defendant EPI.”41 Rule 11 provides in pertinent part: (b) By presenting to the court a pleading, written m otion, or other paper—whether by signing, filing, subm itting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, inform ation, and belief, form ed after an inquiry reasonable under the circum stances: ... 38 R. Doc. 112-2 at 8 . Id. at 7. 40 R. Doc. 118 at 5 (citations om itted). 41 Id. at 6-7. 39 6 (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery. 42 ... (c)(1) If, after notice and a reasonable opportunity to respond, the court determ ines that Rule 11(b) has been violated, the court m ay im pose an appropriate sanction on any attorney, law firm , or party that violated the rule or is responsible for the violation . . . 43 District courts have wide latitude to im pose sanctions under Rule 11, as district court rulings under Rule 11 are reviewed for abuse of discretion. 44 The Fifth Circuit has explain ed: “Rule 11 has as its prim ary focal point the certification m ade by an attorney that he has com plied with the affirm ative duties im posed by the rule at the m om ent he affixes his signature to a pleading, m otion, or other paper in a lawsuit.”45 Accordingly, Rule 11(b) “evaluates an attorney's conduct at the tim e a ‘pleading, m otion, or other paper’ is signed.”46 “The court is expected to avoid using the wisdom of hindsight and should test the sign er's conduct by inquiring what was reasonable to believe at the tim e the pleading, m otion, or other paper was subm itted.”47 In its reply, EPI specifies it is requesting “the sanctions should be assessed against Oracle Oil, LLC for bringing claim s not based in fact rather than its counsel.”48 The Fifth 42 Fed. R. Civ. P. 11(b)(3). Although EPI additionally cites Rule 11(b)(4) in its discussion of sanctions under Rule 11(b), EPI’s argum ent for sanctions under Rule 11(b) appear to be confined to Rule 11(b)(3). EPI argues Oracle lack evidentiary support for its allegations, and cites cases in which sanctions were awarded under Rule 11(b)(3). 43 Fed. R. Civ. P. 11(c). 44 See, e.g., W hitehead v. Food Max of Miss., Inc., 332 F.3d 796, 80 2 (5th Cir. 20 0 3) (citin g Luliram a Ltd., Inc. v. Axcess Broad. Servs., Inc., 128 F.3d 872, 8 84 (5th Cir. 1997)). 45 Thom as v. Capital Sec. Services, Inc., 836 F.2d 866, 8 74 (5th Cir. 198 8). 46 Id. 47 Advisory Com m ittee Notes to Fed. R. Civ. P. 11. 48 R. Doc. 123 at 2. 7 Circuit has explained under Rule 11(c), 49 sanctions m ay be assessed “against a client as well as his attorney, because both have a duty ‘to conduct a reasonable inquiry into the facts or law before filing the lawsuit.’”50 However, clients m ay be only sanctioned for violating Rule 11(b)(3) by m aking “factually groundless allegations in their [c]om plaint.”51 For instance, in Skidm ore Energy Inc. v. KPMG, the Fifth Circuit upheld a district court’s award of Rule 11(b)(3) sanctions against a client when the district court found “the bulk of [p]laintiffs’ causes of action are without evidentiary support and thus appear to have been instigated as a gam ble that som ething m ight com e of it rather than on the basis of the facts at hand.”52 The Fifth Circuit explained the district court did not abuse its discretion in awarding sanctions against the client him self because the client “was entirely unable to articulate a factual nexus between any of the Defendants and [wrongful activity the plaintiff alleged].”53 This case is distinguishable from Skidm ore, in which the Fifth Circuit upheld the district court’s award of sanctions against plaintiffs for “fail[ing] to articulate any evidentiary support for their claim s.”54 In this case, Oracle articulated evidentiary support for its claim s for dam ages. Specifically, Oracle pointed to Mr. Brooks’ affidavit and deposition testim ony as support for Oracle’s allegations that: (1) he directed the solely owned entities to conduct business on behalf of and for the benefit of Oracle, (2) he directed Delphi and Doerr to pay debts associated with the well on behalf of and for the 49 Pursuant to Rule 11(c), if a court determ ines Rule 11(b) has been violated, “the court m ay im pose an appropriate sanction on any attorney, law firm , or party that violated the rule or is responsible for the violation.” Fed. R. Civ. P. 11(c). 50 Skidm ore Energy , Inc. v. KPMG, 455 F.3d 564, 567 (5th Cir. 20 0 6), cert. denied, Skidm ore Energy , Inc. v. Maghreb Petroleum Exploration, S.A., 549 U.S. 996 (Oct. 30 , 20 0 6) (quoting Jennings v. Joshua Indep. Sch. Dist., 948 F.2d 194, 197 (5th Cir. 1991)). 51 Id. (em phasis in original). 52 Id. (internal quotation m arks, brackets, and ellipses om itted). 53 Id. at 568 (internal quotation m arks om itted). 54 Id. at 567. 8 benefit of Oracle, and (3) he bound his com panies via oral contracts to pay bills and conduct operations, all for the exclusive benefit of Oracle. 55 The Court found this evidence legally insufficient to support an elem ent of Oracle’s claim for dam ages. As the Court explain ed in granting EPI’s m otion for sum m ary judgm ent, “[p]ursuant to Louisiana Civil Code article 1846, a contract in excess of $ 50 0 ‘m ust be proved by at least one witness and other corroborating circum stances,’” and therefore “[t]he eviden ce from Mr. Brooks alone is not sufficient to show Oracle sustained a loss.”56 However, the legal insufficiency of this evidence does not m ean Oracle m ade factually groundless allegations in its com plaint. EPI argues several cases in particular support its argum ent that Oracle violated Rule 11. First, EPI argues, its position is supported by the First Circuit case MendezAponte v. Bonilla, in which the plaintiffs’ “opposition to sum m ary judgm ent and the statem ent of contested m aterial facts consisted, in large part, of speculation an d conclusory allegations for which the only evidentiary support was . . . the plaintiff’s sworn affidavit, which itself contains conclusory allegations.”57 EPI argues this case is like Mendez-Aponte because “at the final hour before trial, after ten years of litigation, Plaintiff attem pted to offer an unsupported Rule 10 0 6 executive sum m ary and only his conclusory statem ents in support of his case because there was no evidence to support his position.”58 Second, EPI argues, like the plaintiff in the Fifth Circuit case Elliott v. The M/ V Lois B, Plaintiff filed a petition based on facts it knew to be untrue. “Here, Oracle Oil’s principal, Robert Brooks, being also the principal of the various other entities who 55 R. Doc. 91. R. Doc. 10 4 at 9. 57 R. Doc. 112-2 at 7 (citing M endez-Aponte v . Bonilla, 645 F.3d 60 , 68 (1st Cir. 20 11)). 58 Id. 56 9 issued invoices related to the subject well knew[,] that Oracle Oil did not pay any expenses and therefore did not sustain any dam ages related to the well.”59 The cases cited by EPI do not support an award of sanctions against Oracle. First, Mendez-Aponte 60 is a First Circuit opin ion and accordingly is not bin ding in this Circuit. Moreover, Mendez-Aponte concerns sanctions awarded against a plaintiff’s attorneys, not the plaintiff him self. Accordingly, Mondez-Aponte is not directly on point. Second, although Elliott 61 concerns sanctions awarded against a plaintiff and her attorney, the sanctions were awarded against the plaintiff because her com plaint “border[ed] on perjury” and “[t]he record belies [the plaintiff’s] efforts to avoid responsibility for the com plaint that [her attorney] filed in her behalf.”62 Specifically, the plaintiff “falsely pleaded” she “owned the vessel in question,” the “district court found that [the plaintiff] knew this to be untrue,” and “[m ]oreover, [the plaintiff] m aintained this position at trial” where she testified “that the vessel ‘was m y boat,’ that she ‘authorized [her attorney] to take care of protecting m y interest in the tugboat,’ and that she reviewed the com plaint after it was filed.”63 In this case, it has not been established the affidavit and deposition testim ony of Mr. Brooks, the sole owner of Oracle, that Oracle was bound to reim burse Delphi and Doerr for the expenses they incurred and therefore Oracle was in turn entitled to dam ages, is false. Instead, the Court’s order granting EPI’s m otion for sum m ary judgm ent was based on the legal sufficiency of the evidence based on the absen ce of corroborating circum stances. Accordingly, EPI is not awarded sanctions against Oracle under Rule 11. 59 Id. at 8 (citing Elliott v. The M/ V Lois B, 980 F.2d 10 0 1, 10 0 7 (5th Cir. 1993)). 645 F.3d 60 . 61 980 F.2d 10 0 1. 62 Id. at 10 0 7. 63 Id. 60 10 II. Ru le 3 7 San ctio n s In addition to, or in the alternative to Rule 11 sanctions, EPI seeks an award of sanctions against Oracle in the form of attorneys’ fees and costs under Rule 37 for “its failure to com ply with this Court’s orders directing it to produce specific evidence of the dam ages alleged by Oracle Oil.”64 EPI does not specify the subdivision of Rule 37 under which it seeks an award of sanctions; instead, EPI argues Oracle Oil “has breached its obligations both as set forth in Rule 26 and in this Court’s orders to produce evidence to support its claim s for dam ages in a m anner that at a bare m inim um constitutes gross negligence considering the length and expense of this litigation.”65 EPI thus appears to seek san ctions under Rule 37(b)(2), which allows for sanctions for failure to com ply with a court’s discovery order, and Rule 37(c)(1), which allows for sanctions for failure to com ply with Rule 26(a) or (e). Accordingly, the Court analyzes whether EPI is entitled to an award of sanctions under Rule 37(b)(2) or (c)(1). A. Ru le 3 7( b) ( 2 ) Rule 37(b)(2) provides a court m ay sanction a party who fails to com ply with a court order to provide or perm it discovery, and requires: [T]he court m ust order the disobedient party, the attorney advisin g that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circum stances m ake an award of expenses unjust. 66 The m oving party first has to show that an order to provide or perm it discovery was not com plied with. Subdivision (b)(2) then “places the burden on the disobedient party to avoid expenses by showing that his failure is justified or that special 64 R. Doc. 112-2 at 8 . Id. at 12. 66 Fed. R. Civ. P. 37(b)(2)(C). 65 11 circum stances m ake an award of expenses unjust.”67 “The prim ary purpose of sanctions is to deter frivolous litigation and abusive tactics.”68 Accordingly, a district court “has broad discretion under Rule 37(b) to fashion rem edies suited to the m isconduct.”69 With respect to the appropriate sanctions, “[t]he plain language of Rule 37 . . . provides that only those expenses, including fees, caused by the failure to com ply m ay be assessed against the noncom plying party.”70 To identify an order to provide or perm it discovery that was not com plied with, EPI points to its various discovery requests attached as Exhibit B. 71 However, the record reflects no m otion to com pel or orders com pelling responses to those discovery requests. EPI also points to the Court’s April 10 , 20 19 order requiring “Mr. Brooks to be m ade available for deposition at the earliest possible date.”72 To the Court’s knowledge, Oracle com plied with this order. Finally, EPI points to the Court’s May 21, 20 19 order regarding Oracle’s request to introduce at trial the Broussard Monthly Expense report as a sum m ary exhibit under Federal Rule of Eviden ce 10 0 6. 73 At a status conference held on May 21, 20 19, counsel for Oracle “inform ed the Court that it wishes to introduce the [report] as a sum m ary exhibit under Federal Rule of Eviden ce 10 0 6.”74 Rule 10 0 6 allows a proponent to use a sum m ary to “prove the content of volum inous writings, recordings, or photographs that cannot be conveniently exam in ed in court.”75 Rule 10 0 6 requires, in relevant part: 67 Advisory Com m ittee Notes to Fed. R. Civ. P. 37. Topalian v. Ehrm an , 8 4 F.3d 433 (5th Cir. 1996). 69 Sm ith & Fuller, PA. v. Cooper Tire & Rubber Co., 685 F.3d 486, 488 (5th Cir. 20 12). 70 Batson v. N eal Spelce Associates, Inc., 765 F.2d 511, 516 (5th Cir. 1985). 71 R. Doc. 112-4. 72 R. Doc. 66. 73 R. Doc. 93. 74 R. Doc. 93. 75 Fed. R. Evid. 10 0 6. 68 12 The proponent m ust m ake the originals or duplicates available for exam in ation or copying, or both, by other parties at a reasonable tim e an d place. And the court m ay order the proponent to produce them in court. 76 During the status conference held on May 21, 20 19, the Court ordered: Counsel for Plaintiff will provide the Court and Counsel for Defendant the specific docum ents supporting each entry and am ount on the ‘Broussard Monthly Expen se’ report . . . The supporting docum ents m ust be provided in the sam e order as the entries in the report. Counsel for Plaintiff also will provide the Court and Counsel for Defendant a revised ‘Broussard Monthly Expense’ report, showing when the supporting docum entation for each entry was produced to Plaintiff and in what form the inform ation was produced. 77 The May 21, 20 19 order, entered in connection with the Court’s consideration of whether Oracle would be allowed to introduce into eviden ce a sum m ary exhibit under Federal Rule of Evidence 10 0 6, required Oracle to provide the backup necessary docum ents and to docum ent when these docum ents had been produced so the Court could determ in e an evidentiary issue. The May 21, 20 19 order was n ot an order to perm it or provide discovery. Accordingly, EPI is not entitled to an award of sanctions against Oracle under Rule 37(b)(2). B. Ru le 3 7( c) ( 1) Federal Rule of Civil Procedure 26(a) requires parties to m ake certain disclosures, including: (1) initial disclosures, (2) disclosure of expert testim ony, and (3) pretrial disclosures. 78 Rule 26(e) further requires, in pertinent part, “[a] party who has m ade a disclosure under Rule 26(a)—or who has responded to an interrogatory, request for production, or request for adm ission” to “supplem ent or correct its disclosure or 76 Id. R. Doc. 93. 78 Fed. R. Civ. P. 26(a). 77 13 response” (a) “in a tim ely m ann er if the party learns that in som e m aterial respect the disclosure or response is incom plete or incorrect” or (b) “as ordered by the court.”79 A failure to com ply with the disclosure requirem ents of Rule 26 m ay result in sanctions under Rule 37(c), which provides: (1) If a party fails to provide inform ation or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that inform ation or witness to supply eviden ce on a m otion, at a hearing, or at a trial, unless the failure was substantially justified or is harm less. In addition to or instead of this sanction, the court, on m otion and after givin g an opportunity to be heard: (A) m ay order paym ent of the reasonable expenses, including attorney's fees, caused by the failure[.] 80 A district court’s order of sanctions under Rule 37(c)(1) will be upheld absent an abuse of discretion. 81 In determ in ing whether a party’s failure to sufficiently respond is harm less or substantially justified, a court generally considers: “(1) the im portance of the eviden ce; (2) the prejudice to the opposing party of including the evidence; (3) the possibility of curing such prejudice by granting a continuance; and (4) the explanation for the party's failure to disclose.”82 With respect to the paym ent of expenses a court m ay award, “[t]he plain language of Rule 37 . . . provides that only those expenses, including fees, caused by the failure to com ply m ay be assessed against the noncom plying party. Furtherm ore, the expenses m ust be reason able.”83 The Fifth Circuit has held: “[s]anctions under Rule 37 serve the dual function of reim bursing the m oving party and deterring the violator of the discovery orders (as well as other potential violators).”84 79 Fed. R. Civ. P. 26(e)(1). Fed. R. Civ. P. 37(c)(1). 81 See, e.g., In re Com plaint of C.F. Bean L.L.C., 8 41 F.3d 365, 372 (5th Cir. 20 16). 82 Texas A & M Research Foundation v. Magna Transp. Inc., 338 F.3d 394, 40 2 (5th Cir. 20 0 3). 83 Batson v. N eal Spelce Associates, Inc., 765 F.2d 511, 516 (5th Cir. 1985). 84 Day v. Allstate Ins. Co., 78 8 F.2d 1110 , 1114 (5th Cir. 1986) (citations om itted); see also Sm ith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 20 12) (“[A] prim ary purpose of Rule 37 sanctions is to deter future abuse of discovery.” (quoting Adolph Coors Co. v. Movem ent Against Racism and the Klan, 777 F.2d 1538, 1542 (11th Cir. 1985))); Chapm an & Cole v. Itel Container Intern. B.V., 8 65 80 14 EPI argues Oracle breached its obligations “as set forth in Rule 26 and in this Court’s orders to produce evidence to support its claim s for dam ages in a m anner that at a bare m inim um constitutes gross negligence considering the length and expense of this litigation.”85 Oracle argues it “properly subm itted evidence to support its claim s that it sustained the costs and expenses related to the well during and after EPI’s tim e on the project, the loss of reserves and revenue as a result of EPI’s actions or inactions, an d the cost of drilling replacem ent well” as “evidenced by its responses to discovery prom ulgated in this m atter.”86 Although EPI references Oracle’s disclosure obligations under Rule 26, EPI does not point to a specific discovery response Oracle failed to provide or supplem ent. EPI appears to argue the Court’s May 21, 20 19 is tantam ount to an order to “supplem ent or correct its disclosure response” pursuant to Rule 26(e)(1)(B). However, as discussed above, the Court’s May 21, 20 19 order was not a discovery order but rather was related to whether a Rule 10 0 6 sum m ary exhibit was adm issible. Moreover, EPI does not appear to argue Oracle failed to m ake the production ordered by the Court on May 21, 20 19. Instead, EPI appears to argue for sanctions on the basis that the evidence produced was legally insufficient to support Oracle’s claim s for dam ages. 87 However, sanctions under Rule 37 are m eant to deter individuals who violate their discovery obligations, 88 not individuals F.2d 676, 687 (5th Cir. 1989) (observin g under Rule 11, a party “can only be held responsible for the reasonable expenses caused by their failure to com ply with discovery.” (citing Batson, 765 F.2d 511)). 85 R. Doc. 112-2 at 9. 86 R. Doc. 118 at 6. 87 See R. Doc. 112-2 at 9 (“Oracle Oil failed to com ply with the Court’s order, producing again a volum inous collection of invoices from various entities, none of which showed Oracle’s paym ent of expenses for the well in question.” (em phasis in original)). 88 See supra fn . 84 and accom panying text. 15 whose eviden ce m erely lacks legal strength. In the Court’s discretion the Court finds EPI is not entitled to an award of sanctions against Oracle under Rule 37(c)(1). CON CLU SION IT IS ORD ERED that the Motion for Sanctions 89 filed by Defen dant EPI is D EN IED . N e w Orle a n s , Lo u is ian a o n th is 5th d ay o f Se p te m be r, 2 0 19 . ______________________________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 89 R. Doc. 112. 16