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Entrata, Inc. v. Yardi Systems, Inc.

United States District Court, D. Utah, Central Division

August 28, 2019

ENTRATA, INC., a Delaware corporation, Plaintiff,
v.
YARDI SYSTEMS, INC., a California corporation Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING ENTRATA'S MOTION FOR MONETARY SANCTIONS

          Clark Waddoups United States District Judge.

         Before the court is Plaintiff Entrata, Inc.'s Motion for Monetary Sanctions. (ECF No. 569.) As explained below, the court GRANTS the Motion.

         Background[1]

         On February 13, 2019, Entrata filed an Emergency Motion to Strike the Supplemental Expert Reports of Gordon Rausser and Richard Hoffman. (ECF No. 456.) In its Motion, Entrata argued that the Supplemental Reports “were needed only because Yardi concealed almost 9, 000 documents behind false privilege claims and responsive yCRM data in violation of a prior [court] Order.” (ECF No. 456 at 4.) On February 26, 2019, the court entered an order finding that “Yardi ha[d] repeatedly acted in bad faith in delaying the production of the yCRM data.” (ECF No. 492 at 24.) The court summarized some of Yardi's misconduct in that order:

• Magistrate Judge Warner ordered Yardi to review its September 29, 2017 document production and produce only those documents that were responsive to Entrata's request after it dumped approximately 1.3 million documents on Entrata.
• This court ordered special master review of Yardi's privilege logs after it determined that there was a reasonable basis to believe that many documents Yardi was withholding were not privileged. This resulted in Yardi withdrawing its privilege claims on thousands of documents. The production of some of these documents aided Entrata in discovering that Yardi's November 2018 yCRM production was incomplete. (See ECF No. 461-13 at 3.)
• Regarding the yCRM data, Yardi repeatedly represented to the court that it had complied with its discovery obligations. Time and time again this proved false. Entrata was twice forced to seek relief from the court to force Yardi to disclose relevant yCRM data.
• On October 11, 2018, Magistrate Judge Wells ordered a 30(b)(6) “deposition where Entrata [could] ask questions regarding the yCRM data, its production, methodology, and questions regarding missing data following the production of any additional yCRM data by Yardi.” (ECF No. 380 at 5.) Yardi did not make this witness available until January of 2019, and did not offer any explanation as to why no other witness could fill that role.

(ECF No. 492 at 24-25 (emphasis in original).) The court also noted that Yardi had “submitted multiple sworn declarations that have proved to be inaccurate.” (ECF No. 492 at 25 n. 7.)

         On March 4, 2019, the court held oral argument to determine “how sanctions should apply and to what extent.” (See ECF No. 492 at 26; ECF No. 501.) On March 28, 2019, the court entered an order striking Dr. Rausser's February 8, 2019, expert report. (ECF No. 560.) Additionally, the court entered a briefing schedule to address Entrata's request for fees and costs for Yardi's misconduct. (See ECF No. 560 at 13.)

         “Through its Motion, Entrata requests an award from the Court of $1, 592, 503 in attorneys' fees, $349, 359 in expert fees, and $33, 247 in litigation expenses and costs . . . plus the fees and costs associated with Entrata's Motion for Sanctions . . . .” (ECF No. 573 at 2.) Yardi responds that it “offered to pay [Entrata] monetary sanctions in the amount of $750, 000, ” but argues that “[i]f the Court is inclined to consider a higher monetary award, ” it “respectfully submits that it should not exceed $1, 165, 145.” (ECF No. 613 at 11-12.) Yardi argues that “Entrata's request includes amounts that are not recoverable, notably for review of documents, travel time and work relating to motions for which sanctions were denied.” (ECF No. 613 at 12.) In reply, Entrata argues that “[a]warding Entrata the fees and costs it seeks-without Yardi's arbitrary and unsupported reductions-is the least Yardi's continued misconduct warrants.” (ECF No. 652 at 4.) Entrata clarifies that it “seeks $1, 938, 565, plus fees and costs for [its] Motion . . . .” (ECF No. 652 at 6 n. 1 (emphasis in original).)

         The court heard argument on Entrata's Motion for Monetary Sanctions, among others, on July 23, 2019. (ECF No. 832.)

         Analysis

         “It has long been understood that ‘certain implied powers must necessarily result to our Courts of justice from the nature of their institution,' powers ‘which cannot be dispensed with in a Court, because they are necessary to the exercise of all others.'” Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S.Ct. 2123, 2132, 115 L.Ed.2d 27 (1991) (citation omitted). “Among these . . . powers is a court's ability to fashion an appropriate sanction for conduct which abuses the judicial process.” Farmer v. Banco Popular of N. Am., 791 F.3d 1246, 1255 (10th Cir. 2015) (internal quotation marks omitted) (citation omitted). Indeed, courts have the authority “to impose attorney-fee sanctions upon a party for bad-faith misconduct . . . .” See id. A party ...


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