United States District Court, D. Montana, Missoula Division
L. CHRISTENSEN, CHIEF JUDGE.
parties move for various relief. Plaintiff Federal Trade
Commission ("FTC") moves the Court to: (1) impose
sanctions against Defendant Steven V. Sann ("Sann")
and the Corporate Defendants in this case as a result of their
failure to appear for depositions and produce discovery (Doc.
240); (2) compel Defendant Terry Lane a/k/a Terry Sann
("Lane") to produce outstanding discovery (Doc.
240); (3) compel Sann to appear for depositions following the
production of the outstanding discovery (Doc. 245); and (3)
issue summary judgment in favor of the FTC and against Sann,
Lane, and the Corporate Defendants (Doc. 245). In contrast, Sann
moves the Court to: (1) issue a protective order preventing
his deposition (Doc. 242); (2) compel the FTC to produce
documents in printed form rather than in paper (Doc. 257);
(3) modify the current Scheduling Order to continue the time
for discovery, and to continue the final pretrial conference
and trial date (Doc. 256); and (4) extend the time for Sann
and the Corporate Defendants to respond to the FTC's
motions (Doc. 259). As discussed in detail below, the Court
will deny in part and grant in part these motions.
purposes of the motions at bar, the Court will not repeat the
full and complicated history of this case. Suffice to say
this case involves an alleged scheme by Defendants to defraud
consumers by "cramming" their landline telephone
bills with unwanted and unutilized telecommunications
services, including voicemail, digital fax, and call
forwarding. Through its Complaint filed January 8, 2013 (Doc.
1), the FTC alleges that Defendants' alleged scheme
violated section 5(a) of the Federal Trade Commission Act, 15
U.S.C. § 45(a), and requests injunctive and other
equitable relief, including rescission or reformation of
contracts, restitution, the refund of monies paid, and
disgorgement of unlawfully obtained assets.
who is alleged by the FTC to be the ringleader of this
scheme, was indicted in the United States District Court for
the District of Montana on 32 counts of Wire Fraud in
violation of 18 U.S.C. § 1343, 2 counts of Money
Laundering violation of 18 U.S.C. § 1957, and 1 count of
Conspiracy in violation of 18 U.S.C. § 371. Sann
ultimately pled guilty to 1 count of Wire Fraud and 1 count
of Money Laundering, and was sentenced by this Court on July
17, 2015, to twenty four months on each count to run
concurrently. Sann is currently incarcerated in Taft
Correctional Institution ("Taft CI") in Taft,
California, and states that he is scheduled to be released to
a "half-way house" in mid-February, 2017.
Sarin's criminal proceedings, this matter was
stayed. Following resolution of the criminal
matter, the Court lifted the stay and held a preliminary
pretrial scheduling conference on November 12, 2015. During
this pretrial conference, the parties discussed various
motions filed on behalf of Defendants which requested the
release of currently restrained assets to be applied towards
attorneys' fees. These assets were frozen pursuant to a
stipulated Preliminary Injunction Order entered by the Court
on May 8, 2013 (Doc. 55). Defendants' counsel stated that
if the funds were not released, they would be forced to
withdraw and Defendants would be required to represent
themselves pro se through the entirety of this litigation.
Court expressed that it understood that denial of the motions
for the release of funds would result in Defendants
representing themselves pro se and decided to set a lengthier
discovery and motions period to account for this possibility.
Further, the Court noted that Sann would most likely be
released from prison in spring of 2017 and set a bench trial
date of March 20, 2017, to allow him to appear personally.
Following the preliminary pretrial scheduling conference, the
Court denied Defendants' motions for the release of funds
and allowed counsel for Defendants to withdrawal from
representation. (Doc. 196.)
the measures taken by the Court, it appears that various
issues have arisen concerning the discovery and the motions
deadlines. As discussed above, Sann, as the self-described
representative for the Corporate Defendants in this case, has
refused to appear for scheduled depositions and now moves for
a protective Order preventing his deposition. In response to
this refusal, the FTC moves for sanctions against Sann in the
form of a Court order directing that certain facts be taken
as true pursuant to Federal Rule of Civil Procedure 37.
Defendant Lane, Sarin's wife and apparent agent for Sann,
has been instructed by Sann that she is no longer his agent
and has refused to produce several emails requested for
production. The FTC now moves to compel the production of
these emails, and to compel Sann to appear for his deposition
following the production of these emails.
Sann moves to extend the discovery deadline in this case and
to extend the time to respond to the FTC's motions until
he is released from prison and is free to conduct his case.
The Court will address these motions below.
discussed, the Court set an uncharacteristically long period
for discovery due to the potential that Defendants would be
representing themselves pro se and because Sann would be
incarcerated. However, despite this long schedule, problems
have arisen. Specifically, Sann has moved for a protective
order preventing his deposition and Lane has refused to
produce certain documents requested by the FTC. The FTC now
moves for sanctions, to compel Sann to appear at his
deposition, and to compel production of certain documents.
Motion for Sanctions and to Compel Deposition (FTC)
September 28, 2016, the Court granted the FTC's motion,
pursuant to Federal Rule of Civil Procedure 30(a)(2)(B), to
depose Sann in his individual capacity and as the Rule
30(b)(6) designee of the Corporate Defendants in this
action. (Doc. 231.) This motion was unopposed. As
such, the FTC coordinated with prison officials at Taft CI
and arranged for depositions to occur on November 7, 2016.
Despite his previous lack of objection, Sann emailed the FTC
on November 1, 2016, stating his intentions to move for a
protective order precluding the depositions of him the
Corporate Defendants. Later, on November 4, 2016, a prison
official at Taft CI emailed counsel for the FTC and stated
"Inmate Sann has changed his mind and is declining to
participate in the deposition scheduled for Monday, November
7, 2016." (Doc. 240-1 at 66.)
Sarin believed that he would be able to review the discovery
prior to his deposition in order to prepare. However, the
discovery provided by the FTC is saved to a CD-ROM and, due
to restrictions imposed on inmates at Taft CI, Sann is not
allowed to possess or review the disk. Further, due to a lack
of space in inmates' cells, Sann is unable to store the
vast majority of the discovery, which consists of tens of
thousands of pages. Because he is unable to review the
discovery and prepare for his deposition, Sann seeks a
protective order preventing his deposition until he is
released from prison and can review the discovery.
Consequently, the FTC seeks sanctions against Sann for his
alleged refusal to be deposed.
Rule of Civil Procedure 37(d) states that a court "may,
on motion, order sanctions if a party or a party's
officer, director, or managing agent-or a person designated
under Rule 30(b)(6) or 31(a)(4)-fails, after being served
with proper notice, to appear for that person's
deposition." Fed.R.Civ.P. 37(d)(1)(A)(i) (internal
punctuation omitted). Sanctions for failure to appear
(i) directing that the matters embraced in the order or other
designated facts be taken as established for purposes of the
action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or
opposing designated claims or defenses, or from introducing
designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient