govinfo:USCOURTS-njd-1_16-cv-00711-7

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UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
 
EDWARD SILIPENA, et al.,   : Hon. Joseph H. Rodriguez 
 
  Plaintiffs,    : Civil Action No. 16-711 
 
v.      : OPINION & ORDER 
  
       :           
AMERICAN PULVERIZER CO., et al.,  
       : 
  Defendants.    
       : 
 
Presently before the Court are two separate motions by the Plaintiffs seeking 
default judgment and other sanctions against Defendant Cooper [Dkt. No. 308]. In 
general terms, this matter arises from two catastrophic fires that Plaintiffs allege caused 
approximately $50 million in damages and resulted in the total loss of their business in 
Millville, New Jersey. There is no dispute that discovery in this matter has been 
arduous, has created delay, has necessitated the reopening of discovery, and has caused 
additional briefing.  This is the second time Plaintiffs have sought sanctions related to 
the Defendants piecemeal production of discovery. Plaintiffs accuse the Defendants of 
purposeful withholding of evidence for the purpose of frustrating Plaintiffs’ prosecution 
of their claims.  
Plaintiffs seek default judgment and a myriad of sanctions in the alternative, 
including attorney’s fees and costs associated with pursuing full discovery disclosures.  
The filings are vast and recount in detail the need for recall depositions. The Plaintiffs’ 
first motion for sanctions resulted in the reopening of discovery and the Court ordered 
that Defendants bear the expenses associated with Plaintiffs efforts to re-depose certain 
individuals. Plaintiffs’ present motion addresses the additional undisclosed discovery 
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that became evident during the recall depositions of certain individuals.  For this reason, 
they renewed the motion for sanctions. Defendants acknowledge the shortcomings, but 
claim the nondisclosures are the result of inadvertence and maintain that all newly 
discovered evidence has been produced as quickly as possible. 
As this Opinion is written primarily for the parties, the Court will not restate 
herein the robust factual background of this case. Plaintiffs lay out in great detail the 
history of difficulties in the discovery exchange in this matter. This motion against 
Cooper relates to additional undisclosed discovery identified during the recall 
deposition of Steve Merz during which he explained that three project numbers were 
assigned to the work it did for Plaintiffs’ various projects. Cooper assigned internal 
project number 856 (“Project 856”) to the work it performed on Plaintiffs’ automobile 
sorting and shredding system (the “System”). (Merz Dep., (Vol. III) p. 865:19-23). 
“Project 946”was assigned for inspection work Cooper employee Dave Anderson 
performed at the AIMI facility. (Id. at 866:4-10).  A third number, “Project 993”, relates 
to the post fire investigation work Merz performed for Plaintiffs in support of Plaintiffs’ 
insurance claims; payment for this work is at issue in Cooper’s Counterclaims. (Id. at pp. 
866:22-867:3.)  
According to Plaintiffs, Merz admits that Cooper failed to preserve and/or search 
for documents and search for all employees’ documents, apart from his, Mr. Anderson’s 
and Mr. Ostapink’s files.  (Fidanza Cert. ¶23.) Specifically, Plaintiffs complain that 
Cooper’s production fails to include are any documents from James Watson, who has 
email communications relevant to Project 856, among at least six other employees. 
(Merz Dep., (Vol. III) p. 816:19-823:25).  In addition, there were no other files or emails 
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produced from any Cooper employees who worked on Project 856.  The Project 993 
information was stored on Merz’ personal server and were, therefore, not searchable on 
Cooper’s corporate server, resulting in only the Invoice for this work being disclosed 
during discovery. (Id. at 830:13-22).  It became evident during Merz’ recall deposition 
that additional discovery had not been disclosed.  Cooper characterizes the evidence as 
falling into two categories: 1) email maintained by David Anderson and 2) video and 
photos taken by David Anderson. There is also a revised report following the December 
2012 fire at the Plaintiffs’ facility. 
According to Cooper, the discovered email relates to electrical issues powering 
the facility and the equipment and therefore is not relevant to the issues in this 
litigation. (See Merz Cert.¶6b). Cooper characterizes the files containing photos and 
video of the AIMI plant as being relevant to the December 12 fire, which is not at issue 
in this case.  In addition, Cooper claims that the photographs and video recordings are 
“somewhat” duplicative of previously disclosed evidence.  
In terms of compliance with its discovery obligations, Cooper notes it learned 
that Merz identified undisclosed documents during his recall deposition, it disclosed 
that fact by way of letter to the Court and all parties dated February 27, 2021. Cooper 
confesses that it sent that letter before it reviewed the contents of the documents 
resulting in the disclosure containing more documents than Cooper initially advised. 
Shortly thereafter, Cooper sent an email, dated March 2, 2021, to Plaintiffs’ 
counsel to supplement its document production by providing a link to download the file 
“Project 946.zip.” Cooper also agreed that the briefing schedule should be altered to 
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address the late disclosures and accommodate the need for additional time. (See King 
Cert., Ex. B).  But Cooper’s haste caused more confusion and frustration. 
Cooper notes that its March 2, 2021 email attachment was incorrect.  (Id.,¶10 and 
¶11). Cooper states in its brief: 
Inadvertently attachment to the March 2, 2021 email was the March 30, 
2020 letter serving Cooper’s First Supplemental Production. The letter that 
should have been attached to the March 2, 2021 email is the March 2, 2021 
letter attached at Exhibit C to the Certification of Counsel. (See Exhibit C to 
the Certification of Counsel ¶10 and ¶11). In that letter it states: “It was 
initially advised that these files consisted of a single video and revised 
report. However, there is a single folder that contains 14 v ideos. There is a 
folder containing 109 photos. There are 19 email [s]. There are 14 files 
associated with the report. I understand additional email will be 
forthcoming.” (See Exhibit C to the Certification of Counsel ¶10 and ¶11). 
Unfortunately, this inadvertent oversight was not realized until the filing of 
this motion. 
(Cooper Opposition Br., pp. 11-12). 
Cooper argues that it endeavored to organize the files using bates numbering, and 
that process was delayed and ultimately botched. To mitigate the delay, Cooper utilized 
several tools to assist Plaintiffs’ necessary review of the new information. (King Cert, Ex. 
D, ¶20). Cooper sets forth the following as the reasons  
Unfortunately, by telephone conference on or about April 15, 2021, counsel 
for Cooper was advised that NJL found a discrepancy in the instructions 
and functionality of the software. (See Certification of Counsel ¶33). NJL 
discovered that despite the claim that "any attachments to the email 
messages" would be included, that this, in fact, is not the case. (See 
Certification of Counsel ¶34). This resulted in the software failing to identify 
and produce certain email related to a single string of email. (See 
Certification of Counsel ¶35 -  ¶40). To resolve the error, NJL supplied 
Counsel for Cooper with the missing emails and attachments within that 
thread which were not previously produced. In addition, NJL produced all 
of the email in unthreaded format. (See Certification of Counsel ¶41). Those 
documents have been provided to all parties. (See Certification of Counsel 
¶42). 
Cooper Opposition Br., pp.13-14. 
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 Plaintiffs rightfully argue that the myriad of late evidentiary production 
and the folly of Cooper’s attempts to mitigate its deficiencies is alarming. 
Cooper’s inadequate method of maintaining and then searching for relevant 
documents, emails, and photographs has frustrated the progression of this case 
and is cause for concern. The volume of discovery in this case is staggering, and 
Plaintiffs have met the challenge of organizing the issues for the Court.  It is 
understandable that Plaintiffs are frustrated by the late production of thousands 
of documents, most of which have been produced after the filing of dispositive 
motions. 
 Since the filing of Plaintiffs’ present motion, Cooper certifies that all the 
documents have been produced and that there is nothing outstanding. 
Standard of Review 
Under Federal Rule of Civil Procedure 26(a), except under certain circumstances 
not present here, a party must, without awaiting a discovery request, provide to the 
other parties: 
(i) the name and, if known, the address and telephone number of each 
individual likely to have discoverable information — along with the subjects 
of that information — that the disclosing party may use to support its claims 
or defenses, unless the use would be solely for impeachment; 
(ii) a copy — or a description by category and location — of all documents, 
electronically stored information, and tangible things that the disclosing 
party has in its possession, custody, or control and may use to support its 
claims or defenses, unless the use would be solely for impeachment. 
FED. R. CIV. P. 26(a)(1)(A)(i)-(ii).   
Additionally, [a] party who has made a disclosure under Rule 26(a) — or who has 
responded to an interrogatory, request for production, or request for admission — must 
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supplement or correct its disclosure or response ... in a timely manner if the party learns 
that in some material respect the disclosure or response is incomplete or incorrect. FED. 
R. CIV. P. 26(e)(1)(A). 
Rule 37 addresses the ramifications of a party failing to satisfy Rule 26’s 
requirements: 
If a party fails to provide information or identify a witness as required by 
Rule 26(a) or (3), the party is not allowed to use that information or witness 
to supply evidence on a motion, at a hearing, or at a trial, unless the failure 
was substantially justified or is harmless. 
FED. R. CIV. P. 37(c)(1).  
Alternatively, the court “may order payment of the reasonable expenses, 
including attorney's fees, caused by the failure; ... may inform the jury of the party's 
failure; and ... may impose other appropriate sanctions.” Id. In determining whether to 
impose sanctions pursuant to Rule 37(c)(1), courts will consider: “(1) prejudice or 
surprise to the [opposing party]; (2) the ability of [the opposing party] to cure the 
prejudice; (3) the likelihood of disruption; and (4) the [non-disclosing party's] bad faith 
or unwillingness to comply.” Wachtel v. Health Net, Inc., 239 F.R.D. 81, 104-05 (D.N.J. 
2006) (citing Newman v. GHS Osteopathic, Inc., 60 F.3d 153, 156 (3d Cir. 1995)). 
Moreover, a court has the inherent power to determine whether a fraud has been 
committed upon the court. This requires a party to prove “clearly and convincingly” that 
the opposing party “has sentiently set in motion some unconscionable scheme 
calculated to interfere with the judicial system's ability impartially to adjudicate a 
matter by improperly influencing the trier or unfairly hampering the presentation of the 
opposing party's claim or defense.” Perna v. Elec. Data Sys. Corp., 916 F. Supp. 388, 
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397 (D.N.J. 1995) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 
1989)). In deciding to enforce its inherent powers, a district court should consider the 
same factors as it uses in applying Rule 37. See Republic of the Philippines v. 
Westinghouse Elec. Corp., 43 F.3d 65, 74 (3d Cir. 1994). The following factors must be 
considered prior to the court dismissing a case as a sanction for misconduct: 
(1) the extent of the party's personal responsibility; (2) the prejudice to the 
adversary caused by the failure to meet scheduling orders and respond to 
discovery; (3) a history of dilatoriness; (4) whether the conduct of the party 
or the attorney was willful or in bad faith; (5) the effectiveness of sanctions 
other than dismissal, which entails an analysis of alternative sanctions; and 
(6) the meritoriousness of the claim or defense. 
Poulis v. State Farm Fire & Casualty Co., 747 F.2d 863, 868 (3d Cir. 1984). 
Discussion 
As noted above, Plaintiffs allege that Cooper’s discovery violations warrant the 
desired sanctions: the failure to preserve evidence, the failure to timely disclose, the 
alleged cover-up once Cooper was exposed for failing to produce, the intentional 
withholding of evidence, and the failure to produce evidence from all the Cooper 
employees assigned to the relevant projects.  
The Court will first consider the Rule 37 factors outlined above. To the extent that 
Plaintiffs were prejudiced by these issues, the Court finds that, by the Court’s actions or 
reopening discovery and the Court’s Opinion permitting Plaintiffs’ experts, the prejudice 
has been substantially mitigated. The Court finds that, given the voluminous discovery 
and the fact that the previously undisclosed discovery has been completed, is adequate 
to alleviate any prejudice as to either party. 
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Additionally, the Court rejects the assertion that these issues were the result of 
Defendants’ willful or bad faith conduct. Voluminous discovery was exchanged in this 
case, which included portions of the videos and photos in question and documents 
referring to those videos. While it is regrettable that evidence has been withheld and the 
Defendants supplied erroneous attachments, the Court, at this time will not make a 
finding that Defendants intentionally “buried” the relevant documents and evidence in 
this case. The Court will find, therefore, that Defendants’ actions were not in bad faith. 
In addition, the Court will hold that, under Rule 37, sanctions in the form of 
attorney's fees and costs are not appropriate in this instance. It follows that default 
judgment —  a decidedly more extreme sanction —  is also inappropriate here.  
With respect to the Poulis factors, the Court finds that each of them, too, cut 
against imposing default judgment. Several of the Poulis factors follow the same 
discussion as above: Defendants personal responsibility is negligible here, as the Court 
finds that the non-disclosures were unintentional; any prejudice that resulted was 
already addressed by the Court; and Defendants did not act willfully or in bad faith. As 
to the remaining factors, while there is evidence of Defendants’ history of dilatoriness, 
once Defendants learned of the non-disclosures, they turned it over promptly. The Court 
has already determined that other sanctions are not necessary, meaning that the fifth 
Poulis factor cuts against default judgment. And finally, the sixth factor —  the 
meritoriousness of Defendants’ claim or defense —  is not relevant here given that 
Defendants’ summary judgment motions have largely been denied.
 Examples of 
prejudice are “the irretrievable loss of evidence, the inevitable dimming of witnesses' 
memories, or the excessive and possibly irremediable burdens or costs imposed on the 
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opposing party.” Scarborough v. Eubanks, 747 F.2d 871, 876 (3d Cir. 1984). We have 
also said: “‘prejudice’ for the purpose of Poulis analysis does not mean ‘irremediable 
harm,’ the burden imposed by impeding a party's ability to prepare effectively a full and 
complete trial strategy is sufficiently prejudicial.” Ware v. Rodale Press, Inc., 322 F.3d 
218, 222 (3d Cir. 2003). Plaintiffs have a full record to prosecute at trial. 
In sum, the various factors regarding the imposition of sanctions indicate that 
sanctions are not appropriate.  
For the reasons set forth herein, IT IS on this 9th day of October 2024 hereby, 
ORDERED that Plaintiffs’ motion for default judgment and other sanctions 
against Defendant Cooper [Dkt. No. 308] is DENIED without prejudice. 
 
            
      Hon. Joseph H. Rodriguez, USDJ 
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