How Can Showing Good Faith Help?

When Convenience Stores Are Not Convenient

Court will grant sanctions for discovery transgressions.

In this action, convenience store franchisees sued their franchisor for breach of franchise agreements because the franchisor attempted to end franchises. Some of the stores filed to have to 7-Eleven sanctioned for discovery transgressions and moved to strike 7-Eleven’s answer.

Regarding discovery, the Magistrate Judge held an appropriate sanction against the franchisor for violation of the rule governing signing disclosures and discovery requests, requests, responses, and objections was admonition regarding the violation and that similar conduct would be addressed more harshly in the future. The Court found that 7-Eleven’s conduct caused “substantial case management and discovery problems”, but the Court did not hold 7-Eleven to “harsher” sanctions because the Court recognized that the Plaintiffs conferred with 7-Eleven to resolve their disputes, rather than going to court, which should be a last resort. Also, the Court did not think that 7-Eleven meant to hold onto relevant discovery, showing good faith on 7-Eleven’s behalf.

Consequently, the Court ordered an appropriate sanction for 7-Eleven’s failure to comply with the court order, which was the reimbursement of franchises for fees and costs incurred to obtain discovery, as their “resources were strained by unnecessary and incessant discovery disputes.” This shows that being perhaps too aggressive during discovery could land you in the land of sanctions.

Amanda, a Seton Hall University School of Law student (Class of 2016), focuses her studies in the area of family law. She is the Secretary of the Family Law Society and headed Seton Hall Law’s first involvement with National Adoption Day in November 2015. After graduation, Amanda will be clerking for a Superior Court Judge in the Family Division in New Jersey. Before law school, Amanda earned a B.A. from Penn State with a major in Communication Arts & Sciences and a Minor in Dispute Management and Resolution. In her spare time, Amanda enjoys participating in 5k and 10k races. 

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