Comeens et al v. HM Operating Incorporated et al

Filing 85

MEMORANDUM OPINION AND ORDER - The supplemental briefing has since been completed. (Docs. 80 (Sealed) & 84 (Sealed)). The undersigned having considered the briefs and arguments at the hearing, the motions are GRANTED. Accordingly, Plaintiffs motion to compel Redpaths deposition, (doc. 66 ), is due to be DENIED. Their alternative motion to compel the Funds to provide up-to-date contact information for Redpath, (doc. 66 ), is due to be GRANTED. Plaintiffs motion to modify the order granting limited jurisdictional discovery to allow for the deposition of Dennis Kebrdle, (doc. 70 ), is due to be GRANTED. Based on the foregoing, it is ORDERED: 1. Plaintiffs motion to compel the deposition of Brian Redpath, (doc. 66 ), is DENIED. 2. Plaintiffs alternative motion for production of Redpaths contact information, (doc. 66 ), is GRANTED. The Funds will, by June 25, 2015, provide Plaintiffs counsel with Redpaths phone number and his so cial security number, both of which will be subject to the Confidentiality Order already governing this case, (doc. 57). Further, Plaintiffs will have until July 9, 2015, to serve Redpath for deposition. 3. Plaintiffs motion to modify the orde r granting limited jurisdictional discovery to allow for the deposition of Dennis Kebrdle, (doc. 70 ), is GRANTED. 4. The time for jurisdictional discovery is extended to August 3, 2015. No further extensions will be allowed absent exc eptional circumstances. 5. The Funds are to provide the other parties with their list of proposed corrections to the May 27, 2015 motion hearing transcript by June 19, 2015; the parties are to meet and confer in an attempt to settle any dispute; and a joint status report, setting out any agreed-upon changes and the parties respective positions on any remaining disputes, is due by June 26, 2015. Signed by Magistrate Judge John H England, III on 6/18/2015. (KEK)

FILED
2015 Jun-18 AM 10:42
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
JASPER DIVISION
CHRIS COMEENS, et al.,
Plaintiffs,
v.
HM OPERATING, INC., et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)

Case Number: 6:14-cv-00521-JHE

MEMORANDUM OPINION AND ORDER
On April 24, 2015, Plaintiffs moved to compel the deposition of Brian Redpath, formerly
of Linsalata Capital Management, LLC, who Plaintiff Chris Comeens had attested to being
extensively involved with the facility at issue. (Doc. 66). On May 15, 2015, Plaintiffs moved to
modify the Court’s order granting jurisdictional discovery to allow them to take the deposition of
Dennis Kebrdle, an agent of Defendant Chikol, LLC, who was involved with the facility’s
closure. (Doc. 70). Defendants Linsalata Capital Partners Fund IV, L.P. and Linsalata Capital
Partners Fund IV N-Q, L.P. (“the Funds”) opposed both motions. (Docs. 67 & 75). A telephone
motion hearing was held on May 27, 2015,1 at which the undersigned determined further briefing
was necessary, specifically addressing which alleged gaps in prior testimony Plaintiffs believed
Kebrdle’s testimony could fill and how that testimony would be relevant to the jurisdictional

1

The court reporter has advised the Court there is a dispute between the parties regarding
portions of the transcript from the May 27, 2015 motion hearing. It is the undersigned’s
understanding the parties have unofficial copies of the transcript and the Funds have compiled a
list of corrections. The Funds are to provide their list to the other parties by June 19, 2015. The
parties are then to meet and confer in an attempt to settle the dispute and file a joint status report
by June 26, 2015, setting out any agreed-upon changes and the parties’ respective positions on
any remaining disputes.

question, with particular reference to the factors set out in Duff v. Southern Railway Co., 496 So.
2d 760, 762 (Ala. 1986), and United Steelworkers of America v. Connors Steel, 855 F.2d 1499,
1505 (11th Cir. 1988). (Doc. 76). The supplemental briefing has since been completed. (Docs.
80 (Sealed) & 84 (Sealed)).2 The undersigned having considered the briefs and arguments at the
hearing, the motions are GRANTED.
I. Analysis
A. Motion to Compel Deposition of Brian Redpath
In addition to stating Redpath was a regular at the factory and claimed to work for
Linsalata, Comeens’s affidavit further asserted that Redpath had brought in the CEO of HM
Operating and subsequently fired him; that Redpath had answered to Linsalata, not HM
Operating; and Redpath came regularly to the factory and gave direction to HM Operating
employees until “the latter part of 2013.” (Doc. 66 at 4-6). Plaintiffs assert the Funds responded
to interrogatories that Redpath was a director of HM Holding Company and could be contacted
through the Funds’ counsel, and then responded to Plaintiffs’ request to depose Redpath by
stating he was not an employee of the Funds or under their control but would work with
Plaintiffs on scheduling a deposition. (Id. at 6-7). The Funds subsequently informed Plaintiffs
Redpath would not voluntarily sit for a deposition and stated they would oppose any efforts to
depose him. (Id. at 7). Plaintiffs have been unable to serve a subpoena on Redpath personally,
(id. at 7-8), and now seek to compel his deposition or, alternatively, have the Funds provide
contact information, (id. at 11).
The Funds respond that not only do they not have control over Redpath to produce him
for deposition, but Plaintiffs are also not entitled to his deposition under the discovery order
2

These briefs were sealed under the Agreed Confidentiality Order, (doc. 57), as
containing confidential deposition testimony and exhibits. (Docs. 78, 79, 82, & 83).
2

because Redpath was no longer involved with the facility after late 2013 and Plaintiffs are only
entitled to three depositions “from the Linsalata Funds” and to discovery “related to the facility,
before and around the decision to close it.” (Doc. 67 at 6). They further contend they should not
have to provide his contact information because it was not required by the discovery order or
Plaintiffs’ own discovery requests. (Id. at 7-8). In reply, Plaintiffs stand on their original
motion, contending the Funds have not argued the requested relief would cause any undue
burden or prejudice but merely do not want to cooperate. (Doc. 68 at 1-2).
Although the evidence does indicate Redpath was no longer involved with the facility at
the time of the closure, that fact does not make his testimony completely irrelevant. The Funds
correctly assert the jurisdictional inquiry is to what extent the Funds had connections with HM
Operating and HM Holding at the time of the facility’s closure, (doc. 67 at 7); however,
establishing the extent of connections shortly before the closure would provide important context
to the remaining evidence and is not entirely irrelevant.

Evidence indicates Redpath was

involved with the facility up to the end of 2013 and the closure occurred in March 2014. If
Plaintiffs can serve Redpath, they should be allowed to depose him. The Funds are also correct,
however, that, because Redpath is no longer an employee of any of the Linsalata entities, they
cannot compel him to sit for deposition. The Funds have indicated, though, that they have a
phone number, by which they have been contacting Redpath, and his social security number.
Accordingly, Plaintiffs’ motion to compel Redpath’s deposition, (doc. 66), is due to be
DENIED.

Their alternative motion to compel the Funds to provide up-to-date contact

information for Redpath, (doc. 66), is due to be GRANTED.

3

B. Motion Regarding Deposition of Dennis Kebrdle
Plaintiffs also move to take the deposition of Dennis Kebrdle because they believe he can
clear up the Funds’ allegation Chikol was solely in charge of the closing and can fill in gaps in
the deposition testimony of Mike Faremouth and Steve Perry. (Doc. 70 at 1-2). Plaintiffs
originally asserted these “gaps” in Faremouth and Perry’s testimony but did not identify the gaps
or why Kebrdle could fill them in. (Id. at 2). In their supplemental briefing on that issue,
Plaintiffs list fifteen instances in which Faremouth and Perry could not answer deposition
questions involving Kebrdle and set out which jurisdictional factor Plaintiffs believe the
testimony would answer. (Doc. 80).
As a threshold issue, Plaintiffs repeatedly refer to the issue of who was responsible for
the closure of the facility and the failure to provide a timely WARN notice as “the heart of the
specific jurisdictional question.” (Doc. 80). The Funds assert this is incorrect and the “only
inquiry before the Court is whether the Linsalata Funds have sufficient connections to HM
Operating and HM Holding to be subject to jurisdiction in Alabama.” (Doc. 84 at 2). The
Funds’ statement of the inquiry is correct, but it is not so clear Plaintiffs’ statement is
“incorrect.” To the extent Plaintiffs mean “responsible” in the sense of “liable,” the statement
would be incorrect because that issue would not be the jurisdictional issue, but the ultimate issue;
however, to the extent they simply mean “who was responsible” in the sense of the person or
entity who decided or directed the facility be closed, that is a proper jurisdictional inquiry that
goes to whether the HM entities were operating independently and with proper formality. The
Court assumes Plaintiffs intended the latter sense.
Two instances in particular that clearly go to the jurisdictional question are (1) Perry’s
hearsay testimony about a conversation with Kebrdle in which Kebrdle discussed the closure,

4

and (2) Perry’s statements at various times that Chikol, Kebrdle, or others not associated with the
Funds directed the facility closure. (Doc. 80 at 7). Plaintiffs contend they would ask Kebrdle
who made the decision to close the facility and, if it was he, on whose behalf he was acting in
doing so. (Id. at 8). Kebrdle’s testimony regarding who directed the facility closure is certainly
relevant to the jurisdictional issue.
The Funds contend Perry and Faremouth have clearly testified they did not instruct,
direct, or control HM after they left the board; any suggestion Kebrdle would testify differently
is “pure speculation”; and the Court’s inquiry should end here “because Plaintiffs cannot escape
the undisputed testimony that individuals associated with the Linsalata Funds had no part in the
decision to close the [facility] and terminate employees, and additional testimony from Kebrdle
will not change that clearly established fact.” (Doc. 84 at 3-4 & 9-10). While stating Kebrdle
will testify differently than Perry and Faremouth may be speculative, the implied assertion he
would testify in perfect accord with Perry and Faremouth is based on nothing more than the
assumption Perry and Faremouth are not only telling the truth but the whole truth (not just as
they know and understand it but as to all relevant events). In effect, the Funds’ argument is
Plaintiffs should not be allowed to depose Kebrdle for potentially disputing testimony because
Perry and Faremouth’s testimony is currently undisputed. As an insider of the business at issue,
Kebrdle will likely be able to directly answer questions about the closure decision, and his
testimony would be particularly useful to determination of the jurisdictional question.
Plaintiffs also point to emails sent to Perry as evidence Kebrdle believed he had to keep
the Funds up to date on goings-on regarding the pending sale and closing of the facility. (Doc.
80 at 8-13).

Plaintiffs assert Kebrdle’s testimony about the emails would go toward the

independence and formal legal requirements factors of the jurisdictional analysis. (Id.). The

5

Funds contend generally that the email exchanges between Kebrdle and Perry were just “FYIs”
to an investor. (Doc. 84 at 6-8). Seeing as the email exchanges are reasonably susceptible to
both interpretations, Kebrdle’s testimony could clarify the purpose of the emails and clear up to
what extent Kebrdle was reporting to an investor versus an unofficial superior.
Plaintiffs also point to evidence (1) Kebrdle and HM Operating CEO Sam Federico
referred to Perry, Faremouth and Redpath as “LinCap” (a reference to Linsalata Capital) instead
of as directors and officers of the HM entities and (2) some of the “Chikol Interim Reports”
generated by Federico and/or Kebrdle about the facility were sent only to “LinCap” and not other
interested parties. (Doc. 80 at 13-15). Plaintiffs contend this indicates control from the Linsalata
entities instead of an independent board of directors, as well as potential breakdown in the legal
formalities. (Id.). The Funds contend, relying solely on Perry and Faremouth’s testimony, that
the undisputed evidence shows the reference in the reports was a “drafter’s error.” (Doc. 84 at
9). They also assert there is nothing improper about a company sending periodic updates to an
investor. (Id.). As previously stated, neither of these are reasons to prevent Plaintiffs from
obtaining Kebrdle’s side of the story.
Accordingly, Plaintiffs’ motion to modify the order granting limited jurisdictional
discovery to allow for the deposition of Dennis Kebrdle, (doc. 70), is due to be GRANTED.
II. Conclusion
Based on the foregoing, it is ORDERED:
1. Plaintiffs’ motion to compel the deposition of Brian Redpath, (doc. 66), is DENIED.
2. Plaintiffs’ alternative motion for production of Redpath’s contact information, (doc.
66), is GRANTED. The Funds will, by June 25, 2015, provide Plaintiffs’ counsel
with Redpath’s phone number and his social security number, both of which will be
subject to the Confidentiality Order already governing this case, (doc. 57). Further,
Plaintiffs will have until July 9, 2015, to serve Redpath for deposition.

6

3. Plaintiffs’ motion to modify the order granting limited jurisdictional discovery to
allow for the deposition of Dennis Kebrdle, (doc. 70), is GRANTED.
4. The time for jurisdictional discovery is extended to August 3, 2015. No further
extensions will be allowed absent exceptional circumstances.
5. The Funds are to provide the other parties with their list of proposed corrections to
the May 27, 2015 motion hearing transcript by June 19, 2015; the parties are to meet
and confer in an attempt to settle any dispute; and a joint status report, setting out any
agreed-upon changes and the parties respective positions on any remaining disputes,
is due by June 26, 2015.
DONE this 18th day of June 2015.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE

7