General Steel Domestic Sales, LLC v. Chumley et al

Filing 74

ORDER denying Defendants' 71 Motion to Reconsider Order Denying Defendants' Oral Motion to Compel Production of Plaintiff's Audio Files, by Magistrate Judge Kristen L. Mix on 6/22/11.(lsw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 10-cv-01398-PAB-KLM
GENERAL STEEL DOMESTIC SALES, LLC, d/b/a GENERAL STEEL CORPORATION,
a Colorado limited liability company,
Plaintiff,
v.
ETHAN DANIEL CHUMLEY, individually, and
ATLANTIC BUILDING SYSTEMS, LLC, a Delaware corporation, doing business as
ARMSTRONG STEEL CORPORATION,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Defendants’ Motion to Reconsider Order
Denying Defendants’ Oral Motion to Compel Production of Plaintiff’s Audio Files
[Docket No. 71; Filed June 17, 2011] (the “Motion”). Plaintiff filed a Response [Docket No.
73] in opposition to the Motion on June 21, 2011. On June 15, 2011, the Court denied
Defendants’ Oral Motion to Compel Production of Plaintiff’s Audio Files. Order [Docket No.
69]. Defendants seek reconsideration of this Order [#69] because (1) when taken together
with a prior Minute Order [Docket No. 54], it has the effect of precluding them from
obtaining information that the Court has recognized as relevant and discoverable, and (2)
they were not afforded the opportunity to respond to assertions in Plaintiff’s Memorandum
[Docket No. 70-3].
A motion for reconsideration “is an extreme remedy to be granted in rare
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circumstances.” Brumark Corp. v. Samson Res. Corp., 57 F.3d 941, 944 (10th Cir. 1995).
It is well established in the Tenth Circuit that grounds for a motion to reconsider are
ordinarily limited to the following: “(1) an intervening change in the controlling law; (2) new
evidence previously unavailable; and (3) the need to correct clear error or prevent manifest
injustice.” Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citing
Brumark, 57 F.3d at 948). Thus, a motion to reconsider is typically “appropriate [only]
where the court has misapprehended the facts, a party’s position, or the controlling law.
It is not appropriate to revisit issues already addressed or advance arguments that could
have been raised in prior briefing.” Id.
Here, Defendants contend that the Court misapprehended their ability to “discover
information about Plaintiff’s employees’ statements during sales calls” by canvassing
Plaintiff’s past and current customers. Order [#69] at 6. Defendants argue that they in fact
cannot canvass Plaintiff’s past and current customers because they simply do not know
who these customers are. Motion [#71] at 3 (“Defendants had and have no comprehensive
list of Plaintiff’s customers, nor any way to obtain such a list.”). Defendants made an effort
to learn the identities of Plaintiff’s customers by serving the following interrogatory on
Plaintiff: “Identify, including name and contact information, each person or entity to which
General Steel has sold products or services to since 2007.” Id. at 2 n.1. When Plaintiff
objected to this interrogatory, Defendants made an oral motion to compel a response
during a telephonic discovery hearing held on February 24, 2011.

Courtroom

Minutes/Minute Order [#54]. The Court denied this oral motion. Id. Defendants now argue
that because they are precluded from obtaining a list of Plaintiff’s customers directly from
Plaintiff in response to an interrogatory, they have no other means of identifying Plaintiff’s
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customers. Thus, Defendants argue, the Court should reconsider one basis for its Order
[#69], i.e., the notion that Defendants have a practical means to obtain information about
Plaintiff’s employees’ statements during sales calls other than actually listening to
recordings of such calls.
Defendants’ argument is unpersuasive. As an initial matter, the Court’s statement
that “Defendants have provided no explanation as to why they cannot canvass Plaintiff’s
past and current customers in order to discover information about Plaintiff’s employees’
statements during sales calls” was merely one basis for its decision to deny Defendants’
oral motion to compel. Order [#69] at 6. The Court primarily based its decision on its
findings that (1) production of audio recordings of Plaintiff’s telephone calls would be unduly
burdensome and expensive, and (2) Defendants did not sufficiently “‘explain why the
extensive amount of information [they] seek is of such importance that it justifies imposing
an extreme burden on [Plaintiff].’” Id. at 5 (quoting Thermal Design, Inc. v. Guardian Bldg.
Prods., Inc., No. 08-C-828, 2011 WL 1527025, at *1 (E.D.Wis. Apr. 20, 2011) (unreported
decision)). Standing alone, these two findings sufficiently justify the Court’s Order [#69].
Moreover, the fact that the Court denied Defendants’ motion to compel a response
to a very broad interrogatory seeking a list of all of Plaintiff’s customers for the past four
years, Minute Order [#54], does not establish that the Court has foreclosed all avenues by
which Defendants may request customer information from Plaintiff.

For example,

Defendants could serve more narrowly tailored interrogatories or question Plaintiff’s
representative about customer information during a deposition conducted pursuant to Fed.
R. Civ. P. 30(b)(6). The Court also notes that Plaintiff and Defendants are competitors in
the same market. It is therefore likely that Defendants have at least some idea of the
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identities of some of Plaintiff’s customers and potential customers. The Court’s prior Order
[#54] does not hinder Defendants’ ability to make their own investigative efforts.
Defendants’ second argument, i.e., that they were not afforded an adequate
opportunity to respond to the arguments in Plaintiff’s Memorandum, is also unavailing.
Simply put, the Court was not required to permit Defendants to reply to Plaintiff’s
arguments before ruling on their oral motion to compel. D.C.COLO.LCivR 7.1C (“Nothing
in this rule precludes a judicial officer from ruling on a motion at any time after it is filed.”).
Moreover, Defendants have not attempted to assert legitimate legal or factual grounds on
which they would have opposed Plaintiff’s persuasive arguments that production of the
audio recordings is simply too burdensome. Simply arguing that they should have been
given an opportunity to respond to Plaintiff’s Memorandum without at least suggesting the
substantive basis for such a response is unpersuasive.
As a final matter, the Court notes that Defendants’ purported need to listen to audio
recordings of Plaintiff’s sales calls has been seriously eroded in the time since Defendants
made their oral motion to compel on May 27, 2011.

Defendants sought the audio

recordings in order to discover information relevant to their counterclaims. On June 10,
2011, District Judge Phillip A. Brimmer dismissed Defendants’ “first counterclaim for
commercial disparagement, second counterclaim for deceptive trade practices, and fourth
counterclaim for civil conspiracy.” Order [Docket No. 67] at 14. Defendants’ only remaining
counterclaim is for “tortious interference with prospective business advantage.” Id. at 10.
While Plaintiff’s employee’s statements made during sales calls may be relevant to this
counterclaim, this potential relevance is a thin reed upon which to rest a request for
production of more than 463,000 recorded telephone calls. See Order [#69] at 3. In short,
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the rationale set forth in the Court’s Order [#69] denying Defendants’ oral motion to compel
is even stronger in light of Judge Brimmer’s dismissal of three counterclaims.
IT IS HEREBY ORDERED that the Motion [#71] is DENIED.

DATED: June 22, 2011 at Denver, Colorado.

BY THE COURT:
s/ Kristen L. Mix
Kristen L. Mix
United States Magistrate Judge

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