CenturyLink, Inc. v. Alpine Audio Now, LLC et al
ORDER Granting in part and Denying in part 37 Plaintiff CenturyLink, Inc.s Unopposed Motion for Entry of Preservation Order and to Obtain Expedited Discovery Regarding Defendant Telaris Enhanced Services, LLC., by Magistrate Judge Kristen L. Mix on 1/15/2016.(evana, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 15-cv-01973-MSK-KLM
ALPINE AUDIO NOW, LLC,
TELARIS ENHANCED SERVICES, LLC, and
BLUETONE COMMUNICATIONS, LLC,
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Plaintiff CenturyLink, Inc.’s Unopposed Motion
for Entry of Preservation Order and to Obtain Expedited Discovery Regarding
Defendant Telaris Enhanced Services, LLC [#37]1 (the “Motion”).
The Motion is
unopposed by Defendants Alpine Audio Noa, LLC and Bluetone Communications, LLC.
The Motion seeks entry of an order requiring that Defendant Telaris Enhanced Services,
LLC (“Telaris”) and associated individuals and entities preserve documents and other
materials relevant to the lawsuit, including those described in Exhibit 9 [#37-9]. Motion
[#37] at 18. The Motion also asks permission to serve subpoenas on individuals and
entities pursuant to Fed. R. Civ. P. 26(d)(1), prior to the Fed. R. Civ. P. 26(f) conference.
“[#37]” is an example of the convention the Court uses to identify the docket number
assigned to a specific paper by the Court’s case management and electronic case filing system
(CM/ECF). The Court uses this convention throughout this Order.
In this case, Plaintiff alleges that Defendant Telaris, a provider of dedicated switched
voice telecommunications services, and an underlying telecommunications carrier for
Defendant Bluetone inflated its bills to Plaintiff. Compl. [#1] ¶¶ 4, 17. In short, Plaintiff
alleges that Defendant Telaris routed certain long-distance telephone calls to servers in one
location while reporting to Plaintiff that the calls terminated in a different location, “thereby
artificially inflating the number and duration of calls routed through [Defendants] Bluetone
and Telaris, and causing [Plaintiff] CenturyLink to overpay [Defendants] Bluetone and
Telaris accordingly.” Id. ¶ 24.
As noted in the Motion, on October 9, 2015, the Clerk of the Court entered default
[#17] as to Defendant Telaris.
Pursuant to Fed. R. Civ. P. 26(d), “a party may not seek discovery from any source
before the parties have conferred as required by Rule 26(f),” unless authorized by a court
order or agreement of the parties or when otherwise allowed under the Rules of Civil
Procedure. A court order allowing expedited discovery will issue only upon a showing of
good cause. Qwest Comm’s Int'l, Inc. v. Worldquest Networks, Inc., 213 F.R.D. 418, 419
(D. Colo. 2003); Pod-ners, LLC v. N. Feed & Bean of Lucerne LLC, 204 F.R.D. 675, 676
(D. Colo. 2002).
With regard to Plaintiff’s request for a preservation order, the Courts “must exercise
restraint in using [its] inherent authority to issue preservation orders.” Bright Solutions for
Dyslexia, Inv. v. Doe 1, 15-cv-01618-JSC, 2015 WL 5159125, at *2 (N.D. Cal. Sept. 2,
2015) (citation omitted). Before a preservation order is entered, the movant must show that
there is a significant concern that potentially relevant evidence will be destroyed causing
harm to the opposing party. See id. (citations omitted).
In determining whether a
preservation order is necessary, courts have considered:
(1) the level of concern the court has for the continuing existence and
maintenance of the integrity of the evidence in question in the absence of an
order directing preservation of the evidence; (2) any irreparable harm likely
to result to the party seeking the preservation of the evidence absent an
order directing preservation; and (3) the capability of an individual, entity, or
party to maintain the evidence sought to be preserved.
Id. (citations omitted); Daniel v. Coleman Co., No. 06-5706 KLS, 2007 WL 146312, at *2
(W.D. Wash. May 17, 2007).
Here, Plaintiff argues that relevant evidence may be destroyed because Defendant
Telaris dissolved in response to Plaintiff’s filing of the instant lawsuit. Motion [#37] at 7.
Plaintiff provides documentation regarding Telaris’ status, including a declaration of one of
Plaintiff’s attorneys describing a conversation he had with Telaris’ counsel stating that the
entity had dissolved. See Motion, Ex. 10 [#37-10] ¶ 2 (“Mr. Josephson also stated that TES
had dissolved, and he expected to have difficulty collecting his unpaid legal bills from
TES.”). As Plaintiff argues, “[a] dissolved LLC is unlikely to retain its records indefinitely,
particularly when [Telaris’s] practice was apparently to delete records after just 28 days
while it was still in operation.” Motion [#37] at 7 (citing to Motion, Ex. 6 (Declaration of
Michelle Balke)). Plaintiff also provides information showing that Defendant Telaris’ attorney
registered a new entity, Telaris Communications LLC, with the North Carolina Secretary
of State on July 29, 2015, Motion, Ex. 14 [#37-14], with a street address at the same
location as the registered address of the now-dissolved Defendant. See Motion, Ex. 3
With regard to the nonparties named in the Motion, Plaintiff provides documents to
establish their relationships to Defendant Telaris. Mr. Bradish and Mr. Engbers were the
CEO and President of Defendant Telaris. Id. In addition, Mr. Lammert is a CPA who
prepared Defendant Telaris’ taxes. Motion, Ex. 5 [#37-5]. Sterling Business Law is Telaris’
attorney, Mr. Josephson’s, law firm. Motion, Ex. 8 [#37-8]. According to Plaintiff, Mr.
Dempsay was Defendant Telaris’ Vice President of Operations. Motion [#37] at 15.
Mangrove Holdings, LLC is an entity owned by Mr. Bradish that was a shareholder of
Defendant Telaris. Motion, Ex. 1 [#37-1]. Finally, Telaris Communications Group was
Defendant Telaris’ parent corporation. Motion, Ex. 2 [#37-2]. The relationships between
these individuals and entities and Defendant Telaris make it likely that they may have
relevant documents or other materials.
The Court finds that entry of a preservation order is appropriate because Defendant
Telaris’ dissolution makes it likely that relevant evidence may be destroyed or lost. These
documents go to the heart of Plaintiff’s allegations about the business practices of
Defendant Telaris. Further, there is no reason to believe that Defendant Telaris or the
related individuals and entities are unable to preserve any relevant materials. With regard
to the nonparties, “[t]he need for such [an] order is all the more pressing . . . where the
entities that have the information Plaintiff[ ] need[s] are not parties and thus have no duty
to preserve absent a court order.” Bright Solutions, 2015 WL 5159125, at *3.
With regard to Plaintiff’s request for early discovery, good cause exists where the
evidence sought “may be consumed or destroyed with the passage of time, thereby
disadvantaging one or more parties to the litigation.” Qwest, 213 F.R.D. at 419; see also
Arista Records LLC v. Does 1-20, No. 05-cv-02144-WDM-PAC, 2005 WL 3776346, at *1
(D. Colo. Nov. 7, 2005); Semitool, Inc. v. Tokyo Electron Am., Inc., 208 F.R.D. 273, 276
(N.D. Cal. 2002) (Good cause exists where “the need for expedited discovery, in
consideration of the administration of justice, outweighs the prejudice to the responding
party”). Here the Court does not find that service of subpoenas prior to the Rule 26(f)
conference is necessary. See Liberty Media Holdings, LLC v. Gan, No. 11-cv-02754-MSKKMT, 2012 WL 1015799, at *2 (D. Colo. Mar. 23, 2012) (denying request to serve
subpoenas on non-parties prior to Rule 26(f) conference). There are instances when early
discovery of information is necessary for a lawsuit to move forward; for example, when an
individual defendant cannot be named because his identity is unknown and discovery from
a nonparty is needed to determine the defendant’s identity. See, e.g., Good Man Prods.,
Inc. v. Doe, No. 14-cv-03224-WYD-MEH, 2015 WL 1004575, at *1 (D. Colo. Mar. 3, 2015)
(ordering limited early discovery from defendant’s internet service provider to identify
defendant). However, in this case Plaintiff is not seeking information that will allow it to
identify unknown parties. Further, Plaintiff does not argue that any of the nonparties are
likely to flee or otherwise be unavailable once discovery commences. Finally, to the extent
that Plaintiff would like to serve subpoenas on nonparties prior to the Rule 26(f) conference
“to ensure no relevant materials are lost, destroyed, or otherwise disposed of . . .,” Motion
[#37] at 5, the preservation order will protect against the loss of relevant materials.
For the foregoing reasons,
IT IS HEREBY ORDERED that the Motion [#37] is GRANTED in part and DENIED
in part as discussed about. Accordingly,
IT IS FURTHER ORDERED that Defendant Telaris; Christopher Bradish; Eric
Engbers; Derek Dempsay; Philip Josephson; Sterling Business Law; Mark Lammert; Telaris
Communications LLC; Telaris Communications Group, LLC; and Mangrove Holdings, LLC
shall preserve all materials relevant to this lawsuit, including those described in the Motion
and Exhibit 9 to the Motion.
IT IS FURTHER ORDERED that Plaintiff shall serve this Order on each of the
nonparties and file a Certificate of Service reflecting such service.
Dated: January 15, 2016
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