Local Access, LLC v. Peerless Network, Inc.
Filing
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REDACTED ORDER granting in part and denying in part 55 Motion to Compel production of documents and answer to interrogatory. Signed by Magistrate Judge Thomas B. Smith on 11/21/2017. (Smith, Thomas)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
LOCAL ACCESS, LLC,
Plaintiff,
v.
Case No: 6:17-cv-236-Orl-40TBS
PEERLESS NETWORK, INC.,
Defendant.
REDACTED ORDER
This case comes before the Court without oral argument on Peerless Network,
Inc.’s Motion to Compel Local Access for Discovery and for Sanctions (Doc. 55), and
Local Access’ response in opposition to the motion (Doc. 60).
Background
Local Access and Peerless are parties to a contract (“Contract”) which provides,
among other things, that Peerless will furnish “Homing Tandem Service” for Local Access
(Doc. 1-1). In an amendment to the Contract that was effective August 5, 2015, Peerless
agreed to share (exclusive of certain charges), 75% of collected tandem access revenue
it received for the delivery of tandem access InterMTA and InterLATA traffic with Local
Access (Doc. 1-2).
The Contract includes a provision stating that if Local Access “provides written
proof of a competitive offer from another carrier for the specific service being provided
under this agreement; and (2) Peerless does not match the competitive price being
offered for this specific service, [Local Access] will then be entitled to reroute traffic
pursuant to the alternative proposal (this right constitutes the “Peerless Price Guarantee”)
(Doc. 1-1 at § 3.3). On August 24, 2015, Local Access received a competitive offer from
Inteliquent, Inc. (Doc. 1 at ¶¶ 24-25). When Peerless did not match the offer, Local
Access began rerouting its traffic to Inteliquent (Id.). Although Local Access now does
business with Inteliquent, it alleges that some of its traffic remains on the Peerless’
network (Id. at ¶ 26).
Local Access complains that Peerless breached the Contract and has been
unjustly enriched because, from August 5, 2015 to the present, it has failed to provide
reports, an accounting, or compensation for traffic routed to Peerless under the Contract
(Id. at ¶ 27). Peerless has filed a motion to dismiss Local Access’ complaint (Doc. 14).
Peerless alleges that Local Access failed to disclose all of the terms of the
Inteliquent offer, and that if it had, Peerless might have decided to match the offer (Doc.
41 at 10-11). Peerless also claims that once it ceased to be Local Access’ exclusive
provider of Homing Tandem Services, it was no longer obligated to share 75% of the
collected tandem access revenue with Local Access (Doc. 55 at 4). But, Peerless asserts
that under § 7.2 of the Contract, it retains the right to be the exclusive provider of transit
services to Local Access within its footprint (Id.).
The instant dispute concerns requests for production and an interrogatory Peerless
propounded to Local Access. Some of this discovery concerns “Call Detail Records” (Id.
at 10). Peerless explains that Call Detail Records
[A]re computerized records that provide information on calls
transferred between carriers. Among other things, [Call Detail
Records] contain telephone numbers from which the call
originated, telephone numbers to which the call terminated,
the type of traffic (jurisdiction) involved for those calls, the
volume of traffic, and which carriers transferred, carried, or
delivered the traffic.
(Id. at 12). Peerless has asked Local Access to produce its Call Detail Records so that
Peerless can determine when, and what types of traffic Local Access rerouted to
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Inteliquent or some other third party, and also determine whether Local Access complied
with the Peerless Price Guarantee and § 7.2 of the Contract (Id.).
Peerless is also attempting to discover Local Access’ contracts with any Homing
Tandem Provider, communications relating to the negotiation and execution of those
contracts, and communications between Local Access and Inteliquent concerning the
provision of Tandem Services by Inteliquent to Local Access (Id. at 13-15). Peerless
argues that this information is relevant to determine whether Local Access provided
written proof of all the material terms of every competitive offer it received to Peerless (Id.
at 14).
In addition, Peerless seeks information concerning payments made to and from
Inteliquent and other third parties for traffic routed away from Peerless (Id. at 15-18).
Peerless contends that this information is relevant to Local Access’ compliance with the
Contract and the calculation of Local Access’ damages (Id. at 17).
Lastly, Peerless alleges that Local Access has not complied with the parties’ ESI
Agreement because the documents it has produced do not contain certain metadata
fields (Id. at 18-19).
Legal Standards
The Federal Rules of Civil Procedure “strongly favor full discovery whenever
possible.” Farnsworth v. Proctor & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985).
“The overall purpose of discovery under the Federal Rules is to require the disclosure of
all relevant information so that the ultimate resolution of disputed issues in any civil action
may be based on a full and accurate understanding of the true facts, and therefore
embody a fair and just result.” Oliver v. City of Orlando, No. 6:06-cv-1671-Orl-31DAB,
2007 WL 3232227, at * 1 (M.D. Fla. Oct. 31, 2007) (citing United States v. Proctor &
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Gamble Co., 356 U.S. 677, 682 (1958)); see also U.S. v. Pepper’s Steel & Alloys, Inc.,
132 F.R.D. 695, 698 (S.D. Fla. 1990) (citing Hickman v. Taylor, 329 U.S. 495, 501
(1947)).
Parties may “obtain discovery regarding any nonprivileged matter that is relevant
to any party’s claim or defense.” FED. R. CIV. P. 26(b)(1). Relevance is “construed broadly
to encompass any matter that bears on, or that reasonably could lead to other matter that
could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v.
Sanders, 437 U.S. 340, 351(1978). A discovery request “should be considered relevant if
there is any possibility that the information sought may be relevant to the subject matter
of the action.” Roesberg v. Johns-Manville Corp., 85 F.R.D. 292, 296 (E.D. Pa. 1980); see
also Deitchman v. E.R. Squibb & Sons, Inc., 740 F.2d 556 (7th Cir. 1984) (If court is in
doubt concerning the relevancy of requested discovery the discovery should be
permitted.).
Discussion
A. Requests for Production
Each of the requests for production to which Local Access has made objection
asks for “all documents” concerning a particular matter. 1 Local Access argues that the
phrase “all documents” necessarily makes the requests overbroad (Doc. 60 at 7-8). The
Middle District Discovery Handbook2 explains that “a request for ‘each and every
document supporting your claim’ or a request for ‘the documents you believe support
1 Those matters include Local Access’ communications with other tandem service providers,
contracts to reroute services, the routing of telephone calls to someone other than Peerless, the routing of
calls through a tandem provided by Inteliquent, communications between Local Access and Inteliquent
concerning the provision by Inteliquent of tandem services to Local Access, Call Detail Records, and Local
Access’ damages (Doc. 55 at 10-17).
2
The Handbook provides guidance and advice; it is not law, and is not binding upon the Court.
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Count I’ is objectionably broad in most cases.” Middle District Discovery (2015) at 11; see
Lane v. Guar. Bank, 6:13-cv-259-Orl-36, 2013 WL 4028185, at *2 (M.D. Fla. Aug. 7,
2013); Wiand v. Wells Fargo Bank, N.A., 8:12-cv-557-T-27EAJ, 2013 WL 6170610, at *3
(M.D. Fla. Nov. 22, 2013). The Court overrules this objection. Peerless’ requests specify
the subject matter of the requests, they are not as broad as the examples provided in the
Handbook, and with some exceptions, they are limited to information related to the issues
in the case.
Local Access complains that the requests are also overbroad to the extent they
seek all communications between it and Inteliquent (Doc. 60 at 12). The Court agrees
that discovery of communications between Local Access and Inteliquent should be limited
to the claims and defenses in this case.
Next, Local Access argues that its Call Detail Records are not discoverable
because the exclusivity provision, § 7.2 in the Contract was terminated on March 31,
2015, and therefore, the amendment to the Contract was only in effect from August 5
through August 24, 2015 (Id. at 8). On March 31, 2015, in Local Access, LLC and Blitz
Telecom Consulting, LLC v. Peerless Network, Inc., Case No. 6:14-cv-399-Orl-40TBS
(M.D. Fla.), Local Access and Peerless agreed that:
2. Sections 7.1 and 7.2 of the Homing Tandem Agreement will
be removed from the amended Homing Tandem Agreement
on a go forward basis AND THE PARTIES WILL RELEASE
EACH OTHER FROM ALL CLAIMS RELATED TO
SECTIONS 7.1 AND 7.2.
(Case No. 6:14-cv-399-Orl-40TBS, Doc. 396 at 3). While Peerless insists in Case No.
6:14-cv-399-Orl-40TBS that the parties never arrived at a meeting of the minds, the Court
has already enforced this agreement and the matter is now on appeal to the Eleventh
Circuit (Case No. 6:14-cv-399-Orl-40TBS, Docs. 338, 340, 364, 365). Based upon the
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effective date of the amendment to the Contract, and the release of all claims related to §
7.2, Peerless may only discover Call Detail Records for the period August 5 through
August 24, 2015.
Apart from § 7.2, Peerless argues that it is entitled to the information it seeks
because payments Local Access made to or received from other carriers, including
Inteliquent, is relevant to Local Access’ damages claim (Doc. 55 at 17). That may be true,
but only for the period from August 5 through August 24, 2015.
Local Access has produced its agreement with Inteliquent (Doc. 60 at 11). Now, it
argues that the negotiations which preceded that agreement are not discoverable
because they have nothing to do with this case, and because they merged into the final
contract (Id. at 11-12). Contrary to Local Access’ arguments, the negotiations are relevant
to show whether Local Access performed all of its obligations related to the Peerless
Price Guarantee.
Local Access also argues that payments concerning traffic which it rerouted from
Peerless is not relevant to any issues raised in the pleadings (Id. at 13-14). At the
moment, Local Access’ complaint is the only pleading in the case, and it only seeks
damages for traffic Local Access routed through Peerless. Consequently, apart from the
period August 5 through August 24, 2015, this objection is well taken.
Local Access contends that outbound traffic has nothing to do with this dispute (Id.
at 10-11). It represents that it “asked counsel for Peerless to ‘advise what outbound traffic
has to do with the dispute raised in the instant case,’” and that “[t]here was no response
to that request and there is still nothing in the pleadings of this case that has anything to
do with outbound calling.” (Id. at 10). The Court sustains this objection.
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Local Access objects that the phrase “homing tandem type services” as used in
the requests for production is undefined and requires clarification (Id. at 12). In the
Contract, the parties defined “Services” to mean “any and all components required to
provide Customer with Homing Tandem Service.” (Doc. 1-1 at § 1.6). The Court reads
“homing tandem type services,” as used by Peerless in these requests to mean the same
thing as “Services” in the Contract.
The amendment to the Contract provides that the parties’ agreement for the
provision of interMTA, interLATA, and Homing Tandem Services is intended to apply to
“all markets covered by this offer” (Doc. 1-2 at 2). Peerless is not entitled to discovery
concerning markets not covered by the Contract.
Based upon the foregoing, Peerless’ motion to compel requests for production 7,
12, 13, 14, 19, and 22 is GRANTED to the extent these requests seek information
concerning:
(1) Local Access’ compliance with the exclusivity provision in § 7.2 of the Contract
during the period August 5 through August 24, 2015. This includes but is not limited to
Call Detail Records and the routing of calls through a tandem other than the Peerless’
tandem;
(2) Communications (this includes but is not limited to negotiations), concerning
any potential or actual agreement between Local Access and Inteliquent for the provision
of the same services which Peerless had contracted to provide to Local Access from the
inception of the Contract through August 24, 2015; and
(3) The methodology by which Local Access’ calculates its damages claimed in
this case.
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The motion to compel production is DENIED in all other respects. The Court
acknowledges that its ruling on these requests for production is narrower than earlier
discovery rulings in the case. The Court attributes this to what it believes is a better
understanding of the case.
B. Interrogatory
Peerless’ second interrogatory asks Local Access to state, for certain jurisdictions,
the first date on which Local Access routed telephone calls destined to or delivered from
its end offices using a tandem provider other than Peerless (Doc. 55 at 16-17). Peerless
also asks Local Access to identify the provider of the tandem services it used (Id.).
Peerless argues that this information is relevant to Local Access’ performance of the
Contract and to the calculation of Local Access’ damages (Id. at 17). Local Access
represents that the jurisdictions for which Peerless seeks this information are outside the
Peerless’ footprint and therefore, not relevant (Doc. 60 at 15). Based upon this
representation, and the limited period in which the exclusivity provision in § 7.2 was in
effect, Peerless’ motion to compel a response to this interrogatory is DENIED.
C. Alleged Breach of the Parties’ ESI Agreement
The parties entered into an Electronically Stored Information Agreement to
facilitate discovery (Doc. 55-2 at 14-25). Among other things, the agreement provides that
all documents will be produced in a Load File which contains “full text extracts” and, to the
extent available, specific fields of metadata (Id. at 20-21). Local Access collected
responsive documents by having them emailed to a single person and then produced the
information that was forwarded to that individual. Peerless alleges that the act of
forwarding the emails destroyed the original metadata, and replaced it with the metadata
for the forwarding email (Doc. 55 at 2). If true, this would be a breach of the ESI
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Agreement. Peerless also alleges that Local Access has refused to produce the actual
responsive documents with their unaltered metadata (Id.). Local Access states that
Peerless’ claims are “completely untrue.” (Doc. 60 at 2). It says “[t]he act of forwarding an
email does not alter or destroy the metadata contained in the original email.” (Id.) Local
Access also represents that it has produced “all of the original emails that Peerless
identified in its correspondence.” (Id., at 6). The Court does not know which party has
given it accurate information. If the parties have not already resolved this dispute between
themselves, then someone should contact the Courtroom Deputy to schedule an
evidentiary hearing on the matter. At that hearing the parties can present their evidence,
including their expert witnesses, and the Court will decide the issue.
D. Attorney’s Fees and Costs
On a motion to compel, the court ordinarily awards to the prevailing party, its
reasonable expenses, including attorney’s fees. FED. R. CIV. P. 37(a)(5). The Rule
recognizes three exceptions:
(i) the movant filed the motion before attempting in good faith
to obtain the disclosure or discovery without court action;
(ii) the opposing party's nondisclosure, response, or objection
was substantially justified; or
(iii) other circumstances make an award of expenses unjust.
FED. R. CIV. P. 37(a)(5)(A). In this case the Court has issued a mixed ruling, and has not
disposed of Peerless’ claims concerning metadata. Accordingly, the Court finds that
“other circumstances make an award of expenses unjust,” in this instance.
DONE and ORDERED in Orlando, Florida on November 21, 2017.
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Copies furnished to Counsel of Record
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