Lorali, LLC v. SMK Associates, LLC et al

Filing 97

ORDER FOLLOWING DISCOVERY CONFERENCE. Signed by Magistrate Judge Andrea M. Simonton on 5/30/2014. (eh00)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 13-22204-CIV-WILLIAMS/SIMONTON
LORALI, INC.,
Plaintiff,
v.
SMK ASSOCIATES, LLC, et al.,
Defendants.
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ORDER FOLLOWING DISCOVERY CONFERENCE
This matter is before the Court following an informal discovery conference. The
Honorable Kathleen M. Williams, United States District Judge, has referred all discovery
matters to the undersigned Magistrate Judge, ECF Nos. [16] [63]. The parties noticed this
discovery hearing to resolve several discovery disputes noticed by the parties. ECF Nos.
[88] [94]. At the discovery hearing held on May 30, 2014, the Court ruled on the parties’
discovery disputes, stating the reasons for the rulings on the record. This Order sets
forth the rulings and incorporates by reference the reasons stated at the hearing.
The first issue addressed at the hearing involved the de-designation of certain
documents that Defendant classified as “confidential” pursuant to the parties’ agreed
protective order. ECF No. [67]. Plaintiff argued that the Court should remove the
confidential designation from many of those documents because the Defendants had
disclosed the documents to the public by filing them in a matter pending before the
United States District Court for the Northern District of Illinois. As to the remaining
documents designated as “confidential” that had not been disclosed In that case, Plaintiff
argued that those documents should also be de-designated because they did not contain
information that should be classified as confidential. Defendants argued that the Illinois

federal case is irrelevant to this matter and that the documents should remain
confidential consistent with the non-circumvention agreement entered into by Plaintiff
and Defendants. The Court finds that Defendants have waived the “confidential”
designation under the existing protective order because there hasn’t been an effort to
maintain a document’s confidentiality, as required by the protective order, for any
document that has been publicly filed in the Illinois federal matter. The Court orders
those documents de-designated as “confidential.” For any document at issue that has
not been publicly filed in the Illinois federal matter, Defendants shall file a “Memorandum
in Support of Confidential Designation” on or before June 13, 2014, that specifically
identifies each document as to which Defendants seek to maintain the “confidential”
designation; and, include all arguments as to why each document should retain the
confidential designation. Within 14 days thereafter, Plaintiff shall file a memorandum in
response that describes all arguments against maintaining the confidential designation
for each document identified in Defendants’ memorandum. Defendants may file a reply
within seven days thereafter. These memoranda shall be filed under seal. In the interim,
the documents identified in Defendants’ memorandum shall remain confidential. Any
argument for or against confidentiality that is not contained in the parties’ submissions
will not be considered by the Court.
The next issue addressed at the hearing involved Plaintiff’s First Request for
Production No. 17, which sought production by Defendants of “All Full Corporate Offer”1
agreements, nondisclosure agreements, and noncompetition agreements between
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Plaintiff’s counsel acknowledged at the hearing that the Notice of Hearing
contained a typographical error and Request No. 17 should contain the word “Offer” not
“Officer.”
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Defendant and any individual or entity from January 1, 2011 through July 31, 2012. ECF
No. [88] at 2. Plaintiff argued that Defendants should produce all agreements that would
establish that Defendants were in the business of supplying cigarettes to other entities
because Defendants have represented in this case that its interactions with Plaintiff were
consistent with “how it does business.” Plaintiff contends that the Defendant had no real
cigarette business. Defense counsel argued that the request seeks irrelevant information
because there are no allegations in this case that Defendants committed a fraud. He
argued that Plaintiff has only alleged that Defendants failed to provide Plaintiff with
cigarettes. The Court finds that the requested information goes to Defendants’ credibility
regarding their business operations and therefore must be produced. The request as
written, however, is overbroad in that it seeks agreements unrelated to transactions
similar to the one at issue in this case. In addition, because of the sensitive business
nature of those agreements, the Court finds they are entitled to additional protections.
Accordingly, the Court is limiting the Defendants’ production to any agreements related
to cigarette sales/purchases and brokering, including invoices, between January 1, 2011
through July 31, 2012. Those documents shall be designated for attorneys’ eyes only and
must be produced on or before June 13, 2014.
The next discovery dispute addressed at the hearing, Plaintiff’s First Request to
Produce Nos. 14-16, which sought all of Martin Borg’s travel documents from January
2011 to July 2012 and a copy of his passport, was rendered moot by defense counsel’s
stipulation at the hearing. Defendant stipulated that none of Defendants’ corporate
officers engaged in any travel related to the products at issue in this case except for two
trips to Florida to meet with Plaintiff.
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The next issue addressed at the hearing involved Plaintiff’s Second Request for
Production Nos. 1-10, which sought the production of all the Defendants’ corporate
records, including Articles of Organization, minutes, by-laws, etc. Plaintiff argued that
Defendants only produced the documents that were available on the Illinois Secretary of
State’s website and otherwise indicated they did not have any documents to produce. At
the hearing, Plaintiff’s counsel specified that she seeks the identity of any other members
of the Defendant LLCs and any documents that Defendants have a legal right to obtain.
Defense counsel argued that the request is nothing more than an attempt to conduct
discovery in aid of execution, which is premature at this time. Furthermore, he argued
that his clients do not possess the documents requested by Plaintiff. The Court finds
Plaintiff’s request well-taken and will order Defendants to identify all members of the
Defendant LLCs to Plaintiff on or before June 13, 2014. This is a diversity case and the
Court must sua sponte determine that diversity exists from the outset of the case whether
or not the parties have raised the issue of complete diversity. Rolling Greens MHP, L.P. v.
Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1021-22 (11th Cir. 2004). Furthermore, to
the extent Defendants have a legal right to possess the requested documents,
Defendants shall produce the corporate records requested by Plaintiff on or before June
13, 2014. These documents are relevant to the allegations of counterclaims and are
relevant to Plaintiff’s attempt to explore the nature of Defendants’
business.
The last issue addressed at the hearing involved whether Defendants should be
compelled to respond to Plaintiff’s Requests for Admission that were emailed to defense
counsel eleven days before the May 13, 2014 discovery deadline. Despite the presiding
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district judge denying the parties’ request to extend the discovery deadline, ECF No. [77],
Plaintiff argued that the admissions mostly sought stipulations as to the authenticity of
documents and to simplify the issues at trial, and should therefore be treated more like an
evidentiary matter than a discovery issue. Defendants disagreed and argued that the
requests were untimely because they were not served more than thirty days prior to the
discovery deadline. The Court agrees with Defendants and finds the Plaintiff’s Request
for Admissions untimely. In this District, requests for admissions are subject to the same
rules as discovery requests. The Local Rules for the Southern District require a party to
serve written discovery requests so that responses are due prior to the discovery
deadline. S.D. Fla. L.R. 26.1(f)(“Written discovery requests and subpoenas seeking the
production of documents must be served in sufficient time that the response is due on or
before the discovery cutoff date.”). The Court will, however, require the parties to meet
and confer and stipulate to the facts and authenticity of documents identified in those
requests to admit to the maximum extent possible. This ruling merely expedites the
meeting required by the Local Rules in preparation for trial. S.D. Fla. L. R. 16.1(d)(3).
Accordingly, the parties shall meet and confer on that issue by June 30, 2014.
DONE AND ORDERED in Miami, Florida, on May 30, 2014.

_______________________________
ANDREA M. SIMONTON
UNITED STATES MAGISTRATE JUDGE
Copies furnished via CM/ECF to:
The Honorable Kathleen M. Williams
Counsel of Record

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