Winona PVD Coatings, LLC v. Excel Enterprises, LLC et al
OPINION AND ORDER granting 55 Motion for Reconsideration. Winonas production of the 30,000 documents at issue in the instant motion is complete. Winona need not identify by Bates Numbers which documents were produced in response to which specific discovery requests as ordered by this Court on 11/8/6 at DE 52 . All other aspects of the Courts 11/8/16 order at DE 52 remain in full effect. Signed by Magistrate Judge Michael G Gotsch, Sr on 2/17/17. (nal)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
EXCEL ENTERPRISES, LLC,
Plaintiff and Counter-Defendant,
WINONA PVD COATINGS, LLC,
Defendant and Counter Plaintiff.
CAUSE NO. 3:16-cv-19-WCL-MGG
OPINION AND ORDER
On November 15, 2016, Defendant, Winona PVD Coatings, LLC (“Winona”), filed its
Motion to Reconsider Court’s Order, Dated November 8, 2016; and Motion for a Telephonic
Conference. Plaintiff, Excel Enterprises, LLC (“Excel”), filed its brief in opposition to
Winona’s motion on November 23, 2016. Winona’s motion became ripe on November 30,
2016, when its reply brief was filed.
The Court’s order dated November 8, 2016, resolved Excel’s second motion to compel
filed on July 28, 2016. Excel’s motion to compel was based upon its allegation that Winona’s
production of 30,000 documents responsive to Excel’s discovery requests were deficient in
multiple ways. On July 20, 2016, before filing the motion to compel, Excel’s counsel informed
Winona’s counsel that the documents were not searchable and identified the format for the
documents it preferred. In response, Winona converted all of its responsive documents to
Excel’s preferred format and delivered them to Excel in the requested format on July 28, 2016.
On the same day, Excel filed its motion to compel alleging, among other things, that
Winona had not complied with the production requirements set forth in Fed. R. Civ. P.
34(b)(2)(E)(i), which requires parties to produce documents responsive to requests for
production “as they are kept in the usual course of business” or to “organize and label them to
correspond to the categories in the request.” Excel argued that Winona’s documents were not
presented as they were kept in the usual course of business and therefore asked the Court to
compel Winona to organize and label the documents to clarify which document responded to
which specific discovery request.
The Court ultimately granted this part of Excel’s motion because Winona’s assertion
that it produced the requested documents as they were kept in the ordinary course of business
was not sufficiently supported with appropriate evidence. Without such evidence, the Court
concluded that the disjunctive requirements of Rule 34(b)(2)(E)(i) required the organization
and labeling of the documents requested by Excel. Accordingly, the Court ordered Winona “to
supplement its production to identify by Bates Numbers which documents were produced in
response to which specific discovery requests by November 15, 2016.” [DE 52 at 8–9].
Through the instant motion to reconsider, Winona now presents additional evidence in
an attempt to show that its production complies with Rule 34(b)(2)(E)(i). Specifically, Winona
attached an affidavit from its Director of Information Technology, Mark Hohulin, in an attempt
to show that Winona produced the responsive electronic documents as they are kept in the
ordinary course of its business. In his affidavit, Hohulin summarizes in detail the e-discovery
procedures Winona used to identify and produce the 30,000 documents responsive to Excel’s
discovery requests. [DE 55-1 at 1–3]. Hohulin then asserts that “[t]o [his] knowledge, other
than the exclusion of irrelevant documents based on Winona’s targeted search queries, the
[responsive documents and data] that was sent by Winona to [Winona’s counsel] was not
modified or reorganized in any fashion, and was produced as it was kept in the usual course of
Winona’s business.” [DE 55-1 at 3, ¶ 9].
In addition to submitting Hohulin’s affidavit, Winona argues that the 30,000 documents
“contained key identifying information for each document, including a custodial field (which
indicates the custodial origin of each document), file type, file name, e-mail to, e-mail from,
date sent, and date received.” [DE 55 at 4]. Relying upon Hohulin’s affidavit, the identifying
information included with each document, and Winona’s conversion of the 30,000 documents
into the searchable format requested by Excel, Winona contends that it has complied with Rule
34(b)(2)(E)(i) such that its production is complete and does not prejudice Excel. As a result,
Winona asks the Court to vacate the part of its November 8, 2016, order requiring supplemental
production to match each document to one of Excel’s specific discovery requests.
Excel objects arguing that Hohulin’s affidavit fails to explain how the documents were
stripped of their metadata and converted to unsearchable .pdf and .tiff files before the initial
production. In addition, Excel contends that Hohulin’s affidavit fails to establish that Winona
keeps its emails and other electronically stored information in .pdf or .tiff format with no
associated metadata in its ordinary course of business. Accordingly, Excel asks the Court to
deny Winona’s motion to reconsider so as to ensure that Winona’s production complies with
Rule 34(b)(2)(E)(i) as the Court originally ordered on November 8, 2016.
Because district courts have the inherent power to reconsider interlocutory orders, the
reconsideration of such orders is committed to a court’s sound discretion. See Fisher v. Nat’l
R.R. Passenger Corp., 152 F.R.D. 145, 149 (S.D. Ind. 1993) (noting the “practically unbridled
discretion of a district court to reconsider a previous interlocutory order.”). Thus, the
considerations governing the reconsideration of interlocutory orders are essentially equitable in
nature. See Atchley v. Heritage Cable Vision Assocs., 926 F. Supp. 1381, 1383 (N.D. Ind.
1996) (“Interlocutory judgments are . . . subject to the complete power of the court rendering
them to afford such relief as justice requires.”); Akzo Coatings, Inc. v. Aigner Corp., 909 F.
Supp. 1154, 1160 (N.D. Ind. 1995) (“[A] motion to reconsider an interlocutory order may be
entertained and granted as justice requires.”).
The crux of Winona’s motion to reconsider is that its production complies with the
requirements set forth in Fed. R. Civ. P. 34(b)(2)(E)(i), which provides that “[a] party must
produce documents as they are kept in the usual course of business or must organize and label
them to correspond to the categories in the request . . . .” To show that it produced documents
as they were kept in the ordinary course of business, a producing party cannot simply assert
that the format of its production comports with its usual business practices. A producing party
must also show the way in which the documents were produced did not change from how they
were kept in the usual course of business. In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 351,
363 (N.D. Ill. 2005); see also Cardenas v. Dorel Juvenile Grp., Inc., 230 F.R.D. 611, 618 (D.
In responding to Excel’s second motion to compel, Winona had the opportunity to
present evidence that it produced the 30,000 documents as they were kept in the usual course
of its business. Winona’s attempt to so demonstrate was determined to be deficient to such an
extent that the Court ordered Winona to comply with the other option under Rule
34(b)(2)(E)(i)—organizing and labeling the 30,000 documents to correspond to the categories
in Excel’s discovery requests. By submitting Hohulin’s affidavit with the instant motion to
reconsider, Winona is seeking a second bite at the apple without offering any explanation for
why the affidavit was not presented before. Similarly, Winona now seeks further consideration
based on the “key identifying information [included in] each [of the 30,000] document[s it
produced], including a custodial field (which indicates the custodial origin of each document),
file type, file name, e-mail to, e-mail from, date sent, and date received.” [DE 55 at 4]. Yet
again, Winona knew about this identifying information at the time it briefed Excel’s motion to
compel but failed to explain why it did not direct the Court’s attention to it at that time. As
such, the Court has no compelling reason to reconsider whether the 30,000 documents were
produced as Winona kept them in the usual course of their business.
Even if the Court chose to reconsider the question of whether Winona met the “usual
court of business” prong of Rule 34(b)(2)(E)(i), Winona could not succeed. Hohulin’s
affidavit clearly describes the process Winona used to produce its responsive documents to
Excel, but provides no explanation of how the responsive documents were kept in the ordinary
course of Winona’s business. [DE 55-1 at 1–3]. As a result, Hohulin’s affidavit cannot
persuade the Court that the way in which Winona’s responsive documents were produced did
not change from how they were originally kept. See In re Sulfuric Acid Antitrust Litig., 231
F.R.D. at 363.
In addition, the identifying information on Winona’s documents, as now reported, does
not alone establish how Winona’s documents were originally kept. To show how its
documents were originally kept, Winona would have to, at a minimum,
provide information about each document which ideally would include, in some
fashion, the identity of the custodian or person from whom the documents were
obtained, an indication of whether they are retained in hard copy or digital format,
assurance that the documents have been produced in the order in which they are
maintained, and a general description of the filing system from which they were
Venture Corp. Ltd. v. Barrett, No. 5:13-CV-03384-PSG, 2014 WL 5305575, at *3 (N.D. Cal.
Oct. 16, 2014) (internal quotations and citations omitted) 1. Winona’s identifying information
may show custody of the documents and even the original format of the document. It does not,
however, assure anyone that the documents were produced in the order in which they were
maintained or generally describe the filing system from which they were recovered.
Without sufficient evidence that Winona has satisfied the “usual course of business”
prong, the Court could still require Winona to fulfill its Rule 34(b)(2)(E)(i) obligations by
supplementing its production by organizing and labeling the documents to match up to Excel’s
discovery requests particularly. Yet Winona’s one last argument in favor of reconsidering the
Court’s “organize and label” directive is persuasive. Winona contends that “Excel has yet to
offer any argument or evidence that it has suffered prejudice as a result of Winona’s
production.” [DE 63 at 3]. Winona is correct. Through both its second motion to compel and
its objection to the instant motion to reconsider, Excel has merely asked the Court to hold
Winona to the form of Rule 34(b)(2)(E)(i) with no discussion of any adverse effect on Excel
should the Court deem Winona’s current production of 30,000 documents, in the format
explicitly requested by Excel and with important identifying information, complete.
As this Court stated in the order at issue in the instant motion to reconsider, “Parties may
obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or
defense and proportional to the needs of the case, considering the importance of the issues at
stake in the action, the amount in controversy, the parties’ relative access to relevant information,
the parties’ resources, the importance of the discovery in resolving the issues, and whether the
Notably, both Winona and Excel cite this case in support of its competing perspectives on whether Winona’s
evidence is sufficient to establish that Winona produced its responsive documents as they were kept in the usual
course of business under Rule 34(b)(2)(E)(i). [DE 55 at 5; DE 62 at 5]
burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P.
26(b)(1). In that context, district courts have broad powers to manage discovery in their cases.
Patterson v. Avery Dennison Corp. , 281 F.3d 676, 681 (7th Cir. 2002); see also Fed. R. Civ. P.
26(b)(2)(C)(iii); Sattar v. Motorola, Inc., 138 F.3d 1164, 1171 (7th Cir. 1998).
Excel’s failure to demonstrate any prejudice from the current state of Winona’s
production brings into question whether the organization and labeling of Winona’s 30,000
documents is proportional to the needs of this case. Excel’s demand for strict compliance with
Rule 34(b)(2)(E)(i) amounts to a form-over-substance argument. As such, the cost and time
Winona would expend to organize and label the 30,000 responsive documents at this time would
pose a burden that outweighs the potential benefit of the exercise to Excel. The balance also tips
in favor of Winona here because Excel does not dispute that Winona supplemented its
production after converting its 30,000 documents to the searchable format Excel itself requested.
Moreover, Excel’s objection to Winona’s instant motion reads more like a motion for sanctions
for Winona’s original, unsearchable production rather than a reasonable request for organization
and labeling of the supplemental production to ensure it gets a fair chance to litigate its claims
against Winona. Therefore, the costs of organizing and labeling the documents, as this case is
ready to proceed to the dispositive motion stage of litigation, create a burden on Winona that
outweighs benefits Excel has not disclosed.
For the reasons stated above, the Court GRANTS Winona’s motion to reconsider. [DE
55]. Winona’s production of the 30,000 documents at issue in the instant motion is complete.
Winona need not identify by Bates Numbers which documents were produced in response to
which specific discovery requests as ordered by this Court on November 8, 2016. [DE 52].
All other aspects of the Court’s November 8, 2016, order remain in full effect. [DE 52].
Dated this 17th of February, 2017.
s/Michael G. Gotsch, Sr.
Michael G. Gotsch, Sr.
United States Magistrate Judge
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