Alexander et al v. BF Labs Inc.

Filing 111

MEMORANDUM AND ORDER granting 102 Motion to Compel. Please see order for important deadlines. Signed by Magistrate Judge James P. O'Hara on 7/21/2015. (mmg)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
KYLE ALEXANDER, et al.,
Plaintiffs,
v.

Case No. 14-2159-KHV

BF LABS INC.,
Defendant.

ORDER
The plaintiffs, Kyle Alexander and Dylan Symington, allege in this putative class
action that the defendant, BF Labs, Inc., improperly collected prepayment for bitcoin
mining equipment.1

Plaintiffs bring claims for unjust enrichment, negligent

misrepresentation, conversion, and violations of the Kansas Consumer Protection Act.
The case is before the undersigned U.S. Magistrate Judge, James P. O’Hara, on
defendant’s motion to compel.

(ECF doc. 102).

For the reasons stated below,

defendant’s motion is granted.
Specifically, defendant seeks complete answers and responses to its first
interrogatories and request for production, directed at allegations in plaintiffs’ complaint

1

A bitcoin is a unit of intangible currency that exists only on the internet, without
direct ties to any single nation’s monetary systems. Bitcoins are earned, or “mined,” by
solving a complex mathematical riddle, which requires a large amount of computer
processing power. See ECF doc. 59 (citing Meissner v. BF Labs, Inc., No. 13-2617RDR, 2014 WL 2558203, at *1-2 (D. Kan. June 6, 2014).
O:\ORDERS\14-2159-KHV-102.docx

that seek class action certification under Fed. R. Civ. P. 23(a) & (b). Defendant served
these discovery requests on April 9, 2015.2 Plaintiffs responded with objections on June
8, 2015.3 After a letter and two phone calls, plaintiffs supplemented their responses on
June 30, 2015.4 Defendant then asked whether plaintiffs would continue to object to the
discovery requests, and further that, if so, a motion to compel would be filed. Plaintiffs
responded by stating that they would supplement their answers “in full without objection
once discovery was complete and/or once plaintiffs’ counsel’s legal analysis regarding
class certification has been completed.”5 In this regard, it should be noted here that under
the court’s second amended scheduling order, discovery isn’t due to be completed until
November 2, 2015, and plaintiffs’ motion for class certification isn’t due until November
16, 2015.6 Defendant, dissatisfied with plaintiffs’ supplemental response, filed its motion
to compel.
When a party files a motion to compel and asks the court to overrule objections,
the objecting party must specifically show in his response to the motion how each

2

ECF doc. 81.

3

ECF doc. 97.

4

ECF doc. 101.

5

ECF doc. 103, Ex. G.

6

ECF doc. 89.

O:\ORDERS\14-2159-KHV-102.docx

2

discovery request is objectionable.7 With this standard in mind, the court addresses
defendant’s objections and responses to the disputed requests.
Interrogatory No. 25 asks plaintiffs “[f]or each claim or count in Your Complaint
in which you seek to represent a class of persons, state specifically the definition and
scope of the class of persons You seek to represent, including but not limited to the time
period and nature of each claim that You contend you would adequately represent a class
of persons.”8 Interrogatory No. 26 asks plaintiffs “[f]or each claim or count in Your
Complaint, identify all principal or material facts that you contend support each
requirement of Rule 23(a).”9 Interrogatory No. 27 asks plaintiffs “[f]or each claim or
count in Your Complaint, identify all principal or material facts that you contend support
each requirement of Rule 23(b).”10
Plaintiffs’ responses to Interrogatory Nos. 25-27 are the same:
Objection. Plaintiff is not a lawyer and does not possess the legal
expertise to offer a legal opinion on which claims are subject to class
certification or what constitutes a proper class definition in this case.
Before this case was filed and as this case has progressed, Plaintiff’s
counsel has engaged in substantial legal research, analysis, and
mental notes regarding the claims for which Plaintiff may seek class
certification, as well as a proper class definition for such claims.
Plaintiff’s counsel’s legal analysis regarding class certification has
evolved and continues to evolve as discovery progresses. Plaintiff’s
7

Sonnino v. Univ. of Kan. Hosp. Auth., 221 F.R.D. 661, 670-71 (D. Kan. 2004).

8

ECF doc. 103, ex D & E.

9

Id.

10

Id.

O:\ORDERS\14-2159-KHV-102.docx

3

counsel’s ongoing and evolving legal research, analysis, thoughts,
strategies, and mental impressions regarding class certification and a
class definition are protected by the work product doctrine and are
immune from discovery.
Subject to these objections, Plaintiff states: Plaintiff will file a
motion for class certification setting forth the claims sought to be
certified and a class definition on or prior to November 16, 2015, as
required by the Court’s Second Amended Scheduling Order.
SUPPLEMENTAL ANSWER: Plaintiff has not withheld any
known responsive information. All known persons who might have
relevant knowledge and all known relevant documents have been
provided to Defendant. Plaintiff’s counsel, not Plaintiff, will
determine which claims are proper for class certification, the
definition and scope of the class, and the time period and nature of
each claim Plaintiff is adequate to represent. Plaintiff’s counsel has
not yet decided the requested information and has until November
16, 2015 to do so pursuant to the Court’s Second Amended
Scheduling Order.11
Document Request No. 42 seeks “[a]ll documents reflecting, referring to, or
supporting Your contention that You are an adequate class representative as alleged in
Your Complaint.”12 Document Request No. 43 seeks “[a]ll documents reflecting,
referring to, or that support Your contention that there are common questions of law of
fact as alleged in Your Complaint.”13 Document Request No. 44 seeks “[a]ll documents
reflecting, referencing, or that support Your contention that Your claims are typical of the

11

Id.

12

ECF doc. 103, Ex. B, C.

13

Id.

O:\ORDERS\14-2159-KHV-102.docx

4

class You seek to represent.”14

Document Request No. 45 seeks “[a]ll documents

reflecting, referencing, or that support Your contention that the elements of Rule 23(a)
can be satisfied by You.”15

And finally, Document Request No. 46 seeks “[a]ll

documents reflecting, referencing or that support Your contention that the elements of
Rule 23(b) can be satisfied by You.”16
Plaintiffs responded to Document Request Nos. 42-46 in similar fashion, i.e., by
claiming they have not yet decided which documents will be cited to support the factors
under Rule 23 and have until November 16, 2015 to do so under the court’s second
amended scheduling order.17 Plaintiffs also assert they have already provided defendant
with “the universe of responsive facts and documents currently possessed by Plaintiffs
out of which Plaintiffs’ counsel might cite to in a motion for class certification.”18
Finally, plaintiffs argue their counsel’s mental impressions and legal strategies regarding
class certification are work product and not discoverable, and that there is nothing further
to compel.
Under Fed. R. Civ. P. 26(b)(3), the work product doctrine applies to “documents
and tangible things that are prepared in anticipation of litigation or for trial by or for
14

Id.

15

Id.

16

Id.

17

See generally id.

18

ECF doc. 106 at 4.

O:\ORDERS\14-2159-KHV-102.docx

5

another party or its representative.” Subsection (B) of Rule 26(b)(3) further provides that
the court “must protect against the disclosure of the mental impressions, conclusions,
opinions, or legal theories of a party's attorney or other representative concerning the
litigation.” Thus, although Rule 26(b)(3)(A) is confined to the discovery of “documents
and tangible things,” the doctrine has been expanded to reach information sought through
interrogatories when the interrogatory seeks the mental impressions or legal conclusions
of an attorney.19
A party claiming work product protection has the burden of establishing that the
material sought to be protected as work product comes within the doctrine.20 “A mere
allegation that the work product doctrine applies is insufficient.”21
In the context of an objection to an interrogatory, this court has held that unless the
interrogatory (1) specifically inquires into an attorney's mental impressions, conclusions,
or legal theories, or (2) asks for the content of a document protectable as work product,
it’s inappropriate to raise a work product objection.22 The work product doctrine also

19

Gipson v. SW Bell Tel. Co., No. 08-2017-EFM, 2009 WL 790203, at *15 (D. Kan.
Mar. 24, 2009), overruled in part by 2009 WL 4157948 (D. Kan. Nov. 23, 2009).
20

Resolution Trust Corp. v. Dabney, 73 F.3d 262, 266 (10th Cir. 1995).

21

Id.

22

Gipson, 2009 WL 790203, at *15. See also Starlight Int’l Inc. v. Herlihy, 186
F.R.D. 626, 645 (D. Kan. 1999).
O:\ORDERS\14-2159-KHV-102.docx

6

doesn’t protect “facts concerning the creation of work product or facts contained within
work product.”23
The court finds that plaintiffs’ work product objection in this case is frivolous.
The interrogatories in question do not specifically request nor inquire into the mental
impressions, conclusions, or legal theories of plaintiffs’ counsel. Nor do the document
requests ask for any documents or materials that plaintiffs have shown to be protected by
work product.

Rather, these discovery requests unremarkably require plaintiffs to

identify the facts and documents supporting contentions made in their complaint.
Plaintiffs have failed to show that answering these interrogatories or requests for
production would reveal the mental impressions, conclusions, opinions, or legal theories
of their counsel.
Further, plaintiffs’ work product objection ignores that Fed. R. Civ. P. 33(a)(2)
specifically allows for contention interrogatories and provides provides that an
interrogatory “may relate to any matter that may be inquired into under Fed. R. Civ. P.
26(b). An interrogatory is not objectionable merely because it asks for an opinion or
contention that relates to fact or the application of law to fact . . .. ” This has been the
law in federal court for forty-five years now, i.e., the 1970 Advisory Committee Notes
make clear that an interrogatory "is not objectionable merely because it calls for an
opinion or contention that relates to fact or the application of law to fact.”

23

Resolution Trust Corp., 73 F.3d at 266.

O:\ORDERS\14-2159-KHV-102.docx

7

As noted above, defendant’s discovery requests simply ask plaintiffs to produce
what evidence they have to support allegations in their complaint regarding possible class
certification. Because of Fed. R. Civ. P. 11, the court assumes that plaintiffs’ counsel has
had access to this information from the very start of litigation in early April 2014. So it
shouldn’t be terribly difficult for plaintiffs’ counsel to produce that information now,
after more than fifteen months of litigation. These contention interrogatories clearly are
designed to provide defendant with the opportunity to determine what proof would be
necessary to move for judgment or to effectively refute plaintiffs’ position on these issues
when a class certification motion is filed.
Although Rule 33(a)(2) does permit the court to delay the obligation to respond to
contention interrogatories until other designated discovery has been completed, plaintiffs’
brief is conspicuously devoid of any facts, or any relevant authority, supporting their
assertion that they cannot presently respond fully. The court finds no persuasive reason
in the record for plaintiffs to defer their answers to their discovery responses. Plaintiffs
should answer these interrogatories now as fully as they can, keeping in mind their
continuing obligation to supplement their discovery responses as additional or different
information becomes available.
Accordingly, plaintiffs’ work product objection is overruled and defendant’s
motion to compel is granted. Plaintiffs must fully and properly respond to the discovery
in question by July 28, 2015.

O:\ORDERS\14-2159-KHV-102.docx

8

Under Rule 37(a)(5)(A), if a motion to compel is granted, the court “must, after
giving an opportunity to be heard, require the party . . . whose conduct necessitated the
motion, the party or attorney advising that conduct, or both to pay the movant’s
reasonable expense incurred in making the motion, including attorney’s fees.” However,
the court need not order this payment if “(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.”24 None of the three exceptions
to imposition of sanctions under Rule 37(a)(5)(A) apply here.
Rule 26(g)(1) of the Federal Rules of Civil Procedure provides:
By signing [a discovery request, response, or objection], an attorney or
party certifies that to the best of the person’s knowledge, information, and
belief formed after a reasonable inquiry:
(A) with respect to a disclosure, it is complete and correct as of the time it
is made; and
(B) with respect to a discovery request, response, or objection, it is:
(i) consistent with these rules and warranted by existing law or by a
nonfrivolous argument for extending, modifying, or reversing
existing law, or for establishing new law;
(ii) not interposed for any improper purpose such as to harass, cause
unnecessary delay, or needlessly increase the cost of litigation; and
(iii) neither unreasonable nor unduly burdensome or expensive,
considering the needs of the case, prior discovery in the case, the

24

Fed. R. Civ. P. 37(a)(5)(A).

O:\ORDERS\14-2159-KHV-102.docx

9

amount in controversy, and the importance of the issues at stake in
the action.
Under Rule 26(g)(3), if a certification violates this rule without substantial justification,
the court must impose an appropriate sanction on the responsible attorney or party, or
both. The sanction may include an order to pay reasonable expenses, including attorney
fees, caused by the violation. The importance of Rule 26(g) was specifically emphasized
by the undersigned magistrate judge during the scheduling conference in this case on
December 29, 2014, and it confirmed in detail in the amended scheduling order filed the
next day (see ECF doc. 62 at 7-8).
As noted earlier, plaintiffs’ counsel’s work product objection to defendant’s
contention interrogatories is frivolous. And although plaintiffs’ claim that they have
produced the documents relevant to defendant’s requests, they fail to refer to specific
documents responsive to defendant’s request for production. Plaintiffs’ counsel’s “hide
the ball” tactic is exactly what the federal rules are designed to prevent. Because of that,
it’s clear to the court that plaintiffs’ have violated Rule 26(g)(1)(B)(i) & (ii). As such,
plaintiffs’ counsel are directed to confer with defense counsel in an attempt to agree on
an appropriate fee award. If such an agreement can be reached, then the parties shall
jointly file a notice confirming for the court that’s the case; otherwise, plaintiffs’ counsel
have until July 28, 2015 to show cause why monetary sanctions should not be imposed.
By the same deadline, defendant shall file a fee affidavit with supporting detailed time

O:\ORDERS\14-2159-KHV-102.docx

10

sheets. Plaintiffs then have until July 30, 2015 to file anything challenging those fee
claims.
IT IS SO ORDERED.
Dated July 21, 2015, at Kansas City, Kansas.
s/ James P. O’Hara
James P. O’Hara
U.S. Magistrate Judge

O:\ORDERS\14-2159-KHV-102.docx

11