Magnetar Global Event Driven Master Fund Ltd. et al v. CEC Entertainment, Inc.
MEMORANDUM AND ORDER granting in part and denying without prejudice in part 41 Motion to Compel; granting 65 Motion for Leave to File Surreply. See text of order for details. Signed by Magistrate Judge K. Gary Sebelius on 6/25/15.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
MAGNETAR GLOBAL EVENT
DRIVEN MASTER FUND, LTD
a Cayman Islands Limited Company, et al.,
CEC ENTERTAINMENT, INC.
a Kansas corporation,
Case No. 14-2279-RDR
MEMORANDUM AND ORDER
This matter comes before the court upon Respondent CEC Entertainment, Inc.’s Motion
to Compel the Production of Documents to Respondent’s First Request for Production of
Documents Directed to Petitioners (ECF No. 41). Petitioners Magnetar Global Event Driven
Master Fund, Ltd., Spectrum Opportunities Master Fund, Ltd., Magnetar Capital Master Fund,
and Ltd., Blackwell Partners LLC. (collectively “petitioners”) bring this stock appraisal action
under K.S.A. 17-6712 to obtain a judicial determination of the fair value of their shares of CEC
following the merger between CEC and an affiliate of Apollo Global Management LLC. For the
reasons stated below, respondent’s motion to compel is granted in part and denied without
prejudice in part.
Petitioners’ Withdrawal of Certain Objections
Respondent originally moved for an order compelling petitioners to respond to certain
document production requests falling into three categories: (1) petitioners’ views and analyses
concerning the valuation of CEC, the merger, and the merger consideration; (2) petitioners’
investment strategy relating to CEC and this action, as well as their actual transactions in CEC
stock; and (3) petitioners’ strategies relating to appraisal litigation and past appraisal filings.
Although this action is brought under a Kansas statute, both sides acknowledge that Kansas
courts often look to Delaware case law on appraisal and corporate law issues because the Kansas
Corporation Code is modeled after the Delaware Code.1 After respondent filed its motion to
compel, the Delaware Court of Chancery issued an opinion setting forth a broad scope of
discovery in Delaware appraisal actions.2 Based on this opinion, petitioners have agreed to
produce many of the documents at issue in the motion to compel.
Petitioners have also sought leave to file a surreply, which sets out the issues that remain
in dispute. Those include: (1) whether petitioners must produce all documents regarding
investment strategies relating to appraisal rights and appraisal litigation in other cases beyond the
case at bar, including documents from custodians who may only have had a role in those other
cases; and (2) whether petitioners must produce documents regarding appraisal litigation in cases
other than this one.3 It also appears the parties still dispute whether petitioners have lodged
improper general objections to discovery and made improper conditional responses to the
discovery requests. Because petitioners describe these issues as the only ones remaining in
dispute, the court grants as unopposed respondent’s motion to compel as to the other categories
of information set forth in the motion. If petitioners have not already done so, they shall produce
all non-privileged responsive documents within fourteen (14) calendar days from the date of the
See Resp’t CEC Entertainment, Inc.’s Mot. to Compel the Produc. of Docs. in Resp. to Resp’t’s First Req. for
Produc. of Docs. Directed to Pet’rs, at 12 n.7 (ECF No. 42); Pet’rs Mem. in Opp’n to Resp’t’s Mot. to Compel at 4
n.1 (ECF No. 46).
See In re Appraisal of Dole Food Co., Inc., No. 9079–VCL, 2014 WL 6906134 (Del. Ch. Dec. 9, 2014).
See Pet’rs Mot. for Leave to File Surreply and Proposed Surreply, at 1-2, ECF No. 65.
Petitioners’ General Objections and Conditional Responses
The court also overrules some of petitioners’ general objections and all of petitioners’
conditional responses contained in Petitioners’ Objections and Responses to Respondent’s First
Set of Discovery Requests (ECF No. 42-4). This district “has on several occasions disapproved
of the practice of asserting a general objection ‘to the extent’ it may apply to particular requests
for discovery.”4 These types of “objections are considered mere hypothetical or contingent
possibilities, where the objecting party makes no meaningful effort to show the application of
any such theoretical objection to any request for discovery.”5
Petitioners’ General Objections Nos. 1, 2, and 12-14 are sufficiently specific to enable
respondent to know how the objections apply to the requests, definitions, and instructions.
Petitioners’ General Objections Nos. 3-11 are not. These general objections contain language
objecting to requests, definitions, and instructions “to the extent they seek” certain information.
They are insufficient to put respondent on notice about which specific requests for production or
what language contained in the definitions and instructions is objectionable. The court has
previously ruled that these types of objections are worthless,6 and petitioners should have
withdrawn these objections before respondent filed its motion to compel given the clear lack of
support for these types of objections in the District of Kansas. For these reasons, the court
overrules Petitioners’ General Objections Nos. 3-11. If petitioners have withheld any documents
based on these general objections, they shall produce those documents to respondent within
fourteen (14) calendar days from the date of this order.
Gassaway v. Jarden Corp., 292 F.R.D. 676, 680 (D. Kan. 2013) (citing cases).
Id.; see also Everlast World’s Boxing Headquarters Corp. v. Ringside, Inc., No. 13-2150-CM-KGG, 2014 WL
2815515, at *3 (D. Kan. June 23, 2014) (accord).
The court is equally disapproving of conditional responses, which occur when “a party
asserts objections, but then provides a response ‘subject to’ or ‘without waiving’ the stated
objections.”7 The problem with conditional responses is that the requesting party “is left guessing
as to whether [the producing party] has produced all documents, or only produced some
documents and withheld others[.]”8As observed by Chief Judge James P. O’Hara in Sprint
Communications v. Comcast Cable Communications, the common practice of asserting
conditional objections is manifestly confusing and potentially misleading.9 A party may object to
a portion of a request for production, provided the response specifies the portion objected to and
responds to the non-objectionable portion.10 But “[o]bjecting but answering subject to the
objection is not one of the allowed choices under the Federal Rules.”11
Petitioners argue that because their conditional responses specify what documents they
will produce, these responses are somehow permissible. This is incorrect. While in some
instances, petitioners specify certain information they will produce, their responses largely
amount to statements that they will produce responsive, non-privileged documents and will
provide a privilege log listing any withheld documents. This response does not make clear
whether petitioners are only withholding privileged documents or whether they are withholding
other responsive documents based on the other asserted objections. These are the same scenarios
addressed in Sprint Communications Co., in which Judge O’Hara found the responding party had
Westlake v. BMO Harris Bank, N.A., No. 13-2300-CM-KGG, 2014 WL 1012669, at *3 (D. Kan. Mar. 17, 2014).
Pro Fit Mgmt. v. Lady of Am. Franchise Corp., No. 08-2662-JAR-DJW, 2011 WL 939226, at *7-*9 (D. Kan. Feb.
Nos. 11-2684-JWL, 11-2685-JWL, 2014 WL 545544, at *2 (D. Kan. Feb. 11, 2014).
Id. (citing Fed. R. Civ. P. 34(b)(2)).
Id. (quoting Tardif v. People for the Ethical Treatment of Animals, No. 2:09-cv-537-FTM-29SPC, 2011 WL
1627165, at *1 (M.D. Fla. Apr. 29, 2011)).
waived its discovery objections and in Pro Fit Management v. Lady of America Franchise Corp.,
in which Magistrate Judge David J. Waxse addressed a similar situation involving responses
subject to an attorney-client privilege objection in which the responding party had taken the
additional step of providing a privilege log. Judge Waxse, recognizing the potential for
confusion, ordered the responding party to amend its responses to certain document requests to
make clear whether it was withholding any documents on the ground of privilege and to
specifically identify those documents by Bates number on the privilege log.
Petitioners’ responses along with the promised privilege log should provide respondent
with sufficient information to evaluate the privilege objection. The remainder of the objections
raised in the conditional responses, however, provide respondent with no information to evaluate
whether petitioners have withheld documents subject to those objections. They are impermissible
and are deemed waived. This includes Request Nos. 3, 5-7, 11, 12, 14-18, and 20. If petitioners
have withheld documents responsive to these requests based on any objection other than
attorney-client privilege, they shall produce these documents to respondent within fourteen (14)
calendar days from the date of this order. The motion to compel is granted as to these requests.
Remaining Issues in Dispute
The court appreciates that petitioners have reconsidered certain relevance objections in
light of a Delaware opinion issued after respondent filed its motion to compel. Although
petitioners’ response brief mention three specific requests for production by number, their
response brief largely focuses on certain categories of information rather than listing the request
or requests at issue. Indeed, respondent apparently misunderstood petitioners’ position because
petitioners felt a need to file a surreply clarifying which issues remain unresolved, to which
respondent filed a response stating that it does not object to the surreply. The surreply, however,
does not specify the numbers of the requests for production still in dispute or the numbers of the
requests for production to which petitioners no longer object.
Moreover, like respondent, the court is confused by portions petitioners’ response brief.
For example, petitioners discuss documents relating to petitioners’ investment strategy—what
the court presumes pertains to Request No. 2. After nearly a page of argument about why the
information sought is not relevant, petitioners conclude by stating that in the interest of
compromise, they “will produce non-privileged documents sufficient to identify their investment
strategy regarding statutory appraisal rights or appraisal litigation.”12 Because petitioners do not
identify specific document requests by number, the court is unclear whether this statement means
petitioners have agreed to fully respond to the document production request (or requests) that
seek this information.
Petitioners go on to discuss documents concerning past appraisal actions—information
that pertains to Request No. 6. Petitioners’ arguments largely focus on the relevance of the
requested material.13 But as discussed above, with the exception of privilege, the court has
deemed all other objections to this request waived. This is why it is exceedingly important for
the parties to provide the court with the number of the document production request at issue. If
petitioners have waived their objections, as is the case with Request No. 6, there is nothing more
for the court to take up, and respondent’s motion must be granted as to that particular request.
This is equally applicable to the parties’ dispute about the appropriate custodians from whom to
harvest data. But again, without knowing the specific requests still at issue and the specific
Pet’rs Mem. in Opp’n to Resp’t’s Mot. to Compel at 5 (ECF No. 46).
Id. at 10 (arguing that respondent had failed to address why this information is discoverable and that respondent is
trying to put petitioners’ investment strategy on trial).
objections initially lodged in response to these requests, the court lacks vital information to make
an informed ruling.
Rather than attempt to guess which document requests or portions of document requests
are still at issue, the court will deny without prejudice the remainder of respondent’s motion to
compel. The parties are ordered to confer within seven (7) calendar days from the date of this
order about the remaining discovery requests still in dispute. Respondent may file a renewed
motion to compel within fourteen (14) calendar days from the date of this order. Any motion and
accompanying memorandum must specify to which discovery requests respondent seeks to
compel responses. Petitioners’ response brief must also address its specific objections to specific
discovery requests. Failure to do so will result in a finding that petitioners have failed to support
their objections, and respondent’s motion to compel will be granted. No further briefing shall be
IT IS THEREFORE ORDERED that CEC Entertainment, Inc.’s Motion to Compel the
Production of Documents to Respondent’s First Request for Production of Documents Directed
to Petitioners (ECF No. 41) is granted in part and denied without prejudice in part.
IT IS FURTHER ORDERED that Petitioners’ Motion for Leave to File Surreply and
Proposed Surreply (ECF No. 65) is granted insofar as the court has considered the surreply.
IT IS SO ORDERED.
Dated this 25th day of June, 2015, at Topeka, Kansas.
s/ K. Gary Sebelius
K. Gary Sebelius
U.S. Magistrate Judge
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