InfusAID LLC v. InfuSystem Inc. et al
Filing
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MEMORANDUM AND ORDER denying 29 Motion to Compel. The motion is denied as moot as to First Request Nos. 1-5 and Second Request Nos. 1-2; denied without prejudice to refiling as to First Request Nos. 9 and 11-13; and denied as to all other requests. Signed by Magistrate Judge K. Gary Sebelius on 2/2/18. (bh)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
INFUSAID LLC,
Plaintiff,
v.
INFUSYSTEM INC.,
Defendant.
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Case No. 17-2243-CM
MEMORANDUM AND ORDER
This matter comes before the court upon Plaintiff InfusAID LLC’s Motion to Compel the
Production of Documents by Defendant InfuSystem Inc. (ECF No. 29). Plaintiff seeks a court
order compelling defendant to produce documents responsive to its First and Second Requests
for Production. For the reasons stated below, the motion is denied as moot as to First Request
Nos. 1-5 and Second Request Nos. 1-2; denied without prejudice to refiling as to First Request
Nos. 9 and 11-13; and denied as to all other requests.
I.
Background
The claims in this case arise from the alleged breach of an Asset Purchase Agreement
(APA) whereby defendant acquired plaintiff’s business, namely the service of providing
ambulatory infusion pumps and related billing services. The parties entered into the APA on
March 16, 2016, with closing on the APA occurring on July 1, 2017. Plaintiff asserts defendant
breached the APA by (1) failing to pay Plaintiff for receivables related to patient treatments through
the closing date as required by the APA; (2) failing to fully compensate Plaintiff for a number of
Plaintiff’s infusion pumps in Defendant’s possession; (3) failing to reasonably cooperate in the
transition of accounts to Defendant; and (4) failing to pay for certain accounts conveyed to
Defendant. Plaintiff also asserts a claim for unjust enrichment.
Plaintiff served its first and second requests for the production of documents in October
2017. The parties agreed that defendant would respond to both sets of discovery requests by
November 17, 2017. As plaintiff explains, defendant produced no documents, objected to the
majority of the requests, and stated it would need additional time to produce some responsive
material to which it had no objection to producing.
Defendant’s response brief, however, provides additional context. According to defendant,
information responsive to the requests for production is stored electronically. The parties had
discussed production of electronically stored information (ESI) during their planning conference and
determined that defendant would first produce summary reports of ESI rather than underlying
granular data fields. However, defendant would produce the underlying granular data on a case-bycase basis if plaintiff required additional information. Plaintiff disputes this account, stating that these
discussions never took place and that no agreement existed. Defendant states it had been providing
summary reports upon request to plaintiff for months and that there was never a dispute regarding the
summaries until settlement negotiations stalled. Plaintiff contends that defendant had produced only
two summary reports but updated one with revised information. Defendant contends that it can
produce the ESI to which it has no objection to producing but that because of the large volume of
information, the task cannot be completed until January 12, 2018. As for the remainder of the
document production requests, defendant asserts that they are overly broad and encompass irrelevant
information.
II.
Discussion
Before considering the merits of a motion to compel, the court must determine whether
the moving party has satisfied the procedural conference requirement. Both the Federal Rules of
Civil Procedure and this district’s local rules require a moving party to confer in good faith with
2
the opposing party about a discovery dispute prior to filing a motion to compel.1 A party does not
comply with the requirement “simply by requesting or demanding compliance with the requests
for discovery.”2 Instead, the parties must “make genuine efforts to resolve the dispute by
determining precisely what the requesting party is actually seeking; what responsive documents
or information the discovering party is reasonably capable of producing; and what specific,
genuine objections or other issues, if any, cannot be resolved without judicial intervention.”3
That did not happen here.
Reviewing the correspondence between counsel regarding this discovery dispute, plaintiff
did little more than demand full compliance with the discovery requests, initially giving
defendant a week to fully respond to the requests before plaintiff would file a motion to compel.4
In a subsequent letter, plaintiff’s counsel addressed responses to the requests for production that
state that that defendant would produce responsive documents at a time and place mutually
agreeable to the parties and their attorneys. The letter states, “That time has arrived and is either
today [November 24, 2017] or Monday, November 27, 2017.”5 The letter goes on to inform
defense counsel that if defendant does not produce or make the information available by that
date, plaintiff would move to compel.
While defendant’s correspondence sets forth the reasons for requiring additional time to
gather ESI and states that it could produce responsive information by January 12, 2018, plaintiff
1
See Fed. R. Civ. P. 37(a)(1); D. Kan. Rule 37.2.
2
Contracom Commodity Trading Co. v. Seaboard Corp., 189 F.R.D. 456, 459 (D. Kan. 1999).
3
Id.
4
See Letter from plaintiff’s counsel to defense counsel, ECF No. 30-5
5
See Letter from plaintiff’s counsel to defense counsel, ECF No. 30-7.
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decided to instead move to compel responsive information that defendant has already agreed to
produce. Plaintiff does not challenge the reasons for the additional time required for production.
Plaintiff just believes it should have happened sooner. Notably, plaintiff’s motion was not fully
briefed until December 27, 2017, and the court was not able to render a decision on the matter
until now. This type of motion practice is not a model of efficiency. Instead of filing a motion
regarding issues to which there is a genuine dispute—and there are some—plaintiff has moved to
compel responses to every single document production request on two separate set of requests.
The court has expended time and resources evaluating requests for production to which
defendant simply required additional time to respond for what appear to be valid reasons. At a
minimum, plaintiff has not complied with the spirit of the rules requiring a moving party to
meaningfully confer before filing a motion to compel. In its discretion, the court will evaluate the
merits of the motion to avoid further delay.
Fed. R. Civ. P. 26(b)(1) defines the scope of discovery as nonprivileged matters that are
relevant to any party’s claim or defense and proportional to the needs to of the case. When a
party fails to make disclosure or produce discovery, the opposing party may file a motion to
compel. When a party files a motion to compel that asks the court to overrule certain objections,
the objecting party must specifically show in its response to the motion how each discovery
request is objectionable.6 However, if the discovery requests appear facially objectionable, the
movant bears the burden to demonstrate how the request is not objectionable.7
A. First Request for Production Nos. 1-5 and Second Request for Production Nos.
1-2
6
Sonnino v. Univ. Kan. Hosp. Auth., 221 F.R.D. 661, 670-71 (D. Kan. 2004).
7
See Goodyear Tire & Rubber Co. v. Kirk’s Tire & Auto Service Center of Haverstraw, Inc., 211 F.R.D. 658, 663
(D. Kan. 2003) (citing Steil v. Humana Kan. City, Inc., 197 F.R.D. 442, 445 (D. Kan. 2000)).
4
Defendant states that it is working diligently to produce documents responsive to these
requests by January 12, 2018. The reasons for the additional time required appear reasonable. In
its reply brief, plaintiff asks the court to order defendant to produce documents on a rolling basis
as set forth in the scheduling order. The court expects all parties to comply with the cooperation
agreements set out in the scheduling order. If responsive documents are available to be produced
earlier, the court expects defendant to produce them at that time. However, there is no
information before the court demonstrating that defendant has failed to comply with this
requirement.
B. First Request for Production Nos. 6-8
These document production requests seek documents regarding defendant’s evaluation of
the pumps, including internal communication and communication between plaintiff and
defendant regarding the pumps.8 Defendant asserts a relevance objection to each of these
requests.
Fed. R. Civ. P. 26(b) defines the scope of discovery. Under the rule, “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 . . . .”9 Although considerations of relevance and
proportionality govern the scope of discovery, “[r]elevance is still to be ‘construed broadly to
encompass any matter that bears on, or that reasonably could bear on ‘any party’s claim or
defense.’”10 Proportionality is determined by “considering, ‘(1) the importance of the issues at
8
See InfuSystem’s Resp. to Pl.’s First Set of Req. for Produc. of Docs. Directed to Def. Infusystem Inc. at 2-3 (ECF
No. 30-3).
9
Fed. R. Civ. P. 26(b)(1).
10
Rowan v. Sunflower Elec. Power Corp., No. 15-9227-JWL-TJJ, 2016 WL 3745680, at *2 (D. Kan. July 13, 2016)
(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) and ruling that the court may still rely on the
Oppenheimer’s statements regarding relevance).
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stake in the action, (2) the amount in controversy, (3) the parties’ relative access to relevant
information, (4) the parties’ resources, (5) the importance of the discovery in resolving the
issues, and (6) whether the burden or expense of the proposed discovery outweighs its likely
benefit.”11 However, Rule 26(b)’s proportionality requirement does not alter the burdens placed
on the discovering party or the responding party in briefing a motion to compel, and it does not
require the parties to address all proportionality considerations in order to have a motion to
compel granted or an objection sustained.12
Generally, a discovery request is facially objectionable “if the court could tell that the
request is overly broad, unduly burdensome, vague or ambiguous, or seeks irrelevant information
by doing nothing more than evaluating the plain language of the request.”13 When assessing a
relevance objection, the court must also consider the four corners of the pleadings, given that the
requested discovery must be relevant to a claim or defense.14 Here, however, plaintiff’s
complaint contains no factual allegations or claim related to the alleged damage to the returned
pumps. Because it is not readily apparent how this information bears on claims or defenses in
this case, plaintiff bears the burden to demonstrate relevance.
Plaintiff states that these requests are related to plaintiff’s claims for breach of the APA.
Indeed, plaintiff’s complaint alleges that under the APA, it is entitled to the return of all pumps,
or alternatively, $100 for each pump designated as a “delivered pump.” Defendant has now
returned the pumps to plaintiff, but plaintiff contends the requested information is still relevant
11
Fed. R. Civ. P. 26(b)(1).
12
N.U. v. Wal-Mart Stores, Inc. No. 15-4885-KHV, 2016 WL 3654759, at *6-*7 (D. Kan. July 8, 2016).
13
Id.
14
Fed. R. Civ. P. 26(b)(1).
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because defendant returned the pumps in a condition not usable for any purpose. Although
plaintiff argues that the complaint encompasses this theory, plaintiff fails to cite to the portion of
the complaint where this theory appears. Indeed, the paragraphs addressing this issue make no
mention of a breach of a duty to return the pumps in the same condition.15 This is understandable
given that defendant returned the pumps after plaintiff filed the complaint. However, plaintiff has
never amended its complaint to seek damages stemming from pumps allegedly returned in an
unusable condition. If plaintiff seeks discovery regarding the condition of the pumps, it must
plead a claim for which this discovery would be relevant. Because the requested discovery does
not appear facially relevant to any claim currently pled and because plaintiff has not carried its
burden to demonstrate relevance, the court sustains defendant’s relevance objection. Defendant
need not respond to Request Nos. 6-8.
C. First Request for Production No. 9
This request seeks documents relating to defendant’s effort to obtain assignment-ofbenefits forms from patients.16 Defendant asserts a relevance objection. Again, because the
complaint contains no factual allegations regarding the assignment-of-benefits forms and does
not appear to assert any claim based on the assignment-of-benefits forms, the requested
information does not appear facially relevant. Therefore, plaintiff bears the burden to
demonstrate relevance.
15
See, e,g., Compl. at ¶ 39 (“Plaintiff also demanded that InfuSystem (1) return to Plaintiff the amounts of all
accounts receivable outstanding on and before the Closing Date (July 1, 2016) as required by Section 6.05 of the
APA; and (2) return all Pumps listed on Schedule 2.1(a) of the APA, which InfuSystem determined not to designate
as Delivered Pumps during the Holdback Period.”); id.at ¶ 47 (stating that plaintiff had “repeated its demand to be
paid the amount of receivables through the Closing and return of all Pumps that InfuSystem had elected not to
purchase as Delivered Pumps”); id. at ¶ 55 (stating the ways in which defendant allegedly breached the APA but
making no mention of a breach stemming from the return of the pumps in a damaged condition).
16
InfuSystem’s Resp. to Pl.’s First Set of Req. for Produc. of Docs. Directed to Def. Infusystem Inc. at 3 (ECF No.
30-3).
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In plaintiff’s opening memorandum, plaintiff states that this request is one of a number of
discovery requests that “seek documents related to Defendant’s assimilation of Plaintiff’s
accounts after the APA was signed, which directly relate to Plaintiff’s claims that Defendant has
failed to provide a proper accounting of amounts due to Plaintiff under the APA, and has failed
to compensate plaintiff as provided under the APA.”17 While the complaint does allege that
defendant has breached the APA by failing to provide information and documents to substantiate
the amount of receivables due,18 plaintiff fails to explain how defendant’s efforts to obtain
assignment-of-benefits forms translates into information necessary to substantiate the amount of
receivables due. Although this information might very well bear on plaintiff’s alleged inability to
calculate receivables due, plaintiff has not connected the dots in this instance.
Plaintiff’s explanation of relevance shifts in its reply brief. For the first time, plaintiff
asserts that the discovery is relevant to the claims (1) that defendant refused to provide
information, reports and documents necessary to transition existing accounts and pump billings
and (2) that defendant failed to take actions reasonably required to carry out the provisions and
give effect to the transactions contemplated by the APA.19 The reply brief’s explanation of
relevance is more compelling. However, defendant did not have an opportunity to respond to this
argument because plaintiff did not advance it when it filed its motion to compel. For these
reasons, the court denies the motion to compel without prejudice to refiling within twenty-one
17
Mem. of Law in Supp. of Pl. InfusAID LLC’s Mot. to Compel the Produc. of Docs. by Def. InfuSystem Inc. at 7
(ECF No. 30).
18
See Compl. at ¶ 55(a), ECF No. 1.
19
Pl. InfusAID LLC’s Reply Brief in Supp. of its Mot. to Compel the Produc. of Docs. by Def. InfuSystem, Inc. at
6, ECF No. 32.
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(21) calendar days from the date of this order. The parties are ordered to meaningfully confer
about the relevance of this discovery during that period.
D. First Request for Production No. 10
This request seeks all communication between plaintiff and defendant “referring or
relating to the conversion of the facilities and patient billings between March 16, 2016, and the
end of the Holdback Period.”20 Defendant objected to the discovery request on the ground that
plaintiff was seeking documents that were presumably already in its possession. The relevance of
the information is not apparent, given that plaintiff would be expected to be in possession of the
same information it requests. Moreover, in considering proportionality under Rule 26(b), one of
the factors the court evaluates is “the parties’ relative access to relevant information.” Plaintiff
does not suggest that its own records may be incomplete or offer any other facts demonstrating
why it requires defendant to produce this correspondence. Because of this, the court finds that
the information sought does not appear facially relevant or proportional, and plaintiff has not
carried its burden to demonstrate relevance. Defendant’s objection is sustained. It need not
respond to Request No. 10.
E. First Request for Production Nos. 11-13
These requests seek documents evidencing the conversion of plaintiff’s accounts to
defendant’s EXPRESS paperless record-keeping and billing system, including documents
evidencing the use of iPads to enter documents and documents evidencing the inputting of
patient treatments and pump billings. Defendant asserts that the discovery requests are overly
broad because they encompass irrelevant information. Defendant contends that requesting all of
the granular data in EXPRESS would result in production of patient information and billings
20
InfuSystem’s Resp. to Pl.’s First Set of Req. for Produc. of Docs. Directed to Def. Infusystem Inc. at 4 (ECF No.
30-3).
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from the Closing to the present—information that has no bearing on this case. In its reply brief,
plaintiff fails to address this argument and instead mischaracterizes defendant’s position as
objecting that the requests are “not capable of being answered.” Because neither side disputes
that the requests encompass some relevant information and because neither side disputes that the
requests also encompass irrelevant information, the court denies the motion to compel without
prejudice to refiling within twenty-one (21) calendar days from the date of this order. The
parties, and not the court, are in the best position to narrow these requests to minimize
production of irrelevant information, and they should be capable of doing so. The court orders
them to meaningfully confer to narrow the scope of these discovery requests.
F. Costs & Fees
Fed. R. Civ. P. 37(a)(5)(B) provides that when a motion to compel is denied, the court
“must, after giving an opportunity to be heard, require the movant, the attorney filing the motion,
or both, to pay the party . . . who opposed the motion its reasonable expenses incurred in
opposing the motion, including attorney’s fees.” The court must not award expenses, however, if
the motion was substantially justified or if other circumstances make an award unjust.21
The court finds that an award of expenses is not appropriate in this instance. For one,
Fed. R. Civ. P. 37(a)(5)(B) does not speak to situations in which the denial of a motion to compel
involves the denial without prejudice to refiling as to several requests. As to at least Request
Nos. 11-13, both parties should have made more serious efforts to resolve their disputes prior to
the court becoming involved. Moreover, the undersigned is troubled by the parties’ contradictory
statements about their planning meeting discussions regarding ESI production. Quite simply,
21
Fed. R. Civ. P. 37(a)(5)(B).
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both positions cannot be true, but there is not a sufficient record upon which the court could
determine the accuracy of the representations made in the briefs.
The court will deny any future motions to compel filed before meaningfully conferring
with the opposing party. The parties are further cautioned that any suspected misrepresentations
knowingly made will likely result in an evidentiary hearing before the court and the imposition
of sanctions against the attorneys responsible.
Accordingly,
IT IS THEREFORE ORDERED that Plaintiff InfusAID LLC’s Motion to Compel the
Production of Documents by Defendant InfuSystem Inc. (ECF No. 29) is denied as moot as to
First Request Nos. 1-5 and Second Request Nos. 1-2; denied without prejudice to refiling as to
First Request Nos. 9 and 11-13; and denied as to all other requests.
IT IS SO ORDERED.
Dated February 2, 2018, at Topeka, Kansas.
s/ K. Gary Sebelius
K. Gary Sebelius
U.S. Magistrate Judge
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