Watts Constructors, LLC v Boneso Brothers Construction, Inc.
Filing
13
ORDER granting in part and denying in part 1 petitioner Watts's motion to quash. See order for details. Signed by Magistrate Judge James P. O'Hara on 11/6/20. (jc)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
WATTS CONSTRUCTORS, LLC,
Petitioner,
v.
Case No. 20-mc-00211-EFM
BONESO BROTHERS CONSTRUCTION,
INC.,
Respondent.
ORDER
This motion arises from petitioner Watts Constructors, LLC (“Watts”), the thirdparty in a related civil action pending in this court, 19-2269-EFM, Airtex Manufacturing,
LLC v. Boneso Brothers Construction, Inc.
On July 14, 2020, Boneso Brothers
Construction, Inc. (“Boneso”), the defendant in the civil action and respondent here, served
a subpoena duces tecum on Watts. Watts has filed a motion to quash the subpoena (ECF
No. 1), which Boneso opposes. For the reasons discussed below, the court grants the
motion to quash in part and denies it in part.
Background
Watts is a general contractor and construction manager for federal government
construction projects.1 Watts entered into a contract with the United States Army Corps of
Engineers (“USACE”) to provide general contracting and construction management
1
ECF No. 1 at 2.
O:\ORDERS\20-MC-00211-EFM-1.DOCX
services for the Satellite Earth Terminal Station Facility project, located at Camp Roberts,
California.2 Watts subcontracted elements of the project, including mechanical and HVAC
work, specifically Roof Top Units (“RTUs”), to Boneso.3 Boneso contracted with Airtex
Manufacturing, Inc. (“Airtex”) to design, furnish, and install the RTUs.4
Airtex has filed an action against Boneso, alleging Boneso has failed to pay for
certain elements of the project.5 Watts is not a party to that action. Airtex alleges it hasn’t
been paid in full by Boneso for mechanical and plumbing construction services.6 Boneso
alleges one of the reasons Airtex hasn’t been paid is because Watts has not paid Boneso in
full for the HVAC units.7 Boneso represents it is “not required to pay plaintiff until it has
pursued to conclusion its legal remedies against Watts related to Watts’s failure to pay.”8
Boneso alleges Watts has information related to communication with USACE, regarding
the HVAC units,9 that’s relevant to the payment dispute. Boneso served a subpoena with
18 requests for production to Watts on July 15, 2020, requesting that Watts produce the
documents by August 11, 2020.
2
Id.
3
Id.
4
Id.
5
Case No. 19-2269-EFM, No. 1.
6
ECF No. 9 at 2.
7
Id.
8
Id.
9
Id.
2
Watts objected to the requests. On August 11, 2020, subject to its objections, Watts
made an initial document production to resolve the subpoena.10 Watts asserted it would
provide non-privileged, non-proprietary documents in response to some of the requests but
would not produce e-mails, given the burden it would impose.11 Watts maintained its
objections to four requests that are now subject to the motion to quash.12 Watts made
supplemental productions on September 3, 2020 and September 11, 2020,13 and Watts
represents it has produced or will produce all non-privileged, non-proprietary documents
in response to the subpoena, except for Request Nos. 3, 5, 6, and 13.14 The parties have
conferred multiple times by telephone and e-mail to resolve the subpoena.
On September 2, 2020, Boneso Brothers filed a motion to compel related to the
subpoena in the underlying civil action.15 The court granted that motion as unopposed on
September 17, 2020.16 Meanwhile, on September 15, 2020, Watts filed a motion to quash
in the Eastern District of Virginia, Case No. 20-mc-00028.17 The motion to quash was
transferred to this court on October 2, 2020 by U.S. Magistrate Judge Ivan D. Davis who
10
ECF No. 1 at 4.
11
Id.
12
Id.
13
Id. at 5.
14
Id.
15
Case No. 19-2269-EFM, ECF No. 75.
16
Case No. 19-2269-EFM, ECF No. 76.
17
ECF No. 1.
3
found “exceptional circumstances dictate that the U.S. District Court for the District of
Kansas is the proper court to handle the motion in order to avoid inconsistent rulings
between the D. Kan. and the EDVA regarding the requested discovery.”18 To the extent
Watts briefly raises the issue again in the instant motion, the court reiterates that it can
properly adjudicate this issue because of the transfer from the Eastern District of Virginia.
On October 14, 2020, counsel for Boneso represented by e-mail to the court that
he’d conferred with counsel for Watts and the discovery issues had been resolved, so the
court did not revisit or vacate its prior order.19 The parties expressed optimism the issues
would be resolved, but the undersigned U.S. Magistrate Judge, James O’Hara, in an
abundance of caution, told the parties he’d grant the motion to quash as unopposed unless
there was further briefing or representation that the motion had been mooted.
As it happened, the parties did not, in fact, resolve their disputes, and Boneso filed
its response on October 22, 2020.20 Watts filed its reply on October 29, 2020.21 The court
joins the parties’ frustration that their previous representations implied a resolution that did
not actually occur. Nonetheless, the court, rather than accept Watts’s suggestion to find
the subpoena has been resolved,22 turns to the parties’ arguments.
18
ECF No. 5.
19
Case No. 19-2269-EFM, ECF No. 80.
20
ECF No. 9.
21
ECF No. 12.
22
Id. at 2.
4
Analysis
Fed. R. Civ. P. 45 provides guidelines for the issuance of subpoenas to non-parties.
Rule 45(d)(3)(A) requires the court to quash or modify a subpoena that requires compliance
beyond the geographical limits of service; requires disclosure of privileged or protected
information; or subjects a person to undue burden. The rule allows a court to quash a
subpoena “on timely motion,” although the court is not bound by a strict time period for
determining timeliness.
One of Boneso’s arguments is that the motion to quash was untimely because it was
filed more than 30 days after the date of compliance and 60 days after service. 23 Fed. R.
Civ. P. 45 does not define “timely,” though Boneso cites case law from outside this district
holding that “timely” means “at or around the time when a party files its objections or
within the time set forth in the subpoena for compliance.”24 But this district gives courts
discretion to consider motions to quash that were not “timely” filed within the meaning of
Rule 45.25 Boneso also argues Watts’s objections to the subpoena, filed on August 6, 2020,
were due by July 28, 2020 and are untimely.26
Although the court finds these arguments are made in good faith, it declines to deny
the motion to quash on these bases. The record shows the parties have been trying, in good
23
ECF No. 9 at 7.
24
Id. (citing Ward v. Liberty Insurance Corp., 2018 WL991546, at *2 (W.D. Oklahoma,
February 20, 2018)).
25
Ward, 2018 WL991546, at *2.
26
ECF No. 9 at 8.
5
faith, to resolve the subpoena on their own and with the two courts involved. The court
will not find Watts has waived its objections based on its ongoing cooperation and attempts
to resolve the subpoena. Similarly, the court finds the motion was timely filed.
Watts maintains its objection that the court should quash the subpoena because of
the geographical limits of Fed. R. Civ. P. 45(c)(1)A). Watts “does not maintain an office
in Kansas, is not currently transacting business in Kansas, and does not regularly transact
business in person in Kansas.”27
Watts maintains that the subpoena violates the
geographical restrictions of Rule 45, although it concedes the majority of responsive
documents can be produced electronically.28
As the court stated in its September 17, 2020 order, although Fed. R. Civ. P.
45(c)(1)(A) limits the mandatory appearance of witnesses beyond a 100-mile radius, courts
in this district have repeatedly acknowledged that where a subpoena does not require
attendance of any witnesses – only production of documents – there is no violation of the
100-mile limitation of Rule 45.29 Production of the requested documents via e-mail, which
Watts has already done over several rounds of production, is reasonable and does not
27
ECF No. 1 at 7.
28
Id.
29
Case No. 19-2269-EFM, ECF No. 76. Frick v. Henry Indus., Inc., No. 13-2490-JTMGEB, 2016 WL 6966971, at *3 (D. Kan. Nov. 29, 2016); Holick v. Burkhart, No. 16-1188JTM-KGG, 2017 WL 3723277, at *8 (D. Kan. Aug. 29, 2017).
6
impose a burden.30 Therefore, the court maintains this is not a reason to quash the
subpoena.
Undue Burden
The court therefore moves to the substance of the subpoena. The scope of discovery
under a subpoena is the same as the scope of discovery under Rules 26(b) and 34 of the
Federal Rules of Civil Procedure.31
Rule 26(b) allows discovery regarding “any
nonprivileged matter that is relevant to any party’s claims or defenses and proportional to
the needs of the case.”32 The proportionality standard moved to the forefront of Rule 26(b)
when the rule was amended in 2015, which reinforced the need for parties to focus on the
avoidance of undue expense to the parties.33 Although the court still considers relevance,
the previous language defining relevance as “reasonably calculated to lead to the discovery
of admissible evidence,” was deleted in the 2015 amendment “because it was often misused
Holick, 2017 WL 3723277, at *8 (“If the documents are being produced via e-mail,
however, there is no additional burden on the witnesses to produce the documents.”).
30
31
Butcher v. Teamsters Local 955, No. 18-2424-JAR-KGG, 2019 WL 3453714, at *2 (D.
Kan. July 31, 2019) (quoting Parker v. Delmar Gardens of Lenexa, Inc., No. 16-2169JWL-GEB, 2017 WL 1650757, at *3 (D. Kan. May 2, 2017)).
Fed. R. Civ. P. 26(b)(1). The proportionality standard takes into account “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 burden or expense of the proposed discovery outweighs its
likely benefit.” Id.
32
33
Frick, 2016 WL 6966971, at *3.
7
to define the scope of discovery and had the potential to ‘swallow any other limitation.’”34
As such, the requested information must be nonprivileged, relevant, and proportional to the
needs of the case to be discoverable.35
The court takes Watts’s objections in turn. Watts objects to producing all e-mails
and to producing privileged, confidential, and proprietary documents. For the four specific
requests it objects to, Watts asserts they are overbroad and seek irrelevant information.
Watts argues the underlying civil case “is a breach of contract and payment dispute between
a subcontractor and its sub-subcontractor”36 and Watts “should not be required to broadly
produce all documents in response to these categories.”37 Watts proposes limited scopes
of production accordingly.
E-Mail Production
Watts objects generally that it should not be required to produce all responsive eemail correspondence related to a project that spanned nearly six years and included 25-30
personnel, in addition to subcontractors and suppliers.38 Watts argues the search will be
unduly expensive, costing between $10,000 and $20,000. Watts states its project team
34
Brown v. Panhandle E. Pipeline Co. L.P., No. 16-CV-2428-JAR-TJJ, 2018 WL 263238,
at *2 (D. Kan. Jan. 2, 2018).
35
Funk v. Pinnacle Health Facilities XXXII, LP, No. 17-1099-JTM-KGG, 2018 WL
6042762, at *1–2 (D. Kan. Nov. 19, 2018).
36
ECF No. 1 at 9.
37
Id. at 9-10.
38
Id. at 8.
8
members each maintain their e-mails differently and producing each and every e-mail
would require it to conduct “an extensive search of every custodian’s account to find the
information Boneso seeks.”39
Watts proposed to Boneso that it should “limit its requests to specific date ranges,
custodian accounts, and also provide a list of search terms for Watts to run over the
accounts.”40 Boneso did not respond to this proposal.41 Watts also argues Boneso should
bear the cost.42 Boneso argues the requests do not impose an undue burden and that it does
not know who at Watts would have the relevant information or where these e-mails would
be stored. Boneso is skeptical that 25-30 personnel would be involved in the relevant
conversations; “it seems far more likely that 1 or 2 key individuals at Watts were
participating in these communications.”43 Therefore, Boneso contends Watts should
provide a list of e-mail custodians, including which of them likely had significant
communications regarding the topics identified in the subpoena.44
The court is inclined to rule in favor of Watts on this issue. Boneso represented to
the court on October 14, 2020, over a month after Watts’s three productions, that its counsel
39
ECF No. 12 at 7.
40
ECF No. 1 at 8.
41
ECF No. 12 at 7.
42
ECF No. 1 at 8.
43
ECF No. 9 at 11.
44
Id.
9
“has not had the chance to review all of the documents received from Watts.”45 Apparently,
its client directed counsel not to review the documents “because it did not want to incur
attorney’s fees and costs for the review time.”46 Based on this representation and Boneso’s
lack of supporting case law, the court is unpersuaded that Watts should be required to
produce a nebulous and perhaps unwieldy number of e-mails. The court declines the
general request to compel all e-mails. To the extent there are e-mails responsive to the
specific requests that Watts has not produced but of which it is aware, Watts shall produce
them in accordance with the rulings below.
Privileged, Confidential, and Proprietary Documents
Watts argues it shouldn’t be required to produce documents it contends are
privileged, confidential, or proprietary. Specifically, Watts represents it cannot produce
certain documents with proprietary information about pricing, staffing, and logistics of
government construction projects.47
It proposes the court allow it to redact such
confidential and proprietary information. To that end, Watts produced a privilege log in
response to the subpoena.48 Watts is essentially asking for a blanket protective order to
protect against the disclosure of trade secret information. As such, Watts must first
establish that the information sought to be protected is indeed a trade secret, then must
45
ECF No. 12-2 at 2.
46
ECF No. 12 at 3.
47
ECF No. 1 at 12.
48
Id.
10
show that the disclosure of the trade secret information would result in a clearly defined
and very serious injury.49 To establish such an injury, Watts must “make a particular and
specific demonstration of fact, as distinguished from stereotyped and conclusory
statements.”50
Boneso argues Watts has not met its burden to show that this information should be
redacted, as Watts “does nothing more than make the conclusory statement that certain
information is proprietary or confidential.”51 The court agrees. Beyond asserting that
certain pricing and staff information, if released, “could cause harm to Watts’s competitive
edge,”52 Watts hasn’t cited any case law showing that this information is subject to
redaction. In the underlying civil case, the court entered the parties’ September 3, 2019
agreed protective order (ECF No. 21), whose provisions on confidential information are
extended to third parties, if timely requested by the third party.53 The protective order
should adequately protect the parties’ privacy and confidentiality rights.54 The court denies
Watts’s request to redact information it contends is confidential or proprietary.
49
Rajala v. McGuire Woods, LLP, No. CIV.A. 08-2638-CM-DJ, 2010 WL 4683979, at
*11 (D. Kan. Nov. 12, 2010).
50
Id.
51
ECF No. 9 at 9.
52
ECF No. 12 at 7.
53
Case No. 19-2269-EFM, ECF No. 21, ¶ 16.
54
See Frick, 2016 WL 6966971, at *3 (citing Martin v. Grp. 1 Realty, Inc., No. 12-2214EFM-DJW, 2013 WL 3322318, at *5 (D. Kan. July 1, 2013)).
11
Specific Requests
Boneso argues Watts has asserted general or conditional objections to the four
requests at issue. Conditional objections occur “when a party asserts objections, but then
provides a response ‘subject to’ or ‘without waiving’ the stated objections.”55 For example,
“a general objection that objects to a discovery request ‘to the extent’ that it asks the
responding party to provide documents or information protected by the attorney-client
privilege or work product immunity is tantamount to asserting no objection at all.”56
To be clear, such objections “preserve nothing and serve only to waste the time and
resources of both the parties and the court.”57 General objections are considered overly
broad and worthless, unless the objections are substantiated with detailed explanations.58
After reviewing the relevant discovery requests and objections, the court agrees
some of the objections, particularly those objecting on the basis of attorney-client privilege,
are arguably general objections. Other objections in Watts’s “general objections” are more
specific, focusing on the particulars of the case with sufficient explanations. To the extent
Watts has provided partial answers to these or other requests, the court strongly reminds
55
U, Inc. v. ShipMate, Inc., No. 2:14-CV-2287-JTM-TJJ, 2015 WL 3822731, at *3 (D.
Kan. June 19, 2015).
56
Williams v. CoreCivic, Inc., No. 17-CV-2310-JAR-GLR, 2018 WL 3075867, at *3 (D.
Kan. June 21, 2018).
57
Id.
58
Id.
12
Watts that conditional objections are not appropriate. On the whole, however, the court
finds Watts’s objections are specific enough so as not to be waived.
Request No. 3
Request No. 3 seeks “all documents evidencing payments Watts has received from
USACE for work on the Project, including payment applications and corresponding
payments from USACE.”59 Watts has produced documents showing payments received
from USACE on account of Boneso’s work on the project but objects to producing
documents regarding other subcontractors’ work or Watts’s own work as irrelevant and
overly broad.60
Boneso argues it is entitled to any payment applications and corresponding
payments from the USACE. Boneso explains these payments are relevant to the underlying
lawsuit, which involves failure to pay for work on this project. Airtex claims Boneso has
failed to pay Airtex in full and that Watts has paid Boneso for Airtex’s scope of work.
Boneso argues Watts hasn’t paid Boneso in full for Airtex’s scope of work. The amount
USACE has paid Watts, “in order to determine if Watts has properly flowed down
payments from USACE to Boneso pursuant to their contract,”61 is therefore relevant.
The court agrees with Boneso that the scope of the request is narrowly tailored, not
unduly burdensome, and seeks information relevant to the underlying lawsuit. Watts shall
59
ECF No. 1 at 10.
60
Id.
61
ECF No. 9 at 15.
13
produce any documents sent by Watts to the USACE requesting payments and any
documents from the USACE acknowledging or disputing those payment requests.
Request No. 5
Request No. 5 seeks “all correspondence and other documents exchanged with
USACE concerning payments owed or withheld related to the Project.”62 Watts has agreed
to produce documents related to Boneso’s work but objects to producing documents
“concerning amounts withheld by USACE on account of other subcontractors’ work or
reasons unrelated to Boneso’s work.”63
Boneso again argues the documents related to payments are relevant to determining
if Watts properly paid Boneso or retained some funds “to compensate Watts for the funds
being withheld from the USACE related to Watts’ (or its other subcontractors’)
deficiencies.”64 The court finds this request to be a closer call, given the broader language
of the request. Ultimately, the court finds the language of “all correspondence and other
documents” coupled with the vague language of “concerning payments” to be overly broad.
The court sustains Watts’s objection and requires it to produce only documents showing
payments withheld for reasons related to Boneso’s work.
62
ECF No. 1 at 10.
63
Id.
64
ECF No. 9 at 17.
14
Request No. 6
Request No. 6 seeks “all documents and correspondence concerning any Miller Act
claims related to the project.”65 Under 40 U.S.C. § 3131, a Miller Act claim is “a claim for
non-payment against a general contractor’s bond on a federal government construction
project.”66 Watts argues any claims beyond Boneso’s or Airtex’s claims are irrelevant to
the dispute at issue and that Boneso “is engaging in a fishing expedition.”67 Boneso argues
this information is relevant “to determine if there are other subcontractors or suppliers from
whom Watts is also withholding funds,” which would show a “pattern of withholding funds
from contractors on this project.”68
Boneso does not proffer any evidence that Watts is withholding funds from other
subcontractors or suppliers, nor does Boneso explain how this is relevant to its defense in
the underlying action. The court sustains Watts’s objection and requires it to produce only
documents related to Boneso’s and Airtex’s Miller Act claims.
Request No. 13
Request No. 13 seeks “all documents and correspondence regarding liquidated
damages for the project, including whether liquidated damages will be asserted related to
65
ECF No. 1 at 11.
66
Id.
67
Id.
68
ECF No. 9 at 18.
15
the project.”69
Similarly to its other objections, Watts argues documents related to
liquidated damages asserted or withheld on account of other subcontractors are irrelevant
to the dispute here.70
Boneso argues this information is relevant to the claim in the underlying litigation
that Watts is withholding money from Boneso because the USACE has threatened to
impose liquidated damages.71 As Boneso cites, the record shows Watts references this
threat as one of several reasons why it hasn’t paid Boneso.72 Watts has produced a payment
estimate showing “the amounts presently withheld from Watts for liquidated damages and
the alleged reasons for the withholding (which Watts disputes).”73 Watts asks the court to
find it has complied with the request by limiting its production to liquidated damages on
account of Boneso’s work. Boneso argues that isn’t sufficient because it doesn’t know
how Watts is going to make that determination. Boneso argues other subcontractors’
delays “that were potentially concurrent with alleged delays of Boneso/plaintiff” would be
relevant to “determining what portion of liquidated damages could be assessed against
Boneso and/or plaintiff.”74
69
ECF No. 1 at 11.
70
Id.
71
ECF No. 9 at 19.
72
ECF No. 9-5 at 3.
73
ECF No. 1 at 12.
74
ECF No. 9 at 20.
16
Because the ultimate issue in the underlying claim involves Boneso’s payment to
Airtex – and Boneso claims it doesn’t have to pay until it resolves its issues with Watts’s
payment – the court agrees the issue of liquidated damages is relevant here. The court
overrules Watts’s objection as to Request No. 13 and directs Watts to produce the
responsive information.
IT IS THEREFORE ORDERED that petitioner Watts’s motion to quash (ECF No.
1) is granted in part and denied in part. Watts’s objections as to Request Nos. 5 and 6 are
sustained. Watts shall produce the documents sought by Request Nos. 3 and 13, without
objection, by November 20, 2020.
Dated November 6, 2020, at Kansas City, Kansas.
s/ James P. O’Hara
James P. O’Hara
U.S. Magistrate Judge
17
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