Total Safety U.S., Inc. v. Rowland
Filing
202
ORDER denying 181 Motion to Quash. Signed by Magistrate Judge Karen Wells Roby on 6/17/2014. (caa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TOTAL SAFETY U.S., INC.
CIVIL ACTION
VERSUS
NO:
GARY ROWLAND, ET AL.
SECTION: "B" (4)
13-6109
ORDER
Before the Court is Defendant, Gary Rowland’s (“Rowland”) Motion to Quash Deposition
of Defense Counsel of Record Kindall James (R. Doc. 181). See R. Doc. 181. The motion is
opposed. See R. Doc. 182. A reply was also filed. See R. Doc. 194. It was heard by oral argument
on May 28, 2014.
I.
Background
This case arises from Defendant Gary Rowland’s (“Rowland”) decision to leave his
employment with Plaintiff, Total Safety (“Total Safety”) for that of 24 Hour Safety in October of
2013. See R. Doc. 1, p. 1. Rowland resigned on October 6, 2013, and Total Safety initiated this suit
four days later, asserting a single claim for breach of an employment agreement and seeking
injunctive relief restraining Rowland from working for 24 Hour Safety in certain regards. Id. at
10-13.1 On October 23, 2013, Total Safety filed an amended complaint adding 24 Hour Safety as
a defendant and asserted claims for (i) Breach of Employment Agreement, (ii) Misappropriation of
1
A full factual background is included in the undersigned’s Order and Reasons, dated April 29, 2014, at
Rec. Doc. No. 174.
Confidential Information and Trade Secrets, (iii) Unfair Trade Practices, (iv) Conversion, (v) Breach
of Fiduciary Duty, (vi) Conspiracy, (vii) Violation of the Computer Fraud and Abuse Act, and (viii)
Violation of the Federal Stored Communications Act. Id. The Amended Complaint was also
accompanied by a Motion for renewed and expanded injunctive relief restricting Rowland from
competing in any way with Total Safety. See R. Doc. 19.
As to the instant motion, Defendant Rowland seeks an Order from this Court quashing the
deposition of his counsel of record, Kindall James, noticed by Total Safety on April 28, 2014. See
R. Doc. 181-2, p. 2. Rowland argues that Kindall James (“James”) is an integral part of his defense
team, as she has been enrolled as defense counsel of record since the inception of this litigation. See
R. Doc. 181-1, p. 1. As such, Rowland contends that she should not be deposed by Total Safety, as
she has interviewed witnesses, developed defense strategy, filed numerous pleadings, participated
in the preliminary injunction hearing and will participate in the trial of this case. Id.
II.
Standard of Review
Federal Rule of Civil Procedure (“Rule”) 26(b)(1) provides that “[p]arties may obtain
discovery regarding any non-privileged matter that is relevant to any party’s claim or defense.” Fed.
R. Civ. P. 26(b)(1). The Rule specifies that “[r]elevant information need not be admissible at the trial
if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Id.
The discovery rules are accorded a broad and liberal treatment to achieve their purpose of adequately
informing litigants in civil trials. Herbert v. Lando, 441 U.S. 153, 176 (1979). Nevertheless, discovery
does have “ultimate and necessary boundaries.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,
351 (1978) (quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). Furthermore, “it is well
established that the scope of discovery is within the sound discretion of the trial court.” Coleman v.
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American Red Cross, 23 F.3d 1091, 1096 (6th Cir.1994).
Under Rule 26(b)(2)(C), discovery may be limited if: (1) the discovery sought is unreasonably
cumulative or duplicative, or is obtainable from another, more convenient, less burdensome, or less
expensive source; (2) the party seeking discovery has had ample opportunity to obtain the discovery
sought; or (3) the burden or expense of the proposed discovery outweighs its likely benefit. Id. In
assessing whether the burden of the discovery outweighs its benefit, a court must consider: (1) the
needs of the case; (2) the amount in controversy; (3) the parties’ resources; (4) the importance of the
issues at stake in the litigation; and (5) the importance of the proposed discovery in resolving the
issues. Id. at 26(b)(2)(C)(iii).
The decision to enter a protective order is within the Court’s discretion. Thomas v. Int’l Bus.
Mach., 48 F.3d 478, 482 (10th Cir. 1995). Federal Rule of Civil Procedure 26(c) governs the
issuance of protective orders. It provides in pertinent part:
A party or any person from whom discovery is sought may move for a protective
order in the court where the action is pending-or as an alternative on matters relating
to a deposition, in the court for the district where the deposition will be taken. The
motion must include a certification that the movant has in good faith conferred or
attempted to confer with other affected parties in an effort to resolve the dispute
without court action. The court may, for good cause, issue an order to protect a party
or person from annoyance, embarrassment, oppression, or undue burden or expense.
Fed.R.Civ.P. 26(c)(1).
Rule 26(c), however, contains a requirement that good cause be shown to support the issuance
of a protective order, providing that “the burden is upon the movant to show the necessity of its
issuance, which contemplates a particular and specific demonstration of fact as distinguished from
stereotyped and conclusory statements.” In re Terra Int’l, 134 F.3d 302, 306 (5th Cir.1998); see also
Baggs v. Highland Towing, L.L.C.,No., No. 99-1318, 1999 U.S. Dist. LEXIS 11450, at *6-7, 1999
WL 539459, at *2 (E.D. La. July 22, 1999) (Rule 26(c)(2) orders may be issued only when the
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moving party makes “a particular and specific demonstration of fact as distinguished from
stereotyped and conclusory statements.”).
Rule 45 governs the issuance of subpoenas, and provides that on timely motion, the issuing
court must quash or modify a subpoena if it requires disclosure of privileged or other protected
matter, or otherwise subjects the subpoenaed person to undue burden. See Fed.R.Civ.P. 45(c)(3). “In
general, the burden of demonstrating the applicability of the privilege rests on the party who invokes
it.” Premier Dealer Servs., Inc. v. Duhon, No.12-1498, 2013 WL 5720354 (E.D. La. Oct. 21, 2013);
citing Nat’l West. Life Ins. Co. v. West. Nat. Life Ins. Co., 2010 WL 5174366, at *2 (W.D.Tex.Dec.
13, 2010); 9A Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE §
2463.1 (3d ed.2008); Hodges, Grant & Kaufmann v. U.S. Government, Dept. of the Treasury, 768
F.2d 719, 721 (5th Cir.1985). Under Rule 45, a Court must quash or modify a subpoena that fails
to allow a reasonable time to comply, requires the disclosure of privileged or protected matters, or
subjects a person to an undue burden. See Fed.R.Civ.P. 45(c)(3)(A)(i), (iii) & (iv).
III.
Analysis
Rowland argues that Kindall James (“James”) is an integral part of his defense team, as she
has been enrolled as defense counsel of record since the inception of this litigation. See R. Doc. 1811, p. 1. As such, Rowland contends that she should not be deposed by Total Safety, as she has
interviewed witnesses, developed defense strategy, filed numerous pleadings, participated in the
preliminary injunction hearing and will participate in the trial of this case. Id.
Furthermore, Rowland contends that James had one brief phone conversation with him in
September 2013, at a time when she was representing now co-defendant, 24 Hr. Safety, LLC., (“24
Hr.”) who was then a non-party in the process of hiring Rowland. Id. at 2. Rowland contends that
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Total Safety’s purported justification for deposing James is that she allegedly told Rowland her legal
opinion about a contract referred to in this litigation as the 2011 W3 Agreement (or the Unit Award
Agreement), which is not the employment agreement under which Total Safety sued Rowland in this
action. Id. Rowland contends that the employment agreement at the center of this action involves
non-compete agreements from a November 2005 contract Rowland entered into with Total Safety.
Rowland also contends that the 2011 W3 Agreement is not enforceable, as the presiding
District Judge stated during the parties TRO hearing, that “the Court has grave doubts that the
restrictive covenants in the [2011 W3] Agreement are enforceable under Louisiana law.” Id. at p.
5; citing R. Doc. 116, at p. 11-14. Therefore, Rowland contends that the Court’s reasoning helps
establish that James’s communication with Rowland concerning the 2011 W3 Agreement is not
relevant or crucial to this litigation, such that it would necessitate the taking of her deposition. As
such, Rowland contends that Total Safety cannot satisfy its burden of proof of the extraordinary
circumstances necessary to justify deposing James. Thus, Rowland seeks a protective order from this
Court quashing the deposition notice of Rowland’s counsel, James.
In opposition, Total Safety contends that Rowland’s conversations with James occurred
before she had any attorney-client relationship with him, and involved more than the 2011 W3
agreement’s non-compete clauses. See R. Doc. 182. Total Safety contends that James also served
as a recruiter for now co-defendant 24 Hour Safety, and had multiple conversations with Rowland
on its behalf before the inception of this litigation. Id. at p. 1.
Furthermore, Total Safety contends that in August 2013 James “made herself a fact witness”
in this matter when she gave Rowland advice on whether or not leaving Total Safety to join 24 Hour
Safety would violate the restrictive covenants in the 2011 W3 Unit Award Agreement. Id. at 2.
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Specifically, Total Safety contends that in late 2011, when Rowland agreed to become a member
and receive equity shares in Total Safety’s parent company W3 Holdings, LLC., he entered into the
2011 W3 agreement, which had restrictive covenants that supplemented the previous restrictive
covenants in his 2005 Employment Agreement with Total Safety. Id. at n. 4; citing R. Doc. 117, ¶
34. When Rowland was considering whether to leave Total Safety in August 2013, Total Safety
contends that 24 Hour Safety “hired [James] for advice for ‘ways to work around’ the Unit Award
Agreement.” Id. at 3.
Total Safety contends that James was sent the Unit Award Agreement and the highly
confidential operating agreement for W3 Holdings, LLC., for which she allegedly prepared a
memorandum detailing the activities Rowland could perform for 24 Hour Safety without violating
the agreement’s restrictive covenants. Id. at 3, n. 7. Total Safety contends that around this time Amy
Hains, co-owner of 24 Hour Safety, allegedly set up a conference for Rowland and James to speak
about the memorandum and resolve any of his doubts about leaving Total Safety. Id.
On September 16, 2013, Total Safety contends that Rowland was given James’s contact
information, and that following this, Rowland confirmed that he spoke with James “two or three
times” on this issue before an attorney-client relationship was ever established between he and
James. Id. Furthermore, Total Safety contends that Hains’s testified in her deposition that James’s
discussed restrictive covenants in the Unit Award Agreement with Rowland and informed him that
he could uphold his contract with Total Safety and still work for 24 Hour Safety. Id. at 4. Thus, Total
Safety contends that Rowland relied on James’s advice to leave 24 Hour Safety, prior to the
establishment of any attorney-client relationship in this matter, and thus is subject to being deposed.
As such, Total Safety contends that James is the only person with the relevant information
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as to the advice she gave Rowland regarding the W3 Unit Award Agreement; her discussions with
Rowland are relevant and non-privileged as there was not an attorney-client relationship with
Rowland at the time the conversations took place; and the information regarding these discussions
are crucial to Total Safety’s case preparation. Id. at 7-10.Therefore, Total Safety contends that she
made herself a fact witness, and because Rowland testified that he was unable to remember any
specifics about the conversation he had with James, Total Safety should be allowed to depose James
so that it may learn whether Rowland disclosed to her any plan he had to steal confidential
communications from it, whether they discussed Total Safety’s customers or proprietary
information; whether they discussed activities Rowland was contractually prohibited from
performing; whether they discussed the relationship Total Safety had with its parent company,W3
Holdings; whether they discussed Rowland’s membership and equity in W3; whether they discussed
Rowland’s ability to recruit Total Safety’s employees and why Rowland and Hains’s testified of the
validity of the restrictive covenants in the Unit Award Agreement. Id. at 1, 4-5.
In response, Rowland filed a reply memorandum into the record and contends that James’
testimony is not necessary, as he did not rely on his conversation with James alone to determine
whether or not to leave Total Safety. See R. Doc. 194-1, p. 2. Specifically, counsel for Rowland
argues that Rowland did not testify that he relied on James’s opinion, but rather, that he relied on
the final letter from Amy Hains, which allegedly indicated that he was “good to go” over to 24 Hour
Safety. Id. citing R. Doc. 194-2, p. 20. Rowland also contends that James’s legal opinions
concerning the restrictive covenants in the 2011 W3 Agreement are neither relevant nor crucial to
the instant action, as this agreement was not the one for which Total Safety brought suit against
Rowland for violating in the first place. Lastly, Rowland contends that the information which Total
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Safety seeks to depose James for is highly protected “opinion work product” which is protected by
the work product doctrine and is thus, not discoverable. See R. Doc. 194-1, p. 14; citing Ingraham
v. Planet Beach Franchising Corp., No. 07-3555, 2009 WL 1076717 (E.D. La. Apr. 17, 2009).
“While the Federal Rules of Civil Procedure do not specifically prohibit the taking of an
opposing counsel's deposition in a case, the Fifth Circuit has found that ‘depositions of opposing
counsel are disfavored generally’ and ‘should be permitted in only limited circumstances.’” Nat'l
W. Life Ins. Co. v. W. Nat. Life Ins. Co., No. A-09-CA-711LY, 2010 WL 5174366 (W.D. Tex. Dec.
13, 2010) at*3; citing Nguyen v. Excel Corp., 197 F.3d 200, 209 (5th Cir.1999); see Theriot v.
Parish of Jefferson, 185 F.3d 477, 491 (5th Cir.1999) (noting that “federal courts have disfavored
the practice of taking the deposition of a party's attorney; instead, the practice should be employed
only in limited circumstances.”), cert denied, 529 U.S. 1129 (2000); Shelton v. American Motors
Corp., 805 F.2d 1323, 1327 (8th Cir.1986) (“Taking the deposition of opposing counsel not only
disrupts the adversarial system and lowers the standards of the profession, but it also adds to the
already burdensome time and costs of litigation”).
In Nguyen, the Fifth Circuit applied the three-part test established by the Eighth Circuit in
Shelton, to determine when opposing counsel should be permitted to be deposed in a case. In order
to depose opposing counsel, the party seeking to take the deposition must show that (1) no other
means exist to obtain the information than to depose the opposing counsel; (2) the information
sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the
case. Id. at 209 (citing Shelton, 805 F.2d at 1327).
Here, the Court finds that all of the factors weigh in favor of permitting the deposition of
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James. First, during the deposition of Rowland, counsel for Total Safety attempted to obtain
information from Rowland about the discussions he had with James. See R. Doc. 182, p. 4-5.
Although Rowland did testify that he and James discussed his “options” he testified that he did not
remember all the details or questions he had during the conversation, or if they had discussed the
restrictive covenants. He also testified that he did not want to speculate exactly what he and James
discussed. See R. Doc. 182-1, p. 8-9; R. Doc. 194-2, p. 17.
Furthermore, when asked by counsel for Total Safety whether Rowland would “rely on
whatever James [says that you] discussed,” Rowland testified that he was “fine with that.” See R.
Doc. 182-1, p. 9; R. Doc. 194-2, p. 19. As such, the Court finds that because Rowland could not
confirm all the details surrounding his conversation with James, no other reasonable means exists
to obtain this information. Thus James’s deposition is necessary.
Second, the Court finds that James’s advice and / or conversations regarding the W3
Holdings agreement are highly relevant and crucial to the instant action even though it may not have
been the agreement upon which Total Safety initially brought suit against Rowland. The 2011 W3
Agreement and the “options” which Rowland discussed with James are relevant to this action, as
they center around Rowland’s decision to terminate his employment with his former employer, Total
Safety, and join its competitor, 24 Hour Safety, which is the subject matter of this dispute.
Third, at the time that Rowland had conversations with James, he was not James’s client. In
fact, he was still employed with James’s client – 24 Hour Safety’s business competitor – Total
Safety and had no relationship to 24 Hour Safety or James. Furthermore, litigation had not yet
ensued between the parties when James and Rowland communicated in September 2013, after she
allegedly drafted an opinion on the 2011 W3 Holdings Agreement, at the direction of her client, 24
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Hour Safety, but before he terminated his employment with Total Safety. No attorney client
relationship was ever formed between Rowland and James before the inception of this action, which
is not disputed by the parties.
Therefore the Court finds that James’s conversations with Rowland are not opinion work
product, because Rowland was not yet an employee of 24 Hour Safety, nor was he represented by
James. See e.g., S.E.C. v. Brady, 238 F.R.D. 429, 442 (N.D. Tex. 2006)(where the Court stated that
“[e]xamples of opinion work product include notes and memoranda created by an attorney or his
agent, regarding witness interviews . . .” which is different from Rowland’s conversations with
James, as no attorney-client relationship existed between the two parties). As such, the Court finds
that the conversations between Rowland and James are not protected and are discoverable.
IV.
Conclusion
IT IS ORDERED that Defendant, Gary Rowland’s Motion to Quash Deposition of
Defense Counsel of Record Kindall James (R. Doc. 181) is DENIED.
New Orleans, Louisiana, this 17th day of June 2014.
KAREN WELLS ROBY
UNITED STATES MAGISTRATE JUDGE
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