Marine Power Holding, L.L.C. v. Malibu Boats, LLC

Filing 109

ORDERED that 47 Motion to Compel is GRANTED in Part, DENIED in Part, and DENIED as MOOT in Part. IT IS GRANTED as stated within document. The Court orally ordered that Plaintiffs responses to Interrogatory Nos. 1, 2, 4, 5, 10 shall be supplemented no later than December 31, 2015. The Court further orally ordered that Plaintiffs responses to Interrogatory Nos. 12, 13, 14(d), 15, 16, shall be supplement no later than January 7, 2016. The Court further orders that responses to Request for Produc tion No. 20 and 21 must be supplemented with a privilege log no later than Friday, February 4, 2016, at 12:00 noon. IT IS DENIED as to Interrogatory Nos. 3, 13, 96, 97. IT IS DENIED AS MOOT as to Request for Production Nos. 30, 31, 34, 81, 96, 97, 109-111.. Signed by Magistrate Judge Karen Wells Roby. (cml)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARINE POWER HOLDING, LLC

CIVIL ACTION

VERSUS

NO:

MALIBU BOAT, LLC

SECTION: “I” (4)

14-0912

ORDER
Before the Court is Defendant’s Motion to Compel (R. Doc. 47), seeking an Order
from the Court to compel Plaintiff to respond fully to written discovery request. The motion is
opposed. See R. Doc. 58. The motion was heard by oral argument on December 21, 2016.
I.

Background
This action is a claim for breach of contract and detrimental reliance between Marine

Power, a supplier of marine engines, and Malibu Boats, a Loudon, Tennessee, based company
that manufactures sport boats. R. Doc. 1. Marine Power designs, manufactures, and sells high
performance sport boat engines. Malibu manufacturers and sells sport boats. Id. at 2. In 20013,
Marine Power and Malibu entered into a business relationship. Malibu sent purchase orders to
Marine Power for sport boat engines, which directed Martine Power to construct the engines in
Louisiana. Id. In particular, the parties contracted to supply Marine Power’s LS3 engines in
Malibu’s boats. Id. at 3.
This litigation arises out of purchase order 1125557 (“557”) sent by Malibu to Marine
Power on February 14, 2014. Purchase order 557 called for Marine Power to manufacture 571
engines for Malibu at a price of $5,954,102.00. Plaintiff argues that purchase order 557 did not
provide any dates or details for Marine Power to deliver the engines. Rather, purchase order 557
was a “blanket” purchase order and stated that “delivery date requirements will be in accordance
with issued delivery orders.” Marine Power argue that it made significant capital commitments

(e.g., investments in parts/inventory, re-tooling costs, etc.) to be prepared to satisfy Malibu’s
requirements. Id. at 4.
In late March of 2014, Plaintiff argues that Malibu’s conduct changed drastically. Id. at 5.
Malibu notified Marine Power that Malibu would not be using Marine Power as its supplier of
any engines for the 2015 model year. Plaintiff contends that up to this point, Malibu had never
rejected a delivery or complained about the quality, the condition, or the timing of delivery for
any engine that Marine Power manufactured. However, on April 15, 2014, Plaintiff argues that
Malibu unilaterally terminated purchase order 557.
Marine Power subsequently initiated this action and contends that Malibu breached its
obligations under purchase order 557 in bad faith and caused Marine Power to suffer extensive
damages. Marine Power also argues that Malibu should be liable to it for detrimental reliance
because Marine Power made substantial investments in tooling and inventory to fill the purchase
order. Id. at 11.
Defendant also asserts a number of counterclaims. Malibu alleges that Marine Power
breached and/or repudiated purchase order 557, failed to produce engines to be placed in
inventory, failed to produce engines ready for delivery to Malibu, and improperly delivered a
number of engines that Marine Power were required to hold as inventory. Defendant’s
counterclaims include breach of duty of good faith and fair dealing, breach of warranty, breach
of contract pursuant to Louisiana Civil Code Art. 1906, and breach of contract of sale pursuant to
Louisiana Civil Code Art. 2438. R. Doc. 14, p. 50-52.
As to the instant motion, Defendant propounded Interrogatories and Request for
Production upon Plaintiff on September 23, 2015. R. Doc. 47, p. 1. Plaintiff responded on
October 23, 2015. Despite Plaintiff’s production of documents, Defendants argues that certain

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responses provided by Plaintiff remain deficient. In particular, Defendant argues that the
following discovery request remain deficient: Interrogatory Nos. 1, 2, 3, 4, and 5, 10, 12, 13, 14,
15, and 16 and Request for Production No. 22, 30, 31, 34, 81, 96, 97, 99-102, and 109-111.
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.”
Rule 26(b)(1) 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.” Rule
26(b)(1) also specifics that discovery must be “proportional to the needs of the case, considering
the important 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. Under Rule 26(b)(2)(C), discovery may be limited if “the proposed discovery
is outside the scope permitted by Rule 26(b)(1).
The Court notes that 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. American Red Cross, 23 F.3d 1091, 1096 (6th
Cir. 1994).

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III.

Analysis
A.

Interrogatories
1.

Interrogatory No. 1

Interrogatory No.1 request that for each engine that Plaintiff manufactured under
purchase order 557 it identify: (1) the date the engine was completed and the serial number
assigned to the engine, (2) the date that the engine was placed into Plaintiff’s inventory, (3) the
date that the engine was delivered to Malibu, and (4) the location of the engine if it was not
delivered or accepted by Malibu whether sold to a third-party or not. Defendants contend that
Plaintiff’s chart produced in response to the request does not provide a “completion date or
inventory date” for the engines. R. Doc. 47-1, p. 3.
In opposition, Plaintiff argues that its discovery response directed Defendant to Chart #1
and Chart #5 with information about each engine, including the date that each engine received a
serial number. Plaintiff contends that besides that information it does not maintain information
regarding “completion dates” or “inventory dates.” R. Doc. 58, p. 3.
During oral argument, Plaintiff’s counsel represented to the Court that it provided the
serial numbers and the date that the serial numbers were placed on the engines. Plaintiffs’
counsel stated that Marine Power does not produce the date that the engines were manufactured.
Defendant’s counsel stated that although Plaintiff provided the date that the engines received a
serial number, the serial number dates do not indicate the date that the engines were
manufactured. Plaintiff’s counsel stated that it gave Defendant’s counsel all of the information
that it has and that the serial numbers have connectivity to the completion date of the engines.
However, Plaintiff’s counsel also state that there may be gaps in its paperwork.

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After listening to the parties’ arguments, the Court ordered that to the degree it does not
have the information requested by the Defendant, it should affirmatively state that it does not
have the information. Plaintiff’s counsel also agreed to supplement its response to the extent that
it has documents that show the completion date. The Court ordered that for any engine for which
Plaintiff does not have documents referencing the completion date, it should state that the
completion date is unknown. The Court orally ordered that the response to Interrogatory No. 1
be supplemented no later than December 3, 2015.
2.

Interrogatory No. 2

Interrogatory No. 2 request that Plaintiff: (1) describe its damages in detail, (2) provide
the calculations used for each item of damages claimed, and (3) identify all documents or
communications that support its claimed damages. R. Doc. 47-1, p. 3. Defendants states that
while Plaintiff referred Defendant to four charts, Plaintiff failed to provide the calculations upon
which the figures on the charts are based on and failed to identity which documents it relied upon
for the information on the charts. Id. at 3. Defendants argue that by filing the instant lawsuit,
Plaintiff placed its alleged damages at issue; thus Defendant contends that it is entitled to know
how Plaintiff calculated its alleged damages. Defendant contends that Plaintiff’s refusal to
provide the calculations prevents its expert from analyzing or preparing a report concerning
Plaintiff’s damages and further they are entitled to know how the damages were calculated. Id.
In opposition, Plaintiff contends that the charts speak for themselves, but if Defendant
has any factual questions about the charts, it may clarify its confusion during upcoming
depositions of Plaintiff’s fact witnesses. R. Doc. 58, p. 4. Plaintiff also argues that the Court has
set a December 21, 2015, deadline for Plaintiff to provide its expert reports and the expert is still

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in the process of compiling his report; thus, a final calculation of Plaintiff’s damages has not yet
been calculated.
Although not cited by either party, Federal Rules of Civil Procedure 26(a)(1)(A)(iii)
appears to be the rule applicable here. Pursuant to this rule a party must, without awaiting a
discovery request, provide to the other party “a computation of each category of damages by the
disclosing party – who must also make available for inspection and copying as under Rule 34 the
document or other evidentiary material, unless privileged or protected from disclosure, on which
each computation is based, including material bearing on the nature and extend of injuries
suffered” Fed. R. Civ. P 26(a)(1)(A)(iii). Rule 26 also permits parties to obtain discovery
“regarding any matter, not privilege that is relevant to the claim or defense of any party.”
Fed.R.Civ. P 26(b)(1).
Under Rule 26(a)(1)(A)(iii), a party is required to produce not only his method for
calculating his alleged damages but also an actual computation of his damages. Luna v. Del
Monte Fresh Produce (Southeast), Inc., 2007 WL 1500269 (N.D. Ga. 2007) (emphasis added).
Defendants are entitled to know how a Plaintiff arrives at its computation of damages. Wilson v.
Navika Capital Group, LLC, 2014 WL 253904 (S.D. Tex. June 4, 2014).
During oral argument, the Court reviewed the charts provided by Plaintiff’s counsel and
found them to be deficient because they fail to provide documentation that supports its cost
assessment. The Court therefore orally ordered that for every cost item that is identified on
Plaintiff’s chart that it also provided documentation to support its numbers. If Plaintiff does not
have supportive documentation for the numbers on Charts 1, 2, 3, 4, the Court ordered Plaintiff’s
counsel to affirmatively state whether there are backups that support the serial numbers
referenced on the charts and either produce the backups or respond that they are not available.

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Accordingly, the Court orally ordered that response to Interrogatory No. 2 be
supplemented no later than December 30, 2015. The Court further orally ordered that the
plaintiff should provide written verified responses to the Answers to Interrogatories as required
by FRCP 33 no later than December 30, 2015.
3.

Interrogatory No. 3

Interrogatory No. 3 request the production of information for each engine that was
manufactured between February 14, 2014 the date that purchase order 557 was terminated and
April 15, 2014, for any purpose other than fulfillment of purchase order 557. R. Doc. 47-2, p. 7.
The requested information included the engine model, the date that the engine was completed,
and the name and addresses of the third party that received the engine. Id.
In opposition, Plaintiff contends that the request is broad, unduly burdensome, and not
reasonably calculated to lead to the discovery of admissible evidence. R. Doc. 47-4, p. 7.
Plaintiff contends that the instant lawsuit concerns the alleged unilateral termination of purchase
order 557 and the damages to which Marine Powers is entitled to because of the termination. R.
Doc. 58, p. 4. Plaintiff also contends that information regarding engines that were manufactured
for other customers during that time period have no relevancy to this lawsuit. Plaintiff also
contends that it took a significant amount of time to compile information about the engines that
were built for purchase order 557 and it should not be further burdened by compiling information
that has not relevant to this litigation.
In considering Interrogatory No. 3, the Court orally sustained the plaintiffs relevancy
objection. The Court found that the defendant had no right to know whether the plaintiff
produced engines for other companies during this time period. Accordingly, Defendants request
as to Interrogatory No. 3 was denied.

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4.

Interrogatory Nos. 4 and 5

Interrogatory Nos. 4 and 5 request that Plaintiff identify all parts, equipment, goods, and
supplies that were in its possession or acquired before and after April 15, 2015, which it claims
were purchased in order to fulfill purchase order 557. R. Doc. 47-2, p. 7. Defendant claims that
the information is relevant to Plaintiff’s claim that in reliance upon the purchase order it acquired
substantial parts, equipment, good and supplies. R. Doc. 47-1, p. 4. Defendant contends that
Plaintiff’s provided chart that lists thousands of parts but does not identity when any parts or
equipment were received by Marine Power. Defendant further argues that Plaintiff had a duty to
mitigate its alleged damages at issue and whether Defendant received any parts of equipment
after the purchase order was terminated, and if so whether Plaintiff promptly canceled orders.
The Defendant contends that even after it cancelled the purchaser order, the defendant
kept building engines. Defendant therefore requested specifically the parts the Plaintiff had in
inventory on April 15, 2014.
In opposition, Plaintiff essentially gives the same responses as Interrogatory No. 2 that
the charts speak for themselves and any confusion can be resolved when Plaintiff’s fact
witnesses are deposed. Plaintiff also argues that a full calculation of damages is still in the
process of being completed and will be provides when its expert completes his report. R. Doc.
58, p. 5. Notably Plaintiff does not argue that the requested information is unduly burdensome or
not reasonably calculated to lead to the discovery of admissible evidence.
The Court orally held that the degree to which the plaintiffs are not able to determine the
inventory quantity on hand as of April 15, 2014, the date the purchase order was terminated, that
it should supplement its written response to affirmatively state so as their position.

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5.

Interrogatory No. 10

Interrogatory No. 10 seeks the status of completion as of April 15, 2015, which is the
date that the purchase order was terminated, for each engine listed in a document provided in
connection with a prior mediation. The document lists engines that Marine Power contends were
manufactured in reliance upon the purchase order. Defendant contends that it is entitled to know
whether Plaintiff failed to mitigate its damages by stopping production of the engines when the
purchase order was terminated. R. Doc. 47-1, p. 5.
In opposition, Plaintiff again points the Defendants to two charts that it argues include the
date that each engine was “serialized” which is the date that it received a serial number. R. Doc.
58, p. 5. Plaintiff argues that beyond that it does not maintain information regarding “completion
dates” as requested by Defendant. Plaintiff does not argue that the request is broad, unduly
burdensome, and not reasonably calculated to lead to the discovery of admissible evidence.
The Court noted that it addressed the subject matter of Interrogatory No. 10 in its ruling
on Interrogatory No. 7 and counsel for the mover agreed.
6.

Interrogatory No. 12

Interrogatory No. 12 ask that Plaintiff identify: (1) each engine that it sold to a third part
that was originally constructed for Defendant, (2) the consideration received by Plaintiff, (3) the
work that Plaintiff performed to each engine to facilitate the sale, (4) the specific costs that
Plaintiff incurred in modifying each engine, and (5) any other costs incidental to the sale of each
engine. R. Doc. 47-1, p. 10. Defendant argues that Plaintiff sold an number of engines that were
originally built for Defendant to third parties any damages claimed by Plaintiff should be
reduced by the sale of any such engine. R. Doc. 47-1, p. 5.

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In opposition, Plaintiff argues that it already has provided detailed information to Malibu
about engines sold to third parties. R. Doc. 58, p. 6. Plaintiff further responded that the work that
was generally required to modify the 5.7L engines originally built for Malibu for sale to the other
customers is outlined in MPPO-00001273. Plaintiff further responded that additional task would
have been required to modify 6.0L and 6.2L engines originally built for Malibu for sale to other
customers.
Plaintiff also contends that it has already produced engine work order for all such engines
show the specific work that was done on each engine. Id. Plaintiff further indicates that the
consideration received from the buyers of engines originally built for Malibu is reflected on
Chart #5. Plaintiff further contends that the costs incurred by marine Power incidental to the sale
of engines originally built for Malibu to other customers are identified on Chart #3. Id. Plaintiff
further responded that it suffered extensive damages as a result of the defendants actions but that
it has been able to partially mitigate its damages by modifying the engines’ it originally built for
Malibu.
During the hearing of the matter after listening extensively to the position of the parties,
the Court orally order the plaintiff to supplement their response by providing the part numbers
and also provide the cost associated with each. The Court further gave counsel for the plaintiff
the option of providing the documents and/or producing a witness who would testify about the
documents as the information is not readily apparent by a review of the document. The plaintiff
was thereafter orally ordered to supplement its responses to Interrogatory No. 12 no later than
January 7, 2016.

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7.

Interrogatory No. 13

Interrogatory No. 13 asks for Plaintiff to identify the efforts take to sell, utilize, or cancel
or returns parts that it lists in Exhibit II Inventory Damages $813,139.75. (R. Doc. 47-2, p. 20)
which list thousands of parts that Maine Power argues were purchased in reliance upon
Defendant’s purchase order. R. Doc. 47-1, p. 7. Defendant argues that Plaintiffs make general
statements about its attempt to market, sell or return parts, but failed to provide any part-specific
data. Defendant further argues that the information is relevant because Plaintiff’s effort to
mitigate its damages is an important issue in litigation. Id. at 8. Defendant claims that in light of
the substantial out of damages sought by Plaintiff, it is entitled to the information requested on a
part-by-part basis.
In opposition, Plaintiff argues that it has produced responsive documents relating to the
request. R. Doc. 56, p. 6. Plaintiff’s response state that it has modified its engines designs for
other customers to utilized parts that were originally for use in Malibu’s engines and have
returned items and paid re-stocking fees to mitigate its damages associated with parts that were
originally obtained for use in Malibu engines. R. Doc. 47-1, p. 16. Plaintiff further argues that
this request is another example of Defendant attempt to impose an undue burden on it.
The Court orally found that the answer provided to Interrogatory No. 13 was sufficient as
written. Counsel for the Plaintiff however advised the court that he would honor his duty to
supplement if he deemed it appropriate.
8.

Interrogatory No. 14

Interrogatory No. 14 asks Plaintiff to identify the amount received, any costs incurred
that were incidental to the sale, and the profit that Plaintiff received in connection with each part,
piece of equipment of good that Plaintiff claims it obtained in reliance upon its obligation under

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the purchase order. Defendant also requests the name of the person who purchased the part, piece
of equipment of good. Defendant argues that this information is relevant because Plaintiff’s
requested damages should be reduced by profit it received through the sale of parts that it
obtained in reliance upon the purchase order. R. Doc. 47-1, p. 8.
In response, Plaintiff argues that the highlighted parts of Chart #2 were parts obtained by
it to fulfill the purchase order. R. Doc. 58, p. 6. Plaintiff states that any questions of any of those
parts were sold after April 15, 2015, and not reflected on the chart. Id. Plaintiff argues that it is
not obligated to undertake the extremely burdensome task of individually identifying all parts
that have been separately sold, add them into the chart, and then subtract any amount that
Plaintiff received. Id.
As mentioned previously, under Rule 26(a)(1)(A)(iii), a party is required to produce not
only its method for calculating his alleged damages but also an actual commutation of his
damages. Luna, 2007 WL 1500269. Defendants are entitled to know how a Plaintiff arrives at its
computation of damages. Wilson v. Navika Capital Group, LLC, 2014 WL 2534904 (S.D. Tex.
June 4, 2014).
The Court orally found that the plaintiff gave the defendant a credit for the cost of the
part but not the profit made on the sale of the parts sold to third parties which impacts the
Plaintiff’s loss profits as requested in Interrogatory 14(d). The Plaintiff was thereafter orally
ordered to supplement its responses to Interrogatory 14(d) no later than January 7, 2016.
9.

Interrogatory No. 15

Interrogatory No. 15 seeks for Plaintiff, for various expenses that it is claiming as
damages to identify: (1) the expenses that Plaintiff would have incurred had the purchase order
be fully performed, (2) the factual and legal basis upon which Plaintiff is seeking reimbursement,

12

(3) efforts taken by Plaintiff to mitigate damages, and (4) which supplies that Plaintiff contends it
was unable to sell or utilize. R. Doc. 47-12, p. 12. Defendant argues that the chart that Plaintiff
refers to contains numerous expenses unrelated to Plaintiff’s purchase order and/or its not
recoverable in this litigation. R. Doc. 47-1, p. 8.
In opposition, Plaintiff argues that it provided a detailed chart (Chart #3) that identified
various miscellaneous damages that it incurred in connection with the termination of the
purchase order. R. Doc. 58, p. 7. Plaintiff contends that the chart speaks for itself and any
confusion can be clarified during the depositions of Plaintiff’s fact witnesses.
The Court orally found that the information sought by this Interrogatory was previously
covered as the plaintiff was required to provide the backup to Chart #3. Upon agreement of
counsel, the plaintiff will supplement this response by explaining whether they consumed the
parts in their normal business no later than January 7, 2016.
10.

Interrogatory No. 16.

Interrogatory No. 16 seeks a detailed explanation of how Plaintiff calculated the gross
margins and contra profit for each engine for which it claims a loss in profit. R. Doc. 47-1, p. 9.
Defendant states that Plaintiff failed to provide any actual calculations for engine models
identified on its Lost Profits List (R. Doc. 47-2, p. 28). Defendant argues that because Plaintiff
has filed to provide any actual calculations of any of the figures on its list of claimed lost profits
it is impossible for Plaintiff and its experts to analyze Plaintiff’s methodology for determining
lost profits. Id.
In opposition, Plaintiff argues that its response to this request clearly explains how its lost
profit figures were calculated. Plaintiff’s answer to Interrogatory No. 16 states:
Marine Power states that gross margins were calculated by subtracting the total
cost to manufacture an engine from the price paid by the buyer of the engine.

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Marine Power further states that contra profits are created using contra parts
numbers which are given specific cost and used in the bill of material of engines
and kit parts. These contra parts numbers generate a negative inventory balance as
engines are serialized and parts are put into kits. These negative balances are
adjusted each month, and are treated as revenue that is booked and sued to pay for
supplies, further warrant expense, tooling, capital investment, machine shop labor,
production labor, and machine amortization.
R. Doc. 47-4, p. 18. Plaintiff further argues that to the extent that Defendant has factual
questions pertained to it calculations, those questions can be asked during the deposition
of its witnesses. R. Doc. 58, p. 7.
Counsel for the defendant conceded that the information sought in this
Interrogatory was covered in the courts earlier ruling requiring the supplementation of the
damages calculation in Interrogatory No. 2.
B.

Request for Production
1.

Request for Production Nos. 21 and 22

Request for Production Nos. 21 and 22 seek all documents and communication in
support of Plaintiff’s assertion that Jay Vertzel, a former employee of Plaintiff, is a theif
and a liar. R. Doc. 47-5, p. 13. Defendant states that during a prior deposition a
representative of Plaintiff asserted that believed Vetzel is a liar. Id. at 10. Defendant’s
request all documents and communication of Plaintiff’s assertion that Vertzel is a liar.
Defendants request that Plaintiff be directed to produce documents and communications
response to this request for the Court’s in camera inspection.
In opposition, Plaintiff argues that Request Nos. 21 and 22 calls for production of
information that is protected by the attorney work-produce doctri21 ne. Plaintiff states
that it has already produced non-privileged material responsive to these requests. R. Doc.
47-5, p. 14

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The Court orally ordered that Plaintiff produce a privilege log no later than seven days
from the signing of this order. Counsel for the plaintiff indicated that he would supplement the
response to Request for Production No. 20 and 21 no later than December 31, 2015. Plaintiff’s
counsel failed to comply with the court’s oral order of December 21, 2015. The order required a
written update to the Court’s e-file box advising of the number of documents that would be
itemized on the privilege log. As a result, the Court finds that the response to Request for
Production No. 20 and 21 must be supplemented with a privilege log no later than Friday,
February 4, 2016, at 12:00 noon.
2.

Request for Production No. 30

Request for Production No. 30 request all documents reflecting Plaintiff’s profit
or loss for the sale of each engine that was manufactured by Plaintiff in reliance upon or
in connection of the purchase order but was subsequently sold to a third-party after the
purchase order was terminated. R. Doc. 47-5, p. 17. Defendant argues that it is entitled to
documents that would allow it to determine which specific parts were removed from each
engine sold to a third party, the parts that were added to each engine and the labor costs
incurred in connection with selling each engine sold to a third party. R. Doc. 47-1, p. 11.
In response, Plaintiff states that it has already produce to Plaintiff all material
responsive to its request and complied Chart #5, which list the amount paid from thirdparties that purchased engines originally intended for the Plaintiff.
The Court orally found that the Plaintiff provided Defendant the tools to do the
calculation. Counsel for the Defendant thereafter conceded that Request for Production
No. 30 is moot.

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3.

Request for Production No. 31

Request for Production No. 31 seeks all documents that reflect an alternations or
work that Plaintiff had to make or perform to render each engine acceptable to a thirdparty buyer. R. Doc 47-5, p. 17.
In response, Plaintiff states that it has already produced to Plaintiff all materials
responsive to its request and complied Chart #5, which lists the amount paid from thirdparties that purchased engines intended for the Plaintiff.
The Court orally found that Request for Production No. 31 is moot.
4.

Request for Production No. 34

Request for Production No. 34 seeks all documents reflecting the dates that
engines that were manufactured for Plaintiff and are still in Plaintiff’s possession, were
constructed and completed. R. Doc. 47-5, p. 19. Defendant argues that documents
provided by Plaintiff only provide the completion dates for a limited number of engines.
Defendant acknowledges that Plaintiff provided a list of dates when engines were
assigned serial numbers, but argue that Plaintiff has not produced the underlying
documents. R. Doc. 47-1, p. 12.
In response, the Plaintiff states that it has already produced all material response
to the request. Plaintiff states that it has already provided dates that each engine was
serialized. Plaintiff states that it does not maintain information regarding “completion
dates” or “inventory” dates. R. Doc. 58, p. 8.
The Court found that its earlier ruling provided for the production of the
information sought in Request for Production 34 rendering it now moot.

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5.

Request for Production No. 81

Request for Production No. 81 seeks documents related to engines manufactured
by Plaintiff between February 14, 2014 and April 15, 2014, for any other purpose other
than fulfillment of the purchase order.
In response, Plaintiff argues that the request is overly board, unduly burdensome,
and not reasonably calculated to lead to the discovery of admissible evidence. Plaintiff
argues that its production of engine that were not a part of the purchase order is irrelevant
to the instant litigation. R. Doc. 58, p. 9.
The Court found that its earlier ruling provided for the production of the
information sought in Request for Production No. 81 such that it is moot.
6.

Request for Production Nos. 96 and 97

Request for Production No. 96 seeks financial statement from January 1, 2013, to
present. Request for Production No. 97 seek income tax returns for the same period. R.
Doc. R. Doc. 47-5, p. 50. Defendant argue that these requested documents provide
substantial data relating to Plaintiff’s profits and losses both prior to and after the events
that gave rise to the instant litigation. Defendant contends that if their base line
profitability remained the same then they were not damaged.
In opposition, Plaintiff argues that Defendant has not demonstrated that it is
entitled to discovery of its income tax returns or financial documents. Plaintiff contends
that Defendant has not established a compelling need for Defendant’s tax returns or
financial statements.
Income tax returns are highly sensitive documents which courts are reluctant to
order routine disclosure as a part of discovery. Natural Pipeline Co. of America v. Energy

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Gathering, Inc., 2 F.3d 1397, 1411 (5th Cir. 1993). This is because not only are the
taxpayer’s privacy concerns at stake but unanticipated disclosure of our federal tax laws
given the self-reporting, self-accessing character of the income tax system. Id. For the
court to order disclosure of tax returns, it must find “that the returns are relevant to the
subject matter of the action” and “that there is a compelling need for the returns because
the information contained therein is not other readily obtainable.” Mohnot v. Bhansali,
2001 WL 515242 (E.D. La. 2001) (citing S.E.C. v. Cymaticolor Corp., 106 F.R.D. 545,
547 (S.D. N.Y. 1985)).
The Court orally found that the income tax documents were not relevant or
probative of an issue in the case. Therefore, the Request for Production of Documents
No. 96 and 97 is denied.
7.

Request for Production Nos. 99-102

Request for Production Nos. 99-102 seek documents relating to Plaintiff’s sale of
all model (5.7, 6.0L, and LSA) engines covered under the purchase order to third parties
from April 15, 2014 to the present.
Plaintiff contends that the requests are overly broad, unduly burdensome, and not
reasonably calculated to lead to the discovery of admissible evidence. R. Doc. 47-5, p.
51. Plaintiff contends that engines manufactured for other customers during this time
period is irrelevant to the instant litigation. R. Doc. 58, p. 10.
The Court orally ordered that the response to Request for Production Nos. 99-102
is insufficient and that Plaintiff is required to supplement its response to identify the
names of companies who purchased the 5.7, 6.0L and LSA engines no later than January
7, 2016.

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8.

Request for Production Nos. 109-111

Request for Production Nos. 109-11 seeks the production of documents that
shows the manufacturing process for all model engines constructed in fulfillment of or in
reliance upon the purchase order. R. Doc. 47-5, p. 56. Defendant argues that these
documents would confirm whether labor costs Plaintiffs contend that it incurred are
accurate. R. Doc. 47-1, p. 14.
Plaintiff contends that the request ask for documents already in Plaintiff’s
possession, custody or control which is disputed by the defendant. Counsel for the
defendant acknowledged that no witness was questioned about the documents produced.
As a result, the Court found the documents produced in response to Request for
Production 109-111 are responsive and the request to compel a supplemental response to
these series of requests is denied.
IV.

Conclusion
Accordingly,
IT IS ORDERED that Defendant’s Motion to Compel (R. Doc. 47) is

GRANTED in Part, DENIED in Part, and DENIED as MOOT in Part.
IT IS GRANTED as to Interrogatory Nos. 1, 2, 4, 5, 10, 12, 14(d), 15, 16, and
Request for Production Nos. 21, 22, 99-102. The Court orally ordered that Plaintiff’s
responses to Interrogatory Nos. 1, 2, 4, 5, 10 shall be supplemented no later than
December 31, 2015.

The Court further orally ordered that Plaintiff’s responses to

Interrogatory Nos. 12, 13, 14(d), 15, 16, shall be supplement no later than January 7,
2016. The Court further orders that responses to Request for Production No. 20 and 21

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must be supplemented with a privilege log no later than Friday, February 4, 2016, at
12:00 noon.
IT IS DENIED as to Interrogatory Nos. 3, 13, 96, 97.
IT IS DENIED AS MOOT as to Request for Production Nos. 30, 31, 34, 81, 96,
97, 109-111.

New Orleans, Louisiana, this 29th day of January 2016.

KAREN WELLS ROBY
UNITED STATES MAGISTRATE JUDGE

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