Gaudet et al v. GE Industrial Services et al

Filing 219

ORDER & REASONS: ORDERED that Valero's Motion to Set Aside and/or Modify March 17, 2016 Order (Rec. Doc. 134) is DENIED. FURTHER ORDERED that Valero's Motion for Leave of Court to File Additional Evidence (Rec. Doc. 181) is DENIED. Signed by Judge Carl Barbier on 5/5/16. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

JEFF MICHAEL GAUDET ET AL.

CIVIL ACTION

VERSUS

NO: 15-795

GE INDUSTRIAL SERVICES ET AL.

SECTION: “J”(5)

ORDER & REASONS
Before the Court is a Motion to Set Aside and/or Modify March
17,

2016

Order

(Rec.

Doc.

134)

filed

by

Intervenor,

Valero

Refining-New Orleans LLC (“Valero”); an opposition thereto (Rec.
Doc. 147) filed by Plaintiffs, Jeff Michael Gaudet and Michelle
Paille Gaudet; an opposition thereto (Rec. Doc. 163) filed by
Defendants,

Circuit

Breaker

Sales

Company

Inc.

(“CBSC”)

and

Circuit Breaker Sales & Repair Inc. (“CBSR”); a supplemental
memorandum (Rec. Doc. 183) filed by Valero; a response thereto
(Rec. Doc. 198) filed by Plaintiffs; and a response thereto (Rec.
Doc. 209) filed by Defendants. Having considered the motion and
legal memoranda, the record, and the applicable law, the Court
finds that the motion should be DENIED.
Also before the Court is Valero’s Motion for Leave of Court
to

File

Additional

Evidence

(Rec.

Doc.

181)

and

Defendants’

opposition thereto (Rec. Doc. 206). Having considered the motion
and legal memoranda, the record, and the applicable law, the Court
finds that the motion should be DENIED.

FACTS AND PROCEDURAL BACKGROUND
This litigation derives from an electrical accident involving
Jeff

Michael

Gaudet,

which

occurred

at

a

refinery

owned

and

operated by Valero. Gaudet is a certified electrician and had been
employed

by

Valero

for

approximately

seven

years

before

the

accident. On the day of the accident, Gaudet was performing a job
task requiring electrical service to a switchgear in the refinery.
While working on the switchgear, Gaudet allegedly came into contact
with an energized electrical bus located in the bottom cubicle of
the switchgear, sending an electrical shock through his body.
Gaudet filed the instant lawsuit against General Electric
Company (“GE”) and CBSC, alleging that GE originally manufactured
the switchgear and CBSC refurbished it. Later, Gaudet added CBSR
as a defendant, alleging that CBSR was the vendor. Gaudet asserted
causes of action under the Louisiana Products Liability Act and
general negligence, making allegations of construction defect,
design defect, and inadequate warning. Valero intervened in the
lawsuit, seeking recovery of any and all workers compensation
indemnity and medical payments that Valero has made to Gaudet.
CBSC and CBSR issued a joint request for inspection of the
switchgear to Valero on January 22, 2016. Defendants suggested two
alternative protocols by which the inspection could be performed:
one if the switchgear is kept in service and another if the
switchgear is de-energized. A month later, Valero responded and
2

refused

to

permit

the

inspection,

citing

significant

safety

concerns if the inspection is performed while the switchgear is
energized and substantial time and costs associated with deenergizing the switchgear. Consequently, Defendants filed a joint
motion to compel inspection of the switchgear.
On March 16, 2016, Magistrate Judge North heard oral argument
on the motion to compel the inspection. Following the hearing,
Judge North granted the motion to compel and, considering the
safety concerns raised by Valero, allowed Defendants to conduct a
de-energized inspection of the switchgear, which would be limited
to four hours. Two weeks later, Valero filed the instant Motion to
Set Aside and/or Modify March 17, 2016 Order (Rec. Doc. 134).
At the same time, Valero filed a motion for a protective
order, which sought clarification of Judge North’s order and raised
issues similar to those in the instant motion. Judge North heard
oral argument on the motion for a protective order on April 20,
2016.

After

the

hearing,

Judge

North

issued

a

minute

entry

clarifying the March 16, 2016 Minute Entry to emphasize that the
inspection is to be conducted with the switchgear in a de-energized
state and the entire switchgear may be inspected. Further, Judge
North reasoned that Valero’s request to allocate costs of the
inspection would be more effectively addressed through a postinspection motion itemizing the actual costs that were involved.

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Considering the April 20, 2016 Minute Entry, this Court
ordered Valero to file a supplemental memorandum to its instant
motion and permitted the other parties to file a supplemental
response. Due to the voluminous briefing on the issue already in
the record, the Court limited the supplemental memoranda to ten
pages in length. Valero filed its supplemental memorandum on April
29, 2016, contemporaneously with its Motion for Leave of Court to
File

Additional

Evidence

(Rec.

Doc.

181).

Plaintiffs

and

Defendants filed their responses on May 3.
LEGAL STANDARD
A magistrate judge’s ruling on a nondispositive pretrial
motion may be appealed to the district judge for review pursuant
to Rule 72(a) of the Federal Rules of Civil Procedure. A magistrate
judge is afforded broad discretion in resolving such motions, and
the standard of review is deferential. When a timely objection is
raised to such a ruling, the district judge must review the
magistrate’s ruling and “modify or set aside any part of the order
that is clearly erroneous or contrary to law.” Fed. R. Civ. P.
72(a). “A finding is ‘clearly erroneous’ when although there is
evidence to support it, the reviewing court on the entire evidence
is left with the definite and firm conviction that a mistake has
been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364,
395 (1948). A legal conclusion is contrary to law “when the
magistrate fails to apply or misapplies relevant statutes, case
4

law, or rules of procedure.” Ambrose-Frazier v. Herzing Inc., No.
15-1324, 2016 WL 890406, at *2 (E.D. La. Mar. 9, 2016).
For

issues

that

are

committed

to

a

magistrate

judge’s

discretion, such as the resolution of discovery disputes, the
decision will be reversed only for an abuse of discretion. Id.;
Kresefky v. Panasonic Commc'ns & Sys. Co., 169 F.R.D. 54, 64
(D.N.J. 1996) (“Where, as here, the magistrate has ruled on a nondispositive matter such as a discovery motion, his or her ruling
is entitled to great deference and is reversible only for abuse of
discretion.”). “In sum, it is extremely difficult to justify
alteration of the magistrate judge’s nondispositive actions by the
district judge.” 12 Charles Alan Wright, Arthur R. Miller & Richard
L. Marcus, Federal Practice and Procedure § 3069 (3d ed. 2014)
[hereinafter Wright & Miller].
PARTIES’ ARGUMENTS AND DISCUSSION
Valero
improper

contends

because

the

that

Magistrate

proposed

Judge

inspection

North’s

is

ruling

unreasonable

is
and

exceeds the proportionality component of the scope of discovery.
In its supplemental memorandum, Valero further argues that the
switchgear

inspection

should

not

go

forward

because

of

the

significant safety and environmental risks, as well as significant
costs, associated with such an inspection.
Valero’s supplemental memorandum relies heavily on additional
evidence; therefore, the Court will first address Valero’s motion
5

for leave to file the additional evidence. Rule 72(b), which
provides for a de novo review of a magistrate judge’s findings and
recommendations

as

to

dispositive

motions,

confers

express

authority on the district court to “receive further evidence.”
Fed. R. Civ. P. 72(b)(3). Thus, in the course of performing a de
novo review of a magistrate judge’s recommended disposition, “the
district court need not reject newly-proffered evidence simply
because it was not presented to the magistrate judge.” Freeman v.
County of Bexar, 142 F.3d 848, 852 (5th Cir. 1998).
However,

the

district

court

has

no

such

authority

when

reviewing a magistrate judge’s nondispositive order under the
standard set forth in Rule 72(a). Under Rule 72(a), “the district
court is not permitted to receive further evidence; it is bound by
the clearly erroneous rule in reviewing questions of fact.” Haines
v. Liggett Grp. Inc., 975 F.2d 81, 91 (3d Cir. 1992); accord Moore
v. Ford Motor Co., 755 F.3d 802, 808 (5th Cir. 2014) (“Because the
district court’s review of the magistrate judge’s factual findings
was limited to clear error review, there appears to be no basis
for the district court to have received additional evidence.”).
The instant motion is governed by Rule 72(a). Therefore, there is
no

basis

for

this

Court

to

receive

additional

evidence.

Accordingly, Valero’s motion for leave to file additional evidence
must be denied.

6

Next, the Court considers whether the decision to grant the
motion to compel the inspection was clearly erroneous or contrary
to law. The court has broad discretion to compel or deny discovery.
Save the Bay, Inc. v. U.S. Army, 639 F.2d 1100, 1103 (5th Cir.
1981). Under Rule 26(b), 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, considering 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. Fed. R. Civ. P.
26(b)(1).

For

purposes

of

discovery,

the

term

“relevant”

encompasses “any matter that bears on, or that reasonably could
lead to other matter that could bear on, any issue that is or may
be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,
351 (1978).
In exercising its discretion over discovery matters under
Rule 26(b), courts must be mindful of the limitations placed on
the frequency and extent of discovery. For example, the court must
limit otherwise permissible discovery if it determines that “(i)
the discovery sought is unreasonably cumulative or duplicative, or
can be obtained from some other source that is more convenient,
less

burdensome,

or

less

expensive;
7

(ii)

the

party

seeking

discovery has had ample opportunity to obtain the information by
discovery in the action; or (iii) the proposed discovery is outside
the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P. 26(b)(2)(C).
Rule 34 provides that a party may serve on any other party “a
request within the scope of Rule 26(b) . . . to permit entry onto
. . . property possessed or controlled by the responding party, so
that

the

requesting

party

may

inspect,

measure,

survey,

photograph, test, or sample the property or any designated object
or operation on it.” Fed. R. Civ. P. 34(a)(2). Where a party seeks
entry onto property for an inspection, a court will consider the
relevance of the inspection and balance “the degree to which the
proposed inspection will aid in the search for truth . . . against
the burdens and dangers created by the inspection.” Belcher v.
Bassett Furniture Indus., Inc., 588 F.2d 904, 908 (4th Cir. 1978);
accord Duvall v. BOPCO, L.P., No. 15-2404, 2016 WL 1268343, at *12 (E.D. La. Apr. 1, 2016) (quoting 8B Wright & Miller, supra, §
2214 (3d ed. 2010)).
Valero first asserts that Judge North ignored the fact that
Defendants had ample opportunity to obtain the information they
are now seeking. For example, Valero claims that it invited CBSC
to inspect the switchgear on May 20, 2014, three days after the
accident. This argument lacks merit. As an initial matter, Valero’s
purported invitation came in the form of an email stating “[w]e
had an incident recently in the back of the gear” and asking
8

whether someone could come inspect the switchgear and work on a
plan to install a barrier. The email does not specify what kind of
“incident” occurred and makes no reference to potential litigation
or fault of the Defendants. Accordingly, Judge North’s conclusion
that Defendants did not have any meaningful opportunity to inspect
the switchgear is not clearly erroneous or contrary to law.
Nevertheless,

even

if

Valero’s

invitation

had

been

more

explicit, Rule 26(b) requires that a court limit discovery if it
determines

that

“the

party

seeking

discovery

has

had

ample

opportunity to obtain the information by discovery in the action.”
Fed. R. Civ. P. 26(b)(2)(C) (emphasis added). Thus, the rule
suggests that the party must have had ample opportunity after the
commencement of the action, during the period for discovery.
Valero’s purported invitation took place over eight months before
this lawsuit was filed. Thus, the Defendants have not had ample
opportunity to obtain the information by discovery in this action.
Next,

Valero

contends

that

the

discovery

sought

is

unreasonably cumulative or duplicative, or can be obtained from
some other source that is more convenient, less burdensome, or
less expensive. For example, Valero claims that the information
sought can be obtained from the existing photographs that have
already been produced to Defendants. Judge North determined that
these photographs are an insufficient substitute for an actual
inspection. Having reviewed the photographs in the record, the
9

Court concludes that this determination was not clearly erroneous
or contrary to law.
Valero further argues that that the burden and expense of the
proposed

inspection

outweigh

its

likely

benefit.

“[Rule

34]

necessarily vests in the district court a sound discretion, on
objection, whether and within what limits and under what conditions
inspection . . . should be ordered.” 8B Wright & Miller, supra, §
2214. “The mere fact that compliance with an inspection order will
cause great labor and expense or even considerable hardship and
possibility of injury to the business of the party from whom
discovery is sought does not of itself require denial of the
motion.” Id. “[D]iscovery has normally been allowed unless the
hardship is unreasonable in light of the benefits to be secured
from the discovery.” Id.
In the instant case, Defendants list several reasons for the
inspection, including to determine whether the switchgear had been
properly maintained and whether it had been altered or modified.
In a products liability case such as this, where manufacture and
design

defects

are

alleged,

an

inspection

of

the

product

is

crucial. “Clearly, if a product was manufactured defectively, its
defect is likely to be particular to the individual product.
Consequently, a party’s examination of that product may be critical
to ascertaining, among other things, the presence of the defect.”
Collazo-Santiago v. Toyota Motor Corp., 149 F.3d 23, 29 (1st Cir.
10

1998); see also Aktas v. JMC Dev. Co., 877 F. Supp. 2d 1, 21
(N.D.N.Y.

2012)

(“[W]ithout

an

opportunity

to

examine

the

components of their work that were allegedly defective, defendants
cannot properly defend the action.”). Thus, the inspection is
important for resolving the issues and will likely benefit the
parties. Although a de-energized inspection may be more burdensome
and costly than an energized inspection, Judge North’s decision to
order a de-energized inspection was based primarily on the safety
concerns that were initially raised by Valero.
ruling

that

the

burden

or

expense

of

the

Judge North’s

inspection

is

not

unreasonable in light of the likely benefits to be secured is not
clearly erroneous or contrary to law.
Next, Valero contends that Judge North erred by waiting until
after the inspection to determine whether to allocate the costs.
In short, Valero argues that Defendants should bear the full
expense of the inspection in order to prove that they actually
consider it worth the risk and cost. Under the discovery rules,
“the presumption is that the responding party must bear the expense
of complying with discovery requests.” Oppenheimer Fund, 437 U.S.
at 358. Notwithstanding this presumption, courts have considerable
discretion under Rule 26(c) to allocate the costs of the discovery
in appropriate circumstances.
Although courts have long had the authority to allocate
expenses, Rule 26(c) was amended in 2015 to expressly recognize
11

this authority. Nevertheless, “[r]ecognizing the authority does
not imply that cost-shifting should become a common practice.
Courts and parties should continue to assume that a responding
party ordinarily bears the costs of responding.” Fed. R. Civ. P.
26(c)(1)(B) advisory committee’s note to 2015 amendment. Thus, as
the commentary to Rule 26(c) explains, allocation of expenses is
the exception—not the rule—and should be reserved for appropriate
circumstances. In this case, where the estimated costs of the
inspection have ranged from “hundreds of millions of dollars” to
just over one million dollars, Judge North’s decision to defer
ruling on the issue until after the inspection when the actual
costs

involved

can

be

itemized

was

not

clearly

erroneous

or

contrary to law. Because the costs could be allocated to any of
the parties, this decision encourages the parties to come up with
a protocol for the inspection that is both safe and cost efficient.
Lastly, Valero argues that it needs at least thirty additional
days to prepare for an inspection. In the April 20, 2016 Minute
Entry, Judge North ordered that the inspection take place within
seven days following this Court’s ruling on the motion to review.
Valero has been aware of the possibility of an inspection of the
switchgear since the time Defendants filed their motion to compel
over three months ago. Judge North granted the motion to compel
the inspection seven weeks ago. In fact, if the inspection takes
place one week from this Order, Valero will have had at least three
12

weeks to prepare for the inspection since the April 20, 2016 Minute
Entry. Any inability of Valero to comply with the deadline is of
its own making. The inspection shall take place within seven days.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Valero’s Motion to Set Aside and/or
Modify March 17, 2016 Order (Rec. Doc. 134) is DENIED.
IT IS FURTHER ORDERED that Valero’s Motion for Leave of Court
to File Additional Evidence (Rec. Doc. 181) is DENIED.
New Orleans, Louisiana, this 5th day of May, 2016.

CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

13