XPO CNW, INC. et al v. R & L CARRIERS, INC. et al

Filing 126

ORDER ADOPTING SPECIAL MASTER'S REPORTS AND RECOMMENDATIONS REGARDING DISCOVERY Signed by District Judge Avern Cohn. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

XPO CNW INC., et al.,
Plaintiffs,
vs.

Case No. 16-10391

R&L CARRIERS, INC., et al.,

HON. AVERN COHN

Defendants.
__________________________________/
ORDER ADOPTING SPECIAL MASTER’S REPORTS AND RECOMMENDATIONS
REGARDING DISCOVERY
I. Introduction
This is a business dispute. Plaintiffs XPO CNW, INC and XPO Logistics Freight,
Inc. (collectively “XPO”) are suing defendants R&L Carriers, Inc., James Matthews,
Shawn Thackray, and Jill Langley (collectively “R&L”) claiming breach of contract, unfair
competition, misappropriation of trade secrets, and tortious interference with a contract.
The parties are engaged in discovery. The Court has referred the discovery disputes1
to a Special Master for report and recommendation. See Docs. 110, 120.
The Special Maser rendered a Report and Recommendation (Doc. 118) a
Revised Report and Recommendation (Doc. 119) and an Amended Revised Report and
Recommendation (Doc. 121).

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The discovery disputes are reflected in XPO’s First and Second Motions to
Compel (Docs. 49, 50) and R&L’s Motion to Compel (Doc. 76-77) as well as additional
disputes that the parties raised with the Special Master directly.

Before the Court are the parties’ objections to the Special Master’s
recommendations. The objections and responses are reflected in the following
documents:
Doc. 122 - XPO’s Objections
Doc. 125 - R&L’s Response to XPO’s Objections
Doc. 123 - R&L’s Objections
Doc. 124 - XPO’s Response to R&L’s Objections
For the reasons that follow, the objections are OVERRULED and the Reports and
Recommendations are ADOPTED.
II. Legal Standards
A. Review of Special Master
Fed. R. Civ. P. 53 states the appropriate standard of review for a district court in
reviewing findings of fact and conclusions of law made or recommended by a Special
Master. Rule 53(f)(3) provides as follows:
Reviewing Factual Findings. The court must decide de novo all objections to
findings of fact made or recommended by a master, unless the parties, with the
court's approval, stipulate that:
(A) the findings will be reviewed for clear error; or
(B) the findings of a master appointed under Rule 53(a)(1)(A) or (C) will be final.

Fed. R. Civ. P. 53(f)(4) provides as follows:
Reviewing Legal Conclusions. The court must decide de novo all objections to
conclusions of law made or recommended by a master.
See also Hochstein v. Microsoft Corp., 730 F. Supp. 2d 714, 717 (E.D. Mich. 2010),
aff'd 430 F. App’x 898 (Fed. Cir. 2011) (“The Court reviews de novo factual findings and
legal conclusions of the Special Master to which a specific objection has been made.
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See Fed. R. Civ. P. 53(f)). The Court may “adopt or affirm, modify, wholly or partly
reject or reverse, or resubmit to the master with instructions.” Fed. R. Civ. P. 53(f)(1).
B. Discovery
The Court has broad discretion to determine the scope of discovery. Bush v.
Dictaphone Corp., 161 F.3d 363, 367 (6th Cir. 1998). The scope of discovery, which
permits a party to obtain “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,” is always subject to being “limited by court order[,]” and thus, within the
sound discretion of the court. Fed. R. Civ. P. 26(b)(1). Further, discovery is more
liberal than even the trial setting, as Rule 26(b) allows information that “need not be
admissible in evidence” to be discoverable. Id. However, the court must also balance
the “right to discovery with the need to prevent ‘fishing expeditions.’ ” Conti v. Am. Axle
& Mfg., Inc., 326 F. App’x 900, 907 (6th Cir. 2009) (quoting Bush, 161 F.3d at 367).
Rule 37(a) allows a party to move for an order compelling “an answer, designation,
production, or inspection” if the opposing party has failed to provide a discovery
response. Fed. R. Civ. P. 37(a)(3).
III. Discussion
The Special Master made five recommendations. Each recommendation and the
parties’ objections will be considered in turn below.

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A. Discovery Related to XPO’s Unfair Competition and Tortious Interference Claims
R&L seeks to limit discovery - which is targeted at customer information which
XPO has agreed to limit to six identified customers - on these claims to customers that
are “tied” to XPO’s trade secret claims. XPO contends that the discovery should not be
so limited because different facts support its trade secret and unfair competition and
tortious interference claims.
The Special Master recommends that XPO has the better view, i.e. XPO be
entitled to obtain discovery related it the unfair competition and tortious interference
claims from R&L’s customers regardless of whether identified six customers are “tied” to
XPO’s trade secret claims. The Special Master noted XPO’s position was reasonable
“in the absence of a motion and in light of the July discovery cut-off.”
While R&L says it does not object to the Special Master’s recommendation it
seeks to avoid implementing the recommendation because it seeks leave to file a
motion for partial summary judgment on XPO’s unfair competition and tortious
interference claims and to stay XPO’s discovery request until the motion is resolved.
R&L’s request is not well taken. As XPO points out, even if R&L files a summary
judgment motion, XPO will argue, quite reasonably, that the motion is premature
inasmuch as it has not obtained discovery from R&L. Summary judgment motions are
not mechanisms to avoid discovery. Of course, R&L will be free to seek summary
judgment judgment As such, the Court ADOPTS the Special Master’s recommendation.
R&L must produce the requested discovery.
B. Sequenced Discovery and Tabling R&L’S Request Pending Depositions
XPO requests that R&L’s request for revenue information in its second motion to
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compel be furnished only after XPO takes the deposition of three individuals and after
R&L produces discovery. The Special Master disagrees, stating that it is not
reasonable to further delay or table R&L’s discovery request.
XPO objects, essentially repeating its arguments made to the Special Master.
XPO’s position is not well taken. XPO cannot delay R&L’s search for relevant
information until such time as XPO thinks fit to produce it. The Special Master’s
recommendation is ADOPTED.
C. R&L’S Request for Alternate Reasons for XPO’s Alleged Lost Customer Revenue
R&L seeks discovery from XPO related to whether there are reasons for XPO’s
alleged revenue loss other than R&L’s alleged misconduct. XPO said the request was
vague, overbroad and an undue burden. The Special Master rejected XPO’s argument
and recommends that R&L be permitted to obtain such discovery because it is
“germane and appropriate.”
XPO says that if the Court agrees with the Special Master’s first recommendation
(in Part III. A), then any objection is moot. Because the Court has agreed and adopted
the Special Master’s recommendation, there is no objection. As such, the Special
Master’s recommendation is ADOPTED.
D. R&L’s Request for Discovery Related to XPO’s Trade Secrets
R&L seeks discovery which it says will help determine whether the 400plus trade
secrets meet the definition of trade secrets. XPO seeks to delay this discovery until it
culls its trade secret list. The Special Master recommends that R&L be allowed to
obtain the requested discovery.
XPO objects, contending that R&L’s request is “improperly drawn” and/or an
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“improper fishing expedition.” This objection does not carry the day. The Special
Master is correct that such discovery is reasonable. The Special Master’s
recommendation is ADOPTED.
E. R&L’s Requests for Production Nos. 6, 7 and 8
R&L requested that XPO produce information related to performance evaluation
of XPO’s salespersons assigned to the six identified customers (No. 6), documents
regarding XPO’s missed appointments, delays or untimely deliveries as to the six
selected customers (No. 7) and documents regarding collisions, traffic accidents, etc.
(No. 8). The Special Master recommends that XPO be required to produce the
information.
In response, XPO says it has no objection to this recommendation if the Court
agrees with the Special Master’s first recommendation. Because the Court has so
agreed, XPO must produce the information. The Special Master’s recommendation is
ADOPTED.
IV. Conclusion
Having adopted the reports and recommendations, the disputes which are the
subject of the parties’ discovery motions Docs. 49, 50, 66-67 are RESOLVED. These
motions are TERMINATED.
SO ORDERED.

CODA
The Court is constrained to observe that the parties’ protracted discovery
disputes have done little to move the case forward. The fact that the parties have
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advocated for further delays in producing discovery, either by arguing for a stay pending
resolution of a motion or arguing that other discovery takes place first, is troubling. The
Court hopes that the discovery rulings will result in forward progress.

S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: 3/20/2019
Detroit, Michigan

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