Rockwell Medical, Inc. v. Richmond Brothers, Inc. et al
ORDER OVERRULING Plaintiff's 25 Objections filed by Rockwell Medical, Inc. and AFFIRMING the Magistrate Judge's Order. Signed by District Judge Robert H. Cleland. (LWag)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
ROCKWELL MEDICAL, INC.,
Case No. 17-10757
RICHMOND BROTHERS, INC., et al.,
ORDER OVERRULING PLAINTIFF’S OBJECTIONS AND AFFIRMING
MAGISTRATE JUDGE’S ORDER
This court referred Plaintiff’s Emergency Motion to Expedite Discovery, (Dkt.
#11), to Magistrate Judge Mona K. Majzoub, who entered an order denying the motion,
(Dkt. #23). Plaintiff then filed an objection to the order, (Dkt. #25), to which Defendants
have filed a response (Dkt. #33). Plaintiff has filed a reply as well. (Dkt. #34.) For the
following reasons, the court will overrule Plaintiff’s objections.
Plaintiff filed an Emergency Motion for Preliminary Injunction and Leave to
Conduct Expedited Discovery (Dkts. ##3, 11), scheduled for hearing on May 3, 2017.
Plaintiff seeks an injunction forcing Defendants, prior to the annual shareholder meeting
sometime in May or June, to supplement disclosures that Plaintiff alleges are
misleading and violative of the Securities and Exchange Act of 1934. Magistrate Judge
Majzoub denied Plaintiff’s request for an order that Defendants respond to five
document requests and undertake four depositions within 15 days of service of the
requests. (Dkt. #23.) She found that Plaintiff had failed to show good cause for the
broad requests in advance of the normal Rule 26(f) conference or preliminary injunction
hearing. She also explained that the requests were not limited to relevant documents
and thus did not comport with the proportionality requirement of Federal Rule of Civil
Procedure 26(b)(1). She also added that the proposed 15 day deadline was “vexatious
Plaintiff objects that expedited discovery is routinely granted prior to preliminary
injunction hearings to allow the parties a fair chance to argue the merits. It also
contends that its discovery requests were not overbroad and the abbreviated time frame
is justified by the urgency of the resolution of the factual questions at issue. Defendants
respond that the order denying Plaintiff’s motion was well supported and that the recent
voluntary dismissal of a Defendant only weakens Plaintiff’s case. In reply Plaintiffs insist
that discovery is sorely needed prior to the hearing, that the dismissal of certain
Defendants is irrelevant to the question at hand, and that expedited discovery will not
Objections to orders issued by magistrate judges are treated as appeals subject
to the “clearly erroneous” standard set forth in 28 U.S.C. § 636(b)(1)(A). Brown v.
Rapelje, No. 09–639, 2012 WL 4490769, at *1 (W.D. Mich. Sept. 28, 2012). As such,
the “decision and order of a non-dispositive motion by a magistrate judge will be upheld
unless it is clearly erroneous or contrary to law.” Koetje v. Norton, No. 13–12739, 2014
WL 2005021, at *1 (E.D. Mich. May 16, 2014).
“Information is discoverable under revised Rule 26(b)(1) if it is relevant to any
party’s claim or defense and is proportional to the needs of the case.” Fed. R. Civ. P.
26(b)(1) Advisory Committe’s Note to 2015 Amendment. In assessing the proportionality
the court should look to:
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).
Here the burden and expense of the proposed discovery is immense and
doubtlessly outweighs its likely benefit, even assuming that all other factors favor
Plaintiff–and it is not obvious that they do. Plaintiff attempts to minimize the scope of its
discovery requests by insisting that it “proposed just five (5) document requests . . .”
However, these five requests are exceedingly broad:
1. All documents and communications between Defendants and any other
person relating to Rockwell, including telephone records relating to any
2. All documents or communications relating to any discussions, plans,
agreements, or understandings between the Defendants, on the one
hand, and any other person that owned or beneficially owned any
Rockwell securities, on the other, relating to Rockwell.
3. All documents or communications relating to the discussion,
preparation, approval, or filing of any filings required under the Securities
Exchange Act of 1934, or any rules promulgated thereunder, by any
4. All documents or communications relating to the drafting, discussion,
preparation, or approval of the March 1, 2017 Notice of Shareholder
Nominations of Individuals for Election as Directors at the 2017 Annual
Meeting of Shareholders of Rockwell.
5. Any and all documents or communications relating to transfer of any
Rockwell shares by any Defendant during the relevant time period,
including, but not limited to those related to transfers of shares into the
names of Defendants David S. Richmond and/or Mark H. Ravich, as
alleged in paragraphs 83-84 of Rockwell’s Complaint For Declaratory
Judgment And Injunctive Relief, in this matter.
Further compounding the breadth of these requests is Plaintiff’s definition of
“DOCUMENT(S),” taken to include without limitation:
the original and all copies of all written, printed, typed, or otherwise
recorded matter however produced or reproduced, of every kind and
description, in whatever form (e.g., final and draft version), including, but
not limited to, all writings, contracts, policy statements, manuals,
spreadsheets, power point presentations, telephone messages, voice
mails, checks, notes, correspondence, letters, electronic mail, email
messages, instant messages, any other electronically-stored information
stored on any media for digital data storage or transmittal, telegrams,
notes, mailgrams, minutes of any meetings, agendas, memoranda,
interoffice communications, reports, studies, forecasts, project analyses,
working papers, charts, expense account reports, ledgers, journals,
financial statements, statements of accounts, calendars, appointment
books, diaries, drawings, graphs, charts, photographs, sound recordings,
telephone bills, telephone records, material stored on electronic media
such as computer discs or hard drives, or any other tangible things that
constitute or contain matters within the scope of Federal Rule of Civil
Procedure 34. . . . [Including] originals and copies of all of the above upon
which notations in writing, print, or otherwise have been made which do
not appear in the originals.
Even setting aside whether the requirement to include copies of the same
documents is even consistent with Federal Rule of Civil Procedure 34(b)(2)(E)(iii) (“A
party need not produce the same electronically stored information in more than one
form.”), these requests are unduly burdensome. For example, compare the breadth of
these requests to the procedures contemplated in the Eastern District of Michigan’s
requests for production of ESI and related responses should be
reasonably targeted, clear, and as specific as practicable. Where the
discovery request is potentially burdensome to the responding party, the
parties should consider options such as staging discovery and sampling,
in an attempt to reduce the costs of production. If the discovery request
seeks marginally relevant information, the requesting party should expect
some cost shifting to be imposed by the Court in the absence of an
agreement between the parties.
Model Order Relating to the Discovery of Electronically Stored Information (ESI)
Checklist for Rule 26(f) Meet and Confer Regarding ESI (also discussing how parties
should identify “an initial subset of sources of ESI and documents that are most likely to
contain the relevant and discoverable information as well as methods for culling the
relevant and discoverable ESI and documents from that initial subset.”).
For example, Plaintiff’s first request would surely capture relevant documents,
but that is a necessary rather than sufficient condition for the validity of the request. The
benefit of the request must also be proportionate to the burden of compliance, which
this is not. On its face, the request would include even items like the records of a
telephone call during which any Defendant discussed Rockwell Medical, Inc., with a
personal acquaintance. The other requests suffer from analogous problems, not least of
which the production of every document or communication related to SEC filings
unbound by any time period.
As Plaintiff’s requests are patently overbroad, in the interests of judicial economy
the court will overrule Plaintiff’s objections without discussing the additional issues
raised. Though the court is cognizant of the abbreviated time schedule in this case,
Plaintiff is not thereby entitled to disregard the proportionality requirements of the
Federal Rules of Civil Procedure.
IT IS ORDERED that Plaintiff’s Objection to Order on Motion to Expedite
Discovery (Dkt. #25) is OVERRULED.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: April 14, 2017
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, April 14, 2017, by electronic and/or ordinary mail.
Case Manager and Deputy Clerk
S:\Cleland\JUDGE'S DESK\C2 ORDERS\17-10757.ROCKWELL.discovery.bss.wpd
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?