Great Lakes Gas Transmission Limited Partnership v. Essar Steel Minnesota, LLC et al

Filing 301

ORDER RE APPEAL/OBJECTION OF MAGISTRATE JUDGE DECISION: Magistrate Judge Brisbois' Orders of March 3, 2011 279 and 280 are AFFIRMED. Plaintiff's and Third-Party Defendants' Motion to Strike 289 is DENIED. (Written Opinion). Signed by Judge Susan Richard Nelson on 04/19/11. (bcr)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Great Lakes Gas Transmission Limited
Partnership,

Civil No. 09-CV-3037 (SRN/LIB)

Plaintiff and Counterclaim
Defendant,

MEMORANDUM AND ORDER

v.
Essar Steel Minnesota, LLC; Essar Steel
Holdings, Ltd.; Essar Steel Limited; and
Essar Global Limited, a/k/a Essar Group,
Defendants.
----------------------------------------------------Essar Steel Minnesota, LLC,
Counterclaimant and
Third-Party Plaintiff,
v.
Great Lakes Gas Transmission Limited
Partnership,
Plaintiff and Counterclaim
Defendant,
TC GL Intermediate Limited Partnership;
TC Pipelines, LP; TC Pipelines GP, Inc.;
TransCan Northern, Ltd.; TransCanada
Pipeline USA, Ltd.; TransCanada
Pipelines Ltd.; TransCanada Corporation;
Great Lakes Gas Transmission Co.; and
TransCanada GL, Inc.,
Third-Party Defendants.

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Barbara L. Wohlrabe, Susan D. Nassar, and David W. Elrod, Elrod PLLC, 500 North Akard
Suite 3000 Dallas, Texas 75201; David T. Schultz, Julian C. Zebot, and Mary R. Vasaly, Maslon
Edelman Borman & Brand, LLP, 90 South 7th Street Suite 3300, Minneapolis, Minnesota,
55402, for Plaintiff and Counterclaim Defendant
Scott G. Knudson, Frank A. Taylor, Jessica J. Stomski, and Maren F. Grier, Briggs & Morgan,
PA, 80 South 8th Street Suite 2200, Minneapolis, Minnesota 55402, for Defendants and ThirdParty Plaintiff
Barbara L. Wohlrabe, David W. Elrod, David T. Schultz, and Scott G. Knudson, addresses
above, for Third-Party Defendants
_____________________________________________________________________________
SUSAN RICHARD NELSON, United States District Court Judge
This matter is before the Court on Plaintiff’s timely appeals from parts of two Orders
issued by Magistrate Judge Leo I. Brisbois on March 3, 2011. The first Order granted in part
Defendants’ Motion to Compel and Motion for a Protective Order [Doc. No. 270]. The second
Order granted in part Plaintiff/Counterclaim Defendant’s and Third Party Defendants’ Motion for
a Protective Order and Plaintiff’s Motion to Compel [Doc. No. 271]. The Court will also briefly
address Plaintiff’s and Third-Party Defendants’ Motion to Strike [Doc. No. 289]. For the reasons
that follow, the Magistrate Judge’s Orders are affirmed and the Motion to Strike is denied.
I.

BACKGROUND
Plaintiff Great Lakes Gas Transmission Limited Partnership (“Great Lakes”) filed a

breach of contract action against Defendant Essar Steel Minnesota, LLC (“ESML”), and its
affiliated entities Essar Steel Holdings, Ltd., Essar Steel Limited, and Essar Global Limited, a/k/a
Essar Group. ESML then filed a counterclaim against Great Lakes as well as third-party claims
against TC GL Intermediate Limited Partnership, TC Pipelines, LP; TC Pipelines GP, Inc.,
TransCan Northern, Ltd., TransCanada Pipeline USA, Ltd., TransCanada Pipelines Ltd.,
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TransCanada Corporation, Great Lakes Gas Transmission Co., and TransCanada GL, Inc.
ESML and its affiliates appear to be aliens, and assert that Great Lakes, by way of its
affiliation with Third-Party Defendants, is likewise an alien. The Magistrate Judge therefore
granted limited jurisdictional discovery for the purpose of determining whether Great Lakes and
its affiliates joined as Third-Party Defendants are in fact aliens, as well as whether the Court has
personal jurisdiction over Defendants.1 The Magistrate Judge’s Orders from which Great Lakes
appeals concern solely this jurisdictional component of the discovery process.
Great Lakes argues that the Magistrate Judge committed the following errors in his first
Order: (1) that the Magistrate Judge erred in concluding that Great Lakes waived its objections to
the scope and relevance of document production sought by Defendants; and (2) that the
Magistrate Judge erred in directing Great Lakes to produce un-redacted versions of documents.
(Great Lakes Appeal at 4, 8 [Doc. No. 279].) Great Lakes then asserts that the Magistrate Judge
committed three errors in the second Order: (1) that the Magistrate Judge erred in accepting
Defendants’ contention that they had produced all of the requested documents; (2) that Great
Lakes did not timely assert, and thus waived, its argument that Defendants’ objections to Great
Lakes’s Second Request for Production and Interrogatories were untimely; and (3) that the
Magistrate Judge erred in not compelling Defendants to re-designate documents that were
improperly designated as confidential. (Great Lakes Appeal at 4, 7, 9 [Doc. No. 280].) These
arguments will be addressed in turn.

1

Of course, determination of these threshold issues has ramifications for this case’s
ultimate disposition. The case must be dismissed if the Court does not have personal jurisdiction
over Defendants or if all parties are aliens. See Mossman v. Higginson, 4 U.S. 12, 13 (1800)
(“The [C]onstitution nowhere gives jurisdiction . . . in suits between alien and alien.”).
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II.

DISCUSSION
A.

Plaintiff’s and Third-Party Defendants’ Motion to Strike [Doc. No. 289]

Great Lakes and Third-Party Defendants filed a Motion to Strike Defendants’ responses
to Great Lakes’s and Third-Party Defendants’ Appeal from the Magistrate Judge’s Orders. This
Motion is based largely on “impermissibly placed affidavit evidence and arguments” that were
not first presented to the Magistrate Judge. (Great Lakes Mot. to Strike at 2 [Doc. No. 289].)
The Motion also points out that Defendants’ response to Great Lakes’s and Third-Party
Defendants’ Appeal to Order No. 271 exceeds the 3,500-word limit imposed by Local Rule 72.2.
At the outset, the Court notes that a motion to strike is an improper vehicle by which to
challenge “impermissibly placed affidavit evidence and arguments.” (Id.) Indeed, “there is no
such thing as a motion to strike—at least when the paper being targeted is a memorandum or
affidavit . . . .” Carlson Mktg. Group, Inc. v. Royal Indemnity Co., No. 04-3368, 2006 WL
2917173, at *2 (D. Minn. Oct. 11, 2006) (Schiltz, J.). Litigants may only file a motion to strike
the contents of a pleading—a type of document that is not at issue here. See Fed. R. Civ. P. 8,
12(f).
The appropriate way for Great Lakes and Third-Party Defendants to have voiced their
concerns would have been to request permission to submit a reply brief to Defendants’ responses.
Simply filing a motion sua sponte allows litigants to circumvent the word count constraints of
Local Rule 7.1(d), and thus is looked on unfavorably by this Court. See Carlson Mktg. Group,
2006 WL 2917173, at *2.
On the merits, the Court notes that Great Lakes and Third-Party Defendants indeed have
advanced adequate cause for concern. It is well settled that a district court, on review of a
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magistrate judge’s order, may not consider new affidavits or arguments that were not presented to
the magistrate judge in the first instance. See Roberts v. Apfel, 222 F.3d 466, 470 (8th Cir.
2000) (stating that an argument made before a district court was ineffectual if not first made to
the magistrate judge); Haines v. Liggett Group, Inc., 975 F.2d 81, 93 (3d Cir. 1992) (citing 28
U.S.C. § 636(b)(1)(A) in stating that a court’s “‘clearly erroneous’ review function” extends only
to those facts that were squarely presented to the magistrate judge).
Great Lakes’s and Third-Party Defendants’ contentions that several affidavits
impermissibly expand the record are well-taken; indeed, these contentions are not specifically
contravened by Defendants’ responsive letter. (See Resp. Letter [Doc. No. 292].) Thus,
although the Court will not grant the Motion to Strike, the Court will not consider those
affidavits filed by Defendants that expand the record beyond that considered by the Magistrate
Judge.
Finally, Defendants concede that they did indeed violate the word-count compliance
requirement of Local Rule 72.2(a) in one of their responsive briefs. Defendants have since filed
an amended word-count compliance certificate, however, that indicates that their brief is a mere
12 words over the acceptable limit [Doc. No. 293]. Given this revision, Defendants’ response
will not be invalidated.
B.

Appeal from Magistrate Judge’s Orders of March 3, 2011

The Court next considers Great Lakes’s specific objections in its Appeal from the
Magistrate Judge’s Order to determine whether the Order is clearly erroneous or contrary to law.
28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); D. Minn. L.R. 72.2(a). “‘A finding is clearly
erroneous when, although there is evidence to support it, the reviewing court on the entire
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evidence is left with the definite and firm conviction that a mistake has been committed.’” Chase
v. Comm’r, 926 F.2d 737, 740 (8th Cir. 1991) (quoting United States v. U.S. Gypsum Co., 333
U.S. 364, 395 (1948)). Accordingly, this “standard of review . . . is extremely deferential.” Reko
v. Creative Promotions, Inc., 70 F. Supp. 2d 1005, 1007 (D. Minn. 1999) (Montgomery, J.).
1.

Order on Defendants’ Motion to Compel and for Protective Order
[Doc. No. 270]

Great Lakes takes issue with the Magistrate Judge’s holding that Great Lakes abandoned
its scope and relevancy objections to Defendants’ Motion to Compel. Specifically, Great Lakes
argues that “[t]he Magistrate’s conclusion that [Great Lakes] abandoned [its] relevancy and scope
objections is erroneous and inconsistent with the Magistrate’s narrowing of the scope of
discovery.” (Great Lakes Appeal at 8 [Doc. No. 279].)
But Great Lakes has already acceded to producing documentation addressing the subjects
on which it now seeks to preserve objections. (Compare Great Lakes & Third Party Defs.’
Opp’n Mem. at 16-28 [Doc. No. 231] with Order of Mar. 3, 2011 at 12-24 [Doc. No. 270].)
Further, as Defendants point out, the Magistrate Judge’s dual Orders of March 3, 2011, are
intended to be construed together. (Order of Mar. 3, 2011 at 3 n.1 [Doc. No. 270] (“To the
extent that [Defendants’] motion to compel is granted, this Order shall be read in conjunction
with and consistent with this Court’s order ruling on Great Lakes and Third-Party Defendants’
Motion for a Protective Order.”).) In the Magistrate Judge’s companion Order [Doc. No. 271],
he specifically defined relevancy in the context of this case, thereby rendering moot any
outstanding objections maintained by Great Lakes. (Order of Mar. 3, 2011 at 28-29 [Doc. No.
271].) Thus, the Magistrate Judge’s ruling on this issue was not contrary to law.

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Great Lakes also argues that the Magistrate Judge committed clear error by ordering
Third-Party Defendants to produce un-redacted versions of documents that they had previously
produced. Great Lakes asserts that the redacted information is irrelevant and “highly sensitive,”
and thus it should not be required to produce un-redacted versions. (Great Lakes Appeal at 8-9
[Doc. No. 279].) The Magistrate Judge based his conclusion on a two-part rationale: (1) that
allowing the documents to be redacted was contrary to principles articulated in Beverage
Distributors, Inc. v. Miller Brewing Co., No. 2:08-827 et al., 2010 WL 1727640 (S.D. Ohio Apr.
28, 2010), and ArcelorMittal Cleveland Inc. v. Jewell Coke Co., L.P., No. 1:10-362, 2010 WL
5230862 (N.D. Ohio Dec. 16, 2010); and (2) that Great Lakes’s and Third-Party Defendants’
concerns were obviated by the protective order that was already in place. (Order of Mar. 3, 2011
at 8-10 [Doc. No. 270].)
“[T]he language of [Federal Rule of Civil Procedure] 34 discusses production of
‘documents,’ rather than paragraphs or sentences.” ArcelorMittal, 2010 WL 5230862, at *3
(citation omitted). As the court in Beverage Distributors noted, “redaction of otherwise
discoverable documents is the exception rather than the rule . . . .” Beverage Distribs., 2010 WL
1727640, at *4. Further, in that court’s review of cases that allowed for redaction of irrelevant
information, “the number of redacted documents appeared to be small, and the content of the
redactions was readily apparent.” Id. at *5. Thus, the burden on the court to engage in an in
camera inspection of documents was relatively light in Beverage Distributors. Additionally, in
most cases “the producing party is not harmed by producing irrelevant information or by
producing sensitive information which is subject to a protective order restricting its
dissemination . . . .” Id. at *4.
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In this case, the Magistrate Judge found that, “considering the overall volume of
documents so far produced in this case, . . . it would be ‘unnecessarily burdensome and timeconsuming’ for the Court to expend its limited resources on an in camera review of each and
every redacted document to ascertain whether it was relevant . . . .” (Order of Mar. 3, 2011 at 9
[Doc. No. 270] (quoting Beverage Distribs., 2010 WL 1727640, at *5).) Great Lakes contests
this conclusion, asserting that “the redactions involve, almost exclusively, a single type of
document and one or two discrete categories of non-relevant information,” and thus the Court
would need to examine only “a small handful of such documents.” (Great Lakes Appeal at 10
[Doc. No. 279] (citing Beverage Distribs., 2010 WL 1727640, at *5).)
Contrary to Great Lakes’s assertion, the redactions at issue appear to be rather extensive
and it seems highly unlikely that such redactions can be reduced to merely “one or two discrete
categories.” (See Grier Aff. Ex. P [Doc. No. 214].) Additionally, the Protective Order currently
in place provides adequate protection against dissemination of highly sensitive materials. (See
Protective Order [Doc. No. 187].) The Magistrate Judge’s conclusions were not clearly
erroneous and the Court thus defers to the Magistrate Judge’s ruling on this issue. Chase, 926
F.2d at 740.
2.

Order on Plaintiff’s and Third-Party Defendants’ Motion for
Protective Order and Plaintiff’s Motion to Compel [Doc. No. 271]

Great Lakes also appealed the Magistrate Judge’s second Order of March 3, 2011 [Doc.
No. 271]. Great Lakes first states that the Magistrate Judge erred in accepting Defendants’
representations that they produced documents in response to two Great Lakes requests. Great
Lakes argues that several affidavits, all of which were filed after the required deadline, should
have been considered by the Magistrate Judge and, if they had been, would have mandated a
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finding in Great Lakes’s favor.
It was not contrary to law for the Magistrate Judge to refuse consideration of Great
Lakes’s untimely filed affidavits in support of its Motion. Further, even if those affidavits had
been considered, Defendants have flatly rejected their contents. The Court notes that, “of
necessity, [it] must accept, at face value, a party’s representation that it has fully produced all
materials that are responsive to a discovery request.” Lumber v. PPG Indus., Inc., 168 F.R.D.
641, 643 n.1 (D. Minn. 1996) (Erickson, M.J.). Indeed, the Court has “no means to test the
veracity of [a party’s] avowals, other than to appropriately sanction a recalcitrant party for failing
to responsibly honor its discovery obligations.” Id.; see also Order of March 3, 2011 at 6 [Doc.
No. 271]. Federal Rule of Civil Procedure 26 provides adequate protection to ensure that, if
Defendants are found to be deficient in their document production, appropriate sanctions will be
leveled and Great Lakes will not suffer undue prejudice.
Moreover, despite Great Lakes’s contention, its supporting affidavits do not definitively
demonstrate that Defendants were deficient in their document production. As it relates to the
specific deficiencies cited by Great Lakes—namely, First Request for Production of Documents
(“RFP”) Nos. 3 and 6, and Second RFP No. 13—its affiants’ statements are largely speculative
and non-specific. (See, e.g., Green Aff. ¶ 8 (stating, in part, that “[t]he emails that were produced
tend to indicate that more emails and documents . . . exist but have not been produced”).)
Without more specificity, the Court must rely on the deterrent effect afforded by Rule 26
sanctions and take Defendants at their word. Thus, even if the Magistrate Judge had considered
these affidavits, it is by no means certain, or even likely, that his decision would have been
different. Great Lakes’s argument lacks merit.
9

Great Lakes next objects to the Magistrate Judge’s ruling that Great Lakes failed to timely
assert, and thus waived, its argument that Defendants had waived their objections to Great
Lakes’s Second RFP and First Interrogatories. As the Magistrate Judge noted, Great Lakes
served its Second RFP and First Interrogatories on Defendants on August 11, 2010. (Order of
Mar. 3, 2011 at 15 [Doc. No. 271].) Defendants did not serve their responses, however, until
October 19, 2010, and November 5, 2010—well past the 30-day deadline required by Federal
Rules of Civil Procedure 33 and 34. (Id.) In the meantime, Great Lakes filed a Motion to
Compel Discovery on October 4, 2010 [Doc. No. 155] that did not object to Defendants’ failure
to answer timely Great Lakes’s Second RFP and First Interrogatories. Thus, the Magistrate
Judge deemed Great Lakes’s objection untimely. (Id. at 15-16.)
The Magistrate Judge’s ruling is not contrary to law. Great Lakes argues that it did not
know that Defendants would file belated responses to Great Lakes’s Second RFP and First
Interrogatories at the time Great Lakes filed its Motion to Compel on October 4, 2010, and thus
there was no way that Great Lakes could have objected. But that argument fails because Rules
33 and 34 demand a 30-day response deadline; Great Lakes therefore did not have to wait for
Defendants to answer in order to object. The Court agrees with the Magistrate Judge’s
conclusion that “Great Lakes could have and should have raised the issue in their earlier motion
papers, or at the very least during the hearing on the motion.” (Id.)
Finally, Great Lakes asserts that the Magistrate Judge erred in refusing to require
Defendants to conduct a subsequent review of nearly 88,000 documents to correct any improper
designations of confidentiality. As it did before the Magistrate Judge, Great Lakes provides the
Court with samples of documents that were improperly designated in an effort to show that
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Defendants “have wrongfully shifted the burden and cost to [Great Lakes] of sifting through the
documents to sort out and object to those that have been improperly designated.” (Great Lakes
Appeal at 10 [Doc. No. 280].)
There is already a procedure in place—a procedure to which both parties stipulated—that
allows the parties to make objections to confidentiality designations. (Protective Order at 2-3
[Doc. No. 187].) As the Magistrate Judge noted, the document sampling provided by Great
Lakes does not demonstrate that Defendants acted in bad faith when they improperly designated
some of the documents. Further, Great Lakes provides only conclusory statements in support of
its argument that it is unduly burdened by sorting through Defendants’ documents for improper
designations. Without more, this Court must defer to the Magistrate Judge’s ruling. Great
Lakes’s argument thus fails.
III.

CONCLUSION
Great Lakes and Third-Party Defendants have failed to show that the Magistrate Judge’s

Orders are clearly erroneous or contrary to law.
THEREFORE, IT IS HEREBY ORDERED THAT:
1.

Magistrate Judge Brisbois’s Orders of March 3, 2011 [Doc. Nos. 270 and 271],
are AFFIRMED; and

2.

Plaintiff’s and Third-Party Defendants’ Motion to Strike [Doc. No. 289] is
DENIED.

Dated:

April 19, 2011
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Court Judge
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