Blue Package Delivery, LLC v. Express Messenger Systems, Inc.

Filing 81

ORDER granting 71 Motion to Alter/Amend/Correct Other Orders(Written Opinion) Signed by Magistrate Judge Katherine M. Menendez on 3/13/2019. (LCC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Blue Package Delivery, LLC,

Case No. 0:17-cv-4329 (WMW-KMM)

Plaintiff,
ORDER

v.
Express Messenger Systems, Inc.,
d/b/a/ OnTrac, a Delaware
Corporation,
Defendant.

Plaintiff Blue Package Delivery, LLC (“Blue Package”) has moved to amend
the amending scheduling order. (ECF No. 71.) Defendant Express Messenger
Systems, Inc. (“OnTrac”) opposes the motion. (ECF No. 80.) Because the Court
finds good case to amend the scheduling order, and finds little to no prejudice to
OnTrac, Blue Package’s motion is GRANTED.
FACTS
This litigation has been plagued with delay for myriad reasons. The first delay
occurred in January 2018. On January 19, 2018, OnTrac served discovery on Blue
Package. But discovery responses were not provided to OnTrac within the 30-day
deadline. While the clock was running on the required responses, Blue Package’s first
attorney, Dan Gallatin, informed Blue Package that he would be seeking withdrawal,
and advised them to find new counsel. On February 19, 2018, Mr. Gallatin formally
moved to withdraw without substitute counsel. (ECF No. 20.) Before the Court
could rule on the motion, Blue Package retained new counsel, Halpern Law Firm,
who entered a notice of appearance on March 7, 2018. (ECF No. 23.)
After Halpern took over the case, they learned that Blue Package had never
received OnTrac’s first set of discovery requests. (ECF No. 29, Ex. C.) These
requests were also missing from the file that Mr. Gallatin had sent to Halpern. (Id.)

1

Halpern did receive the requests after this oversight was discovered. However, delay
in the discovery process continued.
Although Halpern met with Blue Package on May 16, 2018 to discuss
responding to discovery (Declaration of Lynn Terpstra, ECF No. 77, ¶ 2), discovery
responses were not timely provided to OnTrac. On June 7, 2018, OnTrac filed a
motion to compel. (ECF No. 26.) Blue Package never responded to the motion, so
the Court granted the motion without their input. (ECF No. 32.) Halpern then
instructed Blue Package to collect responsive documents and send them to OnTrac
without Halpern’s review. (Terpstra Decl., Ex. B.) OnTrac notified Blue Package and
Halpern of deficiencies in the response, and Halpern once again instructed Blue
Package to respond without providing guidance or input. (Id. Ex. C.) They also
acknowledged that they were unaware of what had been produced to OnTrac. (Id.)
On August 29, Blue Package provided Halpern with its updated responses to
OnTrac’s discovery as well as affirmative discovery requests of its own. (Id. Ex. F.)
Halpern never served OnTrac with the discovery requests.
Further delay was caused by circumstances entirely out of Blue Package’s
control. First, Steve Ugland, the primary Halpern attorney working with Blue
Package, suffered a stroke in early September. (Terpstra Decl., Ex. G.) Litigation was
stalled for several weeks while Mr. Ugland recovered. Shortly thereafter, Halpern
moved to withdraw from litigation, citing a refusal by Blue Package to communicate
or engage in the litigation. (ECF No. 48.) The Court granted the motion and gave
Blue Package time to find new counsel, which it did. Blue Package’s third attorney,
Messerli and Kramer, appeared on January 14, 2019. (ECF No. 68.) They promptly
filed this motion. (ECF No. 71.)
ANALYSIS
Amending a scheduling order is governed by Federal Rule of Civil Procedure
16. Under this rule, a movant must demonstrate that there is good cause to modify
the deadlines in a scheduling order. Fed. R. Civ. P. 16(b)(4). “The primary measure
of good cause is the movant’s diligence.” Kmak v. American Century Companies, Inc., 873
F.3d 1030, 1034 (8th Cir. 2017) (quoting Harris v. FedEx Nat’l LTL, Inc., 760 F.3d 780,
786 (8th Cir. 2014)). Prejudice to the nonmovant is generally only considered when
the movant has not been diligent in meeting the deadlines of the scheduling order. Cf.
id.
2

Blue Package argues that it has been as diligent as possible considering the lessthan-perfect actions of Halpern, and that modification of the scheduling order is
warranted. OnTrac opposes Blue Package’s motion, arguing that Blue Package has
caused much of the delay through its own actions, rather than those of its counsel,
and that it will be prejudiced by the late modification of the scheduling order. The
Court finds that a modest change to the scheduling is warranted here.
Ultimately, the Court does not seek to apportion blame between any counsel or
party for the delay that necessitates the current motion. It is clear that actions by
multiple actors have converged to create the situation in which Blue Package now
finds itself—several months after discovery’s close, with no discovery conducted.
And OnTrac is in a similar position in some respects: it has been unable to collect
necessary discovery or conduct essential depositions to support either its defenses or
its counterclaims. Regardless, Blue Package has submitted evidence that demonstrates
their diligence in providing discovery responses and information for discovery
requests to their attorney. (See, e.g., Terpstra Decl. Ex. F.) Accordingly, the Court
finds that at least part of Halpern’s failure to conduct discovery is not tied to Blue
Package’s diligence. Although a litigant typically hires an attorney at their own risk, see
Link v. Wabash Railroad Co., 370 U.S. 626, 633–34 (1962), courts in other circuits have
granted modest changes to a scheduling order where extraordinary circumstances
warrant. E.g., Dunham v. City of New York, 295 F. Supp. 3d 319, 328 (S.D.N.Y. 2018).
Indeed, the Eighth Circuit has considered conduct attributable to a litigant’s attorney
in analogous cases, such as when determining sanctions. See, e.g., Herring v. City of
Whitehall, 804 F.2d 464, 468 (8th Cir. 1986) (considering potential harm to the client
due to attorney neglect); see also Bergstrom v. Frascone, 744 F.3d 571, 575 n.1 (8th Cir.
2014).
The Court is careful to note that it makes no finding of professional
misconduct or malpractice in this Order, nor is any such motion before it. Such a
finding is not warranted by the record before it, nor is it required for the result
reached here. Nor does the Court place blame squarely upon any party’s shoulders.
But on the record before the Court now, it is clear that, while Blue Package may not
have pursued discovery at times with perfect diligence, its efforts were also thwarted
by actions taken by its attorneys, as well as an attorney illness that was certainly
beyond anyone’s control. These are unusual circumstances, and failing to adjust the

3

schedule would not serve the goal of securing an adjudication on the merits of this
case.
Finally, the Court finds that OnTrac will not be prejudiced by this adjustment.
Prejudice is not always considered where an adjustment to the scheduling order is
made, but should be examined when, in cases such as this, the movant has not
demonstrated perfect diligence in its attempts to adhere to the scheduling order. E.g.,
Kmak, 873 F.3d at 1034. The Court finds that OnTrac will suffer little prejudice, and
in fact may even benefit, from reopening discovery. OnTrac has provided little to
support its general claim of prejudice stemming from this motion. Instead, OnTrac
simply argues that it was diligent, and so it is unfair that Blue Package will get a
second chance to conduct discovery. It also appears that OnTrac believes that it
should be absolved of any possible liability for Blue Package’s claims, but awarded full
recovery for its counterclaims as a result of the delay at issue. (See ECF Nos. 66, 80.)
Such a windfall is unjustified. The Court understands OnTrac’s frustration, but finds
that it does not amount to prejudice. Indeed, by reopening discovery, OnTrac will
have the opportunity to conduct previously-noticed depositions and will also gain
insight into Blue Package’s theory of the case.
ACCORDINGLY, IT IS HEREBY ORDERED:
1.

The Amended Scheduling Order (ECF No. 47) is further amended as
follows:
a.

Expert disclosures shall be provided by March 20, 2019;

b.
Fact discovery shall be commenced in time to be completed on or
before May 15, 2019;
c.
Non-dispositive motions and supporting documents, including
those which related to fact discovery and leave to assert punitive
damages (if applicable), shall be filed and served on or before May 15,
2019
d.
All dispositive motions shall be filed, served, and scheduled on or
before June 15, 2019; and
e.

This case shall be ready for a jury trial on October 7, 2019.

4

s/ Katherine Menendez
Katherine Menendez
United States Magistrate Judge

Date: March 13, 2019

5