Garco Wine Company, Inc. v. Constellation Brands, Inc.

Filing 44

AMENDED MEMORANDUM AND ORDER. (Amendment to 43 ) This Court's prior Order, issued September 25, 2013 [ECF No. 43 ], properly included pages 31 and 32 as part of the material to be redacted from the "Exhibits to Missouri State Distributio n Agreement" before production of the exhibits to Garco, but inadvertently failed to identify these pages as "Exhibit H Local Marketing Fund." Consequently, the Court is issuing this Amended Memorandum and Order to correctly identify E xhibit H as a section to be redacted before production of "Exhibits to Missouri State Distribution Agreement." The last full sentence beginning on page 4 and continuing through page 5 of the September 25, 2013, Order [ECF No. 43 ] has been modified to reference Exhibit H. In all other respects, the Order remains unchanged. Signed by District Judge E. Richard Webber on 09/27/2013. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

GARCO WINE COMPANY, INC.,
Plaintiff,
vs.
CONSTELLATION BRANDS, INC.,
Defendant.

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Case No. 4:13CV00661 ERW

AMENDED MEMORANDUM AND ORDER1
This matter comes before the Court on Plaintiff Garco Wine Company, Inc.’s (“Garco”)
“Motion to Compel Discovery” [ECF No. 35]. The parties, through counsel, appeared before the
Court for hearing on September 12, 2013.
Plaintiff Garco Wine Co., Inc. (“Garco”) has filed a Complaint against Defendant
Constellation Brands, Inc. (“Constellation”), alleging that Garco is a wholesale distributor for
Constellation’s portfolio of wines, and that Garco sells Constellation’s products to retailers
throughout Missouri, pursuant to an agreement with Constellation. Garco further alleges on
March 25, 2013, it received a letter from Constellation notifying Garco that, as of April 30,
2013, Constellation would no longer accept Garco’s orders. Garco’s original Complaint asserted
claims for Wrongful Termination Under Missouri Revised Statutes §§ 407.400 et seq., (Count I)

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This Court’s prior Order, issued September 25, 2013 [ECF No. 43], properly included
pages 31 and 32 as part of the material to be redacted from the “Exhibits to Missouri State
Distribution Agreement” before production of the exhibits to Garco, but inadvertently failed to
identify these pages as “Exhibit H Local Marketing Fund.” Consequently, the Court is issuing
this Amended Memorandum and Order to correctly identify Exhibit H as a section to be redacted
before production of “Exhibits to Missouri State Distribution Agreement.” The last full sentence
beginning on page 4 and continuing through page 5 of the September 25, 2013, Order [ECF No.
43] has been modified to reference Exhibit H. In all other respects, the Order remains
unchanged.

and Anticipatory Breach of Contract (Count IV); and requested Declaratory Judgment Relief
(Count II) and Injunctive Relief (Count III).
Garco filed a motion asking the Court to issue Temporary Restraining Order, or to
otherwise grant it Preliminary Injunctive Relief, claiming that Garco is entitled to injunctive
relief enjoining Constellation from prematurely terminating their supplier-distributor relationship
without good cause and without the requisite 90 days’ notice required by Missouri’s franchise
laws, Missouri Revised Statutes §§ 407.400 through 407.420. The Court granted Garco’s request
for injunctive relief, and entered a Temporary Restraining Order on April 30, 2013 [ECF No. 16].
After hearing arguments from counsel regarding their request to consolidate the trial with the
preliminary injunction hearing, the Court vacated a June 24, 2013 setting for the preliminary
injunction hearing, and issued a scheduling order for an October 7, 2013 bench trial.
Subsequently, Constellation filed a Demand for Jury Trial, and the case is presently set for a jury
trial on January 27, 2014.
Garco filed its Amended Complaint against Constellation on June 20, 2013, and
Constellation filed its Answer on July 8, 2013 [ECF Nos. 32, 33]. Garco’s Amended Complaint
asserts claims for Wrongful Termination Under Missouri Revised Statutes §§ 407.400 et seq.,
(Count I), Declaratory Judgment Relief (Count II), Injunctive Relief (Count III), Unjust
Enrichment (Count IV), and Recoupment (Count V). On June 18, 2013, the Court granted the
Parties’ Joint Motion for Protective Order, which provides that material the parties desire to
maintain as confidential will be marked “Confidential,” and limits the disclosure of documents
so identified [ECF No. 29].
In its Motion to Compel Discovery, Garco moves the Court, pursuant to Rule 37 of the
Federal Rules of Civil Procedure, for an Order requiring Constellation to provide for inspection

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and production an un-redacted copy of the “Constellation Brands, Inc. Distribution Agreement”
(“the Agreement”), effective as of June 1, 2013, between Constellation and Major Brands, Inc.
[ECF No. 35]. Garco certifies it has made sincere and reasonable effort to resolve this dispute in
good faith, and claims the un-redacted document is relevant to Garco’s argument that it is
entitled to franchise protections under Missouri statutes. Garco contends any “sensitive business
information” contained in Constellation’s agreement with Major Brands is protected by the Joint
and Stipulated Protective Order entered in this matter.
Constellation filed a Memorandum in Opposition to Garco’s motion, contending the
Court should deny the motion because the Agreement is irrelevant to Garco’s claim in this case
[ECF No. 37]. Constellation claims the agreement with Major Brands was negotiated and
executed after Garco filed this lawsuit, and is an arm’s length transaction between Constellation
and Major Brands. Constellation also asserts the Agreement contains highly sensitive,
confidential business information, and argues, regardless of the existence of the Protective Order,
the Agreement should not be discoverable because it contains sensitive information that has no
bearing on this matter, and it could inform Garco of possible settlement strategies. Constellation
alternatively requests, if the Court finds Plaintiff’s argument for production compelling, that any
Order requiring disclosure be: “(i) limited to disclosure of only those parts of the 54 page
document that refer to the applicability of any franchise protection statute, law or rule; and (ii)
allowed to be made only on an ‘attorney’s eyes only’ basis.”
In its Reply, Garco asserts the Agreement is relevant to its argument that Garco is
afforded statutory protections as a franchisee under Missouri’s franchise statute, because the
Agreement can show that Constellation acknowledged its relationship with Major Brands is a
franchise with statutory protections. Garco argues Constellation’s settlement-strategy argument

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is counter to the purpose of liberal discovery in the federal system; that is, to assist the parties in
settlement. Garco further claims Garco and Major Brands are non-competitors with respect to
the only brand Constellation supplies to them, so there is no reason to prohibit discovery that
might reveal financial data between them.
Federal Civil Procedure Rule 26(b) is a discovery rule that is liberal in scope and
interpretation. Fed. R. Civ. P. 26(b). Thus, Rule 26(b) extends to matters that are relevant and
reasonably calculated to lead to the discovery of admissible evidence. Hofer v. Mack Trucks,
Inc., 981 F.2d 377, 380 (8th Cir. 1993). As noted above, the Court previously entered an Order
in this action that limited the disclosure and use of confidential and sensitive business
information the parties do not desire to be shared publicly. When a party opposes discovery of
confidential business information, the party must show that the information is of the type
afforded protection, and that its disclosure would be harmful to the party’s interest in the
property. In re Remington Arms Co., 952 F.2d 1029, 1032 (8th Cir. 1991). The burden then
shifts to the party seeking discovery of the information, who must establish the information is
relevant to the claim, and necessary for trial preparation. Id. If the party seeking discovery
establishes both relevance and need, the Court “must weigh the injury the disclosure might cause
to the property against the moving party’s need for the information.” Id.
After hearing argument from counsel, the Court ordered Constellation to submit an
unredacted copy of the Agreement between it and Major Brands for an in camera review by the
Court, and took the matter under submission. Portions of the unredacted Agreement are not
relevant to Garco’s claim and the Court finds that the potential harm that disclosure of certain
information could cause to Constellation and Major Brands outweighs Garco’s need for those
sections. Specifically, the Court finds that the potential harm that disclosure of the following

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sections of the Agreement and its exhibits could cause to Constellation and Major Brands
outweighs Garco’s need for the information: paragraph 2.d. on pages 2 and 3, and paragraph
4.p. on page 10 of “Constellation Brands, Inc. Distribution Agreement”; “Exhibit B Product
Points” on pages 3 and 4, “Exhibit C Incentive Model” on pages 5through 8, “Exhibit D Selling
Model, Dedicated Resources and Sales Force Structure” on pages 9 through 11, “Exhibit D.1
Organization Chart” on page 12, “Exhibit F Reports and Data” on page 28, “Exhibit G Local
Marketing Fund” on pages 29 and 30, and “Exhibit H Local Marketing Fund” on pages 31and 32
of “Exhibits to Missouri State Distribution Agreement.” Therefore, as to these sections, the
Court will deny Garco’s motion to compel.
However, the majority of the Agreement is relevant to Garco’s action, particularly to its
argument that Garco is afforded statutory protections as a franchisee under Missouri’s franchise
statute, and will likely lead to the discovery of admissible evidence. Therefore, the Court orders
Constellation to produce the “Constellation Brands, Inc. Distribution Agreement,” and its
attached “Exhibits to Missouri State Distribution Agreement,” with the above listed sections
redacted from the Agreement and the “Exhibits to Missouri State Distribution Agreement.”
Production of the Agreement shall be in accordance with the Protective Order that limits
dissemination of confidential documents in this matter.
Accordingly,
IT IS HEREBY ORDERED that Garcos’ Motion to Compel Discovery [ECF No. 35] is
GRANTED in part, and DENIED in part. Constellation shall produce to Garco the
“Constellation Brands, Inc. Distribution Agreement” and its attached “Exhibits to Missouri State
Distribution Agreement,” redacted in accordance with the limitations set forth in this Order, and

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disseminated in accordance with the Protective Order governing confidential information in this
matter.
Dated this

27th

day of September, 2013.

E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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