H&R Block Eastern Enterprises Inc et al v. Intuit Inc

Filing 63

ORDER ruling discovery disputes. Signed on 2/19/13 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
H&R Block Eastern Enterprises,
Inc., et al.,
Plaintiffs,
vs.
Intuit, Inc.,
Defendant.

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No. 13-0072-CV-W-FJG

ORDER
Before the Court are Plaintiffs’ discovery dispute letter, dated February 15, 2013,
and Defendant’s discovery dispute letter, dated February 15, 2013. The Court finds a
teleconference to be unnecessary, and therefore issues this ruling on the parties’ disputes.
First, the Court is concerned that the parties are engaging in some discovery that is
far afield from the limited purpose of the preliminary injunction hearing. In particular, the
Court believes that the focus should be on the experience of plaintiffs’ and defendant’s tax
preparers and consultants so that the Court can make a more informed assessment as to
whether defendant’s advertisements are literally false, or literally true or ambiguous but
implicitly convey a false impression, are misleading in context, or are likely to deceive
consumers. See United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1180 (8th Cir. 1998).
Accordingly, within each of the below rulings on the parties’ discovery disputes, the Court
has presented the issues it believes to be critical in making its ruling on the motion for
preliminary injunction. To the extent that the Court has ordered the parties’ to produce
information requested or provide witness(es) to testify, all discovery must be completed by
FRIDAY, FEBRUARY 22, 2013.

Therefore, upon consideration of the parties’ letters, the Court enters the following
Order:
(1)

With respect to plaintiffs’ request for a 30(b)(6) deponent prepared to testify to

the topics in Doc. No. 38, Ex. A, Topic No. 10, the Court finds that the topics proposed in
Topic No. 10 are too broad. Instead, defendant should provide a 30(b)(6) deponent who is
prepared to testify as to (a) the qualifications of defendant’s tax consultants; (b) whether the
person answering the customers’ calls is the same person who is giving the tax advice.
Further, the Court does not understand the relevance of (a) the length of each call and (b)
the time frame of January 1, 2011 to the present. Since no explanation was provided, this
request will be denied.
(2)

With respect to plaintiffs’ document request regarding defendant’s solicitation

of plaintiffs’ employees for “tax expert” positions and its request for a 30(b)(6) deponent to
testify regarding same, the Court finds that this is a collateral issue to this injunctive
proceeding. Instead, this proceeding should be focused upon the relative experience and
qualifications of the parties’ tax consultants. The Court will not compel such discovery from
defendant.
(3)

With respect to defendant’s request for production of “documents wherein

HRB offered to hire tax preparers with no prior experience,” (Ex. A. to February 15 letter,
No. 5), and “tax preparers that had no prior experience,” (Ex. A to February 15 letter, No.
13), the Court finds that plaintiffs are making a great deal out of semantics when saying all
of their employees have “experience,” when that experience consists of training through
plaintiffs’ program which the trainees have paid for. For purposes of the hearing, the Court
needs to know what the hiring and training process is for both plaintiffs’ and defendant’s tax
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consultants, and therefore, both defendant and plaintiffs shall provide this information to
each other (and be prepared to discuss this information with the Court at the hearing).
Accordingly, plaintiffs shall respond to defendant’s requests.
(4)

With respect to defendant’s request for “[d]ocuments sufficient to show the

educational and work history” of plaintiffs’ tax preparers (Ex. A. to February 15 letter, No. 9,
see also Defendant’s letter to the Court dated February 19, 2013), the Court agrees with
plaintiffs that the production would be unduly burdensome. However, the Court finds some
discovery on this topic to be relevant to the issues of the qualifications of plaintiffs’
employees and any industry standard as to the training of tax preparers and tax consultants
(to the extent there is a difference between these types of employees). Therefore, the
Court orders plaintiffs to provide to defendant (to the extent they have not done so already)
the following information: (a) percent of seasonal vs. non-seasonal employees; (b) percent
of seasonal employees preparing and/or consulting on tax returns; (c) percent of nonseasonal employees preparing and/or consulting on tax returns; (d) general description of
educational/vocational background of seasonal vs. non-seasonal employees; (e) any
differences in the tax preparation training for seasonal vs. non-seasonal employees.
(5)

Along the same lines as paragraphs 1 and 4, above, the Court instructs each

side to provide discovery to the other (to the extent it has not already provided such
discovery) regarding the following inquiries the Court believes to be relevant: (a) Is the
person that receives inquiries by telephone, internet or other methods from prospective
consumers of the tax service a trained and experienced tax consultant or preparer? (b) If
so, what is the extent of their training?
(6)

With respect to defendant’s request for discovery on its “unclean hands”
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theory based on plaintiffs’ advertisements (Ex. A to February 15 letter, Nos. 20-22), the
Court finds that the “unclean hands” theory has marginal application here, given the lack of
connection between the content of plaintiffs’ ads and defendant’s ads. Accordingly,
plaintiffs will not be required to provide such discovery to defendant.
IT IS SO ORDERED.

/s/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge
Dated: February 19, 2013
Kansas City, Missouri

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