800 COOPER FINANCE, LLC v. LIU et al

Filing 224

OPINION AND ORDER granting Counterclaim Plaintiff's 210 Motion to Reopen Discovery. Signed by Magistrate Judge Sharon A. King on 3/15/2023. (dmr)

Case 1:16-cv-00736-JHR-SAK Document 224 Filed 03/15/23 Page 1 of 6 PageID: 4445

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

[ECF No. 210]

800 COOPER FINANCE, LLC.,
Plaintiff,
Civil No. 16-736 (JHR/SAK)

v.
SHU-LIN LIU et al.,
Defendants.
KL HOLDINGS, INC. et al.,
Plaintiffs,
v.

Civil No. 17-456 (JHR/SAK)

800 COOPER FINANCE, LLC et al.,
Defendants.
OPINION AND ORDER
This matter is before the Court on Counterclaim Plaintiffs KL Holdings, Inc., Shu-Lin Liu,
and Jolin Chiaolin Tsao’s (collectively, “KL Holdings,” or “Counterclaim Plaintiffs”) Motion to
Reopen Discovery [ECF No. 210]. 1 The Court received the opposition by Counterclaim
Defendant 800 Cooper Finance, LLC (hereinafter “800 Cooper” or “Counterclaim Defendant”)
[ECF No. 215]. The Court also received Counterclaim Plaintiffs’ Reply [ECF No. 217]. 2 The

1

Counterclaim Plaintiffs filed this motion in connection with Case Nos. 16-736 and 17-456. To
avoid confusion, record citations refer to docket entries in Case No. 16-736.

2

The Court did not consider Counterclaim Plaintiffs’ reply brief as it was filed without leave of
Court as required pursuant to L. CIV. R. 37.1(b)(3).

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Court exercises its discretion to decide the motion without oral argument. See FED. R. CIV. P. 78;
L. CIV. R. 78.1. For the reasons to be discussed, Counterclaim Plaintiffs’ motion is GRANTED.
I.

BACKGROUND
As the parties are familiar with the lengthy procedural history of this case, the Court recites

only the facts relevant to the instant motion. Discovery in this matter closed on June 30, 2021. See
May 18, 2021 Order [ECF No. 123]. In response to Counterclaim Plaintiffs’ application to compel
the production of certain documents, the Court ordered 800 Cooper to produce the operating
agreement of KVest Camden, LLC (“KVest”). See Sept. 3, 2021 Order ¶ 2 [ECF No. 135].
Counterclaim Defendant produced this document but redacted the last names, addresses and tax
identifiers of KVest members. See Piantino Cert. in Opp’n to Mot. for Contempt and Sanctions ¶
9 [ECF No. 152-1]. Thereafter, Counterclaim Defendant filed a motion for reconsideration, asking
the Court to reconsider the provision of the September 3, 2021 Order requiring the disclosure of
the information redacted by Counterclaim Defendant. See Countercl. Def.’s Mot. for Reconsid.
[ECF No. 138-1]. In its November 10, 2021 Order, the Court permitted Counterclaim Defendant
to redact the social security numbers of KVest’s members, but ordered the disclosure of the full
names and addresses of KVest members. See Nov. 10, 2021 Order [ECF No. 146].
On November 23, 2021, Counterclaim Defendant appealed the November 10, 2021 Order.
See 800 Cooper’s Appeal of Magistrate Decision [ECF No. 148]. On February 28, 2022, the
Honorable Joseph H. Rodriguez, U.S.D.J. denied Counterclaim Defendant’s appeal, and ordered
Counterclaim Defendant to produce the unredacted operating agreement by March 7, 2022. See
Feb. 28, 2022 Order [ECF No. 159]. By June 10, 2022, Counterclaim Defendant failed to produce
the operating agreement, resulting in Counterclaim Plaintiffs filing a motion for sanctions. See
KL Holdings’ Mot. for Sanctions and Contempt [ECF No. 177]. On December 7, 2022, Judge

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Rodriguez granted Counterclaim Plaintiffs’ motion for sanctions. See Dec. 7, 2022 Order [ECF
No. 207]. KL Holdings received the unredacted Operating Agreement on December 7, 2022. See
Countercl. Pls.’ Br. at 3 [ECF No. 210-1]. A trial date is not yet scheduled.
Counterclaim Plaintiffs now seek to reopen discovery “for the limited purpose of . . .
deposing these newly identified KVest members, obtaining all relevant discovery that may arise
as a result of these depositions and fully prosecuting its case.” Countercl. Pls.’ Br. at 1. In their
brief, Counterclaim Plaintiffs state that prior to filing their motion, KL Holdings sought the consent
of 800 Cooper to reopen discovery, but that consent was denied. See id. Counterclaim Plaintiffs
argue good cause exists to reopen discovery to depose KVest members as these members may
have relevant information about KL Holdings’ claims. See id. at 3.
Counterclaim Defendant opposes the motion, arguing that Counterclaim Plaintiffs failed to
timely conduct discovery and arguing that the Court did not authorize or contemplate depositions
related to the breach of contract claim. Counterclaim Defendant also argues that the instant motion
is procedurally deficient as it lacks the necessary affidavit certifying that the moving party
conferred with Counterclaim Defendant in an attempt to resolve the issue without court
intervention. See Countercl. Def.’s Br. in Opp’n at 9 (citing L. CIV. R. 37.1(b)(1)) [ECF No. 215].
800 Cooper further argues that Counterclaim Plaintiffs did not raise the issue with the Court before
filing its motion. See L. CIV. R. 37.1(a)(1).

Counterclaim Defendant claims that although

Counterclaim Plaintiffs emailed counsel to seek consent to reopen discovery, the email does not
satisfy the requirements of Local Civil Rule 37.1. 3

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The Court acknowledges Counterclaim Plaintiff’s failure to fully comply with L. CIV. R. 37.1.
However, given this case’s protracted litigation history, Counterclaim Defendant’s extensive delay
in providing court-ordered discovery, Counterclaim Defendant’s acknowledgement that
Counterclaim Plaintiff sought consent to reopen discovery, and the Court’s interest in moving this
case along, the Court will excuse Counterclaim Plaintiff’s failure to fully comply with the
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II.

DISCUSSION
Pursuant to Rule 16, a district court has “broad discretion to control and manage

discovery.” Cevdet Aksüt Oğullari Koll, STI v. Cavusoglu, No. 14-3362, 2017 WL 3013257, at *4
(D.N.J. July 14, 2017) (citations omitted). Scheduling orders may only be modified to reopen
discovery for “good cause and with the judge’s consent.” FED. R. CIV. P. 16(b)(4). “The good
cause standard is ‘not a low threshold.’” Cavusoglu, 2017 WL 2013257, at *4 (quoting J.G. v.
C.M., No. 11-2887, 2014 WL 1652793, at *1 (D.N.J. Apr. 23, 2014)). “To establish good cause
in this context, the party seeking the extension must show that the deadlines set forth in the
scheduling order ‘cannot reasonably be met despite the diligence of the party seeking the
extension.’” Williams v. Sullivan, No. 08-1210, 2011 WL 2119095, at *4 (D.N.J. May 20, 2011)
(quoting FED. R. CIV. P. 16(b) advisory committee’s note to 1983 amendments). “[P]ermitting
discovery extensions in the absence of good cause would ‘deprive the trial judges of the ability to
effectively manage the cases on their overcrowded dockets.’” Cavusoglu, 2017 WL 3013257, at
*4 (quoting Koplove v. Ford Motor Corp., 795 F.2d 15, 18 (3d Cir. 1986)).
When asked to reopen discovery, a court must consider “(1) the good faith and diligence
of the moving party, (2) the importance of the evidence, (3) the logistical burdens and benefits of
re-opening discovery, [and] (4) prejudice to the nonmoving party.” J.G., 2014 WL 1652793, at *2
(citing Marlowe Pat. Holdings LLC v. Dice Elecs., LLC, 293 F.R.D. 688, 701 (D.N.J. 2013)). The
importance of the evidence is a tantamount factor when looking to reopen discovery. See Virginia
St. Fidelco, L.L.C. v. Orbis Prods. Corp., No. 11-2057, 2017 WL 2335642, at *3 (D.N.J. May 30,

requirements of L. CIV. R. 37.1. The Court will consider Counterclaim Plaintiff’s motion to
reopen discovery on its merit.
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2017) (internal quotations omitted) (“[T]he importance of the evidence Plaintiff[] seeks to include
through supplement[al] [discovery] . . . is often the most significant factor.”).
Here, Counterclaim Plaintiffs demonstrated good faith and diligence in pursuing
underlying discovery. As early as September 3, 2021, the Court ordered Counterclaim Defendant
to produce underlying discovery sought by Counterclaim Plaintiffs. Counterclaim Defendant
resisted the production, ultimately asking the magistrate judge to reconsider her order, and then
appealing the magistrate judge’s denial of the motion to reconsider. Even after the magistrate
judge’s order was affirmed on appeal, Counterclaim Defendant refused to produce the underlying
discovery. It was only after Counterclaim Plaintiffs filed, and prevailed on, a motion for sanctions
that the underlying discovery was produced. Shortly after receiving the discovery on December
7, 2022, Counterclaim Plaintiffs filed the instant motion to reopen discovery on January 9, 2023.
This factor weighs in favor of reopening discovery.
As to the importance of the evidence, Counterclaim Plaintiffs indicate their intent to depose
the individuals identified in the underlying discovery produced on December 7, 2022. In requiring
Counterclaim Defendant to disclose the identities of KVest members, the Court found that these
members may be knowledgeable about the conduct at issue in this case. See Sep. 3, 2021 Order ¶
2; Feb. 28, 2022 Order ¶ 1 n.1. Despite Counterclaim Defendant’s claim that the Court did not
authorize or contemplate the depositions of KVest members, the Court notes that Rule 26(b)
permits discovery regarding “any nonprivileged matter that is relevant to any party’s claim or
defense and proportional to the needs of the case.”

Here, KVest is the sole member of

Counterclaim Defendant, 800 Cooper. Counterclaim Plaintiffs can therefore discover information
relevant to the breach of contract claim that is possessed by 800 Cooper’s members, through the
underlying individual members of KVest. In the scheme of the extensive litigation and motion

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practice in this case, information sought from 800 Cooper’s sole member is clearly proportional to
the needs of the case. This factor weighs in favor of reopening discovery.
The Court finds the third and fourth factors—the burdens and benefits of re-opening
discovery and the prejudice to the non-moving party—weigh in favor of reopening discovery.
Counterclaim Plaintiffs benefit from reopened discovery as they are afforded the opportunity to
employ discovery that both the district and magistrate judges found they are entitled to. While
there is some burden associated with additional delay, in the scheme of this protracted litigation,
this burden is negligible. Counterclaim Defendant is unable to make a good-faith argument that it
will be prejudiced by the delay. Its failure to produce the underlying discovery, even after its
motion to reconsider and appeal of the magistrate judge’s order were denied, has contributed to
the discovery delays in this case. The Court further notes that a trial date has not yet been
scheduled.
Because the factors weigh substantially in favor of reopening discovery, the Court will
grant Counterclaim Plaintiffs’ motion to reopen discovery.
III.

CONCLUSION
Accordingly, for all the foregoing reasons,
IT IS HEREBY ORDERED this 15th day of March, 2023, that Counterclaim Plaintiff’s

Motion to Reopen Discovery [ECF No. 210] is GRANTED.
s/ Sharon A. King
SHARON A. KING
United States Magistrate Judge
cc: Hon. Joseph H. Rodriguez, U.S.D.J.

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