Landry et al v. Swire Oilfield Services, LLC et al
Filing
93
MEMORANDUM OPINION AND ORDER by District Judge James O. Browning granting the Plaintiffs' Motion to Compel Electronic Payroll Records 36 ; granting in part and denying in part the Defendants' Notice of Non-Appearance and Motion for Protect ive Order 52 ; granting in part and denying in part the Plaintiffs' Motion to Compel Swire to Comply with 30(b)(6) Notice 57 ; granting the Defendants' Motion for Enlargement of Time to Produce Documents Received from ADP Payroll, Inc. and Corban OneSource LLC 73 ; and denying the Plaintiffs' Motion to Compel Third Party (ADP) Deposition 76 . (fm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
EDDIE LANDRY; MARIO
CONSTANCIO, JR. and MARK
TAMAYO,
Plaintiffs,
vs.
No. CIV 16-0621 JB/LF
SWIRE OILFIELD SERVICES, L.L.C. and
SWIRE WATER SOLUTIONS, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
THIS MATTER comes before the Court on: (i) the Plaintiffs’ Motion to Compel
Electronic Payroll Records, filed January 26, 2017 (Doc. 36)(“First Motion to Compel”);1 (ii) the
Defendants’ Notice of Non-Appearance and Motion for Protective Order, filed April 6, 2017
(Doc. 52)(“Motion for Protective Order”); (iii) the Plaintiffs’ Motion to Compel Swire to
Comply with 30(b)(6) Notice, filed April 21, 2017 (Doc. 57)(“Second Motion to Compel”);
(iv) the Defendants’ Motion for Enlargement of Time to Produce Documents Received from
ADP Payroll, Inc. and Corban OneSource LLC, filed June 14, 2017 (Doc. 73)(“Enlargement
Motion”); and (v) the Plaintiffs’ Motion to Compel Third Party (ADP) Deposition, filed June 15,
2017 (Doc. 76)(“Third Motion to Compel”). The Court held hearings on March 23, 2017, and
1
On September 19, 2017, the Court issued an order disposing of the First Motion to
Compel in which it granted the Plaintiffs’ request to compel the Defendants to produce payroll
records in the electronic format that the Plaintiffs requested and the Plaintiffs’ request that the
Defendants identify which payroll documents correspond with which potential class of plaintiffs.
See Order at 3-4, filed September 19, 2017 (Doc. 92)(“Order”). In the Order, the Court stated
that it would “at a later date issue a Memorandum Opinion more fully detailing its rationale.”
Order at 1 n.1. This Memorandum Opinion and Order is the promised Memorandum Opinion
that details the Order’s rationale.
May 12, 2017. The primary issues are: (i) whether rule 34 of the Federal Rules of Civil
Procedure requires the Defendants to produce records in electronically readable format -- the
format in which the Plaintiffs request the documents be produced; (ii) whether the Court should
compel a third-party deposition of ADP Payroll Services, Inc.2; (iii) whether rule 26(c) protects
the Defendants from testifying at a deposition about topics related to the Defendants’ interactions
with payroll companies, the Defendants’ efforts to gather discovery documents, the Defendants’
methodology in compiling discovery documents, and matters in which the Defendants have
already produced responsive documents; and (iv) whether the Court should extend, by one week,
the deadline for the Defendants to produce documents received from ADP Payroll and Corban
OneSource, LLC in accordance with the Court’s Order, filed May 25, 2017 (Doc. 69)(“Subpoena
Order”). The Court concludes that: (i) rule 34 requires the Defendants to produce the electronic
documents in the electronic format that the Plaintiffs request; (ii) it will not compel ADP
Payroll’s deposition, because a third-party deposition is unnecessary here as the Defendants’
production of electronic documents in electronic format affords the relief that the Plaintiffs’
seek; (iii) rule 26(c) does not protect the Defendants from testifying at a deposition about their
efforts to produce responsive documents, because the testimony sought is relevant; and (iv) the
Court grants the Defendants’ request for a one-week deadline extension, because there is good
cause for such a slight extension. The Court, accordingly, grants the First Motion to Compel,
grants in part and denies in part the Motion for Protective Order, grants in part and denies in part
the Second Motion to Compel, grants the Enlargement Motion, and denies the Third Motion to
Compel.
2
ADP Payroll is a human resource management software and service provider,
generating, among other things, payroll information on employees. See ADP, Company
Information https://www.adp.com/contact-us/company-information.aspx.
-2-
FACTUAL BACKGROUND
The Court draws its facts from the Plaintiffs’ Original Complaint, Collective Action,
Class Action, and Jury Demand filed June 21, 2016 (Doc. 1)(“Complaint”). It assumes as true
the Complaint’s factual allegations only for the purposes of this Memorandum Opinion and
Order. Swire Oilfield Services, LLC is an oilfield services company, which provides oilfield
fluid management services to drilling companies across the globe, including drilling companies
in New Mexico. See Complaint ¶ 29, at 6. The Plaintiffs are Swire Oilfield’s operators who rig
oilfield equipment, monitor drilling fluids, and generally assist in the drilling process. See
Complaint ¶ 30, at 6. These operators commonly work more than twelve hours a day, and often
more than ninety hours a week. See Complaint ¶ 31, at 6. From 2013 until 2016, Swire Oilfield
paid those operators under two pay systems, a salaried system and a Fluctuating Work Week
(“FWW”) system. See Complaint ¶ 32, at 6.3 The Plaintiffs contend that, under either system,
the Defendants violated the Fair Labor Standards Act, 29 U.S.C. §§ 201-19 (“FLSA”), because
the Defendants failed to pay the requisite overtime, see Complaint ¶¶ 66-74, at 12-13, and the
requisite minimum wage, see Complaint ¶¶ 75-82, at 13-14.
Plaintiff Mark Tamayo also
contends that, on behalf of himself and others similarly situated, the FWW system violates the
New Mexico Minimum Wage Act, N.M. Stat. Ann. §§ 50-4-1-34 (“NMMWA”).
See
Complaint ¶¶ 83-88, at 14-15.
3
The FWW system compensates -- on a fixed salary basis -- employees who have a
varying work schedule, e.g., employees who may work thirty-five hours one week, forty-five
hours the next, and forty-two hours the following. See 29 C.F.R. § 778.114(a)-(b). When there
is a “clear mutual understanding” between the parties that the fixed salary is compensation for
the hours worked during their week, no matter how many, the FWW system requires that the
employee’s weekly salary rate equal or exceed the minimum wage rate and that the employee is
compensated with overtime pay at one-and-a-half times the ordinary weekly rate. 29
C.F.R. § 778.114(a).
-3-
PROCEDURAL BACKGROUND
On June 21, 2016, the Plaintiffs filed this suit as a proposed collective action under the
FLSA, 29 U.S.C. § 216(b), and as a proposed class action under rule 23 of the Federal Rules of
Civil Procedure. See Complaint ¶¶ 47-65, at 8-12. With respect to the FLSA, the Plaintiffs
bring this suit on two proposed classes’ behalf: (i) the Salary Class, i.e., “[a]ll of Defendants’
current and former operators throughout the United States who were paid on a salary basis
without overtime in the last three years”; and (ii) the FWW Class, i.e., “[a]ll of Defendants’
current and former operators throughout the United States who were paid under the fluctuating
work week method during the last three years.” Complaint ¶ 54, at 9. The Plaintiffs allege that
the potential Salary Class members are similarly situated to Landry “in that they share the same
duties and were subject to Swire Oilfields’s policies of misclassifying non-exempt employees as
salaried exempt,” and that the FWW Class members are similarly situated to Constancio and
Tamayo “in that they share the same duties and were subject to Swire’s polices of . . . paying
overtime under a non-compliant FWW system.” Complaint ¶ 49, at 9. The Plaintiffs assert two
causes of action against Swire Oilfield on the proposed Salary Class’ and the FWW Class’
behalf: (i) failure to pay overtime, in violation of the FLSA, 29 U.S.C. § 207 (Count I), see
Complaint ¶¶ 66-74, at 12-13; and (ii) failure to pay the minimum wage, in violation of the
FLSA, 29 U.S.C. § 206 (Count II), see Complaint ¶¶ 75-82, at 13-14.
Regarding the Complaint’s rule 23 class-action allegations, Tamayo asserts a claim under
the NMMWA on the proposed New Mexico Class’ behalf, i.e., “[a]ll current and former
operators of Defendants who worked in New Mexico during the last three years and who were
paid under the fluctuating workweek method.” Complaint ¶ 56, at 10. The Complaint alleges
that the “FWW method is illegal under New Mexico law,” because the NMMWA “requires
-4-
payment of one and one-half times the employee’s regular rate for each hour worked per week
over 40 hours.” Complaint ¶ 85, at 14 (citing N.M. Stat. Ann. § 50-4-22(D)). The Complaint
thus asserts a cause of action against Swire Oilfield for failure to pay overtime, in violation of
NMMWA, N.M. Stat. Ann. § 50-4-26(C)-(E) (Count III).
On May 2, 2017, the Court conditionally certified the Salary Class and the FWW Class as
collective actions under 29 U.S.C. § 216(b). See Memorandum Opinion and Order at 1, 252
F. Supp. 3d 1079, 1085 (D.N.M. 2017)(Browning, J.), filed May 2, 2017 (Doc. 59)(“Certification
MOO”). It reasoned that the Salary Class and FWW Class members are similarly situated with
respect to Swire Oilfield’s purported FLSA violations, because the proposed classes are
comprised of employees with similar positions and duties.
252 F. Supp. 3d at 1118.
See Certification MOO at 60,
The Court concluded that, although Swire Oilfield hired operators
with various job titles, “all operators had essentially the same duties: rigging up, monitoring, and
rigging down water transfer and chemical blending equipment at oil sites,” Certification MOO at
60, 252 F. Supp. 3d at 1118, and all worked “long hours on extended rotations,” resulting in
substantial overtime hours, Certification MOO at 61, 252 F. Supp. 3d at 1119. The Court also
determined that the proposed class members for their respective classes are similarly situated
with respect to Swire Oilfield targeting them with a single decision, policy, or plan, because
Swire Oilfield “made a company-wide decision” to classify “nearly all” Salary Class operators as
exempt from overtime pay and also made a “company-wide decision” to transfer its salaried
operators to the FWW method. Certification MOO at 64-65, 252 F. Supp. 3d at 1121.
1.
The First Motion to Compel.
On January 26, 2017, the Plaintiffs filed the First Motion to Compel. See First Motion to
Compel at 1. The Plaintiffs contend that the Defendants flouted rule 34 by producing electronic
-5-
payroll records sought in PDF format and not in computer readable format as requested. See
First Motion to Compel at 1, 5-6. The Plaintiffs contend further that the Defendants exercise the
requisite control over the payroll records for rule 34 to apply, even though Corban OneSource or,
possibly, ADP, has actual possession. See First Motion to Compel at 6-7. The Plaintiffs explain
that, although the Defendants may lack actual possession of the electronic documents, the
Defendants can easily request Corban OneSource to produce those documents in the requested
electronic format. See First Motion to Compel at 6-7.
The Plaintiffs also contend that the 12,249 pages of PDF documents that the Defendants
produced were not produced as the documents are kept in the usual course of business. See First
Motion to Compel at 7. See also Fed. R. Civ. P. 34(b)(2)(E)(i) (requiring parties to produce
documents “as they are kept in the usual course of business”). The Plaintiffs support that
contention by arguing that the documents came in three separate groups ordered alphabetically,
and argue that a company would not group documents that way without labeling or indexing.
See First Motion to Compel 7-8. The Plaintiffs conclude that, because the Defendants did not
produce the documents as they are kept in the usual course of business, the Defendants must
organize and label them under rule 34(b)(2)(E)(ii). See First Motion to Compel at 8. They add
that, if the documents are not labeled, the Plaintiffs’ discovery request is impermissibly
undermined, because the Defendants will know which payroll documents belong to which class,
but the Plaintiffs will not. See First Motion to Compel at 8 (citing Hickman v. Taylor, 329 U.S.
495, 507 (1947)).
2.
Response to First Motion to Compel.
On February 9, 2017, the Defendants responded to the First Motion to Compel. See
Response Opposing Plaintiffs’ Motion to Compel Electronic Records at 1, filed February 9, 2017
-6-
(Doc. 42)(“First Motion to Compel Response”). The Defendants argued that they do not have
the documents in electronic format and explained that reality to the Plaintiffs several times. See
First Motion to Compel Response at 2-3. The Defendants add that they stopped doing business
with Corban OneSource in 2016, and that the Defendants never had a customer relationship with
ADP Payroll nor direct access to ADP Payroll’s payroll system. See First Motion to Compel
Response at 3. They continue that it is “impossible” for the Defendants to produce the records in
an electronically searchable format, and that they “can no longer demand the information from
Corban OneSource.” Motion to Compel Response at 3. The Defendants contend that Corban
OneSource allowed the Defendants a “one-time download records into PDF files” before their
relationship ended. First Motion to Compel Response at 3. The Defendants conclude that they
discharged their rule 34 duty by producing the relevant records, and that the Court should not
require the Defendants to comb through the documents to match which files belong to which
Plaintiff sub-class. See Motion to Compel Response at 4.
3.
Reply to First Motion to Compel.
On February 10, 2017, the Plaintiffs replied to the First Motion to Compel Response. See
Plaintiffs’ Reply to Swire’s Response (Dkt 42) to Motion to Compel Electronic Payroll Records
(Dkt 36), filed February 10, 2017 (Doc. 43)(“First Motion to Compel Reply”). The Plaintiffs
argue that the Court should not credit the Defendants’ assertion that “it can no longer demand the
information” from its third-party payroll vendor, because the Defendants do not support that
contention with a sworn Declaration. First Motion to Compel Reply at 1. The Plaintiffs also
argue that the Defendants’ assertion that they produced the documents as they are maintained in
the regular course of business must be false, because the documents are lumped in three separate
alphabetical groupings. See First Motion to Compel Reply at 1-2. The Plaintiffs maintain that
-7-
they made four requests for production seeking documents specific to each of the three proposed
classes. See First Motion to Compel Reply at 2. They add that the Defendants have responded
to each request, but still violate rule 34 by failing to identify which of the payroll records
correspond to which request. See First Motion to Compel Reply at 2. The Plaintiffs conclude
that, if the Defendants do not identify the documents, the Defendants should be judicially
estopped from contesting the numerosity element for class or collective action certification,
because “there are hundreds, if not thousands, of workers identified in the records produced.”
First Motion to Compel Reply at 2.
4.
The March 23, 2017 Hearing.
The Court held a hearing on March 23, 2017. See Draft Transcript of Motion Hearing
(taken March 23, 2017)(“March Tr.”).4 First, the Plaintiffs reiterated their argument that the
Defendants have control over the payroll documents requested, because they can ask their former
payroll provider to send those records. See March Tr. at 24:15-23 (Leyendecker). They add that
the Defendants do not attest that they cannot ask their former payroll provider to generate
another copy of the requested records. See March Tr. at 25:3-8 (Leyendecker). Second, the
Plaintiffs argued that they seek information on three different classes, but when the Defendants
produced the responsive records, they refused to identify which documents belong to which
class. See March Tr. at 26:14-23 (Leyendecker). The Plaintiffs’ conclude that the Defendants
are “avoiding their obligation to give us full disclosure.” March Tr. at 27:1-2 (Leyendecker).
In response, the Defendants maintained that their payroll provider represented that they
could not produce them in electronic form. See March Tr. at 27:24-28:1 (Gatling). They also
4
The Court’s citations to the March 23, 2017 and May 12, 2017 hearing transcripts refer
to the court reporter’s original, unedited version. Any final transcript may contain slightly
different page and/or line numbers.
-8-
say that rule 34 requires only that they produce documents in “a reasonably usable form.” March
Tr. at 28:10-11 (Gatling). After colloquy with the Court, the Defendants revealed that their
third-party payroll provider, Corban OneSource, used ADP Payroll to keep track of payroll. See
March Tr. at 29:12-19 (Court, Gatling). The Court asked why the Defendants could not obtain
the documents from ADP Payroll in electronic format. See March Tr. at 30: 1-3 (Court). The
Defendants represented that they do not know whether ADP Payroll had the documents, but
“their understanding is that [ADP Payroll] would have deleted those records.” March Tr. at
30:4-9 (Gatling). When asked whether the Defendants had called Corban OneSource about these
records since the lawsuit had been filed, the Defendants responded that they had not. See March
Tr. at 31:22-32:1 (Court, Gatling).
The Defendants maintained, however, that they have
discharged their rule 34 duty, because they have produced the documents in a reasonably usable
form. See March Tr. at 32:20-22 (Gatling). Regarding identifying which documents correspond
to which plaintiff classes, the Defendants agreed to identify which Bates number5 correspond to
which document request. See March Tr. at 33:11-15 (Gatling).
The Court concluded that it would require the Defendants to do two things. See March
Tr. at 35:20-21 (Court). First, it told the Defendants to contact Corban OneSource and inquire
whether Corban OneSource would contact ADP Payroll for the payroll records in the requested
format. See March Tr. at 35:21-24 (Court). Second, it told the Defendants to reach out to ADP
Payroll independently and ask whether the documents could be provided in the format requested.
See March Tr. at 35:24-36:1 (Court). The Court ordered that, once completed, the Defendants
need to send a letter to the Court and to the Plaintiffs explaining the requests’ results. See March
Tr. at 36:1-2 (Court). The Court explained that, if the companies ended on good terms, the
5
Bates numbers are numbers that are stamped on the bottom of documents produced in
discovery for identification purposes.
-9-
payroll companies should be able to provide these documents in electronic format. See March
Tr. at 36:5-10 (Court). The Court concluded that it would wait for this additional information
before ruling on the First Motion to Compel. See March Tr. at 36:14-16 (Court).
5.
Defendants’ Status Report.
On April 3, 2017, the Defendants filed a status report with the Court. See Status Report
at 1, filed April 3, 2017 (Doc. 51)(“Status Report”). The Defendants report that they contacted
both Corban OneSource and ADP Payroll, and ADP Payroll relays that it has Swire Oilfield’s
pay data in a format that can be imported into Microsoft Excel. See Status Report at 1. They
also report that the data that can be imported is “(a) gross and net pay per pay period; (b) total
regular hours and pay; (c) total overtime hours and pay; and (d) total other earnings per pay
period.” Status Report at 1. The Defendants conclude that they have requested that data for a
period between June, 2013, and March, 2016, and would update the Court and Plaintiffs
accordingly. See Status Report at 1-2.
6.
The Motion for Protective Order.
On April 6, 2017, the Defendants filed the Motion for Protective Order. See Motion for
Protective Order at 1. The Defendants request that the Court enter a protective order under rule
26(c) protecting the Defendants from testifying in a deposition to the subjects listed at 1, 2, 3,
and 7 in the Plaintiffs’ First Amended Fed. R. Civ. P. 30(b)(6) Notice of Deposition of
Defendants, filed April 6, 2017 (Doc. 52-1)(“Deposition Notice”).6
6
The Defendants argue
The subjects listed at 1, 2, 3, and 7 are:
1.
Swire’s agreement and interactions with any payroll type company,
including Corban OneSource during the period June 21, 2013 to the
present.
2.
Swire’s efforts to look for, locate and produce documents responsive to
- 10 -
broadly that those issues are not proper rule 30(b)(6) topics for deposition. See Motion for
Protective Order at 2. First, they argue that topic 1, which covers the Defendants’ agreements
and interactions with any payroll company from June 21, 2013, forward, is irrelevant and not
proportional to the case’s needs. See Motion for Protective Order at 2. The Defendants contend
that there is no allegation that the Defendants have not produced payroll information and any
information on payroll agreements is irrelevant to how the Defendants paid its employees. See
Motion for Protective Order at 2.
They also contend that the subject is overbroad and
burdensome, because it requests “all interactions with any payroll company,” which is both too
sweeping and too vague to be relevant to the Plaintiffs’ claims. See Motion for Protective Order
at 2-3 (citing Kalis v. Colgate-Palmolive Co., 231 F.3d 1049, 1057 n.5 (7th Cir. 2000)).
Second, the Defendants argue that topic 2, which seeks the Defendants to testify about
their efforts to locate and produce documents responsive to the Plaintiffs document production
Plaintiffs’ First Set of Requests for Production to Swire in this case
including efforts to determine whether such data are available in electronic
format.
3.
The basis for segregating Swire’s production, marked by bates numbers 1
through 12,429 into Payroll Data Reports, Timecard reports with Notes,
Swire Water Solutions Handwritten time Cards and Payroll Action
Notices, including the basis for segregating the Payroll Action Notices
into three alphabetical groups, one beginning with Barrett and ending in
Woodcox, a second group beginning with Aguinaga and ending in Zavala
and the third beginning with Acosta and ending in Wilhite.
....
7.
All facts which Swire contends demonstrate that proceeding as a Rule 23
class action on behalf of the New Mexico Class Members would not be
superior to other methods for resolving the claims of such class members.
Deposition Notice at 5.
- 11 -
request, and topic 8,7 which seeks information on the software program that Swire Oilfield uses
to process payroll data, are improper deposition topics, because a deposition on those topics does
not relate to any claim or defense, and a motion to compel is the proper way to obtain the
information requested -- a motion which the Court has already taken under advisement. See
Motion for Protective Order at 3-4. The Defendants argue, similarly, that topic 3, which requests
the basis for segregating Swire Oilfield’s production into three alphabetical groups, is improper
for deposition testimony, and the Defendants agreed at the March, 2017, hearing to identify
which documents correspond to which request. See Motion for Protective Order at 4; March Tr.
at 33:11-15 (Gatling). Next, the Defendants contend that topic 7, which covers all facts that the
Defendants argue demonstrate that a class action is inferior to other resolution methods, is
improper for a deposition, because that topic “is an issue for the fact-finder to conclude.”
Motion for Protective Order at 4. Finally, the Defendants argue that topic 9, which seeks Swire
Oilfield’s payroll processing and time tracking of all of its workers since June 21, 2013, is
irrelevant to the Plaintiffs’ FLSA claims and that the Court’s resolution of the First Motion to
Compel should resolve this topic, too. See Motion for Protective Order at 4-5.
7
The Court notes that the Defendants request a protective order from testifying on
deposition topics 1, 2, 3, and 7, see Motion for Protective Order at 2, but argue subsequently that
topics 8 and 9 are also improper rule 30(b)(6) testimony, see Motion for Protective Order at 3-4.
The Court will consider in its analysis below whether the Defendants are properly protected from
testifying on topics 1, 2, 3, 7, 8, and 9. The subjects listed at 8 and 9 are:
8.
The software program or application Swire uses to process payroll,
including the version used, the data stored on such system, the ability of
such system to export data in an electronic format, and run reports.
9.
Swire’s processing of payroll and tracking of time worked by its workers
since June 21, 2013.
Deposition Notice at 5-6.
- 12 -
7.
The Response to the Motion for Protective Order and the Second Motion to
Compel.8
On April 21, 2017, the Plaintiffs responded to the Motion for Protective Order, see
Plaintiffs’ Response to Motion for Protection at 1, filed April 21, 2017 (Doc. 56)(“Protective
Order Response”), and filed their Second Motion to Compel, see Second Motion to Compel at
1.9 The Plaintiffs argue that Swire Oilfield has “ignored repeated requests for dates on which a
30(b)(6) witness is available,” Second Motion to Compel at 2, and, to contextualize this
argument, offer a timeline of relevant events, see Second Motion to Compel at 2-4. Turning to
their argument, the Plaintiffs assert that Swire Oilfield has yet to “correlate the bates ranges of
Defendants’ production with the four document requests at issue.” Second Motion to Compel at
4.
The Plaintiffs also contend that all of their deposition topics are proper, because
discovery’s scope, under rule 26, is broad. See Protective Order Response at 5 (citing Gomez v.
Martin Marietta Corp., 50 F.3d 1511, 1520 (10th Cir. 1995)).
They also argue that the
Defendants’ arguments are “frivolous,” because the Defendants have been aware of the topics
since February 10, 2017, but declined to object to them until after the March hearing. Protective
Order Response at 6. The Plaintiffs conclude that the “Defendants’ strategy is obvious. Delay.
Delay. And then delay some more.” Protective Order Response at 6.
8.
Second Motion to Compel Response.
On May 2, 2017, the Defendants responded to the Second Motion to Compel. See
8
The Court groups these two documents together, because, save for the titles and the
relief requested, they are word-for-word copies of each other.
9
On April 18, 2017, the Plaintiffs filed a Plaintiffs’ Response to Motion for Protection
(DKT 52) and Motion to Compel Swire to Comply with 30(b)(6), filed April 18, 2017 (Doc.
54), but this document was later marked as “Filed in Error.” The Court, accordingly, will not
consider the document that was filed in error.
- 13 -
Response to Plaintiffs’ Motion to Compel Swire to Comply with 30(b)(6) Notice at 1, filed May
2, 2017 (Doc. 61)(“Second Motion to Compel Response”). The Defendants represent that, since
the Second Motion to Compel, they had scheduled Swire Oilfield’s deposition, so the Plaintiffs’
complaints with respect to scheduling are rendered moot.
See Second Motion to Compel
Response at 1. The Defendants also represent that, on April 18, 2017, they served an updated
document response to the Plaintiffs, correlating the documents served with Bates numbers so that
the plaintiffs would know which documents corresponded with which request. See Second
Motion to Compel Response at 2. The Defendants argue that the Plaintiffs do not address their
Motion for Protective Order’s merits, but instead “dismiss them as frivolous.” Second Motion to
Compel Response at 2.
9.
Motion to Quash Subpoena.
On May 2, 2017, the Defendants also moved to quash subpoenas that the Plaintiffs issued
on ADP Payroll and Corban OneSource. See Defendants’ Motion to Quash Subpoenas at 1, filed
May 2, 2017 (Doc. 60)(“Motion to Quash”). The Defendants note that, in the subpoenas, the
Plaintiffs seek electronic payroll records from ADP Payroll and Corban OneSource directly, in
addition to “payroll and other records that are not relevant to Plaintiffs’ claims or Swire’s
defenses.” Motion to Quash at 2. The Defendants argue that the subpoena is cumulative,
duplicative, irrelevant, not proportional, and that the Plaintiffs’ request for all of Swire Oilfield’s
employees’ payroll records is outside the litigation’s scope. See Motion to Quash at 2.
10.
Motion to Quash Response.
On May 11, 2017, the Plaintiffs responded to the Defendants’ Motion to Quash. See
Plaintiffs’ Response to Swire’s Motion to Quash Subpoenas (DKT 60) at 1, filed May 11, 2017
(Doc. 64)(“Motion to Quash Response”).
The Plaintiffs contend that the Defendants are
- 14 -
“actively trying to delay” production. Motion to Quash Response at 1-2. To support that
assertion, they recount that they requested documents from the Defendants in September, 2016,
but the Defendants, as of May 11, 2017, still have not produced the documents in the requested
format, “[d]espite the [documents’] ready availability.” Motion to Quash Response at 2. The
Plaintiffs contend that the Defendants’ objections to the Plaintiffs’ subpoenas are “patently
frivolous,” because discovery’s scope is broad. Motion to Quash Response at 3-4 (citing Gomez
v. Martin Marietta Corp., 50 F.3d at 1520). They conclude by requesting the Court to overrule
the Motion to Quash. See Motion to Quash Response at 5.
11.
The May Hearing.
On May 12, 2017, the Court held a hearing. See Draft Transcript of Motion Hearing
(taken May 12, 2017)(“May Tr.”). The Defendants began by arguing for their Motion for
Protective Order. See May Tr. at 2:19-25 (Court, Gatling). The Defendants maintain that a
deposition is not the appropriate way to obtain information on the payroll records; rather a
motion to compel is the proper vehicle, and the Court has already considered that motion. See
May Tr. at 3:21-4:4 (Gatling). The Plaintiffs responded, focusing on the depositions’ topic 1,
that they are “just trying to figure out . . . what kind of records of the payroll data exists,” and
insist that this “is just a general topic” to figure out “what information is out there, who has it,
and what’s available for us to get.” May Tr. at 5:1-13 (Leyendecker). The Defendant countered
that, if that is the information which the Plaintiffs actually want, the topic should be “the payroll
records,” which the Defendants have already produced, and not “Swire’s agreements and
interactions with” payroll companies. May Tr. at 5:16-21 (Gatling). The Plaintiffs explained,
however, that the reason that they seek the payroll agreements is that they believe those
agreements will reveal “the types of data that the payroll company” keeps on the Defendants’
- 15 -
behalf. May Tr. at 6:6-10 (Leyendecker).
The Court orally denied the Motion for Protective
Order “as to this topic,” explaining that sometimes “you have to do a little discovery to get
discovery” and that this is one of those situations where it is appropriate for deposition
testimony. May Tr. at 7:2-8:4 (Court).
The Defendants subsequently turned to whether deposition questioning on the
Defendants’ efforts to produce documents responsive to the Plaintiffs’ request is proper. See
May Tr. at 8:6-24 (Gatling). The Defendants explained that they had produced responsive
documents in the requested electronic format, so there is no need to have deposition testimony on
that subject. See May Tr. at 8:6-24 (Gatling).10 The Plaintiffs responded that questions about
how documents are produced are commonly covered in depositions and that it is a particularly
relevant line of questioning here, because the Defendants “took the position in writing that it
could not obtain any electronic records.” May Tr. at 9:2-14 (Leyendecker). The Defendants
refuted that they had taken that position in writing; rather they had taken the position that the
Defendants “did not have [the documents] in electronic format.” May Tr. at 10:1-4 (Gatling).
The Court then ruled orally that it will allow this topic for deposition testimony, because it is fair
for the Plaintiffs to explore whether they had obtained all of the payroll documents. See May Tr.
at 11:4-11 (Court). It explained that the case is “to a great degree” going to be about “who was
paid and how much,” so documentary payroll evidence is highly relevant. May Tr. at 11:13-15
(Court).
The Defendants turned to topic 7 and argued it is not relevant deposition testimony,
because the topic’s scope -- all facts demonstrating that a class action is superior than other
methods to resolve the Plaintiffs’ claims -- is the ultimate issue for the fact finder to conclude.
10
Although not expressly stated in the transcript, this issue refers to deposition topic 2.
See Deposition Notice at 6.
- 16 -
See May Tr. at 11:23-12:9 (Gatling). The Plaintiffs responded that the topic covers the facts that
bear on superiority, which, under rule 23, are relevant and not legal conclusions. See May Tr. at
12:12-24 (Leyendecker). The Court mused that the topic struck it as a contention interrogatory
and not one easily done at a deposition, and asked whether the Plaintiffs would be willing to
change the topic to a contention interrogatory. See May Tr. at 13:17-25 (Court); id. at 14:8-15
(Court). The Plaintiffs agreed to withdraw the topic in favor of a contention interrogatory, but
argued that they are entitled to cross-examine a witness about the answers at a later date. See
May Tr. at 14:16-23 (Leyendecker). The Defendants also agreed to a contention interrogatory.
See May Tr. at 17:25-18:1 (Gatling). The Court subsequently granted in part the Motion for
Protective Order as to topic 7 without prejudice, so that the Plaintiffs may renew their request to
depose someone on the contention interrogatory’s answer. See May Tr. at 18:12-19 (Court).
The Defendants then argued that topic 9 is irrelevant, because how Swire Oilfield
processed its payroll “is not probative of whether or not [the Defendants] paid people on a
salary” or on a FWW basis. See May Tr. at 19:19-20:4 (Gatling). The Plaintiffs responded that,
once again, they are just trying to uncover what actions the Defendants have taken. See May Tr.
at 20:6-10 (Leyendecker). The Defendants countered that the Plaintiffs already know how they
process the payroll records -- they use Corbin OneSource and ADP. See May Tr. at 21:2-5
(Gatling). The Court orally denied the motion, because the questioning is “traditional 30(b)(6),
you’ve got the documents and you want to start asking questions about th[ose documents].” May
Tr. at 21:11-14 (Court).
The Plaintiffs subsequently raised a new issue that, in their rule 30(b)(6) notice, they
request the Defendants to produce six categories of documents, and asked whether the
- 17 -
Defendants intend to produce those documents. See May Tr. at 21:24-22:9 (Leyendecker).11
The Defendants objected, because they had previously objected to producing those documents,
the Plaintiffs have not moved to compel production, and the documents requested appear
duplicative to the deposition’s scope. See May Tr. at 22:12-23:11 (Gatling). The Plaintiffs
countered that they are entitled to both the documents and to depositions on the documents. See
May Tr. at 23:15-19 (Leyendecker). Turning to the first requested production, the Court ruled
that the Defendants need to produce the agreements between the Defendants and its payroll
companies, because “when you have a witness, even a very prepared 30(b)(6) witness, if you
don’t have the document it makes questioning of that person very difficult.” May Tr. at 25:17-25
11
The documents requested are:
1.
All agreements between Swire and any payroll type services company,
including Corban OneSource, that were in force at any point during the
period June 21, 2013 to the present.
2.
All emails and other documents, dated after Swire’s business relationship
with Corban OneSource ended, that relate in any way to Swire’s attempts
to obtain payroll related data and information from Corban OneSource
3.
All emails and other documents that reflect communications between
Swire and Corban OneSource that relate in any way to Plaintiffs’ First Set
of Requests for Production to Swire in this case.
4.
All emails and other documents, dated between January 1, 2016 and the
present, that relate in any way to Swire’s ability to request and/or obtain
records from Corban OneSource
5.
All documents related to Topic 7 in Attachment A above.
6.
Copy of all user manuals and similar guides for the software Swire uses to
process payroll and track time for its workers that have been in effect
since June 21, 2013.
See Deposition Notice at 7.
- 18 -
(Court). The Court subsequently ruled that the other documents requested are also relevant and
ordered their production for the same reasons. See May Tr. at 28:12-14 (Court).
Turning to the Motion to Quash, the Defendants argued that it is moot, because the
Defendants have produced the requested documents. See May Tr. at 29:18-19 (Gatling). The
Plaintiffs rejoined that it has not been mooted, because the documents that the Defendants
produced do “not contain all the information that we know ADP has.” May Tr. at 33:10-11
(Leyendecker). They explained that the documents they already have demonstrate that ADP
Payroll has records of New Mexico state tax withholdings for each employee, which
demonstrates how large the New Mexico class is, yet the Plaintiffs have not received that
information. See May Tr. at 33:12-24 (Leyendecker). The Plaintiffs also contend that ADP
Payroll would have information about how many hours employees worked per day in the
relevant pay period, which would demonstrate damages. See May Tr. at 34:5-11 (Leyendecker).
The Defendants rejoined that they have asked ADP Payroll for all available information and that
ADP Payroll represents that it has furnished all information. See May Tr. at 34:11-13 (Gatling).
The Court ruled orally that it would deny the Motion to Quash, because it concludes that the
information was relevant, but that documents from ADP Payroll needed to be presented to the
Defendants first, so that they had an opportunity to filter irrelevant employees from the eventual
document production. See May Tr. at 36:25-38:4 (Court). On May 25, 2017, the Court entered
an order memorializing the Hearing’s oral order granting in part and denying in part the Motion
to Quash. See Subpoena Order at 1. It ordered that ADP Payroll and Corban OneSource
produce the records which the subpoena requests only to Swire Oilfield by May 30, 2017, and
ordered Swire Oilfield to produce the records to the Plaintiffs by June 14, 2017. Subpoena Order
at 1.
- 19 -
12.
Enlargement Motion.
The Defendants move for a one-week extension to the Subpoena Order’s deadline. See
Enlargement Motion at 1.
The Defendants argue that an extension is proper, because,
“immediately upon receipt of the documents,” the Defendants began processing the documents
for production to the Plaintiffs, but that ADP Payroll produced the documents in PDF format, so
the Defendants had to redact many documents to protect Swire Oilfield employee’s personal
information. Enlargement Motion at 1. They also argue that an extension is proper, because
Corban OneSource produced non-responsive records, some in PDF format, which also had to be
reviewed for redaction. See Enlargement Motion at 1-2. Finally, they conclude that granting an
extension will not delay the case, because the Plaintiffs have many of the records already and
because there is no scheduling order that an extension would affect. See Enlargement Motion at
2.
13.
Third Motion to Compel.
The Defendants filed a Third Motion to Compel requesting that the Court order ADP
Payroll to appear for the deposition that they originally requested in their subpoena. See Third
Motion to Compel at 2. As grounds for this request, they argue that the subpoenas instruct ADP
Payroll and Corban OneSource to produce records in their native format, but that the Defendants
represent in their Enlargement Motion that ADP Payroll and Corban OneSource produced those
records in PDF format. See Third Motion to Compel at 1. They conclude that a deposition is
justified, because they requested these records nine months ago, they still have not received
them, and that they should receive them in their native format as they request. See Third Motion
to Compel at 1.
- 20 -
LAW REGARDING DISCOVERY
Rule 34 governs discovery requests for tangible objects and states:
A party may serve on any other party a request within the scope of Rule 26(b):
(1)
to produce and permit the requesting party or its representative to
inspect, copy, test, or sample the following items in the responding
party's possession, custody, or control:
(A)
(B)
(2)
any designated documents or electronically stored
information -- including writings, drawings, graphs, charts,
photographs, sound recordings, images, and other data or
data compilations -- stored in any medium from which
information can be obtained either directly or, if necessary,
after translation by the responding party into a reasonably
usable form; or
any designated tangible things; or
to permit entry onto designated land or other property possessed or
controlled by the responding party, so that the requesting party
may inspect, measure, survey, photograph, test, or sample the
property or any designated object or operation on it.
Fed. R. Civ. P. 34(a). Discovery’s proper scope is “any nonprivileged matter that is relevant to
any party’s claim or defense and proportional to the needs of the case. . . .” Fed. R. Civ. P.
26(b)(1). The factors that bear upon proportionality are: “the importance of the issues at stake in
the action, the amount in controversy, the parties’ relative access to relevant information, the
parties’ resources, the importance of the discovery in resolving the issues, and whether the
burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26
(b)(1).
Discovery’s scope under rule 26 is broad. See Gomez v. Martin Marietta Corp., 50 F.3d
at 1520; Sanchez v. Matta, 229 F.R.D. 649, 654 (D.N.M. 2004)(Browning, J.)(“The federal
courts have held that the scope of discovery should be broadly and liberally construed to achieve
the full disclosure of all potentially relevant information.”). The federal discovery rules reflect
- 21 -
the courts’ and Congress’ recognition that “mutual knowledge of all the relevant facts gathered
by both parties is essential to proper litigation.” Hickman v. Taylor, 329 U.S. at 507. A district
court is not, however, “required to permit plaintiff to engage in a ‘fishing expedition’ in the hope
of supporting his claim.”
McGee v. Hayes, 43 F. App’x. 214, 217 (10th Cir.
2002)(unpublished).12 “‘Discovery . . . is not intended to be a fishing expedition, but rather is
meant to allow the parties to flesh out allegations for which they initially have at least a
modicum of objective support.’” Rivera v. DJO, LLC, No. 11-1119, 2012 WL 3860744, at *1
(D.N.M. August 27, 2012)(Browning, J.)(quoting Tottenham v. Trans World Gaming Corp.,
No. 00-7697, 2002 WL 1967023, at *2 (S.D.N.Y. 2002)(Knapp, J.)). “[B]road discovery is not
without limits and the trial court is given wide discretion in balancing the needs and rights of
both plaintiff and defendant.” Gomez v. Martin Marietta Corp., 50 F.3d at 1520 (internal
quotation marks omitted).
The 2000 amendments to rule 26(b)(1) began narrowing the substantive scope of
discovery and injected courts deeper into the discovery process. See Simon v. Taylor,
No. 12-0096, 2015 WL 2225653, at *23 (D.N.M. April 30, 2015)(Browning, J.). Before
the 2000 amendments, rule 26(b)(1) defined the scope of discovery as follows:
Parties may obtain discovery regarding any matter, not privileged, which is
relevant to the subject matter involved in the pending actions, whether it relates to
12
McGee v. Hayes is an unpublished Tenth Circuit opinion, but the Court can rely on an
unpublished Tenth Circuit opinion to the extent its reasoned analysis is persuasive in the case
before it. See 10th Cir. R. 32.1(A), 28 U.S.C. (“Unpublished opinions are not precedential, but
may be cited for their persuasive value.”). The Tenth Circuit has stated: “In this circuit,
unpublished orders are not binding precedent, . . . and . . . citation to unpublished opinions is not
favored. . . . However, if an unpublished opinion . . . has persuasive value with respect to a
material issue in a case and would assist the court in its disposition, we allow a citation to that
decision.” United States v. Austin, 426 F.3d 1266, 1274 (10th Cir. 2005). The Court concludes
that McGee v. Hayes, Miller v. Regents of the Univ. of Colo., Price v. Cochran, and Ruleford v.
Tulsa World Pub. Co. have persuasive value with respect to a material issue, and will assist the
Court in its preparation of this Memorandum Opinion and Order.
- 22 -
the claim or defense of the party seeking discovery or to the claim or defense of
any other party, including the existence, description, nature, custody, condition
and location of any books, documents, or other tangible things and the identity
and location of persons having knowledge of any discoverable matter. The
information sought need not be admissible at the trial if the information sought
appears reasonably calculated to lead to the discovery of admissible evidence.
Fed. R. Civ. P. 26(b)(1)(1996). The 2000 amendments made the following changes, shown here
with the deleted language stricken and the added material underlined:
Parties may obtain discovery regarding any matter, not privileged, that which is
relevant to the subject matter involved in the pending actions, whether it relates to
the claim or defense of the party seeking discovery or to the claim or defense of
any other party, including the existence, description, nature, custody, condition
and location of any books, documents, or other tangible things and the identity
and location of persons having knowledge of any discoverable matter. For good
cause, the court may order discovery of any matter relevant to the subject matter
involved in the action. Relevant The information sought need not be admissible at
the trial if discovery the information sought appears reasonably calculated to lead
to the discovery of admissible evidence.
Fed. R. Civ. P. 26(b)(1). Putting aside the last sentence’s changes -- which the advisory
committee’s notes make clear was a housekeeping amendment to clarify that inadmissible
evidence must still be relevant to be discoverable -- the 2000 amendments have two effects:
(i) they narrow the substantive scope of discovery in the first sentence; and (ii) they inject courts
into the process in the entirely new second sentence.
In 1978, the Committee published for comment a proposed amendment, suggested
by the Section of Litigation of the American Bar Association, to refine the scope
of discovery by deleting the “subject matter” language. This proposal was
withdrawn, and the Committee has since then made other changes in the
discovery rules to address concerns about overbroad discovery. Concerns about
costs and delay of discovery have persisted nonetheless, and other bar groups
have repeatedly renewed similar proposals for amendment to this subdivision to
delete the “subject matter” language. Nearly one-third of the lawyers surveyed in
1997 by the Federal Judicial Center endorsed narrowing the scope of discovery as
a means of reducing litigation expense without interfering with fair case
resolutions. [Federal Judicial Center, T. Willging, J. Shapard, D. Stienstra, & D.
Miletich, Discovery and Disclosure Practice, Problems, and Proposals for
Change] 44–45 (1997). The Committee has heard that in some instances,
particularly cases involving large quantities of discovery, parties seek to justify
- 23 -
discovery requests that sweep far beyond the claims and defenses of the parties on
the ground that they nevertheless have a bearing on the “subject matter” involved
in the action.
The amendments proposed for subdivision (b)(1) include one element of these
earlier proposals but also differ from these proposals in significant ways. The
similarity is that the amendments describe the scope of party-controlled discovery
in terms of matter relevant to the claim or defense of any party. The court,
however, retains authority to order discovery of any matter relevant to the subject
matter involved in the action for good cause. The amendment is designed to
involve the court more actively in regulating the breadth of sweeping or
contentious discovery. The Committee has been informed repeatedly by lawyers
that involvement of the court in managing discovery is an important method of
controlling problems of inappropriately broad discovery.
Increasing the
availability of judicial officers to resolve discovery disputes and increasing court
management of discovery were both strongly endorsed by the attorneys surveyed
by the Federal Judicial Center. See Discovery and Disclosure Practice, supra, at
44. Under the amended provisions, if there is an objection that discovery goes
beyond material relevant to the parties’ claims or defenses, the court would
become involved to determine whether the discovery is relevant to the claims or
defenses and, if not, whether good cause exists for authorizing it so long as it is
relevant to the subject matter of the action. The good-cause standard warranting
broader discovery is meant to be flexible.
The Committee intends that the parties and the court focus on the actual
claims and defenses involved in the action. The dividing line between
information relevant to the claims and defenses and that relevant only to the
subject matter of the action cannot be defined with precision. A variety of
types of information not directly pertinent to the incident in suit could be
relevant to the claims or defenses raised in a given action. For example,
other incidents of the same type, or involving the same product, could be
properly discoverable under the revised standard. Information about
organizational arrangements or filing systems of a party could be
discoverable if likely to yield or lead to the discovery of admissible
information. Similarly, information that could be used to impeach a likely
witness, although not otherwise relevant to the claims or defenses, might be
properly discoverable. In each instance, the determination whether such
information is discoverable because it is relevant to the claims or defenses
depends on the circumstances of the pending action.
The rule change signals to the court that it has the authority to confine discovery
to the claims and defenses asserted in the pleadings, and signals to the parties that
they have no entitlement to discovery to develop new claims or defenses that are
not already identified in the pleadings. In general, it is hoped that reasonable
lawyers can cooperate to manage discovery without the need for judicial
intervention. When judicial intervention is invoked, the actual scope of discovery
- 24 -
should be determined according to the reasonable needs of the action. The court
may permit broader discovery in a particular case depending on the circumstances
of the case, the nature of the claims and defenses, and the scope of the discovery
requested.
The amendments also modify the provision regarding discovery of information
not admissible in evidence. As added in 1946, this sentence was designed to
make clear that otherwise relevant material could not be withheld because it was
hearsay or otherwise inadmissible. The Committee was concerned that the
“reasonably calculated to lead to the discovery of admissible evidence” standard
set forth in this sentence might swallow any other limitation on the scope of
discovery. Accordingly, this sentence has been amended to clarify that
information must be relevant to be discoverable, even though inadmissible, and
that discovery of such material is permitted if reasonably calculated to lead to the
discovery of admissible evidence. As used here, “relevant” means within the
scope of discovery as defined in this subdivision, and it would include
information relevant to the subject matter involved in the action if the court has
ordered discovery to that limit based on a showing of good cause.
Finally, a sentence has been added calling attention to the limitations of
subdivision (b)(2)(i), (ii), and (iii). These limitations apply to discovery that is
otherwise within the scope of subdivision (b)(1). The Committee has been told
repeatedly that courts have not implemented these limitations with the vigor that
was contemplated. See 8 Federal Practice & Procedure § 2008.1 at 121. This
otherwise redundant cross-reference has been added to emphasize the need for
active judicial use of subdivision (b)(2) to control excessive discovery. Cf.
Crawford–El v. Britton, [523 U.S. 574] (1998)(quoting Rule 26(b)(2)(iii) and
stating that “Rule 26 vests the trial judge with broad discretion to tailor discovery
narrowly”).
Fed. R. Civ. P. 26 advisory committee’s notes (emphasis added).
One gets the impression from reading the advisory committee’s notes that the amendment
was not intended to exclude a delineable swath of material so much as it is intended to send a
signal to district judges to become more hands-on in the process of regulating -- mostly limiting
-- discovery on relevance grounds alone. The “two effects” of the 2000 amendments might, thus,
be only one effect: directing district judges to roll up their sleeves and manage discovery, and to
do so on a relevance basis. The change in substantive scope from “subject matter,” to “claim or
defense,” would, therefore, seem to “add teeth” to the relevance standard instead of narrowing
- 25 -
that standard. It is not surprising that the Supreme Court of the United States of America and
Congress would want to increase judicial presence: “relevance” is a liberal concept in the context
of trial. Fed. R. Evid. 401 (“Evidence is relevant if: (a) it has any tendency to make a fact more
or less probable than it would be without the evidence; and (b) the fact is of consequence in
determining the action.”).
Of course, regardless of the Court’s musings about the rules, courts should also seek to
give substantive content to amendments. Read literally, the rule does not permit parties to
discover information relevant only to the claim or defense of another party; they must use
discovery only to investigate their own claims and defenses. More problematically, however, the
rule may prevent using the Federal Rules’ compulsory discovery process to obtain “background”
information not specifically relevant to any one claim or defense -- e.g., a plaintiff naming a
pharmaceutical company as a defendant and then using discovery to educate itself generally
about medicine, biochemistry, and the drug industry by using the defendant’s expertise.
In In re Cooper Tire & Rubber Co., 568 F.3d 1180 (10th Cir. 2009), the United
States Court of Appeals for the Tenth Circuit clarified that the 2000 Amendments to rule
26 “implemented a two-tiered discovery process; the first tier being attorney-managed
discovery of information relevant to any claim or defense of a party, and the second being
court-managed discovery that can include information relevant to the subject matter of
the action.” 568 F.3d at 1188. The Tenth Circuit further stated that,
when a party objects that discovery goes beyond that relevant to the claims or
defenses, “the court would become involved to determine whether the discovery
is relevant to the claims or defenses and, if not, whether good cause exists for
authorizing it so long as it is relevant to the subject matter of the action.” This
good-cause standard is intended to be flexible. When the district court does
intervene in discovery, it has discretion in determining what the scope of
discovery should be. “[T]he actual scope of discovery should be determined
according to the reasonable needs of the action. The court may permit broader
- 26 -
discovery in a particular case depending on the circumstances of the case, the
nature of the claims and defenses, and the scope of the discovery requested.”
568 F.3d at 1188–89 (quoting the advisory committee's notes to the 2000 amendments to Fed. R.
Civ. P. 26(b)(1))(citations and footnote omitted)(alteration in original).
The 2015 amendments to rule 26(b)(1) continued this process of narrowing discovery’s
substantive scope and injecting courts further into the discovery process. The 2015 amendment
made notable deletions and additions, both of which emphasized the need to make discovery
proportional to the needs of the case. See Fed. R. Civ. P. 26(b)(1). Rule 26(b)(1), provides13:
(1)
Scope in General. Unless otherwise limited by court order, the scope of
discovery is as follows: Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or defense
including the existence, description, nature, custody, condition and
location of any documents or other tangible things and the identity and
location of persons who know of any discoverable matter. For good
cause, the court may order discovery of any matter relevant to the subject
matter involved in the action. Relevant information need not be
admissible at the trial if the discovery appears reasonably calculated to
lead to the discovery of admissible evidence. All discovery is subject to
the limitations imposed by Rule 26(b)(2)(C) and proportional to the needs
of the case, considering the importance of the issues at stake in the action,
the amount in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit. Information within this scope of
discovery need not be admissible in evidence to be discoverable.
Fed. R. Civ. P. 26(b)(1)(alterations added).
The Committee Notes state that the first deletion does not make a substantive change.
Rather, the deletion was made because “[d]iscovery of such matters is so deeply entrenched” in
standard discovery that including it would be “clutter.”
Fed. R. Civ. P. 26(b) advisory
committee’s note to 2015 amendment.14
13
The deletions are stricken through and the additions are underlined.
- 27 -
Regarding the second deletion, the Committee Notes explain that the former provision for
discovery of relevant but inadmissible information that appears “reasonably calculated to lead to
the discovery of admissible evidence” is also deleted.15
Fed. R. Civ. P. 26(b) advisory
committee’s note to 2015 amendment.
The phrase has been used by some, incorrectly, to define the scope of discovery.
As the Committee Note to the 2000 amendments observed, use of the “reasonably
calculated” phrase to define the scope of discovery “might swallow any other
limitation on the scope of discovery.” The 2000 amendments sought to prevent
such misuse by adding the word “Relevant” at the beginning of the sentence,
making clear that “‘relevant’ means within the scope of discovery as defined in
this subdivision. . . .” The “reasonably calculated” phrase has continued to create
problems, however, and is removed by these amendments. It is replaced by the
direct statement that “Information within this scope of discovery need not be
admissible in evidence to be discoverable.” Discovery of nonprivileged
information not admissible in evidence remains available so long as it is otherwise
within the scope of discovery.
Fed. R. Civ. P. 26 advisory committee’s note to 2015 amendment. The deletion, therefore, did
not necessarily change discovery’s scope, but clarified it. Accordingly, “[r]elevance is still to be
‘construed broadly to encompass any matter that bears on, or that reasonably could lead to other
matter that could bear on’ any party's claim or defense.” State Farm Mutual Auto. Ins. Co. v.
Fayda, No. 14-9792, 2015 WL 7871037, at *2 (S.D.N.Y. 2015)(Francis IV, M.J.)(internal
14
The Court regrets this deletion. Moving things out of the statute’s text often creates
mischief, especially for courts that rely heavily on the text’s plain language. The drafters might
be astonished how often the Court sees objections to interrogatories and requests that seek basic
information about documents. The rule is well-established because the deleted language was in
the rule; now that the language is not in the rule, the rule may be eroded or, more likely, ignored
or overlooked by those who do not spend time in advisory notes’ thicket. What the advisory
comments describe as “clutter” is a simple instruction to practitioners who do not practice in
federal court every day for every case. This deletion might incrementally increase unnecessary
litigation rather than shorten it. Some of the amendments seem more designed to help the
nation’s large corporations, represented by some of the nation's most expensive law firms, cut
down expenses than they are to help courts and practitioners in more routine cases.
15
Arguably, older lawyers will have to learn a new vocabulary and ignore the one they
have used for decades. If the changes were not made to change the scope of discovery, it is
unclear what the benefit of all this really is.
- 28 -
quotation marks omitted)(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351
(1978)).
The most notable addition to rule 26(b) is the proportionality concept. Rule
26(b)(2)(C)(iii) has always limited overly burdensome discovery and required proportionality.
See Fed. R. Civ. P. 26(b)(2)(C)(iii) (pre-2015 version). The proportionality requirement was
relocated to 26(b)(1) to address the “explosion” of information that “has been exacerbated by the
advent of e-discovery.”16 Fed. R. Civ. P. 26(b) advisory committee’s note to 2015 amendment.
Describing how e-discovery is the driving factor in the 2015 amendment, the Committee Notes
state:
The burden or expense of proposed discovery should be determined in a realistic
way. This includes the burden or expense of producing electronically stored
information. Computer-based methods of searching such information continue to
develop, particularly for cases involving large volumes of electronically stored
information. Courts and parties should be willing to consider the opportunities for
reducing the burden or expense of discovery as reliable means of searching
electronically stored information become available.
16
This relocation -- rather than substantive change -- is one reason that the Court is
skeptical that the 2015 amendments will make a considerable difference in limiting discovery or
cutting discovery costs. Courts have been bringing common sense and proportionality to their
discovery decisions long before the 2015 amendments. See Aguayo v. AMCO Ins. Co., 59
F. Supp. 3d 1225, 1275 (D.N.M. 2014)(Browning, J.)(“[T]he Court expects that discovery and
motion practice bear some proportionality to the case’s worth.”); Cabot v. Wal-Mart Stores, Inc.,
No. 11-0260, 2012 WL 592874, at *11–12 (D.N.M. 2012)(Browning, J.)(limiting the scope of
discovery because it was unduly burdensome in relation to the relevance and need). The real
import of the rule is that it will likely lead to more “proportionality” objections and more
disputes that the district courts will have to resolve, which is what the drafters apparently
intended. It is unclear how more judicial involvement in discovery can be squared with a federal
court docket that is at a breaking point already. It is also unclear what was wrong with the old
goal of discovery of being largely self-executing. The new rules also require attorneys to learn
the new vocabulary of “proportionality,” delete their old stock legal sections from their briefs,
and rewrite these new sections to use the correct language. Older lawyers must be particularly
alert to read and learn the new rules, read the comments, and understand the thrust of the
drafting. Finally, given that “proportionality” is a very subjective standard, it will be hard for
any court to sanction any attorney for raising this objection. In sum, the rules are just as likely to
increase the costs of discovery as to decrease it.
- 29 -
Fed. R. Civ. P. 26(b) advisory committee’s note to 2015 amendment.
Chief Justice Roberts’ 2015 Year-End Report on the Federal Judiciary indicates that the
addition of proportionality to rule 26(b) “crystalizes the concept of reasonable limits on
discovery through increased reliance on the common-sense concept of proportionality.”17 Chief
17
The Rules Enabling Act, 28 U.S.C. §§ 2071-2077, empowers the federal courts to
prescribe rules for the conduct of their business. See 28 U.S.C. § 2071. The Judicial
Conference -- the policy making body of the federal judiciary -- has overall responsibility for
formulating those rules. See Chief Justice John Roberts, 2015 Year-End Report on the Federal
Judiciary
at
6,
Supreme
Court
of
the
United
States,
available
at
http://www.supremecourt.gov/publicinfo/yearend/year-endreports.aspx
(“2015
Year–End
Report”). The Chief Justice leads the Judicial Conference. The Judicial Conference’s
Committee on Rules of Practice and Procedure, known as the Standing Committee, solicits
guidance from advisory committees and conferences to draft proposed rules and amendments for
the Judicial Conference’s consideration. See 2015 Year-End Report. Chief Justice Roberts, a
former clerk for Chief Justice William Rehnquist, appointed the Honorable David Campbell,
United States District Judge for the District of Arizona, also a former Rehnquist clerk and
President George W. Bush appointee, to chair the Civil Rules Advisory Committee. Campbell
and David Levi, Dean of the Duke University School of Law, a former clerk to Justice Lewis
Powell, and former chief judge of the United States District Court for the Eastern District of
California, appointed as United States Attorney by President Ronald Reagan and appointed to the
Eastern District of California by President George W. Bush, led the effort to increase
proportionality and hands-on judicial case management in the 2015 amendments. See Report to
the Standing Committee at 4, Advisory Committee on Civil Rules (May 8, 2013), available at
http://www.uscourts.gov/rules-policies/archives/committeereports/advisory-committee-rulescivil-procedure-may-2013. After the Judicial Conference concurred on the 2015 amendments, it
sent the proposed rules and amendments to the Supreme Court, which approved them. Chief
Justice Roberts submitted the proposed rules to Congress for its examination. See 2015 YearEnd Report at 6. Because Congress did not intervene by December 1, the new rules took effect.
Some scholars have noted that the rules reflect the conservative nature of those who have
participated in drafting the amendments. See Edward A. Purcell, Jr., From the Particular to the
General: Three Federal Rules and the Jurisprudence of the Rehnquist and Roberts Courts, 162 U.
Pa. L. Rev. 1731 (2014); Corey Ciocchetti, The Constitution, The Roberts Court, and Business:
The Significant Business Impact of the 2011-2012 Supreme Court Term, 4 Wm. & Mary Bus. L.
Rev. 385 (2013). In particular, the New Mexico Trial Lawyer published an article asserting that
the amendments favored corporate defendants, which was partially the result of Chief Justice
Roberts’ appointment of “corporate-minded judges to the Rules Advisory Committee that drafted
the amendments.” Ned Miltenberg & Stuart Ollanik, The Chief Umpire is Changing the Strike
Zone, at 1, The New Mexico Trial Lawyer (Jan. /Feb. 2016). The Court shares some of the
concerns with the new amendments being pro-business and giving corporations new tools to
limit plaintiffs’ discovery.
- 30 -
Justice John Roberts, 2015 Year–End Report on the Federal Judiciary at 6, Supreme Court of the
United
States,
available
at
http://www.supremecourt.gov/publicinfo/year-end/year-
endreports.aspx (“2015 Year-End Report”). He states that the proportionality concept seeks to
“eliminate unnecessary or wasteful discovery,” and to impose “careful and realistic assessment
of actual need.” 2015 Year-End Report at 7. This assessment may, as a practical matter, require
“judges to be more aggressive in identifying and discouraging discovery overuse by emphasizing
the need to analyze proportionality before ordering production of relevant information.” State
Farm Mutual Auto. Ins. Co. v. Fayda, 2015 WL 7871037, at *2 (internal quotation marks
omitted). The burden of demonstrating relevance remains on the party seeking discovery, and
the newly revised rule “does not place on the party seeking discovery the burden of addressing
all proportionality considerations.” Fed. R. Civ. P. 26(b)(1) advisory committee’s notes to 2015
amendment. See Dao v. Liberty Life Assurance Co. of Boston, No. 14-4749, 2016 WL 796095,
at *3 (N.D. Cal. February 23, 2016)(LaPorte, M.J.)(observing that the 2015 amendment
“reinforces the Rule 26(g) obligation of the parties to consider these factors in making discovery
requests, responses or objections”); Williams v. U.S. Envt’l Servs., LLC, No. 15-0168, 2016 WL
617447, at *1 n.2 (M.D. La. February 16, 2016)(Bourgeois, M.J.). In general, “the parties’
responsibilities [] remain the same” as they were under the rule’s earlier iteration so that the
party resisting discovery has the burden of showing undue burden or expense. Fed. R. Civ. P.
26(b)(1) advisory committee’s notes to 2015 amendment. See Dao v. Liberty Life Assurance
Co. of Boston, 2016 WL 796095, at *3 (noting that, “while the language of the Rule has
changed, the amended rule does not actually place a greater burden on the parties with respect to
their discovery obligations”).
- 31 -
Like with the 2000 amendments, it is unsurprising that the drafters are unable to
articulate precise language narrowing the discovery’s substantive scope.
Instead of being
Aristotelian and trying to draft rules, the drafters largely opted to make federal judges Plato’s
enlightened guardians. They have decided that no single general rule can adequately take into
account the infinite number of possible permutations of different claims, defenses, parties,
attorneys, resources of parties and attorneys, information asymmetries, amounts in controversy,
availabilities of information by other means, and other factors. They have dropped all discovery
disputes into judges’ laps. The drafters have decided that this determination requires the
individualized judgment of someone on the scene, and that presence is what the rulemakers want
when they: (i) encourage district judges to take a firmer grasp on the discovery’s scope; and (ii)
put their thumbs on the scale in favor of narrower discovery in the rule’s definition of the scope
of discovery.
Rule 34 allows a party to serve requests to produce certain items “on any other party
. . . in the responding party’s possession, custody, or control.” Fed. R. Civ. P. 34(a)(1)(emphasis
added). See Hickman v. Taylor, 329 U.S. at 504 (explaining that rule 34 “is limited to parties to
the proceeding, thereby excluding their counsel or agents”). Applying this standard, courts have
found that corporations control documents in their subsidiaries’ hands, clients control case files
in their attorneys’ hands, and patients control health records in their healthcare providers’ hands.
See United States v. Stein, 488 F. Supp. 2d 350, 360-62 (S.D.N.Y. 2007)(Kaplan, J.); CSI Inv.
Partners II, L.P. v. Cendant Corp., 2006 WL 617983, at *6 (S.D.N.Y. March 13, 2006)(Eaton,
M.J.)(compelling a client’s attorney to disclose documents in the attorney’s possession regarding
the attorney’s representation of that particular client, but only insofar as the documents were
relevant). An employee’s or corporation’s ability to access the documents in the normal course
- 32 -
of business weighs in favor of finding control. See, e.g., Gerling Int’l Ins. Co. v. Comm’r of
Internal Revenue, 839 F.2d 131, 140-41 (3d Cir. 1988)(where “agent-subsidiary can secure
documents of the principal-parent to meet its own business needs . . . the courts will not permit
the agent-subsidiary to deny control for purposes of discovery”); Camden Iron & Metal v.
Marubeni America Corp., 138 F.R.D. 438, 441 (D.N.J. 1991)(including “demonstrated access to
documents in the ordinary course of business” in list of factors to be considered in determining
control).
Courts have specifically considered whether clients control information in their attorneys’
hands. Because a client has the right “to obtain copies of documents gathered or created by its
attorneys pursuant to their representation of that client, such documents are clearly within the
client's control.” Am. Soc. For Prevention of Cruelty to Animals v. Ringling Bros. and Barnum
& Bailey Circus, 233 F.R.D. 209, 212 (D.D.C. 2006)(Facciola, M.J.). See Poppino v. Jones
Store Co., 1 F.R.D. 215, 219 (W.D. Mo. 1940)(“It is quite true that if an attorney for a party
comes into possession of a document as attorney for that party his possession of the document is
the possession of the party.”)(emphasis in original). Consequently, a party may be required to
produce a document that it has turned over to its attorney when the document relates to the
attorney’s representation of that client on a specific matter. See In re Ruppert, 309 F.2d 97, 98
(6th Cir. 1962)(per curiam); Hanson v. Garland S.S. Co., 34 F.R.D. 493, 495 (N.D. Ohio
1964)(Connell, J.)(concluding that witness statements taken by a party’s attorney in preparation
of the case were within the party’s control and subject to production under rule 34 on a proper
showing); Kane v. News Syndicate Co., 1 F.R.D. 738, 738-39 (S.D.N.Y. 1941)(Mandelbaum,
J.)(determining that a plaintiff in an action for copyright infringement could require the
defendants’ attorneys to produce a document from which the plaintiff hoped to ascertain whether
- 33 -
material had been obtained from his copyrighted works).
The mere fact, however, that the attorney for a party has possession of a document
does not make his possession of the document the possession of the party. The
paper may be one of his private papers which he had before the relation of
attorney and client was established. It is inconceivable that he should be required
to produce such a paper for the inspection of his client’s adversary. The paper
which he has in his possession may be the property of some other client. It is
inconceivable that he should be compelled to produce the document belonging to
another client because the adversary of one of his clients demands it.
Poppino v. Jones Store Co., 1 F.R.D. at 219. See Hobley v. Burge, 433 F.3d 946 (7th Cir.
2006)(observing that a party may not have had control over its former attorney’s documents);
Ontario Inc. v. Auto Enterprises, Inc., 205 F.R.D. 195 (E.D. Mich. 2000). Simply put, if a
person, corporation, or a person’s attorney or agent can pick up a telephone and secure the
document, that individual or entity controls it. See Simon v. Taylor, 2014 WL 6633917, at *34
(“Control is defined as the legal right to obtain documents upon demand.”).
LAW REGARDING MOTIONS TO COMPEL
Rule 37 provides enforcement mechanisms for rule 34. According to rule 37, if a party
does not respond to an interrogatory or to a request for production, the party requesting the
discovery may move the Court to compel the opposing party to respond. See Fed. R. Civ. P.
37(a)(2)(B). “[A]n evasive or incomplete disclosure, answer, or response is to be treated as a
failure to disclose, answer, or respond.” Fed. R. Civ. P. 37(a)(4). See Lewis v. Goldsberry,
No. 11-0283, 2012 WL 681800, at *4 (D.N.M. February 27, 2012)(Browning, J.). Rule 37(a)
provides:
On notice to other parties and all affected persons, a party may move for an order
compelling disclosure or discovery. The motion must include a certification that
the movant has in good faith conferred or attempted to confer with the person or
party failing to make disclosure or discovery in an effort to obtain it without court
action.
Fed. R. Civ. P. 37(a). If a party refuses to produce documents through proper discovery, a
- 34 -
defendant should move to compel production pursuant to rule 37. See Lane v. Page, 727
F. Supp. 2d 1214, 1236 n.15 (D.N.M. 2010)(Browning, J.). Rule 37(a)(5)(B)-(C) provide:
(B)
If the Motion Is Denied. If the motion is denied, the court may issue any
protective order authorized under Rule 26(c) and must, after giving an
opportunity to be heard, require the movant, the attorney filing the motion,
or both to pay the party or deponent who opposed the motion its
reasonable expenses incurred in opposing the motion, including attorney's
fees. But the court must not order this payment if the motion was
substantially justified or other circumstances make an award of expenses
unjust.
(C)
If the Motion Is Granted in Part and Denied in Part. If the motion is
granted in part and denied in part, the court may issue any protective order
authorized under Rule 26(c) and may, after giving an opportunity to be
heard, apportion the reasonable expenses for the motion.
Fed. R. Civ. P. 37(a)(5). Where parties have taken legitimate positions, and the Court grants in
part and denies in part a motion to compel discovery responses, courts generally conclude that
justice requires that each party be responsible for their own fees and costs. See Pulsecard, Inc. v.
Discover Card Servs., 168 F.R.D. 295, 310-11 (D. Kan. 1996)(Rushfelt, M.J.); Greater Rockford
Energy & Tech. Corp. v. Shell Oil Co., 138 F.R.D. 530, 539 (C.D. Ill. 1991)(Mills, J.).
LAW REGARDING PROTECTIVE ORDERS
The trial court has discretion to grant a protective order pursuant to rule
26(c). See Morales v. E.D. Etnyre & Co., 229 F.R.D. 663, 663 (D.N.M. 2005)(Browning,
J.). Rule 26(c) provides that, upon a good cause showing, a court may “issue an order to protect
a party or person from annoyance, embarrassment, oppression, or undue burden or expense,”
which
may
include
forbidding
disclosure
or
discovery.
Fed. R. Civ. P.
26(c)(1)(A). Accord Miller v. Regents of the Univ. of Colo., 188 F.3d 518, 1999 WL 506520, at
*12 (10th Cir. 1999)(unpublished)(reasoning that “[t]he district court is in the best position to
weigh these variables and determine the appropriate limits because, unlike an appellate court, the
- 35 -
district court has the ability to view firsthand the progression of the case, the litigants, and the
impact of discovery on parties and nonparties”).
“It is the party seeking the protective order who has the burden to show good cause for a
protective order.”
Velasquez v. Frontier Med. Inc., 229 F.R.D. 197, 200 (D.N.M.
2005)(Browning, J.). The party seeking the protective order must submit “a particular and
specific
demonstration
of
fact,
as
distinguished
from stereotyped
and
conclusory
statements.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 102 n.16 (1981)(internal quotation marks
omitted). Although rule 26(c) is silent on when “the movant must file for a protective order, the
United States Court of Appeals for the Tenth Circuit has held that ‘a motion under [rule]
26(c) for protection . . . is timely filed if made before the date set for production.’” Montoya v.
Sheldon, No. 10-0360, 2012 WL 2383822, at *5 (D.N.M. June 8, 2012)(Browning, J.)(quoting In
re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 669 F.2d 620, 622 n.2
(10th Cir. 1982))(alteration in Montoya v. Sheldon).
In Velasquez v. Frontier Med. Inc., 229 F.R.D. 197 (D.N.M. 2005)(Browning, J.), the
Court denied the defendants’ Motion for a protective order. See 229 F.R.D. at 201.
The
defendants objected to two requests for production from the plaintiff and sought a protection
order against the two requests. See 229 F.R.D. at 198–199. The defendants did not provide any
affidavits or documentation to support good cause; the court could not discern any specific harm
that the defendants would receive if they would answer the two requests for production, and the
defendants asserted only general concerns. See 229 F.R.D. at 200. The Court concluded,
accordingly, that the defendants did not show that the requests for production would cause
annoyance, embarrassment, oppression or undue burden. See 229 F.R.D. at 200.
- 36 -
LAW REGARDING 30(b)(6)
Rule 30(b)(6) of the Federal Rules of Civil Procedure provides:
[A] party may name as the deponent a public or private corporation, a partnership,
an association, a governmental agency, or other entity and must describe with
reasonable particularity the matters for examination. The named organization
must then designate one or more officers, directors, or managing agents, or
designate other persons who consent to testify on its behalf; and it may set out the
matters on which each person designated will testify. A subpoena must advise a
nonparty organization of its duty to make this designation. The persons
designated must testify about information known or reasonably available to the
organization. This paragraph (6) does not preclude a deposition by any other
procedure allowed by these rules.
Fed. R. Civ. P. 30(b)(6). “Under Rule 30(b)(6), when a party seeking to depose a corporation
announces the subject matter of the proposed deposition, the corporation must produce someone
familiar with that subject.” Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 268 (2d Cir. 1999).
As a general matter, a corporation may designate any person as a corporate representative if he
or she can meet the necessary criteria to satisfy rule 30(b)(6). See Gulfstream Worldwide
Realty, Inc. v. Phillips Elec. N. Am. Corp., No. 06-1165, 2007 WL 5704041, at *5
(D.N.M. October 24, 2007)(Browning, J.)(discussing how, sometimes, it may be necessary for a
corporation to designate former employees as a rule 30(b)(6) deponent); Moore, § 30.25[3], at
30-71 (“There is no rule that would prevent corporate counsel, or even a corporation’s litigation
counsel, from serving as a Rule 30(b)(6) deponent.”).
Courts have split whether to allow parties to use 30(b)(6) depositions to explore facts
underlying legal claims and theories. Compare JPMorgan Chase Bank v. Liberty Mut. Ins.
Co., 209 F.R.D. 361, 362 (S.D.N.Y. 2002)(Rakoff, J.)(denying the discovery request seeking the
“defendants’ mental impressions, conclusions, opinions, and legal theory”) and SEC v.
Morelli, 143
F.R.D.
42,
47
(S.D.N.Y.1992)(Leisure, J.)(asserting
- 37 -
that
“the
proposed
Rule 30(b)(6) deposition constitutes an impermissible attempt by defendant to inquire into the
mental processes and strategies of the SEC”), with EEOC v. Caesars Entm’t, Inc., 237 F.R.D.
428, 432-34 (D. Nev. 2006)(Leen, M.J.)(denying the “defendant’s request for a protective order
to limit the scope of Rule 30(b)(6) deposition questioning to preclude inquiry into the factual
bases for defendant’s asserted position statements and affirmative defenses”), and In Re
Vitamins
Antitrust
Litigation, 216
F.R.D.
168,
171-74
(D.D.C.
2003)(Hogan,
C.J.)(allowing 30(b)(6) facts and admissions in corporation’s antitrust submission to European
Commission, stating: “Bioproducts argument that the Rule 30(b)(6) discovery is unnecessary and
duplicative is without merit.”). The Court has held that the better rule is to allow parties to craft
rule 30(b)(6) inquires similar to contention interrogatories, because this rule will ultimately lead
to fewer disputes about what subject matter is permitted in 30(b)(6) depositions and advances the
policy underlying the rules favoring disclosure of information. See Radian Asset Assur., Inc. v.
Coll. of the Christian Bros., 273 F.R.D. 689, 691-92 (D.N.M. 2011)(Browning, J.). If the Court
limits rule 30(b)(6) depositions as the Southern District of New York has, courts would have to
referee endless disputes about what is permitted and what is not. Moreover, rule 30(b)(6)’s plain
language does not limit the deposition in that way. See Fed. R. Civ. P. 30(b)(6) (“The persons
designated must testify about information known or reasonably available to the organization.”).
Rule 26(b)(1) states that:
Unless otherwise limited by court order, the scope of discovery is as follows:
Parties may obtain discovery regarding any nonprivileged matter that is relevant
to any part’s claim or defense and proportional to the needs of the case,
considering the importance of the issues at stake in the action, the amount in
controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the issues, and whether the
burden or expense of the proposed discovery outweighs its likely benefit.
- 38 -
Fed. R. Civ. P. 26(b)(1). Rule 30(b)(6) is not “otherwise limited,” but unlimited. The Court sees
no great problem with allowing overlap between the sorts of information obtained through
contention interrogatories and 30(b)(6) depositions. While counsel will have to carefully prepare
the 30(b)(6) representative, they must always do so.
LAW REGARDING RULE 34
Rule 34 governs “Producing Documents, Electronically Stored Information, and Tangible
Things, or Entering Onto Land, for Inspection and Other Purposes.” Fed. R. Civ. P. 34. The
rule’s subdivision (a) outlines the scope of discoverable items, and subdivision (b) outlines the
procedures to be followed for requesting items, see Fed. R. Civ. P. 34(b)(1), objecting to
requests, see Fed. R. Civ. P. 34(b)(2)(C), and producing “documents or electronically stored
information,” see Fed. R. Civ. P. 34(b)(2)(E).
The relevant provision here, rule 34(b)(2)(E)
provides:
(E)
Producing the Documents or Electronically Stored Information. Unless
otherwise stipulated or ordered by the court, these procedures apply to
producing documents or electronically stored information:
(i)
A party must produce documents as they are kept in the usual
course of business or must organize and label them to correspond
to the categories in the request;
(ii)
If a request does not specify a form for producing electronically
stored information, a party must produce it in a form or forms in
which it is ordinarily maintained or in a reasonably usable form or
forms; and
(iii)
A party need not produce the same electronically stored
information in more than one form.
Fed. R. Civ. P. 34(b)(2)(E). There is confusion among courts and commentators regarding the
meaning of and the relationship between (E)(i) and (E)(ii), hinging on whether the term
- 39 -
“documents,” as used in (E)(i), includes ESI.18 The Court has concluded that provisions (E)(i)
and (E)(ii) apply to distinct, mutually exclusive categories of discoverable information:
documents -- a term that does not include ESI -- governs (E)(i), while (E)(ii), but not (E)(i)
governs ESI. See Anderson Living Tr. v. WPX Energy Prod., LLC, 298 F.R.D. 514, 520-26
(D.N.M. 2014)(Browning, J.).
1.
The Evolution of Rule 34 from 1970 to 2006.
Before 1970, rule 34 made no mention of ESI -- by that name or any other -- and allowed
only for “the inspection and copying or photographing . . . of any designated documents, papers,
books, accounts, letters, photographs, objects, or tangible things.” Fed. R. Civ. P. 34 (1964)
(amended 1970). Although it would have been possible for courts to shoehorn the developing
ESI technology into one of those categories, in 1970, the federal judiciary recognized the
emerging importance of electronic record storage, and the rule was amended to the following:
“Any party may . . . inspect and copy[] any designated documents (including writings, drawings,
graphs, charts, photographs, phono-records, and other data compilations from which information
can be obtained, translated, if necessary, by the respondent through detection devices into
reasonably usable form). . . .” Fed. R. Civ. P. 34(a) (2000)(amended 2006)(emphasis added).
“Documents” was no longer one of several classes of discoverable material, but had become the
catchall term for virtually all discoverable material.19 The advisory committee notes “make[]
18
“The rules of statutory construction apply to the Federal Rules. . . .” In re Kubler, No.
11-0048, 2012 WL 394680, at *11 (D.N.M. Jan. 25, 2012)(Browning, J.). Accord Leatherman v.
Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168, (1993)(applying
the expressio unius est exclusion alterius canon when interpreting rule 9(b) of the Federal Rules
of Civil Procedure); Hillis v. Heineman, 626 F.3d 1014, 1017-18 (9th Cir. 2010)(“This same
principle of statutory construction applies to interpreting the Federal Rules of Civil Procedure.”).
19
Only “tangible things” remained outside of the “inclusive description of documents”
that the new rule furnished. Fed. R. Civ. P. 34(a), advisory committee’s notes on 1970
amendment (1970)(amended 2006).
- 40 -
clear that Rule 34 applies to electronic data compilations,” Fed. R. Civ. P. 34 advisory
committee’s notes, and as technology advanced, courts properly allowed for discovery of ESI
under the same procedural framework provided for all other forms of “documents,” e.g., Bills v.
Kennecott Corp., 108 F.R.D. 459, 461 (D. Utah 1985)(Greene, J)(“It is now axiomatic that
electronically stored information is discoverable under Rule 34 of the Federal Rules. . . .”).
In 1980, with ESI growing in prominence but hard copy discovery still predominant,
subdivision (b) of the rule was amended to add the requirement that “[a] party who produces
documents for inspection shall produce them as they are kept in the usual course of business or
shall organize and label them to correspond with the categories in the request.” Fed. R. Civ. P.
34(b), para. 3 (2000)(amended 2006). The reason for this amendment was to put an end to the
“apparently not rare” practice of “deliberately . . . mix[ing] critical documents with others in the
hope of obscuring significance.” Fed. R. Civ. P. 34 advisory committee’s notes (quoting Section
of Litigation of the American Bar Association, Report of the Special Committee for the Study of
Discovery Abuse, 22 (1977)). See United States v. O’Keefe, 537 F. Supp. 2d 14, 19 (D.D.C.
2008)(Facciola, J.)(“The Rule was amended in 1980 to prevent the juvenile practice whereby the
producing party purposely rearranged the documents prior to production in order to prevent the
requesting party’s efficient use of them.”); In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 351,
363 (N.D. Ill. 2005)(Cole, J.)(stating that the provision is designed to prevent litigants from
“deliberately mixing critical documents with masses of other documents to hide their existence
or obscure their significance”)(citing Bd. of Educ. of Evanston Twp. High Sch. Dist. No. 202 v.
Admiral Heating & Ventilating, Inc., 104 F.R.D. 23, 36 (N.D.Ill.1984)(Shadur, J.)).
Over time, courts began to interpret the amended rule 34(b) to impose affirmative
requirements on all massive productions of documents, with the logic being that the enormity of
- 41 -
a production, alone, could render it useless to the requesting party even without any deliberate
mixing on the part of the producing party. See Pass & Seymour, Inc. v. Hubbell Inc., 255 F.R.D.
331, 334 (2008)(Peebles, M.J.)(noting the disfavor that courts have shown to the “dumping of
massive quantities of documents, with no indexing or readily apparent organization, in response
to a document request from an adversary”). The amendment had the effect of requiring the
producing party to turn documents over in an organized, comprehensible arrangement -- either
by specifically indexing each document to the request to which it was responsive, or, failing that
matching, by producing the documents with the business’ filing system or other organizational
structure still intact and usable by the requesting party, thus “minimiz[ing] the burden of
production while maintaining the internal logic reflecting business use.” SEC v. Collins &
Aikman Corp., 256 F.R.D. 403, 409 (S.D.N.Y. 2009)(Scheindlin, J.). See CooperVision, Inc. v.
CIBA Vision Corp., No. 06-0149, 2007 WL 2264848, at *4 (E.D. Tex. August 6,
2007)(Hines, M.J.)(“[P]roduction of records as kept in the usual course of business ordinarily
will make their significance pellucid. That is the overarching purpose of the rule.”). The usual
course of business -- in the days of warehousing large numbers of hard copy documents -- meant
giving the requesting party free access to the facility without any culling or reviewing for
responsiveness by the producing party.
In the ESI context, the new 34(b)(E)(ii) requirement ended up serving another purpose: in
addition to regulating the organization of production, it allowed courts to specify, or at least
restrict, the form -- i.e., the file formatting -- of the individual artifacts of ESI being produced.
Requiring production of ESI in the usual course of business was widely interpreted to mean
turning over computer files in their “native form” -- the format in which they were kept with the
party before the commencement of litigation -- or some agreed-upon alternative. Williams v.
- 42 -
Sprint/United Mgmt. Co., 230 F.R.D. 640, 648-49 (D. Kan. 2005). See Fed. R. Civ. P. 34(a)
(2002)(amended 2006)(providing that “data compilations” must be “translated, if necessary, by
the respondent through detection devices into reasonably usable form”). Cf. The Sedona
Principles 44-46 cmts. 13.a-c (2004).20 Although this interpretive spin on 34(b)(E)(ii) was not
perfect -- it had the effect of reading out the alternative requirement of labeling production to
correspond to categories in the requests, which cannot easily be construed to bear on file
formatting -- it served the purpose in the absence of an alternative basis for regulating the form
of ESI production.
From 1980 until the 2006 amendments, courts applied the organized production
requirement to both hard copy documents and ESI, because (i) as a textual matter, the term
“documents,” as defined parenthetically in rule 34(a), still included “data compilations from
which information can be obtained,” Fed. R. Civ. P. 34 advisory committee’s notes to the 1970
amendment; (ii) the evil that the 1980 amendment was designed to combat -- hiding important
information in a blizzard of irrelevant material, or jumbling the production’s organization to
render diligent examination impracticable -- could just as easily thwart ESI discovery, especially
in the days before the widespread availability of optical character recognition (“OCR”) search
technology; and (iii) there being, at that time, no other basis in the rule for regulating the file
formatting of ESI production, reading out the 34(b)(E)(iii) requirement would leave producing
parties free to turn over ESI in whatever form they wanted -- even if it meant deliberately
converting ESI from its easily accessible native format into an inconvenient, obscure, or
expensive one.
20
The Sedona Principles are a set of best practice recommendations for e-discovery. See
The Sedona Principles (Second Edition): Accommodating the 2006 E-Discovery Amendments, 3
Fed. Cts. L. Rev. 63, 64 (2009).
- 43 -
2.
The 2006 Amendments.
The
2006
amendments
altered
both
the
rule’s
scope
and
procedural
portions. See Fed. R. Civ. P. 34 (2006)(amended 2007). Rule 34(a) now reads:
(a) In General. A party may . . .
(1)
. . . inspect, copy, test, or sample the following items . . .
(A)
any designated documents or electronically stored
information -- including writings, drawings, graphs, charts,
photographs, sound recordings, images, and other data or
data compilations -- stored in any medium from which
information can be obtained . . . or
(B)
any designated tangible things. . . .
Fed. R. Civ. P. 34(a) (emphasis added). ESI -- now referenced by that name -- is no longer
lumped into an expansive parenthetical definition of “documents” under the heading of “other
data compilations,” but instead placed alongside documents in a three-item list. This change was
not haphazard, stylistic, or unintentional. See Fed. R. Civ. P. 34 advisory committee’s notes.
Lawyers and judges interpreted the term “documents” to include electronically
stored information because it was obviously improper to allow a party to evade
discovery obligations on the basis that the label had not kept pace with changes in
information technology. But it has become increasingly difficult to say that all
forms of electronically stored information, many dynamic in nature, fit within the
traditional concept of a document.
Fed. R. Civ. P. 34 advisory committee’s notes.
The production procedure in subsection (b) was also amended, retaining the “usual
course of business or . . . organiz[ation] and label[ing]” requirement for “documents” in the
newly styled (E)(i), and creating a new standard -- that ESI must be produced “in a form or
forms in which it is ordinarily maintained or in a reasonably usable form or forms” -- in the new
(E)(ii). Fed. R. Civ. P. 34(b)(2)(E). These two provisions have widely been recognized as
codifying the organization-versus-form distinction drawn by earlier cases. “[T]he term ‘form’
- 44 -
relates to the diverse types of electronically stored information such as file types (‘.pdf’) or
various storage means. The comments do not refer to the term ‘form’ as encompassing the
organization of all of a party’s production.” Suarez Corp. Indus. v. Earthwise Techs., Inc., Nos.
07-5577
&
07-2020,
2008
WL
2811162,
at
*2
(W.D.
Wash.
July
17,
2008)(Bryan, J.). See Diesel Mach. Inc. v. Manitowoc Crane, Inc., No. 09-4087, 2011 WL
677458, at *3 (D.S.D. February 16, 2011)(Lange, J.).
Of course, just because not all ESI fits into the genus “documents,” it does not follow that
none of it does; a large portion of ESI, such as electronic mail transmissions or electronic
memoranda, would seem to fit comfortably into the everyday definition of documents. Likewise,
while textually and purposively the new (E)(ii) does not apply to hard copy documents -- (E)(ii)
regulates the form of production, which for hard copy documents is always paper -- it is not
obvious why the old requirements, now embodied in (E)(i), should not continue to apply to ESI.
Put another way, it is reasonable to read (E)(i) and (E)(ii) as supplementary, rather than
alternative, at least for those items that seem to be both documents and ESI. There is something
to be gained from imposing basic organization requirements onto massive productions of ESI;
artifacts of ESI can be jumbled beyond usefulness -- by dumping them out of their file directories
and onto the requesting party -- just as easily as hard copy documents can.
The vast majority of courts have treated (E)(i) and (E)(ii) as supplementary rather than
alternative, applying (E)(i)’s organized production requirement to ESI the same way they had
before the 2006 amendments, and adding the (E)(ii) form requirement on top of the requirements
of (E)(i).21 See, e.g., Diesel Mach. Inc. v. Manitowoc Crane, Inc., 2011 WL 677458, at *3.
21
While not directly in conflict, there is some tension between the Court’s decision
in Radian Asset Assurance, Inc. v. College of the Christian Bros. of New Mexico, No. CIV 090885, 2010 WL 4928866, at *6 (D.N.M. Oct. 22, 2010)(Browning, J.)(“Radian”), and the
- 45 -
(holding that ESI was not produced in the usual course of business and thus must be labeled to
correspond to categories in the requests); SEC v. Collins & Aikman Corp., 256 F.R.D. at 413
(holding that ESI produced in the course of an investigation, “which is by its very nature not
routine or repetitive, cannot fall within the scope of the usual course of business,” and requiring
the SEC to label their responsive ESI by category); MGP Ingredients, Inc. v. Mars, Inc., No. 062318, 2007 WL 3010343, at *3 (N.D.N.Y. Oct. 15, 2007)(Waxse, J.)(stating explicitly that (E)(i)
controls the production of ESI). See also Mark S. Sidoti et al., Form and Manner of Production
Under FRCP 34, 52 DRI For the Defense 61 (2010) (“This section gives the producing party the
option to produce documents (including, of course, ESI) as they are ‘kept in the usual course of
business’. . . .”).
interpretation of rule 34(b)(2)(E) the Court adopts here. In Radian, the Court assumed, without
much analysis, that rule 34(b)(2)(E)(i) applied to ESI. See 2010 WL 4928866, at *6. In that
case, the Court analyzed the production of ESI tape backups under (E)(i) before deciding the
issue on other grounds. See 2010 WL 4928866, at *6. Radian Asset, the requesting party, had
argued that the College could not produce its ESI as it was kept in the usual course of business as
(E)(i) requires. See 2010 WL 4928866, at *6. The Court assumed, as did the parties in their
arguments, that (E)(i) applied, and stated that it was unconvinced by Radian Asset's argument
that, because the College transferred its ESI to a third party before subpoenaing it back, the
College could not produce its records in the same way in which they were maintained before it
transferred them. See 2010 WL 4928866, at *6. The Court stated: “Merely transferring material
between parties, however, does not necessarily alter how it was kept.” 2010 WL 4928866, at *6.
The Court concluded: “Thus, the fact that the CSF ESI is stored, in part, on tape backups does
not, without more, suggest that the ESI is not in the same state as it was ‘kept in the usual course
of business.’” 2010 WL 4928866, at *6 (quoting Fed. R. Civ. P. 34(b)(2)(E)(i)). The Court
stated that rule 34 is a default rule, and that the Court can order the producing party to meet
additional or alternative obligations. See 2010 WL 4928866, at *7. The Court stated:
“Consequently, even if the CSF ESI was not kept on tape backups in the course of business, the
Court may order that the tapes be produced.” 2010 WL 4928866, at *7. The Court also required
the College to produce affidavits or declarations stating that the ESI was kept in the usual course
of business. See 2010 WL 4928866, at *9. Thus, while the Court does not have any reason to
question what the Court did in Radian, it might have analyzed the result differently if it had been
presented squarely with the issue in this case and done the analysis here.
- 46 -
Portions of the advisory committee notes on the 2006 amendments support that
interpretation. For example, the committee advises that “a Rule 34 request for production of
documents should be understood to encompass, and the response should include, electronically
stored information unless discovery in the action has clearly distinguished between electronically
stored information and documents,” reflecting the reality that items of ESI are routinely referred
to as documents in common parlance -- and, before 2006, were included in the legal term of art.
Fed. R. Civ. P. 34 advisory committee’s notes (emphasis added). Most confusingly of all, the
term “documents” has a different definition in other rules:
[T]he term used in Rule 34(a)(1) appears in a number of other amendments, such
as those to Rules 26(a)(1), 26(b)(2), 26(b)(5)(B), 26(f), 34(b), 37(f), and 45. . . .
References to documents appear in discovery rules that are not
amended, including Rules 30(f), 36(a), and 37(c)(2). These references should be
interpreted to include electronically stored information as circumstances warrant.
Fed R. Civ. P. 34 advisory committee’s notes (emphasis added).
Professor John K.
Rabiej explains: “[T]he term documents usually includes ESI but only in discovery rules that
[were] not amended [in 2006]. . . . The limitation excludes Rule 34, which was amended.” John
K. Rabiej, Rabiej on Production of ESI, Emerging Issues 2628, at *2 (July 29, 2008)(second and
third alterations in original)(quotations omitted). He continues:
[S]ubparagraph (E)(i) applies only to the production of hard-copy documents,
while subparagraph (E)(ii) exclusively governs the production of ESI. . . .
....
The drafters of the e-discovery amendments to Rule 34 recognized that the
procedures in subparagraph (E)(i), which were written to apply to hard-copy
documents, did not neatly fit ESI and had to be modified to apply to ESI. In
particular, though the procedures in subparagraph (E)(i) work well with paper
documents, which generally can be produced in only one form, they are not as
effective with ESI, which can exist in different forms. Accordingly, the
rulemakers crafted alternative, mutually exclusive, procedures in subparagraph
(E)(ii) that are designed to apply specifically to ESI, not to supplement the
procedures in subparagraph (E)(i).
- 47 -
....
Though lawyers and judges have long interpreted “documents” to include
ESI, Rule 34(a)(1)(A) and the accompanying Committee Note make clear that
ESI is separate from and distinguishable from documents. . . . ESI is not a subset
of documents; it is a new category in addition to documents.
Rabiej, supra at *1-2 (emphasis added)(citing Report of Advisory Committee on Civil Rules to
Committee on Rules of Practice and Procedure, July 25, 2005, found in House Document 109105, at 157-58 (2006) (memorializing that the Committee decided to recommend making
“electronically stored information” separate from “documents”); See Richard L. Marcus, EDiscovery & Beyond: Toward a Brave New World or 1984?, 25 Rev. Litig. 633, 649
(2006)(“Recognizing ‘electronically stored information’ as a separate object of discovery” and
noting that “[t]reating [ESI] as one subcategory of documents . . . seems not to acknowledge its
centrality, [while u]nder the revised rule, it may not be recognized as central, but it is at least
recognized as co-equal to documents”).
Professor Rabiej explains that there are “substantial practical differences between the two
production procedures.” Rabiej, supra at *2 (quoting Fed. R. Civ. P. 34). Namely, while (E)(i)
document production gives the producing party the right to choose22 whether to produce “in the
22
There is some disagreement in the caselaw how absolute this right is -- i.e., whether a
producing party that keeps its files jumbled in the usual course of its business has any further
organization obligation. See, e.g., In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 351, 362-63
(N.D. Ill. 2006)(Cole, M.J.); National Jewish Health v. WebMD Health Servs. Grp., Inc., 305
F.R.D. 247, 255 (D. Colo. 2014)(Daniel, J.). However, the producing party bears the burden of
showing, by more than an unsupported representation to the Court, that the manner of production
is the manner in which the documents are kept in the usual course of business. See Johnson v.
Kraft Foods N. Am., Inc., 236 F.R.D. 535, 540-41 (D. Kan. 2006)(Waxse, M.J.).
A business has an incentive to keep documents organized in some fashion in order to
maximize a company’s day-to-day efficiency. Or course, documents are sometimes misfiled or
misplaced in the usual course of business -- mistakes happen. Some companies, however, have
no discernible filing system. Stacks of paper pile up throughout the office with little rhyme or
reason. This reality calls to mind Albert Einstein’s reflection that “if a cluttered desk is a sign of
- 48 -
usual course of business” or to “label . . . to correspond to the categories in the request,” (E)(ii)
puts the ball in the requesting party’s court by first giving them the option to “specify a form for
producing” ESI. Fed. R. Civ. P. 34(b)(2)(E)(i)-(ii). It is only if the requesting party declines to
specify a form that the producing party is offered a choice between producing in the form “in
which it is ordinary maintained” -- native format -- or “in a reasonably useful form or forms.”
Fed. R. Civ. P. 34(b)(2)(E)(i)-(ii). A second major difference is that, while (E)(ii)’s ordinary
form option is a good match to (E)(i)’s usual course of business option -- in that both allow the
producing party to minimize production costs by simply turning over what he has, as is -(E)(ii)'s “reasonably useful form” option seems to fall far short of (E)(i)'s labeling option in
terms of its immediate usefulness to the requesting party. Fed. R. Civ. P. 34(b)(2)(E)(i)-(ii).
Both Professor Rabiej and the advisory committee notes imply that, if ESI is produced in a nontext searchable format -- or at least if it cannot be readily converted to a text-searchable format -it most likely is not “reasonably usable.” Cf. Fed. R. Civ. P. 34 advisory committee’s notes (“If
the responding party ordinarily maintains the information it is producing in a way that makes it
searchable by electronic means, the information should not be produced in a form that removes
or significantly degrades this feature.”); Rabiej, supra, at *3 (“Determining whether production
a cluttered mind, of what, then, is an empty desk a sign?” See David Burkus, When to Say Yes
to the Messy Desk, Forbes Magazine, May 23, 2014, available at https://www.forbes.com
/sites/davidburkus/2014/05/23/when-to-say-yes-to-the-messy-desk/#e49179d1fdc6.
With that backdrop, the Court approaches the rule’s text, which states that documents
must be produced “as they are kept in the usual course of business.” Fed. R. Civ. P. 34(E)(i). It
does not say the documents must be produced as they are kept in the usual course of a reasonable
business or of an optimally efficient business. The Court concludes that, if the producing party
represents through an affidavit that the jumbled documents were produced as they are kept in the
usual course of business, rule 34 is satisfied. This ruling does not offend rule 34’s primary
purpose, which, as noted above, is to dissuade parties from purposefully shuffling relevant
documents into the proverbial ten-thousand-card deck. If there is no intent to jumble, the rule’s
purpose is not thwarted.
- 49 -
of ESI in a form other than in its native file format represents a ‘reasonably usable form’ will
depend on the circumstances of each case. . . . [E]lectronic .tiff images are not word textsearchable, [but] . . . can be converted to word text-searchable images using an Optical Character
Recognition software program.”).
LAW REGARDING RULE 45
“Discovery
Fed. R. Civ. P. 45.”
of
non-parties
must
be
conducted
by
subpoena
pursuant
to
Myers v. Andzel, No. 06-14420, 2007 WL 3256879, at *1
(S.D.N.Y.2007)(Sweet, J.). See, e.g., Highland Tank & Mfg. Co. v. PS Int’l, Inc., 227 F.R.D.
374, 379 (W.D. Pa. 2005)(Gibson, J.)(“Rule 45 is the only discovery method whereby
information may be obtained from a nonparty to the suit.”); Blazek v. Capital Recovery Assocs.,
Inc., 222 F.R.D. 360, 361 (E.D. Wisc. 2004)(Adelman, J.)(“[A]ny person may be required to
produce documents and any property may be inspected. . . . If the person is not a party to the
litigation, the party seeking such discovery must utilize a subpoena to compel such discovery.”).
Accordingly, courts have denied motions to compel non-parties to produce information where
the moving party did not first attempt to subpoena the information that it sought to compel. In
Harco National Insurance Co. v. Sleegers Engineering, Inc., No 06-11314, 2014 WL 5421237
(E.D. Mich. Oct. 22, 2014), for example, the Honorable Thomas L. Ludington, United States
District Judge for the Eastern District of Michigan, denied the plaintiff’s motion to compel a
former defendant to produce information because the plaintiff had never subpoenaed the
information that it sought to compel. See 2014 WL 5421237, at *4. Judge Ludington stated:
By the terms of Rule 45, a party seeking discovery from a non-party must serve
that non-party with a subpoena. Here, there is no evidence that [the plaintiff]
served a subpoena on [the former defendant], nor does [the former defendant]
make any representations that it did so. Because [the plaintiff] has not complied
with the first step of seeking discovery from a non-party, its motion to compel
will be denied.
- 50 -
2014 WL 5421237, at *4. Cf. Smith v. Fla. Dep’t of Corr., 369 F. App’x 36, 38 (11th Cir.
2010)(holding that the district court did not abuse its discretion when it denied the plaintiff’s
motion to compel a non-party to produce information without having validly served the nonparty with a subpoena).
Rule 45 was amended on December 1, 2013. The December 1, 2013, amendments made
the following changes, shown here with the deleted language stricken and the added material
underlined:
(a)
In General.
(1)
Form and Contents.
(A)
Requirements—In General. Every subpoena must:
(i)
state the court from which it issued;
(ii)
state the title of the action, the court in which it is
pending, and its civil-action number;
(iii)
command each person to whom it is directed to do
the following at a specified time and place: attend
and testify; produce designated documents,
electronically stored information, or tangible things
in that person’s possession, custody, or control; or
permit the inspection of premises; and
(iv)
set out the text of Rule 45(d e) and (e d).
(B)
Command to Attend a Deposition -- Notice of the
Recording Method. A subpoena commanding attendance at
a deposition must state the method for recording the
testimony.
(C)
Combining or Separating a Command to Produce or to
Permit Inspection; Specifying the Form for Electronically
Stored Information. A command to produce documents,
electronically stored information, or tangible things or to
permit the inspection of premises may be included in a
subpoena commanding attendance at a deposition, hearing,
- 51 -
or trial, or may be set out in a set out in a separate
subpoena. A subpoena may specify the form or forms in
which electronically stored information is to be produced.
(D)
(2)
Command to Produce; Included Obligations. A command
in a subpoena to produce documents, electronically stored
information, or tangible things requires the responding
person party to permit inspection, copying, testing, or
sampling of the materials.
Issuing Issued from Which Court. A subpoena must issue from
the court where the action is pending. as follows:
(A)
for attendance at a hearing or trial, from the court for the
district where the hearing or trial where the hearing or trial
is to be held;
(B)
for attendance at a deposition, from the court for the district
where the deposition is to be taken; and
(C)
for production or inspection, if separate from a subpoena
commanding a person’s attendance, from the court for the
district where the production or inspection is to be made.
(3)
Issued by Whom. The clerk must issue a subpoena, signed but
otherwise in blank, to a party who requests it. That party must
complete it before service. An attorney also may issue and sign a
subpoena if the attorney is authorized to practice in the issuing
court. As an officer of:
(A)
(B)
(4)
(b)
a court in which the attorney is authorized to practice; or
a court for a district where a deposition is to be taken or
production is to be made, if the attorney is authorized to
practice in the court where the action is pending.
Notice to Other Parties Before Service. If the subpoena commands
the production of documents, electronically stored information, or
tangible things or the inspection of premises before trial, then
before it is served on the person to whom it is directed, a notice
and a copy of the subpoena must be served on each party.
Service.
(1)
By Whom and How; Tendering Fees; Serving a Copy of Certain
Subpoenas. Any person who is at least 18 years old and not a
- 52 -
party may serve a subpoena. Serving a subpoena requires
delivering a copy to the named person and, if the subpoena
requires that person's attendance, tendering the fees for 1 day’s
attendance and the mileage allowed by law. Fees and mileage
need not be tendered when the subpoena issues on behalf of the
United States or any of its officers or agencies. If the subpoena
commands the production of documents, electronically stored
information, or tangible things or the inspection of premises before
trial, then before it is served, a notice must be served on each party.
(2)
Service in the United States. A subpoena may be served at any
place within the United States. Subject to Rule 45(c)(3)(A)(ii), a
subpoena may be served at any place:
(A)
within the district of the issuing court;
(B)
outside that district but within 100 miles of the place
specified for the deposition, hearing, trial, production, or
inspection;
(C)
within the state of the issuing court if a state statute or court
rule allows service at that place of a subpoena issued by a
state court of general jurisdiction sitting in the place
specified for the deposition, hearing, trial, production, or
inspection; or
(D)
that the court authorizes on motion and for good cause, if a
federal statute so provides.
(3)
Service in a Foreign Country. 28 U.S.C. 1783 governs issuing and
serving a subpoena directed to a United States national or resident
who is in a foreign country.
(4)
Proof of Service. Proving service, when necessary, requires filing
with the issuing court a statement showing the date and manner of
service and the names of the persons served. The statement must
be certified by the server.
(c)
Place of Compliance.
(1)
For a Trial, Hearing, or Deposition. A subpoena may command a
person to attend a trial, hearing, or deposition only as follows:
(A)
within 100 miles of where the person resides, is employed,
or regularly transacts business in person; or
- 53 -
(B)
within the state where the person resides, is employed, or
regularly transacts business in person, if the person
(i)
(ii)
(2)
is a party or a party’s officer;
is commanded to attend a trial and would not incur
substantial expense.
For Other Discovery. A subpoena may command:
(A)
(B)
(d e)
production of documents, electronically stored information,
or tangible things at a place within 100 miles of where the
person resides, is employed, or regularly transactions
business in person; and
inspection of premises at the premises to be inspected.
Protecting a Person Subject to a Subpoena; Enforcement.
(1)
Avoiding Undue Burden or Expense; Sanctions. A party or
attorney responsible for issuing and serving a subpoena must take
reasonable steps to avoid imposing undue burden or expense on a
person subject to the subpoena. The issuing court for the district
where compliance is required must enforce this duty and impose
an appropriate sanction -- which may include lost earnings and
reasonable attorney's fees -- on a party or attorney who fails to
comply.
(2)
Command to Produce Materials or Permit Inspection.
(A)
Appearance Not Required. A person commanded to
produce documents, electronically stored information, or
tangible things, or to permit the inspection of premises,
need not appear in person at the place of production or
inspection unless also commanded to appear for a
deposition, hearing, or trial.
(B)
Objections. A person commanded to produce documents
or tangible things or to permit inspection may serve on the
party or attorney designated in the subpoena a written
objection to inspecting, copying, testing, or sampling any
or all of the materials or to inspecting the premises -- or to
producing electronically stored information in the form of
forms requested. The objection must be served before the
earlier of the time specified for compliance or 14 days after
- 54 -
the subpoena is served. If an objection is made, the
following rules apply:
(i)
(ii)
(3)
At any time, on notice to the commanded person,
the serving party may move the issuing court for the
district where compliance is required for an order
compelling production or inspection.
These acts may be required only as directed in the
order, and the order must protect a person who is
neither a party nor a party’s officer from significant
expense resulting from compliance.
Quashing or Modifying a Subpoena.
(A)
When Required. On timely motion, the issuing court for the
district where compliance is required most quash or modify
a subpoena that:
(i)
fails to allow a reasonable time to comply;
(ii)
requires a person to comply beyond the
geographical limits specified in Rule 45(c); who is
neither a party nor a party’s officer to travel more
than 100 miles from where that person resides, is
employed, or regularly transacts business in person
except that, subject to Rule 45(c)(3)(B)(iii), the
person may be commanded to attend a trial by
traveling from any such place within the state where
the trial is held;
(iii)
requires disclosure of privileged or other protected
matter, if no exception or waiver applies;
(iv)
subjects a person to undue burden.
(B)
When Permitted. To protect a person subject to or affected
by a subpoena, the issuing court for the district where
compliance is required may, on motion, quash or modify
the subpoena if it requires:
(i)
disclosing a trade secret or other confidential
research, development, or commercial information;
or
- 55 -
(ii)
disclosing an unretained expert’s opinion or
information that does not describe specific
occurrences in dispute and results from the expert's
study that was not requested by a party.; or
(iii)
a person who is neither a party nor a party’s officer
to incur substantial expense to travel more than 100
miles to attend trial.
(C)
Specifying Conditions as an Alternative. In the
circumstances described in Rule 45(d e)(3)(B), the court
may, instead of quashing or modifying a subpoena, order
appearance or production under specified conditions if the
serving party:
(i)
(ii)
(e d)
(1)
shows a substantial need for the testimony or
material that cannot be otherwise met without
undue hardship; and
ensures that the subpoenaed person will be
reasonably compensated.
Duties in Responding to a Subpoena.
Producing Documents or Electronically Stored Information.
These procedures apply to producing documents or electronically
stored information:
(A)
Documents. A person responding to a subpoena to produce
documents must produce them as they are kept in the
ordinary course of business or must organize and label
them to correspond to the categories in the demand.
(B)
Form for Producing Electronically Stored Information Not
Specified. If a subpoena does not specify a form for
producing electronically stored information, the person
responding must produce it in a form or forms in which it is
ordinarily maintained or in a reasonably usable form or
forms.
(C)
Electronically Stored Information Produced in Only One
Form. The person responding need not produce the same
electronically stored information in more than one form.
(D)
Inaccessible Electronically Stored Information. The person
responding need not provide discovery of electronically
stored information from sources that the person identifies
- 56 -
as not reasonably accessible because of undue burden or
cost. On motion to compel discovery or for a protective
order, the person responding must show that the
information is not reasonably accessible because of undue
burden or cost. If that showing is made, the court may
nonetheless order discovery from such sources if the
requesting party shows good cause, considering the
limitations of Rule 26(b)(2)(C). The court may specify
conditions for the discovery.
(2)
Claiming Privilege or Protection.
(A)
Information Withhold. A person withholding subpoenaed
information under a claim that it is privileged or subject to
protection as trial-preparation material must:
(i)
(ii)
(B)
(f)
expressly make the claim; and
describe the nature of the withheld documents,
communications, or tangible things in a manner
that, without revealing information itself privileged
or protected, will enable the parties to assess the
claim.
Information Produced. If information produced in response
to a subpoena is subject to a claim of privilege or of
protection as trial-preparation material, the person making
the claim may notify any party that received the
information of the claim and the basis for it. After being
notified, a party must promptly return, sequester, or destroy
the specified information and any copies it has; must not
use or disclose the information until the claim is resolved;
must take reasonable steps to retrieve the information if the
party disclosed it before being notified; and may promptly
present the information under seal to the court for the
district where compliance is required under seal for a
determination of the claim. The person who produced the
information must preserve the information until the claim is
resolved.
Transferring a Subpoena–Related Motion. When the court where
compliance is required did not issue the subpoena, it may transfer a
motion under this rule to the issuing court if the person subject to the
subpoena consents or if the court finds exceptional circumstances. Then, if
the attorney for a person subject to a subpoena is authorized to practice in
the court where the motion was made, the attorney may file papers and
- 57 -
appear on the motion as an officer of the issuing court. To enforce its
order, the issuing court may transfer the order to the court where the
motion was made.
(g e)
The court for the district where compliance is required—and also, after a
motion is transferred, the issuing court—may hold in contempt a person
who, having been served, fails without adequate excuse to obey the
subpoena or an order related to it. A nonparty’s failure to obey must be
excused if the subpoena purports to require the nonparty to attend or
produce at a place outside the limits of Rule 45(c)(3)(A)(ii).
LAW REGARDING THE RELEVANCY OF EVIDENCE
“The rules of evidence contemplate the admission of relevant evidence, and the exclusion
of irrelevant and potentially prejudicial evidence.”
Train v. City of Albuquerque, 629
F. Supp. 2d 1243, 1247 (D.N.M. 2009)(Browning, J.)(citing Fed. R. Evid. 401-03). “Relevant
evidence is evidence that has a tendency to make the existence of any fact that is of consequence
to the determination of the action more probable or less probable than it would be without the
evidence.” United States v. Gutierrez–Castro, No. 10-2072, 2011 WL 3503321, at *3 (D.N.M.
Aug. 6, 2011)(Browning, J.)(citing Fed. R. Evid. 401)(“Evidence is relevant if: (a) it has any
tendency to make a fact more or less probable than it would be without the evidence; and (b) the
fact is of consequence in determining the action.”)). “The standard for relevancy is particularly
loose under rule 401, because ‘[a]ny more stringent requirement is unworkable and unrealistic.’”
United States v. Ganadonegro, 854 F. Supp. 2d 1088, 1127 (D.N.M. 2012)(Browning,
J.)(quoting Fed. R. Evid. 401 advisory committee’s note). Irrelevant evidence, or that evidence
which does not make a fact of consequence more or less probable, however, is inadmissible. See
Fed. R. Evid. 402 (“Irrelevant evidence is not admissible.”).
- 58 -
LAW REGARDING TIME EXTENSIONS
Rule 6(b) of the Federal Rules of Civil Procedure governs the circumstances under which
a court can grant a party an extension of time to perform a specific act. The rule states:
(b)
Extending Time.
(1)
In General. When an act may or must be done within a specified
time, the court may, for good cause, extend the time:
(A)
(B)
(2)
with or without motion or notice if the court acts, or if a
request is made, before the original time or its extension
expires; or
on motion made after the time has expired if the party
failed to act because of excusable neglect.
Exceptions. A court must not extend the time to act under Rules
50(b) and (d), 52(b), 59(b), (d), and (e), and 60(b).
Fed. R. Civ. P. 6(b) (bold in original). “Good cause,” necessary for an extension of time under
rule 6(b)(1)(A), “generally means a substantial reason amounting in law to a legal excuse for
failing to perform an act required by law.” Black’s Law Dictionary 692 (6th ed.1990). See
Black’s Law Dictionary 251 (9th ed.2009)(“good cause. . . . A legally sufficient reason.”).
Showing good cause is not a particularly demanding requirement. See United States v. Bd. of
Cty. Comm’rs., No. 08-0501, 2010 WL 965607, at *4 (D.N.M. February 18, 2010)(Browning,
J.)(granting an extension of time for good cause when “many of the impediments to timely filing
a response . . . were the result of poor decision-making on the part of Ramirez’ counsel,” while
“others were seasonal circumstances that a party filing a dispositive motion on Christmas Eve
might foresee the opposing party raising”); United States v. Portillo-Quezada, Nos. 03-20051,
08-2295, 2010 WL 396309, at *1 (D. Kan. January 27, 2010)(Lungstrum, J.)(finding good cause
where attorney argued only that he “needs additional time to contact a witness for the
Government at the trial of this case who may recant or change her testimony in material respects.
- 59 -
Completion of research and drafting of the memorandum in support is also needed”); Weingarten
v. Optima Commc’n. Sys., Inc., 544 F. Supp. 2d 193, 196 n.1 (S.D.N.Y.2008)(Scheindlin,
J.)(“Under Rule 6(b)(1)(A) . . . the court may, for good cause, extend the time to move if a
request is made before the original time period expires.”).
On the other hand, “a finding of excusable neglect under Rule 6(b)[(1)(B)] requires both
a demonstration of good faith by the parties seeking the enlargement and also it must appear that
there was a reasonable basis for not complying within the specified period .” In re Four Seasons
Sec. Law Litig., 493 F.2d 1288, 1290 (10th Cir. 1974). See Putnam v. Morris, 833 F.2d 903, 905
(10th Cir. 1987)(“[S]ome showing of good faith on the part of the party seeking the enlargement
and some reasonable basis for noncompliance within the time specified is normally
required.”)(emphasis omitted)). “[I]t is well established that inadvertence, ignorance of the rules,
and mistakes construing the rules do not constitute excusable neglect for purposes of Rule 6(b).”
Quigley v. Rosenthal, 427 F.3d 1232, 1238 (10th Cir. 2005). Excusable neglect, therefore, is a
higher burden than good cause.
ANALYSIS
The Court concludes that rule 34’s plain language requires the Defendants to produce
electronic documents in the format the Plaintiffs requested. The Court will not compel ADP
payroll’s deposition, because such a deposition will not redress the harm the Plaintiffs articulate
- 60 -
-- namely, that the Defendants need to produce documents in the requested format.
The
deposition topics and documents requested in the Deposition Notice are proper discovery under
rule 26. They concern payroll records, which bear on whether the FLSA claims exists, so the
Court will deny the Defendants’ Motion for Protective Order, except as to Deposition Topic 7,
because the Plaintiffs agreed to withdraw that topic in favor of a contention interrogatory.
Finally, the Court grants the Defendants’ one-week extension request, because there is good
cause for a slight extension to review a large number of documents.
I.
RULE 34 REQUIRES THE DEFENDANTS TO PRODUCE ELECTRONIC
DOCUMENTS IN THE FORMAT REQUESTED.
The Plaintiffs request that the Defendants produce a set of documents in a “computer
readable format such as excel,” if those documents are maintained in that format. Plaintiffs’
First Set of Requests For Production To Defendants Swire Oilfield Services L.L.C. and Swire
Water Solutions Inc. at 6-7, filed January 26, 2017 (Doc. 36-1)(“Requests for Production”).
Rule 34 requires the responding party to produce items within its “possession, custody, or
control,” and that, “[i]f a request does not specify a form for producing electronically stored
information, a party must produce it in a form or forms in which it is ordinarily maintained or in
a reasonably usable form or forms.” Fed. R. Civ. P. 34(a)(1), (b)(2)(E)(ii). Here, the documents
are with a third-party vendor, ADP Payroll. See Status Report at 1. The Plaintiffs contend that
the Defendants have “control” over the requested records, because, among other things, the
Defendants have “the practical ability to request its payroll vendor to produce an electronic
version of [the] information” requested. First Motion to Compel at 6. The Defendants concede
that, after contacting ADP payroll, “ADP stated that it has Swire’s hours and pay data in its
payroll module available in [a] format that can [be] imported into excel.” Status Report at 1,
filed April 3, 2017 (Doc. 51).
- 61 -
The Court concludes that the Defendants have “control” over the requested records based
on the Defendants’ relationship with ADP Payroll and their concession that ADP Payroll has the
data requested. See United States v. 2121 Celeste Road SW, Albuquerque, N.M., 307 F.R.D.
572, 590 (D.N.M. 2015)(Browning, J.)(“[C]ourts have broadly construed control as ‘the legal
right, authority, or practical ability to obtain the materials sought upon demand’ . . . [I]f a
person, corporation, or a person’s attorney or agent can pick up a telephone and secure the
document, that individual or entity controls it.”)(quoting S.E.C. v. Credit Bancorp, Ltd., 194
F.R.D. 469, 471 (S.D.N.Y. 2000)(Sweet, J.)). The Court also concludes the Defendants must
produce the records in the format requested. Rule 34’s language indicates that the producing
party must produce documents in the requested form. See Fed. R. Civ. P. 34(b)(2)(E)(ii)(“[I]f a
request does not specify a form for producing electronically stored information, a party must
produce it in a form . . . [in] which it is ordinarily maintained.”). Here, the Plaintiffs have
specified a form, see Requests for Prod at 6-7 (“If this information is maintained in a computer
readable format, such as excel, please produce in the computer readable format.”), so the
Defendants must produce it in that format.
II.
THE COURT DOES NOT COMPEL ADP PAYROLL’S DEPOSITION,
BECAUSE THE PLAINTIFFS SEEK DOCUMENTS AND NOT TESTIMONY.
The Plaintiffs move to compel ADP Payroll’s deposition. See Third Motion to Compel at
1. They contend that such a deposition is proper, because the Defendants have suggested in their
Enlargement Motion that the documents from ADP payroll will not be produced in their native
electronic format. See Third Motion to Compel at 1. The Plaintiffs conclude that a deposition is
justified, because they requested those records nine months ago, they still have not received the
requested records, and they should receive the records in the native format as requested. See
Third Motion to Compel at 1. The Defendants have not responded to the Third Motion to
- 62 -
Compel. The Court agrees that the Plaintiffs should receive the electronic documents in the
format requested. See Fed. R. Civ. P. 34(b)(2)(E)(ii); supra at 71-72; Fed. R. Civ. P. 45(e)(1)(B).
The question remains, however, whether the Court should compel the deposition of ADP
Payroll -- a third party.
“[P]arties may compel a nonparty to produce documents while ‘spar[ing]’ everyone ‘the
necessity’ of a needless deposition.” El Encanto, Inc. v. Hatch Chile Co., 825 F.3d 1161, 1163
(10th Cir. 2016)(Gorsuch, J.)(quoting Fed. R. Civ. P. 45(a)(1) advisory committee’s note to 1991
amendment.). The Court has recognized before that “nonparties enjoy considerable protection
from discovery requests.”
Simon v. Taylor, No. 12-0096, 2014 WL 6633917, at *21
(D.N.M. November 18, 2014)(Browning, J.).
For example, “[c]ourts may refuse discovery
requests aimed at nonparties in cases where the same testimony or documents could instead be
obtained from a party to the action,” and a “few courts even impose a heightened relevancy
requirement for nonparty discovery requests.” Simon v. Taylor, 2014 WL 6633917, at *22
(quoting Ryan W. Scott, Minimum Contacts, No Dog: Evaluating Personal Jurisdiction for
Nonparty Discovery, 88 Minn. L. Rev. 968, 973 (2004)(footnotes omitted)).23
A rule 45
subpoena is the proper and only method to conduct discovery of a nonparty. See Simon v.
Taylor, 2014 WL 6633917, at *23.
23
The Court does not adopt a higher relevancy requirement for nonparty discovery
requests, and disagrees with such an approach. Evidence is relevant if:
(a)
it has any tendency to make a fact more or less probable than it would be
without the evidence; and
(b)
the fact is of consequence in determining the action.
Fed. R. Evid. 401. Relevant evidence is relevant no matter who has the documents.
- 63 -
Here, the Plaintiffs have appropriately issued a subpoena on a nonparty for a deposition
and for documents. See Subpoena to Testify at a Deposition in a Civil Action at 1 [at 5 on
CM/ECF], (issued April 21, 2017), filed May 2, 2017 (Doc. 60-1)(“ADP Payroll Subpoena”).
The Court notes that ADP Payroll’s deposition is not necessary for the Plaintiffs to obtain the
documents they seek in the format they request, and, at this juncture, the Court does not find a
reason to compel ADP Payroll’s deposition. The Plaintiffs’ grievance, as the Third Motion to
Compel expresses, is, again, that the Plaintiffs might not receive documents in the electronic
format requested. See Third Motion to Compel at 1. A deposition will not solve that problem.
The documents furnished as requested will solve that problem.
Accordingly, the Court
concludes that there is no sound reason to compel a “needless deposition,” El Encanto, Inc. v.
Hatch Chile Co., 825 F.3d at 1163, and, instead, will order the Defendants to produce the
electronic documents as the Plaintiffs request.
The Court dismisses this request without
prejudice, because there may be a proper purpose for which the Plaintiffs may seek to compel a
third-party deposition of ADP Payroll at a later date.
III.
THE COURT DENIES THE MOTION FOR PROTECTIVE ORDER, BECAUSE
THE TESTIMONY SOUGHT BEARS ON RELEVANT PAYROLL DATA.
The Defendants move for a protective order on topics 1, 2, 3, 7, 8, and 9 presented in the
Plaintiffs’ Deposition Notice. See Motion for Protective Order 2-4. At the May, 2017, Hearing,
the Court orally denied the Motion for Protective Order concerning topics 1, 2, and 9, see May
Tr. at 7:2-8:4 (Court), id. at 11:13-15 (Court); id. at 21:11-14 (Court), and granted in part and
denied in part the Motion for Protective Order, without prejudice, concerning topic 7 -suggesting that the Plaintiffs craft a contention interrogatory instead, see 18:12-19 (Court).24
It
reasoned that topics 1 and 2 are appropriate deposition topics, because the Defendants have
24
The parties did not orally argue topics 3 and 8.
- 64 -
contracted for payroll with a third party, so there is some uncertainty about all of the relevant
documents’ locations. See May Tr. at 7:14-18 (Court); id. at 11:7-9 (Court)(“This is the purpose
of 30(b)(6) . . . does the plaintiff have all the documents here.”). Accordingly, it is appropriate
to ask the Defendants where those payroll documents might be located, how it procured those
documents, who might have more documents, and questions of that nature. See May Tr. at 11:919 (Court). Topic 9 is appropriate, because that topic covers relevant questions about relevant
documents -- “traditional 30(b)(6)” questions. May Tr. at 21:8-14 (Court).
The Court has discretion to grant a protective order pursuant to rule 26(c). See Morales
v. E.D. Etnyre & Co., 229 F.R.D. at 663. Rule 26(c) provides that, upon a good-cause showing,
a court may “issue an order to protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense,” which may include forbidding disclosure or
discovery. Fed. R. Civ. P. 26(c)(1)(A). “It is the party seeking the protective order who has the
burden to show good cause for a protective order.” Velasquez v. Frontier Med. Inc., 229 F.R.D.
197, 200 (D.N.M. 2005)(Browning, J.). The party seeking the protective order must submit “a
particular and specific demonstration of fact, as distinguished from stereotyped and conclusory
statements.” Gulf Oil Co. v. Bernard, 452 U.S. at 102 n.16.
The Court concludes, for largely the same reasons that it did at the May, 2017 Hearing,
that it will deny the Motion for Protective Order as to topics 1, 2, and 9. Relevancy bears on the
protective-order analysis. See Price v. Cochran, 66 F. App’x 781, 786 (10th Cir. 2003)(affirming
a district court’s denial of a protective order motion, because the documents at issue were
relevant)(unpublished); Walker v. THI, No. 09-0060, 2011 WL 2728332, at *1 (D.N.M. July 4,
2011)(Browning, J.)(granting a protective order motion, because the documents at issue were
irrelevant). Topics 1, 2, and 9 concern relevant issues or documents. Topic 1 covers Swire
- 65 -
Oilfield’s agreements and interactions with any payroll company from June 21, 2013, to the
present.
See Deposition Notice at 6.
Topic 2 covers Swire Oilfield’s attempts to locate
documents -- including payroll documents -- responsive to the Plaintiffs’ Requests for
Production. See Deposition Notice at 6.
As the Court reasoned previously, questioning on
those topics could uncover the locations of additional payroll records bearing on the Plaintiffs or
the Plaintiff class. The Plaintiffs can succeed on their FLSA claims only if they can demonstrate
that they were paid less than the overtime or minimum wage that they were owed.
See
Complaint ¶¶ 66-82, at 12-14. Those payroll records, accordingly, are relevant, because they
will likely show how much the Plaintiffs were paid, so they have a tendency to make it either
more or less probable that the Plaintiffs were adequately paid under the FLSA.
See United
States v. Gutierrez–Castro, 2011 WL 3503321, at *3 (“Relevant evidence is evidence that has a
tendency to make the existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the evidence.”). The payroll
records may also reveal more potential Plaintiffs, which is a fact of consequence, because it
bears on the class-action numerosity requirement. Topic 9 covers Swire Oilfield’s processing of
payroll and time tracking methods of its workers, see Deposition Notice at 7, and those records
could uncover information reflecting how much time a number of the Plaintiffs worked. As with
the payroll records, the time worked also tends to demonstrate whether the Plaintiffs were paid
the requisite overtime and minimum wage under the FLSA. The number of hours worked is a
component of the Plaintiffs’ wage calculation, see Complaint ¶¶ 68, 77, at 12-13, 29
U.S.C. §§ 206-07, so time-worked documentation is relevant to whether the Plaintiffs were
properly paid under the FLSA.
- 66 -
Topic 3 is also relevant. It covers the Defendants’ basis for segregating the document
production into three alphabetical subgroups. See Deposition Notice at 6. Questioning on this
subject could reveal whether particular individuals belong to a particular Plaintiff class.
Hammond
v.
Lowe’s
Home
Centers,
Inc.,
216
F.R.D. 666,
671
(D.
See
Kan.
2003)(Waxse, M.J.)(concluding that information defining a proposed plaintiff class is relevant
material). Topic 8 encompasses the software program or application that Swire Oilfield uses to
process payroll, the data stored on the system, and whether the system can export data.
Deposition Notice at 6. That topic is relevant, because it could reveal whether the Defendants
have collected additional payroll data on the Plaintiffs. Although not all of the additional payroll
data collected necessarily bears on whether the Plaintiffs were adequately paid under the FLSA,
it is likely that this payroll data bears on how much the Plaintiffs were paid or could corroborate
other payroll evidence already collected. Accordingly, it is relevant. See United States v.
Spotted Bear, 160 F. App’x 650, 651 (9th Cir. 2005)(holding that corroborative evidence is
relevant).
Although topics 1, 2, 3, 8, and 9 are relevant, the Defendants contend that a deposition on
those topics is unduly burdensome. See Motion for Protective Order 2-5. Whether a request is
unduly burdensome turns on the particular facts of the case, bearing in mind relevance, the
request’s breadth, the request’s time period, and the request’s particularity. See XTO Energy,
Inc. v. ATD, LLC, 2016 WL 1730171, at *27 (D.N.M. April 1, 2016)(Browning, J.). Regarding
Topic 1, the Defendants aver that the topic’s terms are vague and overbroad, so they cannot
provide a proper corporate representative to testify. See Motion for Protective Order at 2-3
(“[The topic] requests ‘all interactions with any payroll company.’ . . . The term ‘payroll type
company is vague.”)(quoting Deposition Notice at 6). The Court disagrees. By its terms, the
- 67 -
topic is limited from June 21, 2013, to the present, which covers a relevant time period. See
Benavidez v. Sandia National Labs., 319 F.R.D. 696, 727 (D.N.M. 2017)(Browning, J.)(ruling
that the time frame of a request bears on whether a production request is unduly burdensome).
The term “payroll type company,” although not specifically defined, implicates a narrow set of
companies that the Plaintiffs could mean. Indeed, based on representations from the Defendants,
there are only two payroll companies at issue -- ADP Payroll and Corban OneSource. It is not
overly burdensome for the Defendants to produce a representative to talk about its relations with
two companies over a defined period. Cf. E.E.O.C. v. Citicorp Diners Club, Inc., 985 F.2d 1036,
1040 (10th Cir. 1993)(ruling that it was not unduly burdensome for a company to comply with a
subpoena that would “require two full-time employees working approximately six months” to
complete, because the preoccupation of those two employees would not “seriously hinder normal
operations of the business,” which employed 1,100 people). On the other topics, the Defendants
assert that “[t]he burden and expense of such a deposition outweigh its likely benefits,” because
the Plaintiffs have already produced responsive documents to the topics. Motion for Protective
Order at 4. See id. at 5. That responsive documents have been produced do not make a
deposition about those documents unduly burdensome.
Questions concerning documents
produced is a classic use of a deposition. See 8 Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 2014, 289 n.2 (4th ed. 2010)(“[T]he mere fact that the matters
regarding which discovery is sought happen to be within the knowledge of the moving party, is
no objection to taking a deposition of the adverse party.”).25 The Defendants articulate no other
25
Wright and Miller explain that depositions about information already obtained, such as
information gained through documents already produced, serve the purpose of “transforming [the
information] into such shape as would render them admissible evidence.” Wright & Miller,
supra § 2014, 289 n.2 “Moreover, it is manifestly useful and desirable, with a view to
diminishing the expense of trials and the time consumed by them, to ascertain in advance to what
- 68 -
reason why producing the documents would unduly burden the Defendants -- e.g., that it would
unduly tax the Defendants’ resources or hinder their normal course of business to produce the
documents. The Court, accordingly, denies the Motion for Protective Order as to topics 1, 2, 3,
8, and 9.
On topic 7, the Plaintiffs agreed at the May, 2017 Hearing to withdraw the topic and
submit a contention interrogatory, although they expressly reserved their right to cross examine a
witness about the subject. See May Tr. at 14:16-23 (Leyendecker). The Court, subsequently,
granted the Motion for Protective Order without prejudice to topic 7, so that the Plaintiffs could
renew a request for information on the topic in a 30(b)(6) format if the contention interrogatory
did not yield the information sought. See May Tr. at 18:12-19:4 (Court). The parties have not
signaled to the Court since the May, 2017 Hearing that the contention interrogatory agreement
failed. The Court, accordingly, will not upset an agreement between the two parties and grants
the Motion for Protective Order as to topic 7. See Murphy v. Deloitte & Touche Group Ins.
Plan, 619 F.3d 1151, 1164 (10th Cir. 2010)(“[C]ontrol of discovery is entrusted to the sound
discretion of the trial courts. . . . [I]n exercising that discretion the district court must bear in
mind . . . the need for a speedy, inexpensive, and efficient resolution of the claim.”); Evans v.
VonFeldt Realtors, Inc., No. 82-1737, 1989 WL 31398, at *1 (D. Kan. March 30,
1989)(Crow, J.)(“Obviously, other discovery is allowed upon the parties’ own agreement.”).
Finally, in their Deposition Notice, the Plaintiffs requested additional documents, which
the Defendants orally objected to producing. See Tr. at 22:12-15 (Gatling). The Plaintiffs
extent facts will be admitted by the adverse party.” Wright & Miller, supra § 2014, 289 n.2. The
Court agrees with this analysis. Sometimes the raw information a document provides is
insufficient or confusing without a witness to speak about it. For example, many relevant
documents include jargon, acronyms, or other abbreviations that are not understandable absent
deposition questions.
- 69 -
requested: (i) all agreements between Swire Oilfield and payroll companies, including Corban
OneSource, that were in force between June 21, 2013, to the present; (ii) all emails and other
documents dated after Swire Oilfield ended its business relationship with Corban OneSource,
which related to Swire Oilfield’s attempts to obtain payroll data from Corban OneSource; (iii) all
communications between Swire Oilfield and Corban OneSource that relate to the Plaintiffs’ first
production requests in this case; (iv) all emails and other documents, dated between January 1,
2016, to the present that relate to Swire Oilfield’s ability to request or obtain records from
Corban OneSource; (v) all documents related to deposition topic 7; and (vi) a copy of all user
manuals and similar guides for the software Swire Oilfield’s uses to process payroll data and
track its workers time since June 21, 2013. See Deposition Notice at 6. The Defendants argued
that the documentation was not relevant and that producing them would be disproportionate to
the needs of the case. See Tr. at 23:2-4 (Gatling); id. at 25:4-8 (Gatling). The Court ruled orally
that the documents were relevant to allow the Plaintiffs to explore where all payroll records
might be and that it would not unduly burden the Defendants to produce the documents, because
they were tied to relevant deposition topics. See 25:17-26:17 (Court); id. at 28:16-18 (Court).
The Plaintiffs requested these documents pursuant to rule 30(b)(2). See Deposition
Notice at 1. Rule 30(b)(2) and rule 34 requests for documents are heavily interrelated, and courts
often require the documents sought under rule 30(b)(2) to meet rule 34 standards. See Kretek v.
Board of Comm’rs of Luna Cty., No. 11-0676, 2012 WL 1283840, at *2 (D.N.M. October 19,
2012)(Wormuth, M.J.)(collecting cases). The advisory committee notes to rule 30(b)(5), rule
30(b)(2)’s predecessor, advise, however, that there is at least one distinction between rule
30(b)(2) and rule 34 document production requests:
Whether production of documents or things should be obtained directly under
Rule 34 or at the deposition under this rule will depend on the nature and volume
- 70 -
of the documents or things. Both methods are made available. When the
documents are few and simple, and closely related to the oral examination, ability
to proceed via this rule will facilitate discovery. If the discovering party insists on
examining many and complex documents at the taking of the deposition, thereby
causing undue burdens on others, the latter may, under Rules 26(c) or 30(d), apply
for a court order that the examining party proceed via Rule 34 alone.
Fed. R. Civ. P. 30 advisory committee’s notes. The note suggests that rule 30(b)(2) yields to rule
34 upon motion and if it would be an undue burden on the party to produce the records at
deposition. See Fed. R. Civ. P. 30 advisory committee’s notes. It does not indicate that the
scope of discovery test -- as mandated by rule 26 -- is different between rule 30(b)(2) requests
and rule 34 requests. The Court therefore applies rule 26’s test to determine whether the
documents are properly requested.
The Court concludes that its analysis at the May, 2017 Hearing was correct.
The
agreements between Swire Oilfield and Corban OneSource, and the communications between the
two companies -- requests (i)-(iv) -- bear on the payroll data or the location of the payroll data
that Corban OneSource generated for Swire Oilfield. As reasoned above, the payroll data is
relevant to the Plaintiffs’ FLSA claims, because it can demonstrate whether the Plaintiffs were
adequately paid under the FLSA’s overtime and minimum wage requirements. See supra at 7778. Moreover, producing documents, which bear on relevant deposition topics, is typically
acceptable discovery. See Wright & Miller, supra § 2014, 289 n.2. Request (v) corresponds
with deposition topic 7. The Defendants agreed to a contention interrogatory for topic 7, so the
Court did not explore topic 7’s relevance. Topic 7 concerns all facts, which bear on rule
23(b)(3)’s superiority requirement. See Deposition Notice at 5. Facts bearing on superiority are
relevant so long as the Plaintiffs intend to seek class certification under rule 23(b)(3). See Hill v.
Butterworth, 170 F.R.D. 509, 519 (N.D. Fla. 1997)(Paul, C.J.).
The Plaintiffs have not yet
signaled with a formal motion how they intend to move for certification, but the request here
- 71 -
signals that the Plaintiffs intend to use rule 23(b)(3), so facts on that subject are relevant.
Finally, user manuals and guides on the software that Swire Oilfield uses or has used since June
21, 2013, to process payroll data and track its workers time -- request (vi) -- is relevant to
understand the raw data in the payroll records, which bears on whether the Plaintiffs were
adequately paid under the FLSA.
The requests, moreover, are not unduly burdensome, because many are limited to a
specific time period -- specifically, requests (i), (ii), (iv), and (vi) -- and producing the documents
relevant to all requests is unlikely to onerously tax the Defendants’ resources. For example,
there are most likely a small and finite number of user manuals that the Defendants have used for
their payroll data software -- request (vi). Similarly, there are likely few agreements between
Swire Oilfield and their payroll companies from June 21, 2013 to the present -- request (i).
Although requests (ii)-(v) might implicate many more documents than requests (i) and (vi), the
Defendants have not concretely represented -- with, for example, an estimate of the number of
documents implicated or a number of man-hours needed to produce those documents -- that
production would require an inordinate amount of time, dedication, or resources. See EEOC v.
Citicorp Diners Club, Inc., 985 F.2d at 1040; Velasquez v. Frontier Med. Inc., 229 F.R.D. at 200
(“It is the party seeking the protective order who has the burden to show good cause for a
protective order.”). Accordingly, the Court denies the Defendants’ oral protective order motion
for the document requests in the Deposition Notice.
IV.
THE COURT GRANTS THE ENLARGEMENT MOTION, BECAUSE THE
DEFENDANTS REQUEST A SHORT, ONE-WEEK EXTENSION TO REVIEW
MANY DOCUMENTS.
In the Court’s Subpoena Order, the Court orders ADP Payroll and Corban OneSource to
produce the records that the Plaintiffs’ subpoena to Swire Oilfield on May 30, 2017 requested
- 72 -
and orders Swire Oilfield to produce those records to the Plaintiffs on June 14, 2017. See
Subpoena Order at 1.
On June 14, 2017, the Defendants moved to extend the June 14, 2017
deadline one week to June 21, 2017. See Enlargement Motion at 1-2. They argued there was
good cause for an extension, because ADP payroll produced the documents in PDF format,
which had to be reviewed and redacted to protect personal Swire Oilfield employee information,
and because Corban OneSource produced non-responsive records in PDF format, which also had
to be reviewed and redacted. See Enlargement Motion at 1-2. The Defendants also represent
that, as it stated at the May, 2017 Hearing, the Defendants’ lead counsel was on vacation the
week of June 5, 2017. See Enlargement Motion at 2. The Plaintiffs do not respond to the
Enlargement Motion, but have argued in another context that the Defendants’ discovery strategy
in this case is to: “Delay. Delay. And then delay some more.” Protective Order Response at 6.
There must be good cause to extend a discovery deadline. See Fed. R. Civ. P. 6(b);
Bolden v. Topeka, 441 F.3d 1129, 1151 (10th Cir. 2006)(“[The Plaintiff] has offered no
colorable reason why the discovery deadlines should have been extended.”). In determining
good cause, one factor a trial court can consider is whether the requesting party has engaged in
dilatory tactics.
See Ruleford v. Tulsa World Pub. Co., 266 F. App’x. 778, 786 (10th
Cir. 2008)(unpublished).
As the Court has stated before, “[s]howing good cause is not a
particularly demanding requirement.” Abraham v. WPX Energy Prod. LLC, No. 12-0917, 2013
WL 5934415, at *5 (D.N.M. October 21, 2013)(Browning, J.)(granting an extension of time,
because the parties requested an extension to “allow discovery and to coordinate the timing” of
the case with another). “The trial court has discretion in granting or denying an extension
request. See Bolden v. Topeka, 441 F.3d at 1151.
- 73 -
Because the Plaintiffs failed to respond to the Enlargement Motion, the Plaintiffs have
consented to the Court granting the Enlargement Motion. See D.N.M. LR-Civ. 7.1(b) (“The
failure of a party to file and serve a response in opposition to a motion within the time prescribed
for doing so constitutes consent to grant the motion.”). Even if the Plaintiffs had responded,
however, the Court concludes that there is good cause for an extension and grants the
Enlargement Motion. The requested relief is short -- a one week extension. The Defendants
represent that they began reviewing the documents immediately upon receipt from ADP Payroll
and Corban OneSource, see Enlargement Motion at 1, and the Court has no reason to doubt that
representation. Moreover, if this production is similar to the original production, the Defendants
had thousands of documents to review. Analyzing that many documents can take time. The
Court is mindful of the Plaintiffs’ argument that the Defendants have purposefully delayed
discovery in this case, but the Court concludes that a short one-week extension request evidences
no intent to inflict unnecessary delay, especially here where there was no follow-up extension
request. The Court, therefore, concludes there is good cause for the extension and grants the
Defendants’ Enlargement Motion.
IT IS ORDERED that: (i) the Plaintiffs’ Motion to Compel Electronic Payroll Records,
filed January 26, 2017 (Doc. 36), is granted; (ii) the requests in the Defendants’ Notice of NonAppearance and Motion for Protective Order, filed April 6, 2017 (Doc. 52), are granted in part
and denied in part; (iii) the Plaintiffs’ Motion to Compel Swire to Comply with 30(b)(6) Notice,
filed April 21, 2017 (Doc. 57), is granted in part and denied in part; (iv) the Defendants’ Motion
for Enlargement of Time to Produce Documents Received from ADP Payroll, Inc. and Corban
OneSource LLC, filed June 14, 2017 (Doc. 73), is granted; and (v) the Plaintiffs’ Motion to
Compel Third Party (ADP) Deposition, filed June 15, 2017 (Doc. 76), is denied. The Court:
- 74 -
(i) orders the Defendants to produce the records responsive to the Plaintiffs’ First Set of Requests
For Production To Defendants Swire Oilfield Services L.L.C. and Swire Water Solutions Inc.
¶¶ 1-3, at 6-7, filed January 26, 2017 (Doc. 36-1), in “a computer readable format, such as excel”
as the Plaintiffs request; (ii) denies the Plaintiffs’ request to compel ADP Payroll Inc.’s
deposition without prejudice to renew if the Plaintiffs decide they need to depose ADP Payroll
for some other reason at a later date; (iii) denies the Defendants’ requests for a protective order
regarding Topics for Examination 1, 2, 3, 8, and 9 in the Deposition Notice ¶¶ 1-3, 8-9, at 5-6,
orders the Defendants to produce records responsive to the documents requested in the
Deposition Notice ¶¶ 1-6, at 6, and grants the request for a protective order regarding Topic for
Examination 7 in the Deposition Notice ¶ 7, at 5; and (iv) grants the Defendants a one-week
extension of time to produce the documents as the Court ordered in the Order, filed May 25,
2017 (Doc. 69).
________________________________
UNITED STATES DISTRICT JUDGE
- 75 -
Counsel:
Daniel M. Faber
Law Office of Daniel Faber
Albuquerque, New Mexico
-- and -Patrick Leyendecker
Ahmad Zavitsanos Anaipakos Alavi & Mensing, P.C.
Houston, Texas
-- and -Galvin B. Kennedy
Udyogi Hangawatte
Kennedy Hodges L.L.P.
Houston, Texas
Attorneys for the Plaintiffs
Charlotte A. Lamont
Littler Mendelson, P.C.
Albuquerque, New Mexico
-- and -Yvette V. Gatling
Littler Mendelson, P.C.
Tysons Corner, Virginia
Attorneys for the Defendants
- 76 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?