Telecom Asset Management, LLC v. Cellco Partnership et al

Filing 161

MEMORANDUM OPINION AND ORDER re: 156 LETTER MOTION for Discovery Seeking Protective Order Re: Depositions, 142 LETTER MOTION for Discovery regarding Verizon Wireless Third Set of Document Requests, 139 LETTER MOTION for Discovery Disputes, 152 LETTER MOTION for Discovery addressed to Magistrate Judge Ronald L. Ellis from Joshua H. Lerner dated January 20, 2016. TAM's request for all dark fiber awards is DENIED. VZW has agreed to produce the form emails it began using in early 2013, and is ORDERED to do so. (See id. at 4.) TAM's requests for all invoices and payment demands related to the Additional RFPs, and for all contracts as of 2012 that include success fees are DENIED. To t he extent that VZW has not produced relevant and responsive documents for individuals identified in their initial disclosures, it is ORDERED to do so by February 29, 2016. VZW's request for all documents relating to TAM's efforts to mitig ate Defendants' alleged harm is DENIED. For the foregoing reasons, Plaintiffs requests to compel discovery are DENIED. Defendants' requests to compel discovery are GRANTED IN PART, as ordered by the Court at the February 10 conference. Having resolved Doc Nos. 139, 142, 152 and 156, the clerk of court is directed to terminate those motions. (As further set forth in this Order.) (Signed by Magistrate Judge Ronald L. Ellis on 2/24/2016) (kko)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
TELECOM ASSET MANAGEMENT, LLC,
Plaintiff,

MEMORANDUM
OPINION AND ORDER

- against 15-CV-2786 (SHS) (RLE)
CELLCO PARTNERSHIP, et al.,
Defendants.

.

--------------------~!
RONALD L. ELLIS, U.S.M.J.:
I.

BACKGROUND

Plaintiff Telecom Asset Management, LLC ("TAM") commenced this action against
Defendant Cellco Partnership d/b/a Verizon Wireless ("VZW") on or about October 24, 2014, in
the Superior Court of California for the County of San Francisco. (Doc. No. 1 at 2.) The case
was removed to the Northern District of California on November 13, 2014 (Doc. No. 1), and
later transferred to the Southern District of New York upon stipulation of the Parties on April 10,
2015. (Doc. No. 76.) The Honorable Sidney H. Stein referred the case to the undersigned for
general pretrial on June 30, 2015. (Doc. No. 105.)
The Parties appeared before the Court on December 21, 2015, to resolve discovery
disputes. At that conference, the Court ordered the Parties to meet and confer on any outstanding
issues, and submit a joint letter motion for the Court's ruling on matters that the Parties could not
resolve. The Parties submitted the letter on January 5, 2016. (Doc. No. 148.)
On January 11, 2016, the Court ordered the Parties to submit affidavits from persons with
knowledge of factual differences for certain discovery production disputes. (Doc. No. 149.)
TAM submitted the affidavit of Michelle Carter ("Carter"), TAM's general business attorney,
and co-counsel ofrecord. (Doc. No. 150.) As TAM's business counsel, Carter conducted legal

review of all "non-IP contracts or proposed contracts" that TAM considered, including nondisclosure agreements, broker/agent agreements, and consulting agreements. (Id at 1.) VZW
submitted an affidavit from Laura E. Miller ("Miller"), admitted pro hac vice as attorney for
VZW. (Doc. No. 151.)
TAM advises telecommunications companies and manages transactions for wholesale
telecommunications assets and services. (Doc. No. 98 at 5.) It alleges that in 2012, it entered
into an agreement with VZW to provide services in exchange for fees or commissions from one
of the parties to a transaction. (Id at 5-18.) In 2011, TAM performed its services for VZW
pursuant to a written agreement, and brought VZW "several large deals as a broker for other
carriers." (Doc. No. 153 at I.) TAM asserts that, based on its success, it reached a second
agreement with VZW that was negotiated from January 2012 through mid-May 2012. (Id.)
TAM was to "assist VZW with all aspects of its telecom procurement in the South Area, and was
to be compensated via success fees based on that procurement." (Doc. No. 148 at 5.) VZW,
however, purportedly repudiated the contract and performed the contract work itself. (Id at 4.)
TAM contends that its damages should be equal to what it would have earned for soliciting bids
under the Parties' alleged agreement. (Id at 5.) VZW disputes that the Parties entered into a
second agreement, that TAM performed work under it, or that TAM would have received
proposals to assist with all telecommunications services for VZW. (Doc. No. 141 at 1-3.)
Before the Court are the Parties' requests that the other side produce certain documents,
and TAM's request that VZW conduct additional searches pursuant to modified search terms and
additional custodians. For the reasons that follow, the TAM's requests to compel production

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and to conduct additional searches are DENIED. VZW's requests to compel production are

GRANTED IN PART.
II.

DISCUSSION

Unless otherwise ordered by the Court, Parties may obtain discovery regarding 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)(l). "Information within this scope of discovery need not be
admissible in evidence to be discoverable." Id. The Court has broad discretion in
managing discovery. Willis v. Amerada Hess Corp., 379 F.3d 32, 41 (2d Cir. 2004).
"Generally, discovery is only limited 'when sought in bad faith, to harass or oppress the party
subject to it, when it is irrelevant' or privileged." Chembio Diagnostic Systems, Inc. v. Saliva
Diagnostics Systems, Inc., 236 F.R.D. 129 (E.D.N.Y. July 14, 2006) (quoting Melendez v.
Greineri, No. 01 Civ. 7888, 2003 WL 22434101, at* 1 (S.D.N.Y. Oct. 23, 2003) (quoting In re
Six Grand Jury Witnesses, 979 F.2d 939, 943 (2d Cir. 1992))). In making a determination on the

scope of the requested discovery, a court may consider the importance of the issues at stake in
the action, the amount in controversy, the Parties' access to relevant information, the Parties'
resources, the importance of discovery in resolving the issues, and whether the burden or
expense of the proposed discovery outweighs its likely benefits. FED. R. CIV. P. 26(b)(l).

A.

TAM's Requests for Production
TAM seeks production of: (1) awards related to "dark fiber"; (2) invoice and payment

demands related to the six formal requests for proposal ("Additional RFPs") issued to solicit bids
for particular assets or services (see Doc. No. 98 at 3-5); and (3) contracts and agreements as of
2012 that include "gain-share" or "success" fees. (Doc. No. 148 at 4-6.) TAM also seeks to
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modify the Parties' discovery agreement to add additional search terms and custodians. (Id. at 69.)
The Court finds that Tam's requests for production are overbroad. TAM has not shown
that the documents sought are relevant. TAM's requests appear to be based on speculation
surrounding the negotiations for, and the nature of, an alleged agreement between the Parties.
TAM asserts that the Parties entered into a second agreement, under which TAM began
performance, but that VZW later breached the agreement. VZW maintains that the Parties did
not enter into a second agreement, and that TAM never had a guarantee to perform work for
VZW. The information TAM has requested seems to relate most closely to its breach of contract
and implied contract causes of action because TAM seeks to show that VZW has engaged in a
pattern or practice of having vendors perform work without a written agreement. (Doc. No. 148
at 4.) TAM is also attempting to prove lost business opportunity as a measure of its damages.
(Id. at 4-5.) The burden VZW will incur, however, in producing information which may or may
not reveal whether the Parties entered into an agreement, outweighs the benefits that TAM
alleges it will obtain if the documents are turned over.
TAM claims to need all awards related to dark fiber that were issued from December 1,
2011, to the present. VZW points out, and TAM concedes, that such production may consist of
thousands of emails. (Id. at 4.) VZW also argues that it would have to gather the documents
from "dozens of employees across several regions in Verizon's South Area." (Id.) TAM has not
made a showing that a search for all awards relating to dark fiber is proportional to the needs of
the case, especially given that the Parties' negotiated the alleged agreement from January 2012
through mid-May 2012, and it is not clear that TAM would have received dark fiber

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procurement. (Doc. No. 153 at 1.) VZW argues that it has already provided information to
TAM regarding dark fiber procurement projects for which an RFP was issued. (Doc. No. 141 at
2.) TAM's request for all dark fiber awards is DENIED. VZW has agreed to produce the form
emails it began using in early 2013, and is ORDERED to do so. (See id. at 4.)
TAM's requests for all invoices and payment demands related to the Additional RFPs,
and for all contracts as of 2012 that include success fees are DENIED. TAM has not shown that
it would have received the Additional RFPs, even if there had been an agreement in place
between the Parties. TAM has also not established that the alleged agreement would have
resulted in the same, or similar, compensation for TAM as for the third-party contracts. In her
deposition, Carter stated that only if a transaction was in progress, would TAM receive success
fees. (Miller Affidavit, Ex. A at 215: 4-10.) Furthermore, VZW argues that it does not keep a
central database of all contracts, and has stated that it has no agreements relating to the type of
services for which TAM alleges the Parties contracted. (Doc. No. 141 at 2.) Therefore, the
relevance of these documents is not proportional to the needs of this case, and does not outweigh
the burden placed on VZW in having to produce them.
TAM states that the Parties "have been unable to agree to a modified list of additional
search terms," pursuant to a 2015 discovery agreement that provided for additional discovery and
custodians. (Doc. No. 148 at 6.) VZW asserts that it has met its discovery obligations, and will
not conduct another search. (Doc. No. 148 at 7.) According to VZW, the Parties began
exchanging documents in March 2015, and "tens of thousands of documents" have been
produced. (Id.) It argues that at the Parties' meet and confer, TAM agreed to provide VZW with
an explanation of how VZW did not meet its discovery obligations, but that TAM did not explain

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the perceived deficiencies. (Id) The Court is not aware of any agreements between the Parties
from early 2015 to engage in additional discovery. The Court finds that TAM has not provided a
sufficient basis to compel VZW to conduct searches pursuant to new search terms, especially
since discovery was set to close February 16, 2016. (Doc. No. 132.) To the extent that VZW has
not produced relevant and responsive documents for individuals identified in their initial
disclosures, it is ORDERED to do so by February 29, 2016.
B.

VZW's Requests for Production
VZW seeks production of: (1) all contracts related to TAM' s provision of services from

December 2011 to the present (Defendants' ("Defs.") RFP No. 21); (2) TAM's general ledgers
from 2009 to the present (Defs. RFP No. 22); and (3) all documents related to TAM's efforts to
mitigate damages (Defs. RFP No. 23). (Doc. No. 148 at 1-4.) The Court ruled on the requests
for contracts and the general ledgers in the conference held on February 10, 2016. TAM was
ordered to produce the fifteen to twenty identified contracts, and the general ledgers no later

than February 16, 2016.
VZW' s request for all documents relating to TAM' s efforts to mitigate Defendants'
alleged harm is DENIED. VZW argues that TAM refuses to confirm whether it has produced all
documents related to its efforts to mitigate. (Doc. No. 142 at 2.) TAM argues that it is
"impossible for TAM to mitigate its damages in the traditional sense," because TAM' s loss is a
loss of business opportunity. (Doc. No. 145 at 3.) TAM's agreement with VZW was a "unique
opportunity" to administer RFPs for VZW, and it could not simply look for new RFPs to
administer for another company. (Id) Lastly, TAM confirmed that it has already produced
responsive documents regarding its efforts to mitigate. (Doc. No. 148 at 3.)

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III.

CONCLUSION

For the foregoing reasons, Plaintiffs requests to compel discovery are DENIED.
Defendants' requests to compel discovery are GRANTED IN PART, as ordered by the Court at
the February 10 conference. Having resolved Doc Nos. 139, 142, 152 and 156, the clerk of court
is directed to terminate those motions.
~

SO ORDERED this v4 day of February 2016.
New York, New York
The Honorable Ronald L. Ellis
United States Magistrate Judge

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