Vireo Systems, Inc. v. HTG Ventures, LLC et al

Filing 237

MEMORANDUM AND ORDER: The undersigned finds that Plaintiff Vireo's motion to compel discovery (Docket Entry No. 115 ) should be GRANTED in part and DENIED in part. The undersigned further finds that Defendants motion to compel discovery (Docket Entry No. 122 ) should be GRANTED in part and DENIED in part. Signed by Magistrate Judge John S. Bryant on 6/27/2016. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(eh)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
VIREO SYSTEMS, INC.,

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Plaintiff
v.
HTG VENTURES, LLC; et al.
Defendants

No. 3:14-2359
Chief Judge Sharp/Bryant
Jury Demand

MEMORANDUM AND ORDER
There are two motions to compel discovery pending in this
case. Plaintiff Vireo has filed its motion to compel discovery specified
in discovery statements (Docket Entry No. 115), to which Defendants have
responded in opposition (Docket Entry No. 127). Plaintiff has filed a
reply (Docket Entry No. 131-1).
Defendants

have

filed

their

motion

to

compel

discovery

responses and production of documents (Docket Entry No. 122).
The Court-appointed Receiver for Defendant HTG Ventures, LLC,
has filed his position statement regarding these two pending motions to
compel discovery (Docket Entry No. 231).
As a general statement, Rule 26(b)(1) provides in pertinent
part that parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense and proportional
to the needs of the case. The rule further provides that information
within this scope of discovery need not be admissible in evidence to be
discoverable.
The undersigned Magistrate Judge has reviewed the motion
papers of the parties as well as the statement of position filed by the

Receiver. The undersigned finds the Receiver’s proposal regarding this
position

of

the

two

pending

motions

to

compel

discovery

to

be

persuasive.
Therefore, the undersigned finds that Plaintiff Vireo’s
motion to compel discovery (Docket Entry No. 115) should be GRANTED in
part and DENIED in part. Specifically, the undersigned finds that
Defendants shall produce the following described documents in response
to Plaintiff’s requests for production Nos. 1 and 3:
1.

Documents

that

support,

describe

or

evidence

the

fulfillment fees and administrative fees charged in
connection with any ProMera product as well as any
intercompany

loans

among

the

entities

that

are

consolidated with Harvest Trading Group, Inc. for tax
or accounting purposes;
2.

Annual

financial

statements,

including

any

balance

sheets, income statements, comparative combined income
statements,
statements

profit/loss
and

detailed,

statements,
itemized

cash

general

flow

ledgers,

whether maintained for one or multiple parties or in
one or multiple formats, for Harvest Trading Group,
Inc.,

HTG

Technologies,

and

ProMera

Health,

LLC,

through 2015 and monthly financial statements to date
in 2016;

2

3.

To

the

support

extent
or

not

included

evidence

above,

payroll,

documents

advertising

that

expense,

commission information, and applicable invoices for the
above-listed entities.
To

the

extent

that

Plaintiff

Vireo’s

motion

to

compel

discovery seeks additional documents, the motion is DENIED, without
prejudice to Vireo’s right to seek additional documents after receiving
and evaluating documents ordered produced above.
The undersigned further finds that Defendants’ motion to
compel discovery (Docket Entry No. 122) should be GRANTED in part and
DENIED

in

part.

Specifically,

Plaintiff

Vireo

shall

produce

to

Defendants the following documents:
1.

Vireo’s

financial

statements,

excluding

a

general

ledger, sufficient to show its net income and net
profit related to the manufacture and sale of products
from 2007 - 2014.
2.

Documents supporting Vireo’s costs for administration,
sales, fulfillment, storage, shipments, and marketing
related to the manufacture and sale of products from
2007 - 2014.

To the extent that Defendants’ motion to compel discovery
seeks additional documents or information, the motion is DENIED, without
prejudice to Defendants’ right to seek additional documents following
the production of documents ordered to be produced herein.

3

To the extent that documents produced in compliance with this
order include confidential information, the parties may designate such
documents as confidential pursuant to the protective order previously
entered in this case (Docket Entry No. 92).
The parties shall produce documents as required by this order
no later than July 8, 2016.
It is so ORDERED.
/s/ John S. Bryant
JOHN S. BRYANT
United States Magistrate Judge

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