Fusion Elite All Stars et al v. Varsity Brands, LLC et al

Filing 291

ORDER denying #199 Motion to Compel; denying #281 Motion for Hearing. Signed by Chief Magistrate Judge Tu M. Pham on September 15, 2022. (cmp)

Case 2:20-cv-02600-SHL-tmp Document 291 Filed 09/15/22 Page 1 of 11

PageID 5280

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
________________________________________________________________
FUSION ELITE ALL STARS,
et al.,

)
)
)
Plaintiffs,
)
)
v.
)
No. 20-cv-2600-SHL-tmp
)
VARSITY BRANDS, LLC,
)
et al.,
)
)
Defendants.
)
________________________________________________________________
ORDER DENYING PLAINTIFFS’ MOTION TO COMPEL DISCOVERY
________________________________________________________________
Before the court by order of reference is plaintiffs’ Motion
to Compel, filed on February 15, 2022. (ECF Nos. 199, 200.) For
the reasons below the motion is DENIED.
I.

BACKGROUND

The present case involves antitrust claims brought against
Varsity Brands, LLC, and its affiliated brands and companies,
(“Varsity”) as well as the United States All Star Federation
(“USASF”). In brief, the plaintiffs allege that the defendants
conspired to and did in fact form a monopoly over the cheerleading
industry in the United States. The plaintiffs filed their initial
complaint

on

August

13,

2020,

seeking

class

certification,

damages, and injunctive relief. (ECF No. 1.) Plaintiffs filed an
amended consolidated complaint on October 2, 2020, which contained

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allegations that the defendants’ exclusionary scheme allowed them
to “resist the demand to prevent sexual abuse in the [All Star
cheerleading] industry.” (ECF No. 56 at PageID 428.)
Plaintiffs

served

Varsity

with

their

First

Request

for

Production of Documents (“Varsity Requests”) on October 16, 2020,
and their First Interrogatories (“Varsity Interrogatories”) on
November 25, 2020. (ECF No. 199-2 at PageID 3341-42.) Some of these
requests and interrogatories sought information

pertaining to

Varsity’s policies regarding background checks and the reporting
of sexual misconduct. (ECF No. 199-1.) Varsity served its written
responses and objections to the Varsity Requests on November 16,
2020, and its written responses and objections to the Varsity
Interrogatories on November 25, 2020. (ECF No. 199-2 at PageID
3341-42.)
Plaintiffs

served

USASF

with

their

First

Request

for

Production of Documents (“USASF Requests”) on October 19, 2020,
and

their

First

Interrogatories

(“USASF

Interrogatories”)

on

November 25, 2020. (Id. at PageID 3342-43.) USASF served its
written responses and objections to the USASF Requests on November
18, 2020, and its written responses and objections to the USASF
Interrogatories on December 28, 2020. (Id.)
On December 1, 2020, Varsity filed a Motion to Strike Class
Allegations and Spurious Allegations Regarding Sexual Abuse. (ECF
No. 82.) On May 5, 2021, plaintiffs filed motions to compel
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discovery responses from USASF and Varsity. (ECF Nos. 102 & 105.)
On June 22, 2021, plaintiffs agreed to withdraw requests regarding
sexual abuse pending the resolution of Varsity’s Motion to Strike.
Specifically,

plaintiffs

stated

in

an

email

memorializing

a

discovery agreement between the parties:
93-103: Plaintiffs will withdraw these Requests, without
prejudice, pending a decision on the Motion to Strike.
If Defendants’ motion to strike is denied, these
Requests will automatically be deemed reinstated, and
Plaintiffs and Varsity will promptly meet and confer
regarding the scope of the Requests and Defendant[]s[‘]
related requests to Plaintiffs.
(ECF No. 203-1.) On December 3, 2021, plaintiffs and USASF reached
a similar agreement regarding the production of documents and
search parameters for electronically stored information. (ECF No.
199-2 at PageID 3343.) As part of that agreement, plaintiffs again
agreed to withdraw requests related to sex abuse without prejudice
pending the resolution of the Motion to Strike.1 (Id.)
On December 16, 2021, the court entered an Amended Scheduling
Order, which extended the close of fact discovery to April 18,
2022. (ECF No. 177.) At the end of the Order, the court stated,

1In

their Motion to Strike, Varsity argues that under Federal Rule
of Civil Procedure 12(f), the allegations in the amended complaint
regarding sexual abuse should be stricken because “[t]he
allegations have no place in an antitrust suit,” and therefore are
“immaterial, impertinent, [and] scandalous.” (ECF No. 82 at PageID
565.) Should the presiding District Judge grant the motion to
strike, plaintiffs would clearly not be entitled to the discovery
at issue. However, even if the motion to strike is denied, that
decision would not entitle plaintiffs to discovery because the
motions are decided under different standards.
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“No other requests for extensions of these deadlines will be
granted absent extraordinary circumstances.” (Id.) (emphasis in
original). Plaintiffs contacted Varsity and USASF on January 12,
2022 to re-instate the requests related to sex abuse. (ECF No.
199-2 at PageID 3342-43.) Both Varsity and USASF refused to comply
with production. (Id.) On February 15, 2022, plaintiffs filed the
present Motion to Compel, requesting that this court compel Varsity
and

USASF

to

produce

documents

related

to

sex

abuse

in

the

cheerleading industry. (ECF No. 199.) Both Varsity and USASF
responded on March 1, 2022, arguing that the Motion should be
denied because plaintiffs’ requests have been withdrawn pursuant
to discovery agreements, the requests seek irrelevant information,
and the requests are unduly burdensome. (ECF Nos. 203 & 204.) Both
Varsity and USASF argue that they should be awarded the costs of
responding

to

the

motion

pursuant

to

Federal

Rule

of

Civil

Procedure 37(a)(5)(B). (Id.) Plaintiffs filed a reply on March 8,
2022, in which they argued that their requests were paused rather
than

withdrawn,

that

the

requested

discovery

is

neither

disproportionate nor unduly burdensome, and that there is no basis
for sanctioning them.2 (ECF No. 207.)

2On

June 29, 2022, plaintiffs filed a motion requesting a hearing
on the present motion. (ECF No. 281.) The same day, defendants
filed a response opposing the motion for a hearing. (ECF No. 282.)
The motion for a hearing is denied, as the parties’ arguments are
fully addressed in their briefs.
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II.
A.

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ANALYSIS

The Scope of Discovery
The scope of discovery is governed by Federal Rule of Civil

Procedure 26(b)(1), which provides that “[p]arties 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[.]” Fed. R. Civ. P. 26(b)(1). The party seeking discovery is
obligated to demonstrate relevance. Johnson v. CoreCivic, Inc.,
No. 18-CV-1051-STA-tmp, 2019 WL 5089086, at *2 (W.D. Tenn. Oct.
10, 2019). Upon a showing of relevance, the burden shifts to the
party

opposing

discovery

to

show,

with

specificity,

why

requested discovery is not proportional to the needs

the

of the

case. William Powell Co. v. Nat'l Indem. Co., No. 1:14-CV-00807,
2017 WL 1326504, at *5 (S.D. Ohio Apr. 11, 2017), aff'd sub
nom. 2017 WL 3927525 (S.D. Ohio June 21, 2017), and modified on
reconsideration, 2017 WL 4315059 (S.D. Ohio Sept. 26, 2017). Six
factors are relevant to proportionality: (1) “the importance of
the

issues

at

controversy;”

stake

(3)

“the

in

the

action;”

parties’

(2)

relative

“the

access

amount
to

in

relevant

information;” (4) “the parties’ resources;” (5) “the importance of
the discovery in resolving the issues;” and (6) “whether the burden
or

expense

of

the

proposed

discovery

outweighs

its

likely

benefit.” Fed. R. Civ. P. 26(b)(1). “It is well established that
the scope of discovery is within the sound discretion of the trial
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court.” Pittman v. Experian Information Solutions, Inc., 901 F.3d
619, 642 (6th Cir. 2018) (quoting Lavado v. Keohane, 992 F.2d 601,
604 (6th Cir. 1993)).
B.

Relevance and Proportionality
As a threshold issue, defendants argue that pursuant to their

discovery agreements, the discovery requests at issue have been
withdrawn pending a ruling on the Motion to Strike. (ECF No. 203
at PageID 3446-47.) Because the Motion to Strike has not been
denied,

defendants

claim

that

plaintiffs’

renewal

of

these

requests constitutes a breach of their discovery agreements, and
that the Motion should be denied on this basis alone. (Id. at
PageID 3448.) However, given the current status of the case,
including the December 16 Amended Scheduling Order, (see ECF No.
177) the undersigned will address the merits of the present motion.
Defendants argue that discovery relating to sexual abuse is
not relevant to plaintiffs’ antitrust claims. Plaintiffs contend
that the discovery is relevant because the failure to police sexual
abuse constitutes a reduced quality of service, which is a kind of
anticompetitive
Plaintiffs

effect

argue,

that

antitrust

“[a]nticompetitive

laws

seek

effects

can

to

remedy.
establish

monopoly power and can support finding an antitrust violation . .
. . Reduced quality of a product or services is one such effect.”
(ECF No. 199-1 at PageID 3327.)

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In their amended complaint, plaintiffs cite to a USA Today
article that claims 140 people who were convicted of sex offenses
against children continue to work unrestricted in the All Star
cheerleading industry. (ECF No. 56 at PageID 428.) Plaintiffs
allege

that

“USASF

has

a

system

for

checking

the

backgrounds of coaches and gym owners, but its system only flagged
21 people before USA Today reporters began their investigation.
USASF only banned these 21 people from going ‘backstage’ at USASF
events - they could still work in the industry.” (Id.) Further,
plaintiffs assert “USASF previously fielded complaints from its
customers

regarding

sex

offenders

within

the

cheerleading

industry, but it refused to take comprehensive action in response
to these complaints.” (Id.) Finally, plaintiffs allege, “Varsity,
through USASF, refused to take action because its market share and
lack of effective competition allowed it to resist calls for a
more rigid, restrictive, and expensive background check system.”
(Id.)
Although these allegations are unquestionably serious, their
relevance to the pending antitrust action is, at best, tenuous.
One of the requirements of establishing antitrust standing is
antitrust injury. Dodge Data & Analytics LLC v. iSqFt, Inc., 183
F. Supp. 3d 855, 863 (S.D. Ohio 2016). An antitrust injury is (1)
an “injury of the type the antitrust laws were intended to prevent”
and (2) an injury that “flows from that which makes defendants'
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acts unlawful.” In re Cardizem CD Antitrust Litig., 332 F.3d 896,
909 (6th Cir. 2003). “[B]ecause the purpose of the antitrust laws
is to protect competition rather than competitors, a plaintiff
must allege injury, not only to himself, but to a relevant market.
Thus, failure to allege an anti-competitive impact on a relevant
market amounts to a failure to allege an antitrust injury.” Brown
Shoe Co. v. United States, 370 U.S. 294, 320 (1962). Specifically,
“a

plaintiff

must

put

forth

factual

allegations

plausibly

suggesting that there has been an adverse effect on prices, output,
or quality of goods in the relevant market as a result of the
challenged actions.” Guinn v. Mount Carmel Health, No. 2:09cv226,
2012 WL 628519, at *4 (S.D. Ohio Feb. 27, 2012). “Even though a
claimant

alleges

that

an injury is

causally

related

to

an

antitrust violation, it will not qualify as ‘antitrust injury’
unless it is attributable to an anticompetitive aspect of the
practice under scrutiny.” NicSand, Inc. v. 3M Co., 507 F.3d 442,
451 (6th Cir. 2007) (quoting Atl. Richfield Co. v. USA Petroleom
Co., 495 U.S. 328, 334 (1990) (internal quotations omitted)).
Plaintiffs argue the alleged pervasive sexual abuse within
the All Star cheer industry is an anticompetitive effect of
defendants’ monopolization of that industry. However, plaintiffs
have

not

demonstrated

a

nexus

between

defendants’

alleged

anticompetitive conduct in the competitive cheer industry and
USASF’s purported failure to police sexual abuse within that
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industry. The USA Today article cited by plaintiffs discusses
USASF’s failure to warn gyms - members of the putative class that coaches were under investigation for sexual abuse. (ECF No.
199-3 at PageID 3349.) As a result, gyms would unknowingly hire
these

coaches.

(Id.

at

PageID

3354.)

However,

there

are

no

allegations that a gym must rely on USASF’s background check
process and could not implement their own safety policies when
hiring their own

employees. Additionally, besides

plaintiffs’

allegation in their complaint that “Varsity controls the USASF,”
plaintiffs have not pointed to any specific conduct of Varsity
relating to the failure to police sexual abuse within the industry.
(ECF No. 56 at PageID 418-20.)
Further, plaintiffs have acknowledged that they “are not
seeking to recover damages resulting from any sexual misconduct,”
nor could they. (ECF No. 118-1 at PageID 1779.) An antitrust injury
must be to “business or property.” 15 U.S.C. § 15(a); Reiter v.
Sonotone Corp., 442 U.S. 330, 339 (1979) (“The phrase ‘business or
property’ . . . retains restrictive significance [and] would, for
example, exclude personal injuries suffered.”). Plaintiffs solely
seek discovery on sexual abuse to present it as one of several
anticompetitive

effects

of

defendants’

alleged

monopoly.

The

majority of their complaint focuses on injuries that are commonly
recognized in antitrust cases as anticompetitive effects: raised
prices and the impaired growth of competitors. (ECF No. 56 at
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PageID 426-27.) The allegations regarding sexual abuse simply do
not demonstrate that the alleged abuse is “causally related to an
antitrust violation,” and thus the relevance of the discovery on
the topic is questionable at best.

NicSand, Inc., 507 F.3d at 451

(quoting Atl. Richfield Co., 495 U.S. at 334).
Turning to proportionality,

alleged sexual abuse against

minors is an issue of the highest public importance. However, that
critical issue is, at most, only marginally relevant to the present
antitrust
production

action.
of

Although

the

the

discovery

court

would

be

is
as

skeptical

that

burdensome

as

the
the

defendants suggest it would be, and believes that the first four
proportionality factors favor the plaintiffs, the fifth and sixth
factors weigh heavily in favor of defendants. Therefore, the motion
to compel is DENIED.
C.

Costs and Expenses
Both Varsity and USASF assert that they are entitled to

reasonable expenses and attorneys’ fees regarding their responses
to the motion to compel pursuant to Fed. R. Civ. P. 37(a)(5)(B).
(ECF Nos. 203 at 12; 204 at 17.) Rule 37(a)(5)(B) provides that if
a motion to compel is denied, the court “must, after giving an
opportunity to be heard, require the movant . . . to pay the party
or deponent who opposed the motion its reasonable expenses incurred
in opposing the motion, including attorney's fees.” Fed. R. Civ.
P. 37(a)(5)(B). However, “the court must not order this payment if
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the motion was substantially justified or other circumstances make
an award of expenses unjust.” Id. “A motion is substantially
justified

if

reasonable

people

could

differ

as

to

the

appropriateness of the . . . action.” State Farm Mutual Auto. Ins.
Co. v. Angelo, No. 19-10669, 2020 WL 7021695, at *2 (E.D. Mich.
Nov. 30, 2020) (quoting Pierce v. Underwood, 487 U.S. 552, 565
(1988) (internal quotations omitted)). Although the court has
denied the motion to compel, the court finds that the motion is
substantially justified and, therefore, defendants’ motion for
attorney’s fees is DENIED.
III. CONCLUSION
For the above reasons, the Motion to Compel is DENIED.
IT IS SO ORDERED.
s/ Tu M. Pham
TU M. PHAM
Chief United States Magistrate Judge
September 15, 2022
Date

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