Hoffman v. Martinez et al

Filing 422

MEMORANDUM OPINION AND ORDER: The court re-refers L&M's 5/15/2012 sealed motion for protective order 230 to the magistrate judge for further proceedings consistent with this memorandum opinion and order. (Ordered by Chief Judge Sidney A Fitzwater on 2/21/2013) (twd)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MARGUERITE HOFFMAN,
Plaintiff,
VS.
L&M ARTS, et al.,
Defendants.

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§ Civil Action No. 3:10-CV-0953-D
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MEMORANDUM OPINION
AND ORDER
Defendant L&M Arts (“L&M”) objects to the magistrate judge’s August 9, 2012 order
denying L&M’s May 15, 2012 sealed motion for protective order.1 The court re-refers
L&M’s motion for protective order to the magistrate judge for further proceedings.2
I
Hoffman noticed L&M for a Fed. R. Civ. P. 30(b)(6) deposition. The notice of
deposition included 80 topics, 26 of which were substantive factual topics and 54 of which
covered information technology issues. L&M is controlled by two principals, Robert
Mnuchin (“Mnuchin”) and Dominique Lévy (“Lévy”). In March and April 2012, plaintiff

1

The magistrate judge’s August 9, 2012 order was filed under seal, and L&M filed its
objections to the order under seal. The court has determined, however, that this
memorandum opinion and order need not be sealed.
2

Under § 205(a)(5) of the E-Government Act of 2002 and the definition of “written
opinion” adopted by the Judicial Conference of the United States, this is a “written opinion[]
issued by the court” because it “sets forth a reasoned explanation for [the] court’s decision.”
It has been written, however, primarily for the parties, to decide issues presented in this case,
and not for publication in an official reporter, and should be understood accordingly.

Marguerite Hoffman (“Hoffman”) deposed Mnuchin and Lévy.
L&M objected to the notice, and Hoffman agreed to eliminate topics A(15) and A(22),
and to remove from topic A(12) relationships with L&M’s attorneys and several other
persons, paring the list from 35 to 21 persons. L&M later identified for Hoffman certain
deposition testimony of Mnuchin and Lévy that L&M said was responsive to the
unobjectionable topics from the Rule 30(b)(6) deposition notice. Hoffman and L&M could
not resolve L&M’s other objections, and Hoffman objected to L&M’s deposition
designations.
L&M moved for a protective order, requesting that the court limit Hoffman’s Rule
30(b)(6) notice to L&M’s document retention and collection efforts in this case and its
electronic and physical filing systems. Defendant Studio Capital, Inc. (“Studio Capital”)
moved for a protective order from a Rule 30(b)(6) deposition notice served on it that included
topics nearly identical to the ones in the notice served on L&M. In a June 21, 2012 sealed
order, Judge Stickney granted Studio Capital’s motion, limiting the scope of the Rule
30(b)(6) deposition to eliminate the following topics, concluding that they were “not relevant
and discoverable”:
(a) testimony regarding Studio Capital’s present and anticipated
future relationships with twenty individuals and entities
unrelated to the Painting [at issue in this case]; (b) testimony
regarding Studio Capital’s beneficial owners who were unaware
of the Painting; (c) testimony regarding Studio Capital[’s]
acquisition or sale of other artwork besides the Red Rothko and
the Korean Rothko; and (d) testimony regarding complex ESI
issues that expand beyond Studio Capital’s document retention
and collection efforts for this case and the general structure of
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its email systems.
June 21, 2012 Order at 1 (bracketed material added).
Although the topics included in the Rule 30(b)(6) deposition notice served on Studio
Capital were largely the same as those included in the notice served on L&M, Judge Stickney
denied L&M’s motion for protective order in all respects, stating:
The Court is aware that L&M Arts is a small company, but the
Federal Rules of Civil Procedure allow a 30(b)(6) representative
to be deposed. Even though L&M Arts has offered to allow the
previous testimony of its principals to be used as answers by its
corporate representative, Plaintiff is not bound to accept the
same. The Court has further reviewed L&M Arts’s arguments
to limit the scope of the deposition. Again, Plaintiff is entitled
to take the 30(b)(6) deposition and therefore while it may appear
duplicative, Plaintiff is allowed to cover in its deposition these
noticed areas of inquiry.
August 9, 2012 Order at 1. Judge Stickney did not narrow any of the topics in the Rule
30(b)(6) notice served on L&M.
L&M objects to the August 9, 2012 order, contending that it is erroneous, contrary to
Judge Stickney’s other discovery orders in this case, and contrary to controlling law.
II
“When a party appeals a magistrate judge’s order, [it] must demonstrate how the order
is reversible under the applicable standard of review—de novo for error of law, clear error
for fact findings, or abuse of discretion for discretionary matters.” Jefferson-Pilot Life Ins.
Co. v. Bellows, 2003 WL 21501904, at *1 (N.D. Tex. June 24, 2003) (Fitzwater, J.). “Except
as to issues of law that are reviewed de novo, district judges do not sit as second-tier

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decisionmakers concerning discovery matters referred to the magistrate judge.” Nunn v.
State Farm Mut. Auto. Ins. Co., 2010 WL 2044477, at *4 (N.D. Tex. May 24, 2010)
(Fitzwater, C.J.). “And in matters of discretion—and discovery decisions are usually
quintessential examples of the exercise of discretion—district judges do not substitute their
own judgment for that of the magistrate judge.” Id.
Although L&M appears to argue that Judge Stickney committed an error of law,3 it
has not demonstrated that Judge Stickney erred in any respect in his legal conclusions.
Instead, L&M is challenging Judge Stickney’s discretionary discovery decisions, which the
court reviews only for abuse of discretion.
Before the court can conduct adequate review under the abuse of discretion standard,
however, it must re-refer L&M’s May 15, 2012 sealed motion for protective order to Judge

3

See, e.g., L&M Br. 5 (“L&M believes that the magistrate did not apply the Rule
26(b)(1) standard here, because applying it requires limiting the Notice to topics as they
relate to the Painting and limiting Schedule B to L&M’s document collection and retention
efforts and its electronic and physical filing systems.”); id. at 7 (“The Discovery Order
provides no analysis of [the Rule 26(c)] burden or even consideration of the burden that
Plaintiff’s duplicative deposition request places on L&M.”); id. at 8 (“Based on the written
order, Magistrate Judge Stickney does not appear to have balanced Plaintiff’s claimed
interest in taking a duplicative deposition of a corporate designee . . . against the serious and
unnecessary burden that it would place on L&M”); id. (“The Discovery Order directly
contradicts prior orders entered in this case and therefore, should be reversed as erroneous.”);
L&M Reply 1 (“Magistrate Judge Stickney misapplied the law in the Discovery Order at
issue simply by not applying his own prior rulings in this case.”); id. at 2 (“Initially it is
important to note that L&M’s Objections are premised on arguments that the legal
conclusions in Magistrate Judge Stickney’s August 9, 2012 Discovery Order were erroneous
and represent misapplications of the law. L&M’s Objections are generally based on the
failure to properly apply the Magistrate’s previous orders in this case and the failure to limit
discovery topics pursuant to established standards of discovery. Both of these grounds are
purely legal. . . . [and] call for a de novo review by the Court.”).
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Stickney for further proceedings. This is required because there is an unexplained, putative
inconsistency between his June 21, 2012 order concerning the Rule 30(b)(6) notice served
on Studio Capital and the instant August 9, 2012 order concerning the Rule 30(b)(6) notice
served on L&M. Although the noticed topics were nearly identical, Judge Stickney limited
the scope of the Rule 30(b)(6) deposition of Studio Capital yet did not similarly limit the
scope of the Rule 30(b)(6) deposition of L&M. The court has found no basis in the record
to conclude that it was not an abuse of discretion for the motions for protective order to be
given disparate treatment.4
Accordingly, the court re-refers L&M’s May 15, 2012 sealed motion for protective

4

Judge Stickney held a hearing on a number of evidentiary issues on June 18, 2012,
just before issuing the June 21, 2012 order. The following exchange occurred at the
conclusion of the hearing regarding L&M’s motion for protective order:
MR. WULFF [Hoffman’s counsel]: You know, also don’t—
let’s don’t overlook that there is a 30(b)(6) motion as to L&M
as well.
THE COURT: Right. What’s L&M planning to do about the
30(b)(6)?
MR. KURTH [L&M’s counsel]: They’ve filed a response. We
filed a reply this week, Your Honor.
THE COURT: Oh, all right. Okay. It’s not ripe then?
MR. KURTH: No, Your Honor.
THE COURT: All right. I’m going to go through these again
and try and prepare some orders and get them out as soon as I
can. Thank you[.]
June 18, 2012 Hrg. Tr. 78-79. Although during the hearing the parties argued at length about
how discovery should be limited, Judge Stickney did not say anything that would enable the
court to determine on review why L&M’s motion for protective order should be treated
differently from Studio Capital’s motion.
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order to Judge Stickney for further proceedings. If he reaches the same result as in his
August 9, 2012 order, he should provide an explanation on the record or in a written order
of why L&M is not entitled to the same or similar relief as he granted Studio Capital. If he
reaches a different result, he should provide a sufficient explanation on a hearing record or
in a written order to permit the court to review the decision if it is challenged.
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Accordingly, the court re-refers L&M’s May 15, 2012 sealed motion for protective
order to the magistrate judge for further proceedings consistent with this memorandum
opinion and order.
SO ORDERED.
February 21, 2013.

_________________________________
SIDNEY A. FITZWATER
CHIEF JUDGE

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