Language Connect International, Ltd. v. iVerse Media

Filing 33

ORDER GRANTING IN PART AND DISMISSED AS MOOT IN PART 29 Sealed Motion; iVerse shall make the required production to the Court no later than April 29, 2016. All other issues raised in this motion to compel are DISMISSED AS MOOT without prejudice. Signed by Judge Xavier Rodriguez. (wg)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
LANGUAGE CONNECT
INTERNATIONAL, LTD.
Plaintiff,
v.
IVERSE MEDIA,
Defendants.

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Civil Action No. 15-cv-00236-XR

ORDER
On this day, the Court considered Plaintiff’s Motion to Compel (Dkt. No. 29),
Defendant’s Response, and Plaintiff’s Reply. Although the motion originally raised three issues,
on March 11, 2016, the parties filed a Joint Advisory (Dkt. No. 32) essentially stating that only
the arbitration issue remains live, which includes Request Nos. 17, 19–20, and 31. For the
following reasons, the Court GRANTS IN PART and DISMISSES AS MOOT IN PART
Plaintiff’s Motion to Compel.
BACKGROUND
Plaintiff Language Connect International, Ltd. (“Language Connect”) filed this action
against iVerse Media, LLC (“iVerse”), alleging breach of contract and other theories of recovery.
In 2012, iVerse entered into a contract with Marvel Worldwide, Inc. (“Marvel”) pursuant to
which iVerse would hold a license to distribute translations of Marvel comic books
internationally in various languages. (Dkt. No. 30, at 1). iVerse contracted with Language
Connect to make the translations. Id. On October 28, 2014, Marvel filed a Demand for
Arbitration with JAMS against iVerse for failing to pay Marvel under the license agreement. Id.
at 2. iVerse stated that Marvel complained about the quality of the translations. Id. at 1–2. On

March 27, 2015, Language Connect sued iVerse for outstanding invoices owed for translation
work. Id. at 2. iVerse counterclaimed, asserting that the Language Connect translations were
poor quality and the invoices were inaccurate. iVerse further asserted that Language Connect’s
actions were the proximate cause of any damages to Marvel in the event such damages are
found. Language Connect filed this motion to compel production of documents related to
iVerse’s arbitration with Marvel to determine whether iVerse is taking contrary positions in this
litigation and in the arbitration. (Dkt. No. 29, at 2). In Request Nos. 17, 19–20 and 31,
Language Connect requests all documents filed or served by any party in the arbitration,
including but not limited to pleadings, discovery, and motions (17), all witness statements or
testimony given in the arbitration that concern Language Connect or that concern the quality of
the translations (19-20), and documents that support iVerse’s allegation that “Marvel has
asserted in the [Arbitration] that [you have] breached [your] contract with Marvel and that
Marvel is owed damages” (31). (Dkt. No. 29, at 7, 9). iVerse objected to these requests as
overly broad, unduly burdensome, exhibiting time and scope limitations, and subject to
confidentiality concerns. Id. iVerse argues the arbitration documents are private, not subject to
disclosure without Marvel’s permission, and not necessary to the present litigation. (Dkt. No.
30, at 4).
DISCUSSION
Where jurisdiction is based upon diversity of citizenship, as in this case, the Court must
follow Erie and apply state substantive law while adhering to federal procedure. Kona Tech.
Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 602 (5th Cir. 1986). Also, Federal Rule of Evidence
501 mandates that state privilege laws govern when a district court sits in diversity. FED. R.
EVID. 501; see Miller v. Transam. Press, Inc., 621 F.2d 721, 724 (5th Cir.), opinion

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supplemented on denial of reh’g, 628 F.2d 932 (5th Cir. 1980) (interpreting the application of
state privilege laws in a diversity case).
Texas Civil Practice and Remedies Code § 154.073 governs the confidentiality of certain
records and communications made during alternative dispute resolution. TEX. CIV. PRAC. &
REM. CODE § 154.073. Section 154.073(a) states, “[A] communication relating to the subject
matter of any civil or criminal dispute made by a participant in an alternative dispute
resolution . . . is confidential, is not subject to disclosure, and may not be used as evidence
against the participant in any judicial or administrative proceeding.” Additionally, participants
or arbitrators may not be required to testify or be subject to process requiring the disclosure of
information related to or arising out of a matter in dispute. Id. § 154.073(b). Arbitration falls
within the category of alternative dispute resolutions described in Chapter 154 of the civil
practice and remedies code. See Abbott v. GameTech Int’l, Inc., No. 03-06-00257-CV, 2009 WL
1708815, at *4 (Tex. App.—Austin, June 17, 2009, pet. denied) (mem. op.) (“The following
alternative dispute resolution procedures are described in chapter 154: mediation, mini-trial,
moderated settlement conference, summary jury trial, and arbitration.” (citing TEX. CIV. PRAC. &
REM. CODE § 154.023–.027)). There are exceptions to the general rule of confidentiality for all
oral and written communications related to arbitration proceedings. See, e.g., § 154.073 (c)–(f).
Section 154.073(e) states, “If this section conflicts with other legal requirements for
disclosure of communications, records, or materials, the issue of confidentiality may be
presented to the court . . . to determine, in camera, whether the facts, circumstances, and context
of the communications or materials sought . . . are subject to disclosure.” Id. § 154.073(e). A
request for production is a legal requirement that entitles a party to serve a request on another
party for documents “relevant to any party’s claim or defense and proportional to the needs of
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the case.” FED. R. CIV. P. 26(b)(1); id. 34(a). Language Connect requests documents from the
iVerse and Marvel arbitration to establish whether iVerse took a contrary position as to the
quality of Language Connect’s translations than it takes in the present action. This request is
relevant to the claims and issues in this case, and thus the court will order production for in
camera review pursuant to § 154.073(e). However, the Court agrees with iVerse’s objections
that the requests are overbroad. Therefore, iVerse shall produce to the Court for inspection all
arbitration pleadings and documents that refer to the quality of Language Connect’s translations.
CONCLUSION
For the foregoing reasons, Plaintiff Language Connect’s Motion to Compel is
GRANTED IN PART and DISMISSED AS MOOT IN PART. iVerse shall make the required
production to the Court no later than April 29, 2016. All other issues raised in this motion to
compel are DISMISSED AS MOOT without prejudice.
SIGNED this 14th day of April, 2016.

XAVIER RODRIGUEZ
UNITED STATES DISTRICT JUDGE

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