Gulf Coast Shippers Limited Partnership et al v. DHL Express USA et al
MEMORANDUM DECISION AND ORDER granting #437 Motion to Compel. Signed by Magistrate Judge Paul M. Warner on 1/7/2015. (las)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH CENTRAL DIVISION
GULF COAST SHIPPERS LIMITED
PARTNERSHIP, et al.,
MEMORANDUM DECISION AND
Case No. 2:09cv221
DHL EXPRESS (USA), INC., an Ohio
corporation, et al.,
District Judge Robert J. Shelby
Magistrate Judge Paul M. Warner
This matter was referred to Magistrate Judge Paul M. Warner by District Judge Robert J.
Shelby pursuant to 28 U.S.C. § 636(b)(l)(A).1 Before the court is DHL Express (USA), Inc. et
al.’s (collectively, “Defendants”) motion to compel Gulf Coast Shippers Limited Partnership, et
al.’s (collectively, “Plaintiffs”) to produce updated financial information.2 The court has
carefully reviewed the memoranda submitted by the parties. Pursuant to civil rule 7-1(f) of the
United States District Court for the District of Utah Rules of Practice, the court elects to
determine the motion on the basis of the written memoranda and finds that oral argument would
not be helpful or necessary. See DUCivR 7-l(f).
The present discovery dispute stems from new expert discovery necessitated by the Tenth
Circuit’s ruling in Unishippers Global Logistics, LLC v. DHL Express (USA), Inc., 526 F. App’x
See docket nos. 60 & 386.
See docket no. 437.
899 (l0th Cir. June 4, 2013) (unpublished). In that case involving Plaintiffs’ franchisor
Unishippers, the Tenth Circuit held that Unishippers could not recover damages extending
beyond May 10, 2009; 180 days from the date that the contract between Unishippers and DHL
terminated. See id. at 906-909. In the instant case, Plaintiffs separately seek to enforce the same
contract against DHL based upon a third-party beneficiary theory. The parties do not dispute
that the Tenth Circuit’s decision in Unishippers applies to limit Plaintiffs’ damages to 180 days.
After the Tenth Circuit’s ruling, Judge Shelby held a status conference in the instant case
and ordered the parties to “serve on the other a new or updated expert report, providing the
calculation that each side believes the Tenth Circuit has asked us to provide.”3 The parties’
respective experts have furnished their reports per Judge Shelby’s direction.
In the instant motion, Defendants are seeking to compel Plaintiffs to produce updated
financial information, including tax returns from 2011 to the present. Specifically, Defendants
assert that the information must be produced so that their expert can, among other things, assess
whether Plaintiffs’ businesses actually suffered any diminution in value, as Plaintiffs’ expert
Richard Hoffman has newly opined. Defendants argue that rather than simply cutting off his lost
profits damages calculation at the 180-day mark, Mr. Hoffman set forth a new theory that
Plaintiffs’ businesses also suffered a “diminution in value” as a result of Defendants’ alleged
In response, Plaintiffs assert that Mr. Hoffman did not rely on any post-2010 financial
documents for his report and, as such, they have no bearing on his damages calculation.
Specifically, Plaintiffs maintain that Mr. Hoffman’s diminution in value calculation quantified
the loss value that Plaintiffs’ businesses suffered during the 180-day damage period and was
Docket no. 428 at 1.
based solely on lost revenues from November 2008 until May 2009. Plaintiffs contend that Mr.
Hoffman did not review or rely on any financial information that he did not consider when
preparing his initial report and that his diminution in value theory is not prospective in nature.
Plaintiffs state that Mr. Hoffman used the same methodology he used to calculate lost terminal
value in his first expert report and merely applied that methodology to Plaintiffs’ lost gross
profits sustained during the 180-day breach period, as required by the Tenth Circuit.
In their reply, Defendants argue that Mr. Hoffman’s diminution in value theory is
necessarily prospective and his failure to rely on the post-2010 financial documents is
methodologically unsound. Defendants conclude that the requested documents are highly
relevant to defend against Mr. Hoffman’s diminution in value theory (by demonstrating what
actually happened to the value of Plaintiffs’ businesses) or, at the very least, the documents
sought are reasonably calculated to lead to the admissibility of relevant expert evidence.
While Plaintiffs assert that Mr. Hoffman did not rely on post-2010 financial documents to
construct his diminution in value theory, it does not necessarily follow that Defendants are not
entitled to discover those documents. In other words, the court is not persuaded by Plaintiffs’
relevance argument. Under rule 26(b)(1) of the Federal Rules of Civil Procedure, a party may
obtain discovery “regarding any nonprivileged matter that is relevant to any party’s claim or
defense. . . . Relevant information need not be admissible at the trial if the discovery appears
reasonably calculated to lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1).
Thus, the standard for relevance in discovery is lower than the standard for admissibility at trial.
This court is not willing to allow one party to determine unilaterally what is relevant, insofar as
discovery is concerned, for the opposing party.
Based on the foregoing, this court concludes that Defendants are entitled to discover the
requested financial documents. Whether those documents and/or the export reports that rely
upon them will be admissible at trial is a question for Judge Shelby to determine at a later date.
Accordingly, Defendants’ motion to compel is GRANTED.
IT IS SO ORDERED.
DATED this 7th day of January, 2015.
BY THE COURT:
PAUL M. WARNER
United States Magistrate Judge
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