Trans Energy, Inc. et al v. EQT Production Company
Filing
96
MEMORANDUM OPINION AND ORDER AFFIRMING AND ADOPTING 84 THE MAGISTRATE JUDGES DISCOVERY ORDER, OVERRULING 91 92 93 THE PARTIES OBJECTIONS, DENYING 73 THE DEFENDANTS MOTION FOR LEAVE TO FILE MOTIONS TO COMPEL, STAYING 77 A DETERMINATION ON THE PLAINTIFFS MOTION FOR LEAVE TO AMEND THE COMPLAINT, GRANTING AS FRAMED 58 THE DEFENDANTS MOTION FOR AN EXTENSION TO DISCOVERY, LIFTING 68 THE STAY OF DISCOVERY AND ESTABLISHING A DISCOVERY AND BRIEFING SCHEDULE. Discovery due by 3/4/2016; Motions due by 3/18/2016; Responses due by 4/1/2016; Replies due by 4/8/2016. Signed by Senior Judge Frederick P. Stamp, Jr. on 1/29/2016. (copy to counsel of record via CM/ECF) (nmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
TRANS ENERGY, INC.,
a Nevada corporation,
PRIMA OIL COMPANY, INC.,
a Delaware corporation, and
REPUBLIC PARTNERS VI, LP,
a Texas limited partnership,
Plaintiffs,
v.
Civil Action No. 5:13CV93
(STAMP)
EQT PRODUCTION COMPANY,
a Pennsylvania corporation,
Defendant.
MEMORANDUM OPINION AND ORDER
AFFIRMING AND ADOPTING THE
MAGISTRATE JUDGE’S DISCOVERY ORDER,
OVERRULING THE PARTIES’ OBJECTIONS,
DENYING THE DEFENDANT’S MOTION FOR
LEAVE TO FILE MOTIONS TO COMPEL,
STAYING A DETERMINATION ON THE PLAINTIFFS’
MOTION FOR LEAVE TO AMEND THE COMPLAINT,
GRANTING AS FRAMED THE DEFENDANT’S MOTION
FOR AN EXTENSION TO DISCOVERY,
LIFTING THE STAY OF DISCOVERY AND
ESTABLISHING A DISCOVERY AND BRIEFING SCHEDULE
I.
Procedural History
The defendant EQT Production Company (“EQT”) filed a motion to
dismiss this civil action for failure to join as a plaintiff
Republic Energy Ventures, LLC (“REV”).
EQT argued that REV was an
indispensable party because: (1) the plaintiffs’ asserted rights in
the Robinson Lease are actually held by a joint venture between
Trans Energy and REV, meaning that the plaintiffs lack standing to
bring this civil action; and (2) REV is the alter ego of plaintiff
Republic Partners VI, LP (“Republic Partners”).
This Court denied
EQT’s motion without prejudice and ordered limited discovery on the
issue of whether REV is an indispensable party.
EQT then filed a motion for an extension to discovery (ECF No.
58), arguing that plaintiffs Trans Energy, Inc. (“Trans Energy”)
and Prima Oil Company, Inc. (“Prima”) had failed to adequately
respond to a set of interrogatories, preventing EQT from preparing
for depositions. EQT also filed motions to compel Trans Energy and
Prima to respond to those interrogatories (ECF Nos. 60, 61), and
served Republic Energy, Inc. (“REI”), with a subpoena duces tecum
seeking information regarding any partnership between REI and Trans
Energy as to the Robinson Lease.
subpoena (ECF No. 66).
REI filed a motion to quash the
This Court referred these motions to
Magistrate Judge James E. Seibert.
While
the
motions
were
pending
before
Magistrate
Judge
Seibert, EQT filed a motion for leave to file further motions to
compel REV and Republic Partners (ECF No. 73). The plaintiffs then
filed a motion for leave to amend the complaint (ECF No. 77).
Magistrate Judge Seibert granted EQT’s motions to compel Trans
Energy and Prima to answer EQT’s Interrogatory Nos. 3, 4, and 7,
and granted REI’s motion to quash.
ECF No. 84.
The plaintiffs
then filed objections to the magistrate judge’s decision regarding
Interrogatory No. 7, and EQT filed objections regarding REI’s
motion to quash.
This Court stayed discovery (ECF No. 68) and the
2
magistrate judge’s discovery order (ECF No. 90) pending this
Court’s resolution of the parties’ motions and objections.
II.
A.
Discussion
The Magistrate Judge’s Order
Under Federal Rule of Civil Procedure 72(a), a district court
may refer to a magistrate judge “a pretrial matter not dispositive
of a party’s claim or defense.”
Fed. R. Civ. P. 72(a).
The
parties may file objections to the magistrate judge’s order, and
the “district judge in the case must consider timely objections and
modify or set aside any part of the order that is clearly erroneous
or is contrary to law.”
Id.
When a court orders limited discovery, Federal Rule of Civil
Procedure 26(b)(1) permits parties to “obtain discovery regarding
any nonprivileged matter that is relevant to” the issues defined by
the court for discovery.
admissible
at
the
trial
“Relevant information need not be
if
the
discovery
appears
reasonably
calculated to lead to the discovery of admissible evidence.”
Fed.
R. Civ. P. 26(b)(1). The court may protect a party from oppressive
or unduly burdensome discovery requests. Fed. R. Civ. P. 26(c)(1).
This Court reminds the parties that the Federal Rules of Civil
Procedure have been amended effective December 1, 2015.
In
particular, the amended Rule 26 adds language stating that a party
is entitled to discovery that is relevant to claims and defenses
3
“proportional to the needs of the case,” explicitly incorporating
proportionality into the scope of discovery.
1.
Interrogatory No. 3
Magistrate Judge Seibert granted EQT’s motion to compel Trans
Energy
and
Prima
to
answer
its
Interrogatory
No.
3.
That
interrogatory requests a list of persons or entities possessing an
ownership interest in the Robinson Lease, the nature of their
interest,
when
the
interest
was
acquired,
the
consideration
exchanged for the interest, and how the person became aware of the
opportunity to obtain the interest.
ECF No. 75-2 at 2, 8.
The
magistrate judge correctly concluded that this request was within
the limited scope of discovery ordered by this Court because it
could reasonably lead to evidence regarding REV’s relationship with
the plaintiffs concerning the Robinson Lease.
This Court finds no
error in the magistrate judge’s conclusion.
2.
Interrogatory No. 4
The magistrate judge granted EQT’s motion to compel Trans
Energy
and
Prima
to
answer
its
Interrogatory
No.
4.
That
interrogatory requests a list of every person or entity that
contributed anything of value for the acquisition of the Robinson
Lease, the nature of the contribution, when it was made, the
consideration exchanged for the contribution, and how the person or
entity became aware of the opportunity to contribute. ECF No. 75-2
at 3, 9-10.
Magistrate Judge Seibert correctly concluded that the
4
requested information was relevant to determining whether REV was
involved in the plaintiffs’ acquisition of the Robinson Lease.
This Court finds no error in the magistrate judge’s conclusion.
3.
Interrogatory No. 7
Magistrate Judge Seibert ordered Trans Energy and Prima to
answer EQT’s Interrogatory No. 7. That interrogatory requests that
Prima and Trans Energy identify any communications between them
regarding the acquisition of the Robinson Lease and to state the
substance of each communication.
The plaintiffs object to the
magistrate judge’s order on this issue for two reasons.
First,
they argue that the information sought in this interrogatory is
beyond the scope of the limited discovery regarding whether REV was
involved in a joint venture with the plaintiffs and whether REV is
the alter ego of Republic Partners.
that
the
interrogatory
is
Second, the plaintiffs argue
overly-broad
and
unduly
burdensome
because Prima is Trans Energy’s subsidiary and they would not have
separate communications regarding the Robinson Lease.
Any
nonprivileged
communication
regard
the
plaintiffs’
acquisition of the Robinson Lease is relevant to whether REV was
involved in a joint venture to acquire the lease or if REV was
acting as an alter ego of Republic Partners as it was participating
in the lease acquisition.
Furthermore, the burden of identifying
and summarizing communications between Prima and Trans Energy
regarding the acquisition of the lease is minimal because those
5
parties likely have thorough records of all such communications.
If those communications exist, the plaintiffs may produce them
without undue burden.
judge’s conclusion.
This Court finds no error in the magistrate
Therefore, Trans Energy and Prima must answer
Interrogatory No. 7.
4.
REI’s Motion to Quash
Magistrate Judge Seibert granted REI’s motion to quash as to
EQT’s
request
for
(1)
documents
related
to
REI’s
corporate
formation and general functions (Request Nos. 1-19, 28-31); (2)
documents regarding any persons or entities possessing an ownership
interest in the Robinson Lease and the nature of their interest
(Request No. 20); (3) documents regarding any person or entity that
contributed anything of value for the acquisition of the Robinson
lease
(Request
relationship
Magistrate
No.
with
Judge
21);
the
and
(4)
plaintiffs
Seibert
concluded
documents
related
(Request
Nos.
that
this
to
22-27,
Court’s
REI’s
32).
limited
discovery order allows discovery only on whether REV is an alter
ego of Republic Partners, and whether REV was a partner to the
joint venture to acquire the Robinson Lease. Therefore, he granted
REI’s motion to quash. EQT objected to only the magistrate judge’s
conclusions as to the first and fourth categories of requests.
First, because EQT did not object to the magistrate judge’s
conclusions regarding the second and third categories of requests,
this Court reviews those conclusions for clear error.
6
Magistrate
Judge Seibert concluded that those requests were cumulative and
duplicative because they request from REI information identical to
that requested of Trans Energy and Prima in EQT’s Interrogatory
Nos. 3 and 4.
This Court finds no error in the magistrate judge’s
conclusion.
Second, EQT objected to the magistrate judge’s conclusions
regarding the first and fourth categories of requests.
EQT argues
that these requests are within the scope of the limited discovery
order because the information sought confirms that REI was a party
to the plaintiffs’ joint venture to acquire the Robinson Lease,
that REV is an alter ego of REI, and that both REV and REI would
then be treated as partners of the joint venture, meaning that
REV’s domicile would defeat diversity jurisdiction.
However, this Court’s grant of limited discovery clearly
limited the scope of discovery to REV’s relationship with the
plaintiffs regarding the Robinson Lease.
discovery
to
the
relationship
of
other
plaintiffs.
Because
EQT’s
Request
Nos.
information
regarding
REI’s
relationship
It did not extend
non-parties
22-27
with
and
the
to
32
the
seek
plaintiffs
regarding the Robinson Lease, those requests are outside the scope
of the limited discovery granted by this Court.
Thus, this Court
adopts and affirms the magistrate judge’s discovery order.
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B.
EQT’s Motion to Extend Discovery
EQT filed a motion to extend discovery by 45 days to allow it
to obtain responses from the plaintiffs and to conduct depositions.
Because this Court adopts and affirms Magistrate Judge Seibert’s
order, this Court finds that discovery should be extended to allow
Trans Energy and Prima to answer EQT’s Interrogatory Nos. 3, 4, and
7, and to allow EQT to conduct depositions. Trans Energy and Prima
must provide answers to Interrogatory Nos. 3, 4, and 7 on or before
February 12, 2016.
EQT may then conduct one deposition for each
plaintiff (preferably under Fed. R. Civ. P. 30(b)(6)) on or before
March 4, 2016.
These depositions shall pertain only to the
relationship between REV and the plaintiffs regarding the Robinson
Lease.
C.
Therefore, EQT’s motion is granted as framed.
EQT’s Motion for Leave to File Additional Motions to Compel
While EQT’s motions to compel Trans Energy and Prima’s answers
to its interrogatories and REI’s motion to quash were pending
before the magistrate judge, EQT filed a motion for leave to file
additional motions to compel responses from REV and Republic
Partners.
Because this motion was filed while discovery was
stayed, it is denied.
REV
that
they
have
However, this Court reminds the parties and
a
duty
to
discovery requests.
8
supplement
their
responses
to
D.
Plaintiffs’ Motion for Leave to Amend the Complaint
The plaintiffs seek to amend the complaint to drop their
adverse possession claim, to add as a plaintiff American Shale
Development, Inc., and to assert subject matter jurisdiction as
ancillary to a prior civil action before this Court (Civil Action
No.
1:11CV75).
However,
the
issues
of
whether
REV
is
an
indispensable party and whether this Court has subject matter
jurisdiction in this civil action must be resolved before this
Court
can
consider
the
plaintiffs’
motion.
Therefore,
the
plaintiffs’ motion for leave to amend the complaint is stayed, and
will be considered by this Court along with any motion to dismiss
for lack of subject matter jurisdiction.
III.
Conclusion
The magistrate judge’s order granting EQT Production Company’s
motions to compel and granting Republic Energy, Inc.’s motion to
quash (ECF No. 84) is AFFIRMED and ADOPTED.
Accordingly, EQT
Production Company’s motions to compel (ECF Nos. 60, 61) are
GRANTED, Republic Energy Inc.’s motion to quash (ECF No. 66) is
GRANTED, and the parties’ objections to the magistrate judge’s
order (ECF Nos. 91, 92, 93) are OVERRULED. Further, EQT Production
Company’s motion for leave to file additional motions to compel
(ECF No. 73) is DENIED, and the plaintiffs’ motion for leave to
amend the complaint (ECF No. 77) is STAYED.
This Court’s stay of
discovery (ECF No. 68) is LIFTED, EQT Production Company’s motion
9
for an extension of time to complete discovery (ECF No. 58) is
GRANTED AS FRAMED, and it is ORDERED:
1.
Discovery: All discovery as ordered by this Court in its
previous order granting limited discovery (ECF No. 48) shall be
fully served and completed by March 4, 2016. “Completed discovery”
as used in Fed. R. Civ. P. 16(b) means that all discovery,
objections, motions to compel and all other motions and replies
relating to discovery ordered in this civil action must be filed in
time
for
the
parties
objecting
or
responding
to
have
the
opportunity under the Federal Rules of Civil Procedure to make
responses.
2.
Depositions:
deposition
of
each
The defendant is permitted to conduct one
plaintiff
regarding
only
Republic
Energy
Ventures, LLC’s relationship with the plaintiffs as to the Robinson
Lease.
The parties shall conduct these depositions on or before
the above discovery deadline.
The parties may conduct additional
depositions only by consent or with prior leave of this Court.
3.
7:
Responses to the Defendant’s Interrogatory Nos. 3, 4, and
Plaintiffs Trans Energy, Inc. and Prima Oil Company, Inc. must
respond to the defendants’ Interrogatory Nos. 3, 4, and 7, in
accordance with this order, on or before February 12, 2016.
4.
Briefing Schedule:
The defendant may file a motion to
dismiss for lack of subject matter jurisdiction regarding the
jurisdictional issues outlined by this Court’s prior order (ECF No.
10
48) on or before March 18, 2016.
Any such motion must be supported
by a memorandum at the time the motion is filed.
opposition to such motion
Memoranda in
filed on the above deadline date shall
be filed with copies served upon opposing counsel on or before
April 1, 2016.
If a motion has been filed before the above
deadline date, opposing counsel is directed to comply with LR Civ
P 7.02(b), which requires responses no later than 14 days after the
date of service of the motion.
Any reply memoranda shall be filed
with copies served upon opposing counsel on or before April 8, 2016
or, if the response is filed prior to the above deadline date,
within seven days from the date of service of the memorandum in
response to the motion.
All dispositive motions unsupported by
memoranda will be denied without prejudice.
The parties shall
comply with LR Civ P 7.02 imposing a page limitation upon memoranda
unless a motion to exceed the page limitation is granted.
See LR
Civ P 7.02.
Factual assertions made in memoranda should be supported by
specific
references,
including
page
or
paragraph
numbers,
to
affidavits, depositions, or other documents made a part of the
record before this Court.
Copies of the supporting documents, or
relevant portions thereof, should be appended to the memoranda.
The parties may refer to LR Civ P 7.02 for details on motion
practice before this Court.
IT IS SO ORDERED.
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The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
January 29, 2016
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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