W. W. McDonald Land Co. et al v. EQT Production Company et al

Filing 90

MEMORANDUM OPINION AND ORDER granting in part and denying in part Defendants' 86 MOTION for Protective Order; denying Defendants' motion to quash or limit the subject matter of the deposition, but granting its motion to restrict the applicability of the notice to one Defendant, EQT Production Company. Signed by Magistrate Judge Cheryl A. Eifert on 5/16/2013. (cc: attys; any unrepresented party) (mkw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
W.W. MCDONALD LAND, CO., et al.
Plaintiffs,
v.

Case No.: 2:11-cv-0418

EQT PRODUCTION COMPANY, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
On May 15, 2013, the parties appeared by telephone for an expedited hearing on
Defendants’ Motion for Protective Order. (ECF No. 86). In the motion, Defendants seek
an order quashing a notice for a Rule 30(b)(6) deposition scheduled to take place on
May 16, 2013. In the alternative, Defendants request that the Court limit the subject
matter of the deposition and find that only one Defendant, EQT Production Company, is
obligated to designate and present a Rule 30(b)(6) witness. In view of the date of the
deposition, the Court proceeded with the hearing although Plaintiffs had not yet
responded to the motion.1 Notwithstanding the lack of a written memorandum,
Plaintiffs were given ample opportunity to respond to the motion by oral argument, and
their position was clear. Having considered the motion and the arguments of counsel,
the Court DENIES Defendants’ motion to quash or limit the subject matter of the
deposition, but GRANTS its motion to restrict the applicability of the notice to one
Defendant, EQT Production Company.
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During the hearing, the undersigned learned that the deposition had been rescheduled to June 11, 2013.

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I.

Relevant History
Plaintiffs are landowners who leased rights to the Defendants to develop and

produce natural gas on property located in Logan County and Mingo County, West
Virginia. Plaintiffs claim that they are entitled to royalty payments under the leases,
which the Defendants have intentionally underpaid. In their Complaint, Plaintiffs allege
fraud; negligent misrepresentation or concealment related to royalty statements; breach
of contract; civil conspiracy; aiding and abetting a tort; breach of a fiduciary duty,
punitive damages; and request an accounting.
In the course of discovery, Plaintiffs filed a motion to compel responses to a
request for production of documents and an interrogatory to which Defendants had
asserted the attorney-client privilege and work product doctrine. Plaintiffs argued that
Defendants had waived any privilege or protection attached to the requested
information because they had invoked the “advice of counsel” as a defense. On March
27, 2013, this Court entered an order denying Plaintiffs’ motion to compel, finding that
Defendants had not asserted an advice of counsel defense and, thus, had not waived the
attorney-client privilege or work product protection. The following day, Plaintiffs filed a
notice of Rule 30(b)(6) deposition that listed five topics of inquiry, largely involving
Defendants’ analysis of the leases and Defendants’ decision to take deductions from the
royalties.
Defendants object to the topics of inquiry contained in Plaintiffs’ notice, arguing
that Plaintiffs are seeking the same privileged information previously protected by the
Court. According to Defendants, Plaintiffs are simply attempting to circumvent the
Court’s prior order with the Rule 30(b)(6) deposition. Defendants claim that the
deposition will serve no purpose, as Defendants will not be able to provide the privileged
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information, and will result in unnecessary expense and burden to Defendants as they
will be forced to prepare for and attend the deposition.
In response, Plaintiffs argue that the purpose of the deposition is not to discover
the communications or advice of counsel, but is intended to investigate the actions and
decisions of Defendants’ in relation to taking monetary and volumetric deductions from
Plaintiffs’ royalties. According to Plaintiff, Defendants claim that they took the
deductions based upon their review and interpretation of the leasehold agreements,
rather than on the advice of counsel. Consequently, Defendants’ interpretation of the
leases and decisions in regard to the deductions are critical to establishing the claims of
fraud, misrepresentation, breach of fiduciary duty and similar intentional torts.
II.

Discussion
Federal Rule of Civil Procedure 26(c)(1) allows a court, for good cause shown, to

issue an order prohibiting discovery when necessary to protect a party or person “from
annoyance, embarrassment, oppression, or undue burden or expense.” Nonetheless,
motions that seek to preclude the taking of a deposition are regarded with disfavor.
Minter v. Wells Fargo Bank, N.A., 258 F.R.D. 118, 125 (D.Md. 2009) (citing Static
Control Components, Inc. v. Darkprint Imaging, 201 F.R.D. 431, 434 (M.D.N.C. 2001)
(“protective orders which totally prohibit a deposition should rarely be granted absent
extraordinary circumstances”)). The “good cause” standard to justify prohibition of a
deposition is high, and orders providing such relief “should be sparingly used and
cautiously granted.” Medlin v. Andrew, 113 F.R.D. 650, 652-53 (M.D.N.C. 1987) (“It is
very unusual for a court to prohibit the taking of a deposition altogether and absent
extraordinary circumstances, such an order would likely be in error”) (quoting Salter v.
Upjohn Co., 593 F.2d 649, 651 (5th Cir. 1979). The duty to demonstrate good cause rests
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with the party seeking to prevent the discovery. Webb v. Green Tree Servicing, LLC, 283
F.R.D. 276 (D.Md. 2012) (citing Minter, 258 F.R.D. at 124).
The Court has considered the topics of inquiry contained in the notice of Rule
30(b)(6) deposition filed by Plaintiffs. Indeed, the topics are likely to touch on matters
that are privileged. On the other hand, there conceivably are questions pertinent to
these topics that will not require invasion into attorney-client communications or work
product. Without having all of the Plaintiffs’ questions written out and tendered to the
Court, there is no possible way for the Court to rule on their propriety in advance of the
deposition. Consequently, the Court declines to quash the notice of deposition. See
Collier v. BrightPoint, Inc., Case No. 1:12-cv-1016-TWP-DKL, 2013 WL 652448, at *3
(S.D.Ind. Feb. 21, 2013); Cooper v. Old Dominion Freight Line, Inc., Case No. 09-cv2441 JAR, 2011 WL 124567, at *6 (D.Kan., Jan. 14, 2011); Draper v. University of
Tennessee, Case No. 1:08-cv-01125-JBD, 2010 WL 5634364, at *2 (W.D.Tenn. Apr. 13,
2010) (the claim of attorney-client privilege or work product doctrine cannot be a
blanket claim; it “must be made and sustained on a question-by-question or documentby-document basis”) (quoting United States v. Lawless, 709 F.2d 485, 487 (7th
Cir.1983)).
Likewise, the Court is not inclined to rewrite Plaintiffs’ topics of inquiry. The
subject matter outlined in the notice is clearly relevant to Plaintiffs’ claims. Defendants
will no doubt have to assert the attorney-client privilege or work product protection to
discreet questions as they arise in the deposition. However, the Court does not find this
task to be overly burdensome, oppressive, annoying or embarrassing to the Defendants.
Further, Plaintiffs are fully aware of the Court’s ruling on the waiver of privilege and are
obliged to conduct the deposition in a manner that respects the Court’s order.
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Accordingly, Defendants’ motion to quash or refine the notice of deposition is
DENIED.
In regard to Defendants’ request that the notice be limited to Defendant, EQT
Production Company, the Court GRANTS the motion. Defendants represent to
Plaintiffs and the Court that EQT Production Company alone is responsible for the
deductions taken from the royalties and, therefore, is the Defendant with knowledge of
the issues surrounding the deductions. Based upon this representation, the Court agrees
that it would be overly burdensome to require the remaining Defendants to produce
corporate representatives who are unable to address the issues outlined in the notice of
deposition.
The Clerk is instructed to provide a copy of this Order to counsel of record and
any unrepresented party.
ENTERED: May 16, 2013.

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