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Machinery Solutions, Inc. v. Doosan Infracore America Corp.

United States District Court, D. South Carolina, Columbia Division

January 11, 2018

Machinery Solutions, Inc. Plaintiff,
v.
Doosan Infracore America Corporation, and Ellison Technologies, Inc., Defendants.

          ORDER

         Plaintiff Machinery Solutions, Inc. (“MSI” or “Plaintiff”) filed this action seeking damages from Defendant Doosan Infracore America Corporation (“Doosan”) for terminating its dealership contract with MSI and for contracting with another distributor, Ellison Technologies, Inc. (“Ellison”). (See generally ECF No. 37.)

         This matter is before the court on Plaintiff's Motion to Compel against Doosan (ECF No. 130).

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Doosan manufacturers machine tools. (ECF No. 25-1 at 3 ¶¶ 8-9.) MSI alleges that it has had an ongoing contractual relationship with Doosan since 1997. (ECF No. 37 at 3 ¶ 17.) On February 10, 2009, Doosan sent MSI a “Letter of Understanding” or “Distributor Agreement” to outline the sale of new machine tool products in North Carolina, South Carolina, and Georgia. (ECF No. 1-1 at 22-25.) Pursuant to the terms of the Distributor Agreement, either party could terminate the agreement, at any time for any reason whatsoever, by giving the other party prior written notice of at least 30 days. (ECF No. 1-1 at 24 ¶ XIII.)

         On August 21, 2015, MSI received a letter (the “August Letter”) from Doosan's President in which he communicated the intent of Doosan to terminate the Distributor Agreement with MSI. (Id. at 28-30.) The August Letter stated that MSI would have 30 days to finalize all existing projects, and, after that time, MSI must cease pursuing any future business or representing that MSI is an authorized Doosan dealer. (Id. at 28.) The letter also included an attachment entitled “Conduct of Business During Transition Period.” (Id. at 29-30.) In the attachment, Doosan identified Ellison as the new Doosan dealer in North Carolina, South Carolina, and Georgia.[1] (Id. at 30 ¶ 6.)

         On August 25, 2015, MSI filed a Complaint against Doosan and Ellison (together “Defendants”) in the Court of Common Pleas for Lexington County, South Carolina. (ECF No. 1-1.) Specifically, MSI alleged claims against Defendants jointly for civil conspiracy and against Doosan singularly for breach of contract, breach of contract accompanied by a fraudulent act, violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), SC Code Ann. § 39-5-10 to -560 (2014), and violation of the Fair Practices of Farm, Construction, Industrial, and Outdoor Power Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act (“FPA”), SC Code Ann. § 39-6-10 to -180 (2014). (ECF No. 1-1 at 10 ¶ 32-19 ¶ 88.) Doosan removed MSI's action from state court to this court on August 27, 2015, pursuant to 28 U.S.C. § 1332 claiming that “this civil action is ‘between citizens of different States' and the amount ‘in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.'”[2] (ECF No. 1 at 2 ¶ 3 (quoting 28 U.S.C. § 1332(a)(1)).) MSI then filed an Amended Complaint on October 8, 2015, alleging claims against Doosan and Ellison jointly for violation of the SCUTPA, civil conspiracy, and interference with existing and prospective contracts (count 6); and against Doosan singularly for violation of the FPA, breach of contract and breach of contract accompanied by fraudulent act. (ECF No. 37 at 7 ¶ 36-17 ¶ 98.) On May 12, 2016, the court granted in part Ellison's Motion to Dismiss (ECF No. 42) and dismissed MSI's causes of action for violation of SCUTPA, tortious interference with existing contracts, and tortious interference with prospective contracts. (ECF No. 55 at 14.)

         On July 31, 2017, MSI filed the instant Motion to Compel seeking to “compel full and proper answers and responses to the following discovery responses . . .: 1. Plaintiff's First Set of Interrogatories to Defendant Doosan Numbers 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14[;] 2. Plaintiff's First Set of Requests for Admission to Defendant Doosan Numbers 1, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13[;] 3. Plaintiff's Second Set of Interrogatories to Defendant Doosan Number 15[;] 4. Plaintiff's First Requests for Production to Defendant Doosan Numbers 7 and 30[;] 5. Plaintiff's Fifth Set of Requests for Production to Defendant Doosan Number 1[;] 6. All documents improperly withheld on the basis of Attorney-Client privilege[;] 7. Those document[s] withheld by Defendant Doosan on the ground of relevancy claiming that general discussions about replacing many dealers in the United States are not ‘relevant.'” (ECF No. 130 at 1-2.) Doosan opposes this Motion.[3] (ECF No. 137.)

         II. JURISDICTION

         The court has subject matter jurisdiction over this action, pursuant to 28 U.S.C. § 1332, because the parties are citizens of different states and the amount in controversy exceeds $75, 000.00. MSI is a corporation organized under the laws of South Carolina with its principal place of business in Lexington County, South Carolina. (ECF No. 37 at 1 ¶ 1.) Doosan is incorporated in the State of New York and Ellison is incorporated in the State of Delaware. (Id. at 2 ¶¶ 5 & 7; see also ECF No. 1 at 2-3.) Moreover, the court is satisfied that the amount in controversy exceeds $75, 000.00 in accordance with MSI's representation. (ECF No. 37 at 3 ¶ 11.)

         III. LEGAL STANDARD

         A. Discovery Generally

         Amended Rule 26 of the Federal Rules of Civil Procedure provides that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, . . . .” Fed.R.Civ.P. 26(b)(1). The scope of discovery under Rule 26 is defined by whether the information sought is (1) privileged, (2) relevant to a claim or defense and (3) proportional to the needs of the case. E.g., Gordon v. T.G.R. Logistics, Inc., Case No. 16-cv-00238-NDF, 2017 WL 1947537, at *2 (D. Wyo. May 10, 2017). “While the party seeking discovery has the burden to establish its relevancy and proportionality, the party objecting has the burden of showing the discovery should not be allowed and doing so through ‘clarifying, explaining and supporting its objections with competent evidence.'” Wilson v. Decibels of Or., Inc., Case No. 1:16-cv-00855-CL, 2017 WL 1943955, at *2 (D. Or. May 9, 2017) (quoting La. Pac. Corp. v. Money Mkt. 1 Institutional Inv. Dealer, 285 F.R.D. 481, 485 (N.D. Cal. 2012) (internal citations omitted). A discovery request is relevant “if there is any possibility that the information sought might be relevant to the subject matter of [the] action.” Wilson, 2017 WL 1943955, at *5 (quoting Jones v. Commander, Kan. Army Ammunitions Plant, 147 F.R.D. 248, 250 (D. Kan. 1993)). Whether a discovery request is proportional is determined by “considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to the relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Fed.R.Civ.P. 26(b)(1).

         The scope of discovery permitted by Rule[4] 26 is designed to provide a party with information reasonably necessary to afford a fair opportunity to develop its case. Nat'l Union Fire Ins. Co. of Pittsburgh, P.A. v. Murray Sheet Metal Co., Inc., 967 F.2d 980, 983 (4th Cir. 1992) (“the discovery rules are given ‘a broad and liberal treatment'”) (quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). That said, discovery is not limitless and the court has the discretion to protect a party from “oppression” or “undue burden or expense.” Fed.R.Civ.P. 26(c).

         B. Motions to Compel

         If a party fails to make a disclosure” required by Rule 26, “any other party may move to compel disclosure and for appropriate sanction” after it has “in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.” Fed.R.Civ.P. 37(a). Specifically, a party “may move for an order compelling an answer, designation, production, or inspection.” Fed.R.Civ.P. 37(a)(3)(B). Broad discretion is afforded a district court's decision to grant or deny a motion to compel. See, e.g., Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995) (“This Court affords a district court substantial discretion in managing discovery and reviews the denial or granting of a motion to compel discovery for abuse of discretion.”) (Internal citation omitted); Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988); LaRouche v. Nat'l Broad. Co., 780 F.2d 1134, 1139 (4th Cir. 1986) (“A motion to compel discovery is addressed to the sound discretion of the district court.”).

         IV. ANALYSIS

         MSI filed the instant Motion to Compel (ECF No. 130 at 1) seeking responses to its First Set of Interrogatories to Doosan Nos. 1, 3-11, and 13-14; First Set of Requests for Admission to Doosan Nos. 1, 4-13; Second Set of Interrogatories to Doosan No. 15; First Requests for Requests for Production to Doosan Nos. 7 and 30; and Fifth Set of Requests for Production to Doosan No. 1.[5] Additionally, MSI seeks to compel responses to all documents improperly withheld on the basis of Attorney-Client Privilege and documents regarding general discussions about replacing dealers improperly withheld on the ground of relevancy. (See Id. at 1-2.) Upon review and consideration of the parties' respective positions (see ECF Nos. 130-1, 137 & 145), the court adjudicates each disputed discovery request as follows:

         A. First Set of Interrogatories to Defendant Doosan

Interrogatory No. 1: State with specificity all facts concerning or relating to Defendant Doosan's allegation in paragraph 101 of its Answer to the Amended Complaint that Plaintiff failed to mitigate its damages.

(ECF No. 130-2 at 4.)

Interrogatory No. 3: State with specificity all facts concerning or relating to Defendant Doosan's allegation in paragraph 104 of its Answer to the Amended Complaint that Plaintiff is not a “dealer” as defined by the Fair Practices of Farm, Construction, Industrial and Outdoor Power Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, SC Code Ann. § 39-6-10 et seq. (Fair Practices Act).

(ECF No. 130-2 at 4.)

         The Court's Ruling: MSI argues that Doosan's response to Interrogatory No. 1 is improper for the following reasons. First, MSI claims that it was improper for Doosan to cite to ongoing discovery as reason to object and that Doosan should answer with information it currently knows. (ECF No. 130-1 at 3.) Next, MSI argues it was improper for Doosan to object on the ground that MSI had control of the relevant information. (Id.) Specifically, MSI asserts that Doosan is obligated to provide evidence to support its defense that Plaintiff failed to mitigate damages, pursuant to Federal Rule of Civil Procedure 11(b). (Id.) Further, MSI claims that Doosan's proportionality argument is without merit. (Id.)

         In response, Doosan argues that its objection stating Interrogatory No. 1 was premature is proper because discovery is still ongoing and that depositions had just commenced at the time Doosan filed its response. (ECF No. 137 at 4.) In addition, Doosan claims that “the Interrogatory is overly broad, unduly burdensome and not proportional because it requests ‘all facts' concerning or relating to a broad subject matter.” (See id.) Further, Doosan argues that it properly objected on the basis of MSI having control of the relevant information because any information regarding efforts to mitigate damages would be in MSI's possession or control and because Doosan would not be able to obtain this information until it deposed MSI's principals. (See Id. at 5.) Last, Doosan claims that it is complying with Federal Rule of Civil Procedure 11(b) because it is undertaking reasonable efforts to investigate and discover information related to MSI's mitigation efforts. (Id.)

         MSI argues that Doosan should be compelled to answer Interrogatory No. 3 because it is not overbroad and Rule 33(a)(2) requires Doosan to provide supporting facts for its claim that that MSI is not a dealer under the FPA. (See ECF No. 130-1 at 3-4.) In response, Doosan argues that Interrogatory No. 3 is objectionable because “(i) it is premature since fact discovery is ongoing, (ii) the information that MSI seeks is already in MSI's possession, custody, and control, (iii) it is overly broad, unduly burdensome and not proportional because it requests ‘all' facts concerning or relating to a broad subject matter, (iv) it improperly seeks to place the burden of proof on Doosan regarding an ultimate issue in this lawsuit, (v) it improperly requires Doosan to prove a negative, and (vi) it improperly calls for a legal conclusion.” (ECF No. 137 at 5-6.)

         Upon review, the court finds that Interrogatory No. 1 and Interrogatory No. 3 are overly broad and unduly burdensome. In both Interrogatories, MSI essentially asks Doosan to provide “all facts” relating to Doosan's legal claims or defenses. Specifically, Interrogatory No. 1 asks for “all facts” relating to Doosan's failure to mitigate damages defense, while Interrogatory No. 3 asks for “all facts” relating to Doosan's legal claim that MSI is not a dealer under the FPA. (See ECF Nos. 130-1 at 3 & 130-2 at 4.)

         The court finds these Interrogatories overly broad and unduly burdensome for the reasons set forth in Moses v. Halstead, 236 F.R.D. 667 (D. Kan. 2006). In Moses, the plaintiff sent an interrogatory requesting the defendant to list each defense and “provide all facts which support each defense.” Id. at 673. The court noted “that interrogatories which seek opinions or contentions that call for the application of law to facts are proper, and an interrogatory may properly inquire into a party's contentions in the case.” Id. at 674 (internal quotations and citations omitted); see also Fed. R. Civ. P. 33(b)(2). However, the court noted that “‘contention interrogatories' are overly broad and unduly burdensome on their face if they seek ‘all facts' supporting a claim or defense, such that the answering party is required to provide a narrative account of its case.” Id. The court held that such interrogatories will not be overly broad if they only ask for the “‘principal or material' facts which support an allegation or defense.” Id.

         Accordingly, in Moses, the court only required the defendant to provide the plaintiff with the “material” or “principal” facts that support each defense in its answers to the interrogatory. Id.

         Here, the court finds that Interrogatory Nos. 1 and 3 are overly broad, like the interrogatory in Moses, because they require Doosan to provide “all facts” supporting their two separate defenses.[6] Accordingly, the court GRANTS MSI's Motion to Compel answers to Interrogatory Nos. 1 and 3 and ORDERS Doosan to provide answers to Interrogatory Nos. 1 and 3 on or before January 23, 2018, but for the reasons noted above, only directs Doosan to provide the “material” or “principal” facts that support each defense. See Moses, 236 F.R.D. at 674.

         Specifically, the court directs Doosan to answer the Interrogatories with information that it currently has, and separately notes that Doosan has an obligation to supplement its response if it obtains any additional relevant information regarding these Interrogatories after further discovery. See Fed. R. Civ. P. 26(e)(1).[7]

Interrogatory No. 4: Identify all in-person meetings that occurred between representatives of Ellison and Doosan between January 1, 2014 and August 21, 2015. When identifying each meeting, list the date, location, persons attending the meeting and the purpose of the meeting.

(ECF No. 130-2 at 5.)

         The Court's Ruling:

          Doosan objects to Interrogatory No. 4 as overly broad, unduly burdensome and not proportional and further asserts that it seeks irrelevant information. (ECF No. 137 at 6.) Doosan argues that “[t]his interrogatory seeks irrelevant information because it fails to specify the topic of the meetings or otherwise limit the topics of the meetings to information related to the MSI.” (Id.) Additionally, Doosan claims that asking it to identify all meetings between Ellison and itself during this time period is disproportionate to the needs of this case. (Id. at 7.) Lastly, Doosan cites to Rule 33(d) and argues that it produced documents that potentially contain the information that MSI seeks in this Interrogatory in its response to MSI's Second Request for Production No. 12. (See ECF Nos. 130-2 at 5 & 137 at 7.)

         In support of its Motion, MSI argues that Interrogatory No. 4 does not seek irrelevant information and is proportional because Doosan and Ellison's counsel previously asserted that there was “no other interaction during this relevant time period other than the discussions relevant to Ellison becoming Doosan's dealer in North America[], including in MSI's territory.” (ECF No. 130-1 at 4.) Additionally, MSI claims that the relevant time period is not overly burdensome because Doosan indicated that there were no meetings prior to 2015, which reduces the relevant time period to eight months. (Id.)

         Here, the court agrees with MSI that Integratory No. 4 is proportional and that it seeks relevant information. The fact that discussions between Doosan and Ellison during this time period concerned Ellison potentially becoming one of Doosan's dealers make them relevant to the instant action. Additionally, the court does not find that identifying meetings during this time period would be overly burdensome on Doosan. Lastly, the court notes that Doosan's reliance on Rule 33(d) is improper. Doosan has not specified “the records that must be reviewed, in sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could.” Fed.R.Civ.P. 33(d)(1). Pointing to Doosan's response to MSI's Second Request for Production, without providing the Bates Numbers in which the relevant information can be found, does not meet this requirement under Rule 33(d)(1). Accordingly, the courts GRANTS MSI's Motion to Compel and ORDERS Doosan to provide a revised answer to Interrogatory No. 4 on or before January 23, 2018.

Interrogatory No. 5: Identify all persons, including Doosan employees, that the Protected List provided by Machinery Solutions, Inc. to Tom Lattie on August 25, 2017 was shared. (Bates Labeled MSI 11-28-16 0001-0002). When identifying the persons, provide the date of communication and the method of communication.

(ECF No. 130-2 at 5.)

         The Court's Ruling:

         Doosan argues that Interrogatory No. 5 is overly broad because it asks Doosan to identify “all persons” who received the Protected List. (ECF Nos. 130-2 at 5, 137 at 9.) In addition, Doosan claims that MSI has failed to show that this information would be relevant or proportional to this case. (ECF No. 137 at 9.) However, pursuant to Rule 33(d), Doosan “directed MSI to bates number Doosan005413-15, which reflects that Tom Lattie of Doosan emailed a copy of the 8/25/15 Letter to, among others, employees of Ellison.” (ECF No. 137 at 9.) In contrast, MSI argues that this request was not overly broad or irrelevant. (ECF No. 130-1 at 5.)

         First, the court notes that Doosan has failed to make any specific argument as to why Interrogatory No. 5 is not relevant or proportional, but instead argues that MSI has failed to meet its burden of showing that the requested information is relevant or proportional. However, “the party resisting a discovery request bears the burden of persuading the court that the requested information is outside the scope of discovery.” Ashmore v. Williams, No. 8:15-cv-03633-JMC, 2017 WL 2437082, at *4 (D.S.C. June 6, 2017) (citing Volumetrics Med. Imaging, LLC v. Toshiba Am. Med. Sys., 2011 U.S. Dist. LEXIS 65422, at *20-21 (M.D. N.C. 2011) (collecting cases in the Fourth Circuit)). The court finds that Doosan has failed to meet its burden. Furthermore, the court agrees with MSI that Interrogatory No. 5 is not overly broad or unduly burdensome. Accordingly, the courts GRANTS MSI's Motion to Compel and ORDERS Doosan to identify the persons to whom this list was shared on or before January 23, 2018, to the extent it has not already.

Interrogatory No. 6: Identify all Doosan machines sold by Ellison to any customer identified on Plaintiff's Protected List (Bates Labeled MSI 11-28-16 0001-0002) between August 2015 and [] December 31, 2016. When identifying the machines, identify the machine by type number, the date of sale, the sales price and the end purchaser.

(ECF No. 130-2 at 6.)

         The Court's Ruling: Doosan objected to Interrogatory No. 6 on the basis that it seeks information that is in Ellison's possession, custody, or control; it is overly broad and burdensome; and it is outside the time and scope limitations imposed by the court. (See ECF Nos. 130-2 at 6 & 137 at 10.) Significantly, in addition to its other arguments, Doosan claims MSI already obtained the information that Interrogatory No. 6 seeks from Ellison's June 2, 2017 response to one of MSI's requests for production. (ECF No. 137 at 10.) MSI argues that, contrary to Doosan's assertions, the court did not “limit the relevant disclosure period to the 30-day period ending September 20, 2015.” (ECF No. 130-1 at 6.)

         “The court cannot compel a party to furnish information that they do not possess.” Hoffman v. Jones, No. 2:15-cv-1748-EFB P, 2017 WL 5900086, at *8 (E.D. Cal. Nov. 30, 2017). For this reason, the court DENIES WITHOUT PREJUDICE MSI's Motion to Compel a response to Interrogatory No. 6. However, to the extent Doosan learns of information sought in Interrogatory No. 6, Doosan should provide such information to MSI in the form of an amended response.

Interrogatory No. 7: Identify any and all inventory of Doosan machine tools delivered to any Ellison location located in North Carolina, South Carolina, or Georgia at any time in 2015 by giving the machine type ...

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