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Lane v. New Gencoat Inc.

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

September 10, 2019

Eddie Lane, Plaintiff,
v.
New Gencoat, Inc., Gencoat, Inc., Genesis Worldwide, Inc., Defendants.

          ORDER AND OPINION

         Plaintiff Eddie Lane filed an action against Defendants New Gencoat, Inc., (“New Gencoat”) Gencoat, Inc., (“Gencoat”) and Genesis Worldwide, Inc., (“Genesis”) seeking to recover damages for catastrophic injuries to his right hand while using a coater machine. (ECF No. 46 at 1.) The matter before the court is Plaintiff's Motion to Compel Defendants' responses to interrogatories and requests for production. (ECF No. 55.)

         For the reasons set forth below, the court GRANTS Plaintiff Eddie Lane's Motion to Compel (ECF No. 55) for Interrogatory Nos. 12, 19, 21, 22 and for Request for Production Nos. 9, 10.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On April 23, 2018, Plaintiff filed a Complaint in the Court of Common Pleas, Richland County, South Carolina. (ECF No. 1-1 at 1.) While working as a prime coater, Plaintiff's hand became stuck in an exposed “nip point” between two rollers on the coater machine. (ECF Nos. 1-1 at 8 ¶ 22-25; 46 at 4 ¶¶ 26-30.) Plaintiff alleges that the coater machine was not reasonably safe as constructed when it was manufactured, not reasonably safe as designed, not reasonably safe due to lack of adequate warnings or instructions, and failed to comply with express and implied warranties. (ECF Nos. 1-1 at 8 ¶¶ 28, 29; 40 at 4-5 ¶¶ 32, 33.) On May 21, 2018, Defendants filed a Notice of Removal. (ECF No. 1.)

         On July 2, 2018, Plaintiff filed an Amended Complaint under Fed.R.Civ.P. 15 to revise the opposing parties to the above-captioned Defendants. (ECF No. 25.)

         On September 19, 2018, the court issued a scheduling order with a discovery plan due by February 7, 2019, and the parties agreed to limit discovery to the issue of successor liability. (ECF No. 40 at ¶¶ 1-3.)

         On October 1, 2018, Plaintiff filed a Second Amended Complaint under Fed.R.Civ.P. 15(a)(2) that included causes of action for successor liability (ECF No. 46 at 5), strict liability (Id. at 6), negligence (Id. at 9), breach of expressed and implied warranties (Id. at 10), and pre-judgment interest (Id. at 11).

         On January 1, 2019, Plaintiff filed a Motion to Compel information related to the manufacturing date of the coater machine and “any evidence that Defendant New Gencoat had an ongoing business relationship with Plaintiff's employer regarding the subject machine.” (ECF No. 55 at 5-6.)[1]

         On February 12, 2019, Defendants filed a Response in Opposition claiming that the information requested by Plaintiff exceeds the scope of issues related to successor liability. (ECF No. 56.)

         On February 19, 2019, Plaintiff filed a Reply to Defendants' Response in Opposition asserting that the discovery at issue is relevant to successor liability under South Carolina product-liability law. (ECF No. 57.)

         II. LEGAL STANDARD

         The amendment to Fed.R.Civ.P. 26 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, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to 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. 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 Fed.R.Civ.P. 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).

         Fed. R. Civ. P. 33(b)(3) requires that each interrogatory must, to the extent there is no objection, be answered separately and fully in writing under oath. Fed.R.Civ.P. 34(a)(1)(A) permits a party to serve upon any other party a request within the scope of Rule 26(b) to produce and permit the requesting party to inspect, copy, test, or sample any designated tangible things. Fed.R.Civ.P. 34(b)(2)(B) requires that for each item or category, the response must either state that inspection and related activities will be permitted as requested or state with specificity the grounds for objecting to the requests, including the reasons.

         Fed. R. Civ. P. 37 states that “[o]n notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery. The motion must include a certification that the movant 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)(1). “For purposes of [Rule 37(a)], an evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer, or respond.” Fed.R.Civ.P. 37(a)(4). 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 given to 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).

         “The scope and conduct of discovery are within the sound discretion of the district court.” Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co., 56 F.3d 556, 568 n.16 (4th Cir. 1995); see also Carefirst of Md, Inc. v. Carefirst Pregnancy Ctrs., 334 F.3d 390, 402 (4th Cir. 2003) (“Courts have broad discretion in [their] resolution of discovery problems arising in cases before [them].” (alternations in original and internal quotation marks omitted)).

         III. ANALYSIS

         The Supreme Court of South Carolina has recognized that “corporate law generally favors the free transfer of assets and disfavors successor liability.” Nationwide Mutual Ins. Co. v. Eagle Window & Door, Inc., 818 S.E.2d 447, 454 (S.C. 2018).

         In a product-liability action, the test for successor liability of a company that purchased assets of an unrelated company is well-established: “In the absence of statute, in order to render a purchasing company liable for the debts of the selling corporation, it must appear: (a) [t]hat there was an agreement to assume such debts; (b) the circumstances surrounding the transaction must warrant a finding that there was a consolidation of the two corporations; (c) or that the purchasing corporation was a mere continuation of the selling corporation; or (d) that the transfer was pretensive of the transaction fraudulent in fact.” Brown v. American Ry. Exp. Co., 123 S.E. 97, 98-99 (S.C. 1924); see also Simmons v. Mark Lift Indus., Inc., 622 S.E.2d 213, 215 (S.C. 2005).

         According to the Court, the burden is an intentionally high, but it also acknowledged the need to balance corporate law protections with corporate liability: “[South Carolina's] successor liability doctrine affords protection for plaintiffs . . . where corporate sale is driven . . . to escape the predecessor's liabilities and obligations. Where the changing of corporate hats is tainted by such fraudulent intent, the successor corporation remains liable, even when the test for mere continuation is not otherwise satisfied.” Nationwide, 818 S.E.2d at 454-55.

         Plaintiff seeks to compel answers to the following interrogatories and requests for production from Defendants. The court addresses each below:

         A. Plaintiff's ...


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