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CGC Royalty Investments I LLC v. Bluewater Moorings LLC

United States District Court, N.D. Texas, Dallas Division

January 11, 2017

CGC ROYALTY INVESTMENTS I, LLC, Plaintiff,
v.
BLUEWATER MOORINGS, LLC, MANAGEMENT SYSTEMS, LLC, INNOVATE 360 DALLAS ACQUISITION, LLC, THE INNOVATION FACTORY, INC., and TIMOTHY J. SOMMERS, Defendants.

          MEMORANDUM OPINION AND ORDER [1]

          DAVID L. HORAN UNITED STATES MAGISTRATE JUDGE.

         Plaintiff CGC Royalty Investments I, LLC (“Plaintiff” or “Cypress”) has filed a Motion to Compel Discovery from Defendants, see Dkt. No. 29 (the “MTC”), seeking an order compelling discovery and for imposition of sanctions and request for attorneys' fees on Defendants Order Management Systems, LLC (“OMS, LLC”), Innovate 360 Dallas Acquisition, LLC (“Innovate 360 Dallas”), The Innovation Factory, Inc. (“The Innovation Factory”), and Timothy J. Sommers (“Sommers”) (collectively, “Defendants”) for Defendants' willful, intentional violations of the discovery rules and abuse of the discovery process.

         United States District Judge Sidney A. Fitzwater has referred the motion to the undersigned United States magistrate judge for a hearing, if necessary, and determination pursuant to 28 U.S.C. § 636(b)(1)(A). See Dkt. No. 31. The Court determines that a hearing is not necessary.

         Defendants have not responded to the motion, and their time to do so has passed. See N.D. Tex. L. Civ. R. 7.1(e) (“A response and brief to an opposed motion must be filed within 21 days from the date the motion is filed.”).

         For the reasons explained below, the Court GRANTS in part and DENIES in part on Cypress's Motion to Compel Discovery from Defendants [Dkt. No. 29].

         Background

         In its MTC, Cypress explains that it “filed a lawsuit against Defendants bringing claims for breach of contract, fraud, and violation of the Uniform Fraudulent Transfer Act.” Dkt. No. 29 at 2. On September 6, 2016, Cypress served Plaintiff's First Set of Interrogatories (the “Interrogatories”), Plaintiff's First Requests for Production (the “Requests for Production”), and Plaintiff's First Request for Admissions (“Requests for Admissions”) on Defendants (collectively, the “Discovery Requests”). According to Cypress, Defendants' responses and objections to the Discovery Requests were due October 6, 2016.

         Cypress then explains the course of the parties' communications regarding the Discovery Requests:

3. On October 5, 2016, Defendants requested “an extension of time until Thursday, October 20, 2016 to provide responses to Plaintiff's outstanding Requests for Production, Requests for Admission and Interrogatories to Defendants.” (Appx. 024, Correspondence from Defendants' counsel, dated October 5, 2016). Plaintiff granted the request.
4. On October 20, 2016, Plaintiff did not receive objections or responses to the Discovery Requests from any of the Defendants. Consequently, on October 25, 2016, counsel for Plaintiff called and emailed Defendants' counsel inquiring as to when Plaintiff could expect to receive Defendants' objections and responses to Plaintiff's Discovery Requests. (Appx. 025, Email from Plaintiff's counsel to Defendants' counsel). Counsel for Plaintiff did not receive a response to the inquiry made.
5. On October 31, 2016, counsel for Plaintiff, again called Defendants' counsel. During the call, Defendants' counsel represented that Plaintiff could expect to receive objections and responses to Plaintiff's Discovery Requests by November 4, 2016 if not before. That same day, Defendants' counsel served Defendants' Responses to Plaintiff's First Request for Admissions and confirmed that “Defendants anticipate[d] serving their Answers to Interrogatories and Requests for Production by November 4, 2016.” (Appx. 026, Correspondence from Defendants' counsel to Plaintiff's counsel).
6. On November 4, 2016, Plaintiff did not receive Defendants' objections and responses to the Interrogatories or the Requests for Production.
7. On November 6, 2016, without explanation as to the delay, Plaintiff received Defendants' objections and responses to the Interrogatories. (Appx. 027-035, Defendant's Responses to Plaintiff's First Set of Interrogatories). Plaintiff did not, however, receive Defendants' objection and responses to Plaintiff's First Requests for Production or a single document.
8. On November 10, 2016, after reviewing Defendants' Responses to the Interrogatories, counsel for Plaintiff attempted to contact Defendants' counsel to discuss deficiencies in Defendants' Interrogatory responses. (Appx. 036, Emailed from Plaintiff's counsel to Defendants' counsel).
9. On or about November 15, 2016, Plaintiffs' counsel had still not received a response from Defendants' counsel regarding Defendants' deficient Interrogatory responses, and therefore counsel for Plaintiff again reached out to Defendants' counsel, sua sponte. During a telephone call, counsel for the parties discussed the Interrogatory responses as well as Defendants' failure to provide Plaintiff with responses and objections to its First Requests for Production.
10. On November 18, 2016, Plaintiff's counsel followed up with correspondence to Defendants' counsel summarizing the issues that were previously discussed and requesting that they be cured by November 30, 2016. (Appx. 037-038, Correspondence from Plaintiff's counsel to Defendants' counsel).
11. To date, Defendants have not made any attempt to respond to the November 18, 2016 correspondence or to cure the discovery issues.

Id. at 2-4 (footnote omitted). Cypress also explains that, “[o]n October 13, 2016, Defendant Bluewater filed a Notice of Bankruptcy Filing and of Automatic Stay and on October 17, 2016 this Court issued an Order administratively closing the case as it relates to Defendant Bluewater only” and that, “[t]herefore, Plaintiff does not seek to compel objections and responses from Bluewater Moorings, LLC.” Id. at 2 n.1

         Cypress now “moves this Court to: Compel Defendants' complete responses to Plaintiff's Interrogatories Nos. 3, 4, [10, ] 16, and 17; and Compel written responses and the production of all documents that are responsive to Plaintiff's First Request for Production to Defendants.” Id. at 2. And, “pursuant to Federal Rule of Civil Procedure 37(a)(5)(A), Plaintiff respectfully requests the Court award Plaintiff its reasonable expenses, including attorneys' fees, related to the filing of this” MTC. Id. at 9.

         Legal Standards

         Federal Rule of Civil Procedure 37(a) governs motions to compel discovery responses. Rule 37(a)(3)(B) provides that a party seeking discovery may move for an order compelling production or answers against another party when the latter has failed to produce documents requested under Federal Rule of Civil Procedure 34 or to answer interrogatories under Federal Rule of Civil Procedure 33. See Fed. R. Civ. P. 37(a)(3)(B)(iii)-(iv). 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).

         The party resisting discovery must show specifically how each discovery request is not relevant or otherwise objectionable. See McLeod, Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1485 (5th Cir. 1990). A party resisting discovery must show how the requested discovery was overly broad, burdensome, or oppressive by submitting affidavits or offering evidence revealing the nature of the burden. See Merrill v. Waffle House, Inc., 227 F.R.D. 475, 477 (N.D. Tex. 2005); see also S.E.C. v. Brady, 238 F.R.D. 429, 437 (N.D. Tex. 2006) (“A party asserting undue burden typically must present an affidavit or other evidentiary proof of the time or expense involved in responding to the discovery request.”).

         In response to a Rule 34 request, “[f]or 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 request, including the reasons.” Fed.R.Civ.P. 34(b)(2)(B). “An objection must state whether any responsive materials are being withheld on the basis of that objection. An objection to part of a request must specify the part and permit inspection of the rest.” Fed.R.Civ.P. 34(b)(2)(C).

         And, in response to an interrogatory under Rule 33, “[e]ach interrogatory must, to the extent it is not objected to, be answered separately and fully in writing under oath”; “[t]he grounds for objecting to an interrogatory must be stated with specificity”; and “[a]ny ground not stated in a timely objection is ...


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