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Payne v. Forest River, Inc.

United States District Court, M.D. Louisiana

December 23, 2014

WENDELL PAYNE, CHRIS RIDDLE, AND XCURSION MARKETING GROUP, LLC
v.
FOREST RIVER, INC

ORDER

RICHARD L. BOURGEOIS, Jr., Magistrate Judge.

Before the Court is a Motion to Quash filed by Plaintiffs Wendell Payne, Chris Riddle, and Xcursion Marketing Group, LLC (collectively, "Plaintiffs") and non-party Denali Marine Group, LLC ("Denali") (R. Doc. 24); a Motion to Quash filed by non-party Kevcon Corporation d/b/a Misty Harbor Boats ("Kevcon") (R. Doc. 25); and a Motion for Protective Order filed by Kevcon (R. Doc. 21). All three of these motions concern a Rule 45 subpoena served by Defendant Forest River, Inc. ("Forest River") on Kevcon. All three of these motions are opposed by Forest River. (R. Docs. 26, 27, 31).

Also before the Court is a Motion to Quash filed by Denali in response to a Rule 45 subpoena served on it by Forest River (R. Doc. 30). This motion is opposed by Forest River as well. (R. Doc. 33).

I. BACKGROUND

The parties to this action dispute the ownership of the design and specifications of certain pontoon boats and whether they entered into a joint venture regarding the production and sale of those pontoon boats. In their Petition, Plaintiffs allege that in January 2011 they perfected the design of the "Xcursion" series pontoon boats, which they allege is "unique in the pontoon boating market because of [Plaintiffs'] invention and innovation, including higher end finishes for the product as well as a more functional and customer-friendly design." (R. Doc. 1-1, "Petition, " ¶¶ 2-3). Plaintiffs allege that they then entered into a joint venture agreement with Forest River by which "Forest River would acquire the rights to Xcursion and [Plaintiffs] would market Xcursion and, in exchange, Forest would pay [Plaintiffs] 4% of the gross sales of Xcursion." (Petition, ¶ 4). Plaintiffs further allege that in May 2011, Forest River began manufacturing the Xcursion series pontoon boats using Plaintiffs' "designs, specifications, and plans for the Xcursion concept." (Petition, ¶ 5). Plaintiffs allege that after a series of attempted modifications to their joint venture agreement, Forest River breached the agreement by ceasing to pay Plaintiffs in August of 2012. (Petition, ¶¶ 7-11).

Forest River denies that a joint venture agreement exists between the parties. (R. Doc. 14 at 4). If, however, the Court determines that a joint venture between the parties does exist, Forest River seeks to recover net losses for the manufacture and sale of Xcursion series pontoon boats. (R. Doc. 14 at 4-5).

On June 14, 2014, Plaintiffs Payne and Riddle formed Denali. (R. Doc. 31-1). Plaintiffs and Denali claim that Denali was formed "to start an organization to pursue the development of another pontoon design separate and apart from Xcursion using [Kevcon] proprietary chassis configurations." (R. Doc. 24 at 12-13). Plaintiffs and Denali further assert that although Denali has entered into contract negotiations with Kevcon, those negotiations do not involve any "Forest River Marine, Forest River, Inc. or Xcursion pontoon boats." (R. Doc. 24 at 13).

On July 28, 2014, Denali and Kevcon entered into a non-disclosure agreement ("NDA") governing the exchange of confidential information regarding "Pontoon Boat Building Concepts." (R. Doc. 29-1 at 5).

On October 16, 2014, Forest River served a Rule 45 subpoena on Kevcon. (R. Doc. 19). The subpoena seeks production of the following categories of documents:

1. All documents [Kevcon] sent to or received from Wendell Payne, Chris Riddle and/or Denali Marine Group, LLC concerning and/or mentioning Xcursion pontoon boats, Denali Series pontoon Boats or other pontoon boat lines or products.
2. All documents [Kevcon] sent to or received from Wendell Payne, Chris Riddle and/or Denali Marine Group, LLC concerning or mentioning Forest River, Inc. or Forest River Marine (including any employees or representatives thereof).

(R. Doc. 18-2 at 6). The subpoena sought performance on November 5, 2014 in Shreveport Louisiana. (R. Doc. 18-2 at 3). The Court has suspended Kevon's duties to respond to the subpoena until resolution of the motions discussed in this Order. (R. Doc. 22 at 2).

On October 28, 2014, Plaintiffs and Denali filed their Motion to Quash the subpoena served on Kevcon. (R. Doc. 18). This Court denied the motion on the basis that a motion to quash filed pursuant to Rule 45 must first be filed in the district of compliance, namely the Western District of Louisiana. (R. Doc. 20). The Motion was subsequently filed in the Western District of Louisiana.[1] Kevcon then filed its own Motion to Quash in the Western District of Louisiana.[2] These Motions have been transferred back to this Court for resolution. (R. Docs. 24, 25). Forest River filed Oppositions responding to both Motions. (R. Docs. 26, 27). Kevcon has filed a Reply. (R. Doc. 29).

While the Motions to Quash were pending before the Western District of Louisiana, Kevcon filed its related Motion for Protective Order in this Court. (R. Doc. 21). Forest River filed an Opposition consolidating its arguments in opposition to the two Motions to Quash and the Motion for Protective Order. (R. Doc. 31).

On October 30, 2014, Forest River served a Rule 45 subpoena on Denali. (R. Doc. 32). The subpoena seeks production of the following categories of documents:

1. All documents related to the formation, creation, registration and/or ownership of Denali Marine Group, LLC.
2. All documents constituting agreements of any type which Denali Marine Group, LLC is a party.
3. All nondisclosure and/or confidentiality agreements of any type to which Denali Marine Group, LLC is a party.
4. All documents referring to or mentioning Forest River, Inc. and/or Forest River Marine (including any of its employees, agents, and representatives).
5. All documents containing designs, drawings, specifications or descriptions of any type for any type of pontoon boats, including Denali Series Pontoon Boats.
6. All documents sent to or received from Misty Harbor Boats (including any of its employees, agents, and representatives).
7. All documents sent to or received from Kevcon Corp. (including any of its employees, agents, and representatives).
8. All documents relating to and/or mentioning Xcursion, South Bay or Berkshire series pontoon boats.

(R. Doc. 32 at 3-4). The subpoena sought performance on November 17, 2014 in Baton Rouge, Louisiana. (R. Doc. 32 at 1). Accordingly, the Motion to Quash filed by Plaintiffs Payne, Riddle, and Denali on November 14, 2014 was timely and properly before this Court. Forest River has filed an Opposition to this Motion. (R. Doc. 33).

II. LAW & ...


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