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First American Bankcard, Inc. v. Smart Business Technology, Inc.

United States District Court, E.D. Louisiana

May 24, 2017

FIRST AMERICAN BANKCARD, INC.
v.
SMART BUSINESS TECHNOLOGY, INC. ET AL.

         SECTION “N” (2)

          ORDER AND REASONS ON MOTION

          JOSEPH C. WILKINSON, JR. UNITED STATES MAGISTRATE JUDGE

         This is an action asserting various state law claims pending in this court under the court's diversity of citizenship jurisdiction. Plaintiff, First American Bankcard, Inc., seeks damages, alleging that defendants provided it with deficient and defective services relating to the design, manufacture and hosting of software products for use by plaintiff in processing cash advance and check cashing at casinos.

         Plaintiff filed a Motion to Compel Discovery and for Reasonable Expenses against one of the defendants, Smart Business Technology, Inc. Record Doc. No. 136. The motion seeks additional responses to plaintiff's Interrogatories Nos. 6, 8, 10, 13, 14 and 15 and Requests for Production Nos. 3, 6, 7, 36, 37, 42 and 43. Defendant filed a timely opposition memorandum, Record Doc. No. 145, and plaintiff was permitted to reply. Record Doc. No. 152. Having considered the motion papers, the record and the applicable law, IT IS ORDERED that the motion is GRANTED IN SUBSTANTIAL PART AND DENIED IN LIMITED PART.

         The motion is granted as to Interrogatories Nos. 6, 8, 10 and 15, and all objections are overruled, subject to the limitation contained herein. Specifically, defendant has offered nothing sufficient to support or establish its objections on grounds of disproportionality and undue burden and expense outweighing the likely benefit of this highly relevant discovery. The amendment to Fed.R.Civ.P. 26(b)(1) that incorporated the proportionality component into the threshold definition of the scope of discovery

does not place on the party seeking discovery the burden of addressing all proportionality considerations. Nor is the change intended to permit the opposing party to refuse discovery simply by making a boilerplate objection that it is not proportional. The parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes. . . . A party requesting discovery, for example, may have little information about the burden or expense of responding. A party requested to provide discovery may have little information about the importance of the discovery in resolving the issues. . . . A party claiming undue burden or expense ordinarily has far better information - perhaps the only information - with respect to that part of the determination.

Federal Civil Judicial Procedure and Rules at p. 150 (quoting Advisory Committee Notes to the 2015 Amendments to the Federal Rule of Civil Procedure) (Thomson Reuters 2017) (emphasis added). In this instance, defendant has offered nothing more than a boilerplate proportionality objection, without providing any information concerning burden or expense that the court would expect to be within defendant's own knowledge.

         IT IS ORDERED, however, in the exercise of the court's responsibility to consider the proportionality of all discovery, that the time period as to which Interrogatories Nos. 6 and 15 must be answered is limited to the time period alleged in the complaint as the period of the business relationship between the parties, June 8, 2009 to the date when plaintiff “elected to permanently end its relationship” with defendant. Record Doc. No. 1 (Complaint) at ¶¶ 18, 33.

         The motion is granted as to Interrogatories Nos. 13 and 14. All objections are overruled. The limited responsive information provided in response to these interrogatories is deficient. Again, defendant has offered nothing more than a boilerplate proportionality objection, without providing any information concerning burden or expense that the court would expect to be within defendant's own knowledge. In addition, the vague reference to “responsive Documents” that defendant says it will produce fails to comply with the specificity requirements of Fed.R.Civ.P. 33(d)(1). Defendant must answer these interrogatories by providing all responsive information within its corporate knowledge.

         In addition, I note that the copy of interrogatory answers provided to me in connection with this motion does not include the verification of interrogatory answers, sworn under oath, required by Fed.R.Civ.P. 33(b)(1)(B), (3) and (5). The required verification must be provided.

         As to the disputed requests for production, the motion is granted as to Requests for Production Nos. 3, 6, 7, 36, 37 and 42. The objections are overruled because they are absurd in this context. A discovery ruling is interlocutory and non-dispositive. The requested materials are clearly relevant and within the scope of discovery. The fact that they are ordered produced for discovery purposes in no way pretermits the court's resolution of the ultimate, dispositive issues defendant objects are “disputed.” Almost all claims or defenses as to which discovery is sought are disputed. A protective order sufficient to address defendant's concerns about the use to which these materials may be put is already in place, Record Doc. No. 139, and these materials may be produced subject to that protective order, if appropriate. Defendant must provide new written responses to each request clearly stating, without objection, either that all responsive materials in its possession, custody or control are being produced or that it has no responsive materials in its possession, custody or control.

         For the first time in its opposition memorandum, though not in its Rule 34(b) written responses and/or objections to these requests, defendant argues that it “does not have possession of the requested data” because it “is no longer a going concern” and, upon its business demise, the materials “remained in the hands of [its] former owners and top officers, co-defendants Fuente and Romero.” Record Doc. No. 145 at p. 4 (emphasis added). This argument is unpersuasive for two reasons.

         First, because defendant did not assert this argument in its Rule 34(b) written responses, the objection has been waived. See Poulos v. Naas Foods, Inc., 959 F.2d 69, 74 (7th Cir. 1992) (party “waived any objection to production by failing to object when disclosure was due”); Marx v. Kelly, Hart & Hallman, P.C., 929 F.2d 8, 10, 12-13 (1st Cir. 1991) (objections to requests for production were waived by failure to make timely objections); McLeod, Alexander, Powell & Apffel v. Quarles, 894 F.2d 1482, 1484 (5th Cir. 1990) (vague objections lacking in specificity held invalid); In re United States, 864 F.2d 1153, 1156 (5th Cir. 1989) (“[A]s a general rule, when a party fails to object timely to interrogatories, production requests, or other discovery efforts, objections thereto are waived.”); accord Autotech Techs. Ltd. P'ship v. Automationdirect.Com, Inc., 236 F.R.D. 396, 398 (N.D. Ill. 2006); Brown-Stahlman v. Charter Trust Co., No. 04-CV-322-SM, 2006 WL 680874, at *1 (D.N.H. Mar. 16, 2006); Banks v. Office of Senate Sgt.-at-Arms, 222 F.R.D. 7, 21 (D.D.C. 2004).

         Second, a party's obligation to produce materials in the Rule 34 production and inspection process extends beyond mere possession. Defendant's obligation is to produce such materials or electronically stored information (“ESI”) ...


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