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In & Out Welders Inc v. H & E Equipment Services Inc.

United States District Court, M.D. Louisiana

May 9, 2018

IN & OUT WELDERS, INC.
v.
H & E EQUIPMENT SERVICES, INC., ET AL.

          ORDER

          RICHARD L. BOURGEOIS, JR. UNITED STATES MAGISTRATE JUDGE

         Before the Court is Plaintiff's Motion to Compel (R. Doc. 82) filed on January 11, 2018. The motion is opposed. (R. Doc. 84).

         The Court held oral argument on April 18, 2018. (R. Doc. 96). The Court allowed the parties to file supplemental briefs not to exceed five pages, without further leave of court, identifying any relevant deposition testimony not discussed with the parties' initial briefs. (R. Doc. 96 at 2).

         Defendants filed a supplemental brief. (R. Doc. 97). Plaintiff filed a supplemental brief exceeding the five page limit (R. Doc. 98) and subsequently filed a motion seeking to exceed the page limits and to strike the non-compliant supplemental brief. (R. Doc. 100). The motion is opposed. (R. Doc. 101).

         The Court has considered all of the briefing submitted by the parties, as well as oral argument by counsel, in resolving Plaintiff's Motion to Compel.

         I. Background

         On October 5, 2015, In & Out Welders, Inc. (“Plaintiff” or “In & Out”) brought this class action lawsuit against H&E Equipment Services, Inc. and H&E Equipment Exchange, LLC (collectively, “Defendants” or “H&E”) claiming that certain Loss Damage Waivers and Environmental Charges contained in the Defendants' equipment rental contracts constitute a breach of contract, violate the duty of good faith and fair dealing, and violate Florida's Deceptive and Unfair Trade Practices Act. Fla. Stat. § 501.201, et seq. (“FDUTPA”) and Texas's Deceptive Trade Practices-Consumer Protection Act, Tex. Bus. & Com. Code § 17.50 (“TDTPA”). (R. Doc. 1 at 3). Plaintiff alleges that the Loss Damage Waivers (sometimes referred to as “LDW” by the parties) and Environmental Charges are included on pre-printed contracts, and that Defendants misrepresent the nature and purpose of these fees, which Plaintiff asserts solely included to raise profits. (R. Doc. 1 at 2-3, 10-11).

         The parties are currently engaged in discovery regarding class certification issues. (R. Doc. 60; R. Doc. 83).

         On July 6, 2017, Plaintiff propounded its First Requests for Production on Defendants. (R. Doc. 82-2). Defendants provided responses on August 8, 2017. (R. Doc. 82-3). Defendants provided supplemental responses on September 12, 2017. (R. Doc. 82-4).

         On November 10, 2017, Plaintiff's counsel sent an email to defense counsel proposing certain search terms to obtain responsive documents and raising certain issues with Defendants' supplemental responses. (R. Doc. 82-6 at 4-6). Defense counsel provided a response letter on November 10, 2017. (R. Doc. 82-5). Plaintiff's counsel sent an additional e-mail raising issues with regard to Defendants' supplemental responses, and Defendants agreed that the parties reached an impasse on the identified issues. (R. Doc. 82-6 at 1-2). Plaintiff represents that the parties held a discovery conference on January 10, 2018 but were unable to resolve the issues identified in the motion. (R. Doc. 82-1 at 13).

         Plaintiff now seeks an order requiring Defendants to provide supplemental responses to Requests for Production Nos. 1, 2, 3, 4, 7, 8, 9, 10, 13, 14, 15, 17, 19, 20, 21, and 23. (R. Doc. 82). Plaintiff argues that Defendants' objections based on relevance, overbreadth, speculation, and lack of control are meritless, and to the extent Defendants have raised privilege objections, they have not provided a privilege log in accordance with Rule 26(b)(5)(A) of the Federal Rules of Civil Procedure. (R. Doc. 82-1 at 3-4). In opposition, Defendants argue that they have already produced nearly 70, 000 pages of documents and over one gigabyte of native documents, that many of the documents sought by Plaintiff do not exist, and that compiling other documents requested by Plaintiff would be unduly burdensome or impossible. (R. Doc. 84).

         In a separate filing, Plaintiff represents that Defendants produced a 22-page privilege log on February 23, 2018 identifying hundreds of documents withheld as privileged. (R. Doc. 86 at 2).

         II. Law and Analysis A. Legal Standards

         “Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any non-privileged 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 court must limit the frequency or extent of discovery if it determines that: “(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed.R.Civ.P. 26(b)(2)(C).

         “The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c)(1). Rule 26(c)'s “good cause” requirement indicates that the party seeking a protective order has the burden “to show the necessity of its issuance, which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.” In re Terra Int'l, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (quoting United States v. Garrett, 571 F.2d 1323, 1326 n.3 (5th Cir. 1978)).

         Rule 34 provides a party with 30 days after service of the discovery to respond or object. See Fed. R. Civ. P. 34(b)(2)(A). If a party fails to respond fully to discovery requests made pursuant to Rule 34 in the time allowed by the Federal Rules of Civil Procedure, the party seeking discovery may move to compel disclosure and for appropriate sanctions under Rule 37. 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).

         B. Analysis

         1. Request for Production No. 1

         Plaintiff's Request for Production No. 1 seeks production of “all documents relating to Plaintiff, including, but not limited to invoices, contracts, and screen shots from any billing or customer information storage system.” (R. Doc. 82-2 at 3). Subject to certain objections, Defendants produced “copies of invoices and contracts pertaining to Plaintiff, copies of correspondence between H&E and Plaintiff, and other documents pertaining to In & Out identified after a reasonable search.” (R. Doc. 82-3 at 3). In their supplemental response, Defendants asserted that they would not produce “screen shots from its billing or customer information storage system” because such production would be unduly burdensome and would not result in the production of relevant information not available through other sources. (R. Doc. 82-4 at 4).

         Plaintiff seeks production of the requested screenshots, arguing that they “are relevant because they show the categories of information that H&E maintains on In & Out which will be used to show at class certification that H&E treats all its customers in a common and typical way with respect to the issues in this case.” (R. Doc. 82-1 at 4). Defendants argue that the production of such screenshots would be unduly burdensome, as it would require Defendants to print each available window in two different software systems and manually produce hundreds of screenshots. (R. Doc. 84 at 2). Defendants further argue that the production of screenshots will not result in the production of additional relevant information given that they have already produced data regarding Plaintiff's dealings with Defendants, and Plaintiff has noticed a Rule 30(b)(6) deposition on “the operation information, setup and functionality” of Defendants' computer systems.

         In its supplemental brief, Plaintiff argues that despite having conducted the foregoing Rule 30(b)(6) deposition after the filing of its Motion to Compel, it has not obtained information from Defendants' “Rental Result” and “SAP” programs “produced in a manner that would allow it to determine what type of information is stored and how it is stored.” (R. Doc. 98 at 2). Plaintiff identifies two other computer systems-NDS and Rental Operations Center-but does not argue that information from these systems would be responsive to the document request. (R. Doc. 98 at 2).

         In their supplemental brief, Defendants argue that the Rule 30(b)(6) deposition testimony identifies “the types of information accessible through Rental Result, ” and that the deposition testimony, along with the previous production of a spreadsheet and training manuals, sufficiently respond to the document request. (R. Doc. 97 at 1-2).

         There is no dispute that the electronically stored information sought in the form of screenshots is obtainable pursuant to Rule 34(a)(1)(A). Furthermore, Defendants do not dispute that the information sought is relevant. Defendants have not demonstrated that the discovery sought is not proportional to the needs of the case or that the production of the screen shots would cause their undue burden. Given Defendants' resources and the amount at issue, manually printing or capturing “hundreds” of pages of screenshots is not unduly burdensome. Accordingly, the Court will grant the relief requested.

         IT IS ORDERED that Plaintiff's Motion to Compel is GRANTED with respect to Request for Production No. 1. Defendants must provide the requested screen shots within 14 days of the date of this Order.

         2. Request for Production No. 2

         Plaintiff's Request for Production No. 2 seeks production of “all customer data for customers who have paid or been charged a Fee, [1] including each customer's full name and last known address, and the amount and date of each Fee paid.” (R. Doc. 82-2 at 3). Subject to certain objections, Defendants stated they would “produce documents reflecting customers, by customer number only, who have been charged LDW and Environmental Charges during the period from 2009 through 2016.” (R. Doc. 82-3 at 4).

         Acknowledging that Defendants have produced certain information in a spreadsheet reflecting those customers that have been charged fees, Plaintiff now seeks an order directing Defendants to produce the documents that show which putative class members paid specific Fees. (R. Doc. 82-1 at 5-6). In opposition, Defendants explain that they do not have documents responsive to this request because their general ledger entries for the Fees, and all other charges, are only made at the time the item is billed, not at the time it is paid. (R. Doc. 84 at 3). Defendants represent that they have produced financial records reflecting when Fees were charged to customers, but do not have responsive documents allocating payments to the particular line-item charges of Fees. (R. Doc. 84 at 3-4).

         In its supplemental brief, Plaintiff argues that it is not seeking an order requiring Defendants to run any reports, and is instead seeking the production of underlying data showing “payments, payment dates, credits, and write-offs” that Defendants' deposition testimony indicates exists. (R. Doc. 98 at 2-3). In their supplemental brief, Defendants reference certain deposition testimony, indicating that while they could easily run reports saying whether a particular invoice is open or not, it would take individualized inquiry into the SAP program to determine whether an invoice was paid in full or whether an amount was written off. (R. Doc. 97 at 2-3).

         Defendants' Corporate Credit Manager stated that “It's pretty easy to run a report that says it is open or not open. How it became not open is not necessarily easy to go to in SAP.” (R. Doc. 97 at 2). The Controller further explained that the accounts receivable detailed in SAP would still not reflect whether an invoice was closed because it was written off or paid. “You'd have to go research each particular transaction.” (R. Doc. 97 at 2).

         In the initial opposition memo, Defendants discussed the possibility of creating reports using SAP to create a list of invoices including LDW or Environmental Charges, with additional data indicating the status of that invoice. (R. Doc. 84 at 4). It is apparent that such a record does not exist at this time. Even then, the Court is satisfied that based on the representations of the parties and the deposition testimony above, even that report would not provide the “amount and date of each Fee paid” as demanded in Request for Production No. 2.

         Defendants have reasonably complied with Request for Production No. 2 as written. Defendants have also explained the limitations based on how the accounting records are compiled and maintained, and have diligently responded with the records available. Review of transaction details numbering in what could be hundreds of thousands is not reasonable. This is a situation where the Court would expect the parties to find some area of compromise based on the records as they exist.[2] Instead, Plaintiff seeks this Court to compel the Defendants to produce records that do not exist, potentially create reports that would still fall short of the demand in Request for Production No. 2, or review documentation for every transaction in the entire geographic area and duration covered by the Complaint. The Court determines that none of these are appropriate under the applicable Federal Rules of Civil Procedure.

         IT IS ORDERED that Plaintiff's Motion to Compel is DENIED with respect to ...


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