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LLOG Exploration Company, L.L.C. v. Federal Flange, Inc.

United States District Court, E.D. Louisiana

December 4, 2018

LLOG EXPLORATION COMPANY, L.L.C.
v.
FEDERAL FLANGE INC., et. al

         SECTION: “M” (4)

          ORDER

          KAREN WELLS ROBY, CHIEF UNITED STATES MAGISTRATE JUDGE.

         Before the Court is a Motion to Quash or Limit and for a Protective Order Pursuant to Fed.R.Civ.P. 26(c) (Rec. Doc. 132) filed by the Defendant, Silbo Industries, Inc. Silbo seeks a protective order prohibiting the taking of its deposition by Plaintiff, CGP Manufacturing, Inc. The Motion is opposed and was heard by oral argument on November 28, 2018. (Rec. doc. 133)

         I. Background

         This multi-party litigation was filed because of the sale of allegedly defective target elbows to LLOG Exploration Company, LLC (LLOG) a company engaged in the exploration, development and production of oil and gas in the Gulf of Mexico. LLOG operated two wells off the coast of Louisiana and ordered four 6x6 target elbows intended to be used in connection with the two wells which would connect pipe to the subsea manifold. After the target elbows were installed off the Louisiana coast, LLOG discovered defects or cracks in the elbows, which could allegedly be sourced to the manufacturing process. LLOG, thereafter, removed the alleged defective elbows and replaced them asserting this claim based on theories of product liability, redhibition and breach of contract.

         The elbows were purchased from Federal Flange, Inc. (“Flange”) who bought them from CGP Manufacturing, Inc. (“CGP”), who ordered them from Silbo Industries, Inc. (“Silbo”), a distributor of steel from foreign countries. Silbo placed the order with R.N. Gupta & Company Limited (“Gupta”), an importer from India who direct shipped the products to CGP in Texas. After being sued Flange, CGP filed a Third-Party demand against the foreign importer in its capacity as the manufacturer of the forgings and Silbo, the importer and distributer of the forgings.

         Silbo, thereafter, filed a Motion to Dismiss for lack of Personal Jurisdiction because it is a Delaware Corporation with is principle place of business in New Jersey. According to Silbo, it has insufficient contacts with Louisiana, the forum state, because it directed the forging be shipped from India to a distributor in Texas and not Louisiana.

         CGP, in the meantime, sought additional time to conduct limited jurisdiction discovery to determine if there is sufficient evidence of minimum contacts to establish specific jurisdiction utilizing the stream of commerce doctrine. The Stream of Commerce doctrine contemplates that the offending product will have to be sold by a participant in the process with a minimum awareness that it may or will sweep the product into forum state of Louisiana. Asahi v. Superior Court, 480 U.S. 102 (1987)

         In connection with its attempt to acquire jurisdictionally focused discovery, CGP noticed the deposition of Silbo. In so doing, it itemized thirteen areas of inquiry in the notice and also with a document request. Upon receiving the document request, Silbo filed the subject motion seeking either (1) to completely quash the deposition or alternatively (2) limit the scope of the deposition. Rec. Doc. 132.

         CGP opposes the Motion, arguing that the topics and requests are well within the District Court's jurisdictional discovery limitation. Rec. Doc. 133. Primarily, CGP argues that discovery is permitted on more than just the four subject target elbows. CGP contends that Silbo is trying to limit the scope of discovery based on a “tortured” reading of the District Court's Order. Rec. Doc. 133, p 7.

         II. Standard of Review

         A. Scope of Deposition

         Rule 26(b)(1) provides that “[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense.” Fed.R.Civ.P. 26(b)(1). The Rule specifies that parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” Id. The discovery rules are accorded a broad and liberal treatment to achieve their purpose of adequately informing litigants in civil trials. Herbert v. Lando, 441 U.S. 153, 176 (1979). Nevertheless, discovery does have “ultimate and necessary boundaries.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). Furthermore “it is well established that the scope of discovery is within the sound discretion of the trial court.” Coleman v. Amer. Red Cross, 23 F.3d 1091, 1096 (6th Cir.1994).

         Under Rule 26(b)(2)(c), discovery may be limited if: (1) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from another, more convenient, less burdensome, or less expensive source; (2) the party seeking discovery has had ample opportunity to obtain the information sought; or (3) the burden or expense of the proposed discovery outweighs its likely benefit. Fed.R.Civ.P. 26(b)(2)(c). In assessing whether the burden of the discovery outweighs the benefit, a court must account for: (1) the needs of the case; (2) the amount in controversy; (3) the ...


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