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Washington-St. Tammany Electric Cooperative, Inc. v. Louisiana Generating, LLC

United States District Court, M.D. Louisiana

April 24, 2019

WASHINGTON-ST. TAMMANY ELECTRIC COOPERATIVE, INC., ET AL.
v.
LOUISIANA GENERATING, L.L.C.

          ORDER

          RICHARD L. BOURGEOIS, JR., UNITED STATES MAGISTRATE JUDGE

         Before the Court is Defendants' Motion to Extend Deadline for Completion of Fact Witness Depositions for Limited Purposes, Consented In Part and Disputed In Part. (R. Doc. 79). The motion is opposed in part. (R. Doc. 92).

         Also before the Court is Defendant's First Motion to Compel. (R. Doc. 63). The motion is opposed. (R. Doc. 87).

         Also before the Court is Defendant's Second Motion to Compel. (R. Doc. 85). The motion is opposed. (R. Doc. 102).

         Also before the Court is Plaintiff's Motion for a Protective Order Concerning Certain Rule 30(b)(6) Deposition Topics. (R. Doc. 52) The motion is opposed. (R. Doc. 62).

         The Court considers the foregoing interrelated motions together.

         I. Background

         On June 28, 2017, Washington-St. Tammany Electric Cooperative, Inc. (“WST”) and Claiborne Electric Cooperative, Inc. (“Claiborne”) (collectively, “Plaintiffs” or the “Customer Cooperatives”), filed this breach of contract action against Louisiana Generating, L.L.C. (“Defendant” or “LaGen”). (R. Doc. 1, “Compl.”). The Customer Cooperatives allege that they are non-profit electric cooperative corporations who obtain electric power from LaGen. (Compl. ¶¶ 1-4). The Customer Cooperatives seek a finding that LaGen breached certain Power Supply and Service Agreements (“Contracts”)[1] by charging them for costs associated with LaGen's remediation of environmental conditions existing at the Big Cajun II power generating plant before the execution of the Contracts, as well as a declaration that LaGen may not assess such costs in the future. (Compl. ¶¶ 4-5). The Customer Cooperatives assert that in light of certain Environmental Law Clauses in the Contracts, LaGen “has exclusive responsibility for the costs of complying with Environmental Laws existing prior to June 24, 2002, and also the costs of remediating environmental conditions that existed at the Big Cajun II power generating plant prior to June 24, 2002.” (Compl. ¶¶ 7-10).

         The Customer Cooperatives assert that LaGen has improperly assessed them with certain remediation costs incurred pursuant to a Consent Decree between LaGen and the Environmental Protection Agency (“EPA”) and Louisiana Department of Environmental Quality (“LDEQ”). (Compl. ¶¶ 11-22). The federal action in which the Consent Decree was entered was brought by the EPA against LaGen on February 18, 2009 “pursuant to Sections 113(b) and 167 of the Clean Air Act (‘the Act'), 42 U.S.C. § 7413(b) and 7477, for injunctive relief and the assessment of civil penalties for violations of the Prevention of Significant Deterioration (‘PSD') provisions of the Act, 42 U.S.C. §§ 7470-92; the federally approved Louisiana PSD regulations of the Louisiana State Implementation Plan (‘SIP'); Title V of the Act, 42 U.S.C. §§ 7661-7661f, and the federally approved Louisiana Title V program, or any rule or permit issued thereunder.” EPA v. Louisiana Generating, Civil Action No. 09-100-JJB-RLB, ECF No. 1 at 1 (M.D. La. Feb. 18, 2009).[2] On March 5, 2013, the Court entered a Consent Decree providing, in pertinent part, the following:

WHEREAS, the Settling Defendant affirms that a portion of the emissions technology, including related to PM emissions and refueling, under this consent decree, will allow it to comply with the Mercury [and] Air Toxics Rule, a change in environmental law promulgated after the filing of the complaint.

Louisiana Generating, ECF No. 427 at 4.[3] The Customer Cooperatives allege that “on the basis of this self-serving statement, ” LaGen has wrongly characterized remediation costs of past excess emissions of nitrous oxides (“NOx”), sulfur dioxide (“SO2”), and particulate matter (“PM”) as related to the 2011 Mercury and Air Toxics Standards (“MATS”) Rule, as opposed to environmental laws in effect prior to the execution of the Contracts. (See Compl. ¶¶ 21-31).[4]

         The Customer Cooperatives specifically contend that the following five categories of costs have been wrongly assessed by LaGen: (i) the boiler conversion of Unit 2 at LaGen's Big Cajun II power plan from coal to natural gas (including natural gas pipeline costs); (ii) the installation of PM continuous emission monitoring systems (“CEMS”) on Units 1 and 3; (iii) “certain costs” associated with the ash handling collection systems; (iv) “certain costs” of electrostatic precipitator (“ESP”) upgrades; and (v) “certain costs” that LaGen has identified as MATS chemical costs. (Compl. ¶¶ 27, 30, 34, 37).

         The Customer Cooperatives assert that LaGen has wrongly assessed them with approximately $38.1 million between 2016 and 2025 in remediation costs. (Compl. ¶ 28). The Customer Cooperatives allege that “[o]f the approximately $38.1 million in costs that [they] dispute, approximately $10.4 million are capital costs, approximately $16.2 million are interest expenses, and approximately $11.5 million are operations and maintenance expenses.” (Compl. ¶ 28). The Customer Cooperatives challenge LaGen's position that it “has appropriately allocated chemical costs between the Activated Carbon Injection system (a mercury control) and the dry sorbent injection (‘DSI') and SNCR [Selective Non-Catalytic Reduction system] required by the Consent Decree.” (Compl. ¶ 29). The Customer Cooperatives assert that they have “already suffered significant harm, paying more than $7.6 million in unjustified charges from July 2015 through May 2017.” (Compl. ¶ 31).

         II. Law and Analysis A.LaGen's Motion to Extend Deadline for Completion of Fact Witness Depositions for Limited Purposes (R. Doc. 79)

         1. Legal Standard

         Rule 16(b)(4) of the Federal Rules of Civil Procedure allows for the modification of a scheduling order deadline upon a showing of good cause and with the judge's consent. The Fifth Circuit has explained that a party is required “to show that the deadlines cannot reasonably be met despite the diligence of the party needing the extension.” Marathon Fin. Ins. Inc., RRG v. Ford Motor Co., 591 F.3d 458, 470 (5th Cir. 2009) (quoting S&W Enters., LLC v. Southtrust Bank of Ala., NA, 315 F.3d 533, 535 (5th Cir. 2003)). In determining whether the movant has established “good cause” for an extension of deadlines, the Court considers four factors: (1) the party's explanation for the requested extension; (2) the importance of the requested extension; (3) the potential prejudice in granting the extension; and (4) the availability of a continuance to cure such prejudice. See Leza v. City of Laredo, 496 Fed. App'x 375, 377 (5th Cir. 2012) (citing Reliance Ins. Co. v. Louisiana Land & Exploration Co., 110 F.3d 253, 257 (5th Cir. 1997)).

         2. Analysis

         LaGen seeks a limited extension of the deadline to conduct fact witness depositions, which expired on November 2, 2018, for the purpose of conducting or continuing certain depositions. LaGen first seeks an order providing that the Rule 30(b)(6) depositions of WST and Claiborne, to the extent allowed, [5] as well as any other depositions permitted by the Court in connection with timely filed discovery motions, take place within fifteen days of the Court's ruling on the underlying motions. (R. Doc. 79 at 1-2).[6] The Customer Cooperatives consent to this portion of the motion. (R. Doc. 92 at 1). The Court finds good cause to grant the instant motion with respect to this relief.

         LaGen also seeks an order providing for the continuation of the deposition of Mark Brown (Claiborne's General Manager) taken on October 18, 2018, the deposition of Charles Hill (WST's General Manager) taken on October 26, 2018, and the deposition of Walt Sylvest (WST's Manager of Finance and Administration) taken on October 26, 2018. (R. Doc. 79 at 2-3). LaGen seeks the continuation of these depositions in light of document productions made on October 11, 2018, October 16, 2018, and October 23, 2018, as well as the identification of certain documents at the depositions of Messrs. Hill and Sylvest that were not previously produced. (R. Doc. 79-1 at 4-10).[7]

         The Customer Cooperatives argue that the instant motion is unnecessary with respect to the continuation of the deposition of Mr. Brown because counsel for the parties agreed at the conclusion of his deposition to reopen it for the purposes of addressing documents produced during the week of his deposition. (R. Doc. 92 at 1-3). With respect to the depositions of Messrs. Hill and Sylvest, the Customer Cooperatives argue that the October 11, 2018 production was delayed in light of LaGen's own delay in agreeing upon ESI search terms. (R. Doc. 92 at 3; see R. Doc. 87 at 1-3). The Customer Cooperatives further note that LaGen sought to move the depositions forward one day after receipt of the October 11, 2018 production, and that the October 23, 2018 production “was a small, supplemental production containing only 220 pages” pertaining to regulatory proceedings before the Louisiana Public Service Commission (“LPSC”) that LaGen may already have had in its possession. (R. Doc. 92 at 3-5). Finally, the Customer Cooperatives assert that LaGen did not identify all documents that were “discovered” during the foregoing depositions, and otherwise assert that the specific documents addressed in LaGen's motion are outside the scope of discovery. (R. Doc. 92 at 5-7).

         The Court finds good cause to extend the fact witness deposition deadline for the purpose of continuing the October 18, 2018 deposition of Mr. Brown in light of the parties' agreement on the record to reopen the deposition to address documents produced during the week of his deposition. The Court will limit the continued deposition to 2.5 hours. The subject matter of the deposition is limited to the documents produced on October 11, 2018, October 16, 2018, and October 23, 2018.

         The Court does not, however, find good cause to extend the fact witness deposition deadline for the purposes of continuing the October 26, 2018 depositions of Messrs. Hill and Sylvest. All of the document productions at issue were made prior to these depositions, and the bulk of the documents appear to have been produced more than two weeks prior to these depositions. The record does not indicate that LaGen sought a continuation of these deposition dates in light of the document productions. LaGen has not otherwise demonstrated how it did not have sufficient time to review the produced documents prior to the depositions.

         The Court will also not reopen these depositions in light of the identification of documents during the depositions that were not previously produced. If these documents are responsive to previous written discovery requests, then they are properly sought through LaGen's motions to compel (R. Docs. 63, 85). In ruling upon LaGen's Second Motion to Compel, the Court will consider whether LaGen should be allowed to conduct additional discovery with respect to the previously unidentified documents. (See R. Doc. 85-2 at 12-18).

         B. Motions to Compel and Motion for Protective Order

         1. Legal Standards

         “Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged 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).

         Rule 26(c) of the Federal Rules of Civil Procedure allows the court to issue a protective order after a showing of good cause “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)).

         Motions to compel discovery responses are governed by Rule 37(a) of the Federal Rules of Civil Procedure.

         2. LaGen's First Motion to Compel (R. Doc. 63)

         LaGen seeks an order requiring the Customer Cooperatives to produce documents responsive to Request for Production Nos. 1-5, 7, 11, 14, 16, 17, 20, [21], 25, and 26, to which the Customer Cooperatives responded on February 20, 2018.[8] LaGen represents that the parties negotiated an Electronically Stored Information Protocol and Protective Order (“ESI Agreement”) that was fully executed on June 21, 2018. (R. Doc 63-1 at 2).[9] While LaGen asserts that the parties “engaged in extensive negotiations regarding the ESI Agreement”, it does not identify whether any specific custodians or search terms were identified and agreed upon pursuant to the ESI Agreement. (R. Doc. 63-1 at 3). LaGen's arguments are based on assertions that the Customer Cooperatives have not produced any responsive documents for specific requests or otherwise have withheld documents on the basis that they are publicly available or belong to third parties. (R. Doc. 63-1 at 6-11).

         In opposition, the Customer Cooperatives assert that they have produced more than 20, 000 pages of documents, including ESI collected pursuant to “agreed-upon search terms” and “agreed-upon custodians” following the parties' September 18, 2018 discovery conference. (R. Doc. 87 at 1-3). The Customer Cooperatives represent that the parties agreed upon the search terms, custodians, and dates ranges for Request for Production Nos. 1, 4, 5, 7, 11, 14, 16, 17, and 26. (R. Doc. 87 at 4-7). These search terms, custodians, and date ranges are found in a spreadsheet attached to the Customer Cooperative's Opposition as Exhibit 1. (R. Doc. 87-1) (“the ESI Spreadsheet”). LaGen has not sought leave to file any additional argument or otherwise challenged the Customer Cooperative's assertion that the ESI Spreadsheet consists of agreed-upon search terms and custodians.

         The Customer Cooperatives raise separate arguments with respect to Request for Production Nos. 2, 3, 20, 21, 25, which are not subject to the ESI Agreement or ESI Spreadsheet. (R. Doc. 87 at 4-7).

         i. Request for Production Nos. 4, 11, and 21 [10]

         LaGen asserts that the Customer Cooperatives have failed to produce specific documents responsive to Request for Production Nos. 4, 11, and 21, which the Customer Cooperatives only objected to on the basis of privilege. (R. Doc. 63-1 at 6-7).

         The Customer Cooperatives represent that it conducted the proper agreed-upon ESI search protocols with respect to Request for Production Nos. 4 and 11. (R. Doc. 87 at 5). Given this representation, the Court will not require the Customer Cooperatives to produce any additional ESI responsive to these requests based upon the arguments raised in the instant motion. The Court will further address Request for Production No. 4 below in the context of resolving LaGen's Second Motion to Compel, which raises somewhat more detailed arguments with respect to this document request.

         While the Customer Cooperatives assert that they have satisfied their duty to provide ESI in light of the parties' agreements, they have not represented whether they have searched for and produced hard copy documents responsive to Request for Production Nos. 4 and 11. The Customer Cooperatives have raised no objections to such a production. Unless the parties have entered into a separate agreement regarding the search and production of hard copy documents, the Customer Cooperatives must produce all non-privileged hard copy documents in their possession, custody, or control responsive to Request for Production Nos. 4 and 11, or otherwise certify that no such documents have been located after a reasonable search.

         Request for Production No. 21 seeks the production of “all documents and information” posted to the Customer Cooperatives' social media sites from 2010 to the present. (R. Doc. 63-2 at 69). The Customer Cooperatives responded by stating that their social media pages are publicly available and by providing the relevant internet addresses for their Facebook and Twitter accounts, as well as their ...


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