On August 11, 2008, Trans Continental[1] filed its Complaint against MTV Networks (“MTV”), alleging that MTV had breached its joint venture agreement to develop an episodic television series entitled Making the Band, filmed over several seasons, and an all-male pop band. See Doc. No. 70-1 (Second Amended Complaint). The parties have had various discovery disputes, the most recent over documents allegedly not produced and sought to be compelled by Trans Continental from MTV.

Trans Continental originally moved for the sanction of a default judgment against MTV for its alleged spoliation related to MTV's belated and non-production of red-line and draft versions of the Key Agreements[2]between the parties and the pertinent metadata[3]. MTV filed a response arguing that Trans Continental lacks any evidence of spoliation, and MTV was required to respond to last-minute discovery demands[4], leading it to locate a small number of documents that it had not previously produced (Doc. 174). MTV contends that although Trans Continental deposed MTV's document custodian almost three months before filing its spoliation motion, Trans Continental did nothing to follow up on the information learned in that deposition, and rather than elect to timely raise and discuss his issues with MTV's counsel, instead “embarked on a gambit to serve ‘gotcha’ discovery requests about MTV's discovery that were due just days before discovery's close. By delaying these requests to a point at which it would be impossible to meaningfully meet-and-confer, [Trans Continental's] clear objective was to file this motion on the final day of discovery, rather than actually resolve the issues.” Doc. 174.

*2 Trans Continental filed a Reply conceding that most of the draft and red-line versions that Trans Continental initially argued had been intentionally spoliated have now been produced, but maintaining that Trans Continental remains entitled to the draconian sanction of default because “it took a spoliation motion to smoke out crucial documents that MTV was obligated to produce more than two and a half years ago.” Doc. 199. Trans Continental argues that the interpretation and application of the Key Agreements are at the heart of this case, thus, it was handicapped in not receiving the missing drafts and redlines of the Key Agreements and their metadata regarding authorship until March 21, 2011. Doc. 199. Trans Continental argues that “MTV's discovery stratagem results in trial by ambush, which can only be remedied by a default judgment.” Doc. 199.

“Spoliation” is the “intentional destruction, mutilation, alteration, or concealment of evidence.” BLACKS LAW DICTIONARY 1437 (8th Ed. 2004). Sanctions for discovery abuses are intended to prevent unfair prejudice to litigants and to insure the integrity of the discovery process. See Flury v. Daimler Chrysler Corp., 427 F.3d 939, 944 (11th Cir. 2005). Prior to the court exercising any leveling mechanism due to spoliation of evidence, the court must decide: 1) whether the evidence existed at one time, 2) whether the spoliator had a duty to preserve the evidence, and 3) whether the evidence was critical to an opposing party being able to prove its prima facie case or a defense. See Flury, 427 F.3d at 944. The most severe sanction of default should be exercised only when there is a showing of bad faith and lesser sanctions will not suffice. Id. at 944-45.

Trans Continental contends that still missing from MTV's belated production are versions 2, 3, and 4 of the Amended Agreement which Trans Continental argues “given sworn testimony that these documents once existed on MTV's computer system, should exist in perpetuity.... [T]he only explanation is bad faith destruction.” Doc. 199 at 4. The sworn testimony on which Trans Continental relies from Warren Solow (Doc. 159-6, pp. 140-42) merely discusses a system used for documents that theoretically assigns each version an identification number; there is no testimony that any document identified as version 2 or 3 or a complete copy of version 4 of the Amended Agreement ever actually existed. In the Motion for Sanctions, Trans Continental states in a footnote:

Doc. 159 at 4 n. 5. Trans Continental's supposition that other intervening versions of the Amended Agreement (putative versions 2 and 3) may have existed at one point in time is hardly unequivocal evidence that versions 2, and 3, or a complete copy of 4 ever existed. Contrary to the interpretation by Trans Continental, the discovery responses from MTV on which Trans Continental relies do not state that Versions 2 and 3 “no longer exist,” but instead that “MTV admits that it searched for any and all versions of the Amended Agreement” and objects to the assumption that Version 2, 3, or missing pages of Version 4 ever even existed. Doc. 159-5 at 7-8. Trans Continental's arguments may support an argument against the validity of certain drafts of the Amended Agreement, but it falls far short of supporting the claim of spoliation or warranting the extreme penalty of a default judgment for alleged spoliation. Trans Continental also argues that these putative versions of the Amended Agreement are critical to its claims, but fails to articulate how these previous versions, if they indeed existed, are critical to its claims, as opposed to the final version of the Amended Agreement dated November 15, 2001. The Motion for Sanctions (Doc. 159) is DENIED.

*3 Trans Continental seeks to compel three categories of documents from MTV: tax returns for MTV's parent company Viacom, Inc.; documents related to the “Five Projects,” which is a series of television shows and projects in which Trans Continental was involved; and advertising revenue data from the airing of seasons one and two of Making the Band I (“MTB 1.1” and “MTB 1.2”). These documents were sought in Request Numbers 1-2, 18-19 and 67 of the Trustee's Fifth Request for Production of Documents. Soc. 171-1.

Motions to compel discovery under Rule 37(a) of the Federal Rules of Civil Procedure are committed to the sound discretion of the trial court. See Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir. 1984). The overall purpose of discovery under the Federal Rules is to require the disclosure of all relevant information so that the ultimate resolution of disputed issues in any civil action may be based on a full and accurate understanding of the true facts, and therefore embody a fair and just result. See United States v. Proctor & Gamble Co., 356 U.S. 677, 682 (1958). Discovery is intended to operate with minimal judicial supervision unless a dispute arises and one of the parties files a motion requiring judicial intervention. S.L. Sakansky & Associates, Inc. v. Allied American Adjusting Co. of Florida, LLC, No. 3:05cv708-32MCR, 2007 WL 2010860, *1 (M.D. Fla. Jul. 6, 2007). Furthermore, according to the Middle District guidelines, “[d]iscovery in this district should be practiced with a spirit of cooperation and civility.” Middle District Discovery (2001) at 1.

Federal Rule of Civil Procedure 34 allows a party to serve on any other party a request to produce and permit the requesting party to inspect, copy, test, or sample any designated documents or electronically stored information in party's possession, custody, or control. FED. R. CIV. P. 34(a). The scope of discovery under Rule 26(b) is broad: “parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” FED. R. CIV. P. Rule 26(b)(1); see, e.g., Hickman v. Taylor, 329 U.S. 495, 507-508 (1947); Farnsworth v. Procter and Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985) (the Federal Rules of Civil Procedure “strongly favor full discovery whenever possible”). Information can be relevant and therefore discoverable, even if not admissible at trial, so long as the information is reasonably calculated to lead to the discovery of admissible evidence. Dunbar v. United States, 502 F.2d 506 (5th Cir. 1974). Discovery is not limited to the issues raised by the pleadings because “discovery itself is designed to help define and clarify the issues.” Id. at 352. However, under recent changes to Federal Rule of Civil Procedure 26, the scope of discovery is restricted to the claims or defenses of the parties, rather than merely the subject matter. See, e.g., Nathai v. Florida Detroit Diesel-Allison, Inc., Case No. 3:09-cv-1, 2009 WL 2424570, (M.D. Fla. Aug. 5, 2009) (applying new language in the Rules).

Trans Continental seeks to compel tax returns of MTV, arguing that the “foreign income revealed on MTV's tax returns may bear on the correct construction of the Amended Agreement.” Trans Continental argues that the tax return information and supporting documents are relevant to the construction of the imputed license fee in the Amended Agreement because the parties have vastly differing interpretations of the license fee provision, Trans Continental argues the “tax returns will likely provide more details on the significance of MTV's foreign affiliates' revenues” and shed light on the accuracy of MTV's previously-produced advertising figures because “the tax returns will demonstrate how MTV in fact characterized its income.” Doc. 171.

*4 Apparently at issue in the case is the interpretation and application of the extent of the imputed license fee, with Trans Continental arguing that it is entitled to an imputed license fees for each of MTV's foreign affiliates' broadcast of Making the Band, and MTV arguing that Trans Continental is only entitled to a percentage for the entirety of the world irrespective of how many foreign affiliates broadcast Making the Band. Trans Continental argues the foreign income revealed on MTV's tax returns may bear on the correct construction of the Amended Agreement.

There are no “MTV tax returns”—Viacom, Inc. files consolidated tax returns which include Viacom International, Inc. of which MTV is an unincorporated division. Doc. 183-1, Velez Decl. Viacom International, Inc., does not file a separate tax return, but instead reports its financial information to Viacom Inc. which files a consolidated tax return for Viacom International, Inc. and its other subsidiaries. Id. Viacom, Inc. reports all revenue streams for a legal entity as “gross receipts” and Viacom Inc.'s tax returns do not reflect separate revenue figures for any division of Viacom International, including MTV; the supporting tax documentation is no different, and specific MTV revenues and are not discernable. Id. MTV also argues that the information sought from the tax returns[5] has already been provided in numerous other documents and in deposition testimony.

One district court, faced with parsing through the tax sharing relationships between a subsidiary and parent corporation who filed consolidated tax returns, gives the following general description of the intertwined financial calculations in the consolidated tax return:

In re Marvel Entertainment Group, Inc., 273 B.R. 58, 64 (D. Del. 2002).

Trans Continental fails to explain how the underlying gains and losses from Viacom International, Inc., of which MTV is an unincorporated subsidiary, buried in the consolidated tax return of Viacom, Inc., even if they could somehow be deduced from the consolidated tax returns, would bear on the proper construction or interpretation of the imputed license fee provision in the Amended Agreement. Construction of a contract is generally a question of law for the Court to decide, see, e.g., St. Paul Fire and Marine Ins. Co. v. Sea Quest Intern., Inc. 676 F.Supp.2d 1306, 1313 (M.D. Fla. 2009), thus, the interpretation of the Amended Agreement will not be determined by the tax figures on a consolidated return. To the extent Trans Continental seeks to compel “MTV's tax returns” the Motion is DENIED.

*5 Trans Continental seeks to compel Request No. 67, which requests all documents relating to MTV and/or its foreign affiliates' involvement in “Five Projects”[6] that are relevant allegedly to refute MTV's defense that Trans Continental had no capability to produce a television show while Making the Band was being filmed and aired on MTV. Trans Continental argues that although MTV objects based on over breadth and undue burden, MTV can, in all likelihood, capture responsive documents by searching for each of the Five Projects' names in its electronic database. Trans Continental also argues that its Fifth Request for Production was served timely on MTV before the March 9, 2011 fact discovery deadline. However, the Motion to Compel was not served until March 23, 2011, and the deadline for dispositive motions passed on June 1, 2011.

Trans Continental does not set forth in its Motion to Compel the relevance of these specific Five Projects to its ability to refute MTV's defense that Trans Continental had no capability to produce a television show while Making the Band was being filmed and aired on MTV. Apparently, MTV requested documents concerning these Five Projects in a request on April 2, 2010 to which Trans Continental provided responsive documents. Doc. 171 at 16. MTV argues that Trans Continental must have considered these projects inconsequential, as Trans Continental's counsel has known about them since April 2, 2010 (when MTV first requested documents regarding them), but did not request discovery about the Five Projects prior to February 2011.

MTV argues that Trans Continental's own production of documents reveals the Five Projects' marginal relevance to the central issues in this case. Three of the Five Projects apparently did not come to fruition and existed, if at all, in the idea stage. According to MTV, the only evidence of a show entitled the Brady Bunch Band is a draft fax to Paramount pitching a “Making the Band (‘MTB’) type program based on a Brady Bunch theme”; there is no final fax or documents evidencing any discussions. Doc. 183-12. On the Road refers to a reality television show about US5, the group formed on Big in America, moving to the U.S. market (see Doc. 183-13), and no evidence suggests that this show was even pitched to MTV. Another Project, “Making the Hit” is a home recording kit produced by Atari for Trans Continental (see Doc. 183-14), and MTV argues that nothing produced indicates that MTV was aware of the project, let alone involved in it. It does not appear that discovery regarding these three of the “Five Projects” is reasonably calculated to lead to the discovery of admissible evidence in Trans Continental's claims against MTV.

The two other of the Five Projects, Big in America[7] and Breaking the Band[8], may have some relevance to Trans Continental's claims, but MTV argues that Trans Continental waited too long to request the relevant discovery and full discovery regarding these Projects would place an undue burden on MTV. Big in America was a reality television show that chronicled a competition between eight performers from the United States and Germany to become members of Trans Continental's new group, US5. Doc. 183-5. Breaking the Band refers to three reality series about other Trans Continental performers, Natural, C Note, and a sequel to Big in America; however, MTV European affiliates may have aired a Big in America sequel (Doc. 183-10 at 9877-78), but the evidence does not suggest that a show about Natural or C Note was ever created. It does appear that, of the Five Projects, Big in America and Breaking the Band, which were “Lou Pearlman reality TV shows” (as the exhibits to Doc. 183[9] describe them), may have some relevance to Trans Continental's ability to refute MTV's defense that Trans Continental had no capability to produce a television show while Making the Band was being filmed and aired on MTV.

*6 MTV argues that searching for documents related to even these two Projects, however, would require it to conduct an extensive search looking for “needles in haystacks” including from its European affiliates. MTV argues there is no obvious link between MTV's airing of these shows and Trans Continental's “wherewithal to participate in the production of the show” which justifies the enormous burden in time and expense of production of the documents sought by Trans Continental from MTV's 100-plus channels throughout the world, foreign licensees, and 37 joint venturers. MTV contends that responding to Trans Continental's request would require identifying the involvement of each of those MTV-related entities and any relevant custodians; and collecting documents in the European Union can also be challenging given differing privacy laws—MTV estimates that it would take approximately six months to collect and process the documents Trans Continental seeks. MTV would have to collect documents from new custodians and process more than 1.4 million documents, allegedly costing MTV in excess of $100,000 even before outside counsel's review and (see Doc. 183-4—Solow Decl. ¶ 11). MTV estimates that this process would take another month in preparation time in this crucial period of time leading up to trial, which would delay the case for information that MTV argues has little relevance to the principal issues based on Trans Continental's failure to depose any corporate representative or propound interrogatories seeking information on these Projects. MTV states that it explained the burden of searching for the discovery during a March 14, 2011 telephonic meet and confer, but Trans Continental did not agree to limit the scope.

Under these circumstances, the Court finds that Trans Continental's efforts to obtain the discovery of documents relating to Big in America and Breaking the Band come too late as to such far-flung and tangential information. Cf. In re Sulfuric Acid Antitrust Litig., 231 F.R.D. 331, 337 (N.D. Ill. 2005) (denying plaintiffs' motion to compel because it was filed on the last day of the discovery period, stating that if the motion were to be granted, “it would result in protracted discovery, the bane of modern litigation”). The Motion to Compel was filed after the discovery period closed, seeking discovery from MTV databases, including those for the European channels, licensees, and joint venturers that may take as long as six to seven months to produce at a cost of $100,000 to MTV. Trans Continental has not made a compelling showing, given the lateness and the expense of such production, that these documents are important to its case, beyond the argument that MTV requested them, so MTV cannot deny that they are relevant. The Motion to Compel documents related to the Five Projects is DENIED.

Trans Continental seeks the production of all documents evidencing the advertising revenue generated by MTV in connection with its broadcasts of Seasons 1.1 and 1.2 of Making the Band. Trans Continental has contended throughout discovery that it was entitled under the terms of the Joint Venture Agreement to split the license fee paid by ABC, who broadcasted the original episodes of Making the Band. Trans Continental contends that unbeknownst to it prior to discovery, MTV had also secured ABC's permission to broadcast encore (or repeat) episodes of Making the Band Seasons 1.1 and 1.2 on MTV. Trans Continental argues that there is no record evidence which suggests that MTV paid a license fee to ABC to broadcast the encorepresentations of Making the Band.

MTV does not dispute that Trans Continental is entitled to the advertising revenue documents for the encore presentations, but argues that Trans Continental filed its motion to compel before the meet and confer process concluded. At the time Trans Continental filed its motion, MTV states that it had agreed to determine whether it had access to reliable advertising revenue data, and MTV subsequently learned that it could produce the data, but would have to incur an extra cost to obtain the data—it would not have otherwise had to pay the extra cost if Trans Continental had requested the data with its prior requests. MTV informed Trans Continental that it would produce the data, but only if Trans Continental paid the extra cost, and Trans Continental had not responded at the time MTV filed its Response. MTV argues that the Court should not shift the cost burden to MTV when Trans Continental chose to wait to request the additional advertising revenue documents. MTV contends that Trans Continental was aware that Making the Band 1.1 and 1.2 aired on MTV at the time of Trans Continental's previous requests for advertising data and more than one year before this Court issued its May 6, 2010 order compelling MTVN to produce advertising data (Doc. 75).

*7 MTV contends that on January 27, 2009, Jackie French testified MTB I appeared on MTV, and provided the Trustee with a list of the number of times each episode of MTB I was broadcast. See Doc. 183-19 (French Dep. at 120, 260-261, Pl. Ex. 67). Trans Continental's counsel asked detailed questions about the list, confirming that the number Ms. French provided only included airings on MTV, and not other Viacom-owned channels, but Trans Continental did not request the advertising data for MTB 1.1 and 1.2 until more than two years after that deposition. To retrieve the data, MTV must pay a flat fee to its vendor for every report (Doc. 183-4 Solow Decl. ¶ 13), and if Trans Continental had requested this advertising data for Making the Band 1.1 and 1.2 when it made the prior request for similar data for later seasons, MTV would not have to incur any additional expense.

The Court agrees that Trans Continental has delayed in seeking the additional advertising revenue documents when Ms. French testified in 2009 that Making of the Band, Season 1 (O-Town) aired on MTV after the show already aired on ABC. See Doc. 183-19 at 120-21. Again, taking into account the history of discovery, any additional expense associated with this relevant but somewhat tardy request should be split by the parties. If Trans Continental desires the advertising data at this late juncture, Trans Continental can pay 50% of MTV's vendor charge to collect the information, which Solow estimated to be between $5,000 to $10,000. See Doc. 183-4 ¶ 15. To the extent the Motion to Compel seeks the advertising revenue from Making the Band 1.1 and 1.2, the Motion is GRANTED as long as Trans Continental pays the half the cost of production.

Any other relief sought in the Motion to Compel (Doc. 171), such as fees and costs associated with the Motion, is DENIED.

DONE and ORDERED in Orlando, Florida on July 22, 2011.

Plaintiff Soneet Kapila is the Chapter 11 Trustee for the bankruptcy estate of Trans Continental Television Productions, Inc. Doc. No. 70-1. For ease of reference, the Court will refer to Plaintiff as “Trans Continental.”

The Key Agreements between the parties at issue in the motion are comprised of the January 7, 2000 Joint Venture Agreement and the November 15, 2001 Amended Agreement (“Amended Agreement”). The Court refers to the documents collectively as the “Key Agreements.”

Trans Continental also alleges MTV failed to produce any metadata in connection with the original July 12, 2002 contract with Bad Boy Films.

MTV contends that it has responded to more than 291 individual requests for documents that with sub-parts total 421 requests in the case. Doc. 174 at 3.

MTV argues that the only data not previously provided is the subscriber fee data, which Trans Continental has never specifically requested at any other time. Doc. 183 at 4-5.

The Five Projects are Big in America, Breaking the Band, Brady Bunch Band, On the Road, and Making the Hit.

MTV represents that this show was produced by a Trans Continental and Triple-M joint venture (Doc. 183-6), and MTV Europe negotiated a gratis license (Doc. 183-7), and while certain MTV European channels may have aired this show, no evidence suggests that their role extended beyond the terms of the license agreement; there is no evidence indicating that any U.S. MTV-related entity was involved.

MTV contends that Trans Continental did not define “Breaking the Band” in the discovery request, and the title may refer to one of these three shows. Docs. 183-8, 183-9, 183-10 at 9877-78; Doc. 183-11.

The exhibits are email correspondence—not with MTV, but with an entertainment group, MME Me, Myself & Eye Entertainment GmbH and Hakan & Associates—and an unsigned agreement between MTV Networks Europe, MME, and Trans Continental. Docs. 183-5, 183-6, 183-7, 183-8, 183-9.