Lambland, Inc. v. Heartland Biogas, LLC
Lambland, Inc. v. Heartland Biogas, LLC
2018 WL 7825202 (D. Colo. 2018)
November 29, 2018
Mix, Kristen L., United States Magistrate Judge
Summary
The Board of County Commissioners (BOCC) sought to quash a subpoena issued by Heartland Renewable Energy LLC (Heartland) for documents related to the Heartland Facility. The Court denied the Motion to quash, as well as the BOCC's request for a protective order and costs. The BOCC was unable to show that the subpoena was unduly burdensome or that good cause existed for a protective order.
LAMBLAND, INC., a Colorado corporation doing business as A-1 Organics, Inc., Plaintiff,
v.
HEARTLAND BIOGAS, LLC, a Delaware limited liability company, and EDF RENEWABLE DEVELOPMENT, INC., a Delaware corporation, Defendants
v.
HEARTLAND BIOGAS, LLC, a Delaware limited liability company, and EDF RENEWABLE DEVELOPMENT, INC., a Delaware corporation, Defendants
Civil Action No. 18-cv-01060-RM-KLM
United States District Court, D. Colorado
Filed November 29, 2018
Mix, Kristen L., United States Magistrate Judge
ORDER
*1 This matter is before the Court on Non-party Board of County Commissioners of Weld County’s (“BOCC”) Motion to Quash Heartland Biogas, LLC’s Subpoena to Produce [#27][1] (the “Motion”). Defendants filed a Response [#34] in opposition to the Motion [#27], and Non-party BOCC filed a Reply [#40]. The Court has reviewed the Motion, the Response, the Reply, the entire case file and applicable case law and is sufficiently advised in the premises. For the reasons stated below, the Motion [#27] is DENIED in part and DENIED without prejudice in part.
I. Background
Plaintiff brings this diversity action based on claims of breach of contract and negligent misrepresentation by Defendants. See generally Am. Compl.[#7]. On August 10, 2018, Defendants served a Subpoena to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action [#27-5] (the “Subpoena”) on Non-party BOCC. The Subpoena [#27-5] requests ten categories of documents from the BOCC, whom Defendants have designated as a non-party at fault pursuant to Colo. Rev. Stat. § 13–21–111.5(3)(b). See [#47].
Defendant Heartland Biogas, LLC (“Heartland”) here is also the sole plaintiff in Civil Action No. 1:16-cv-03183-RM-NYW, Heartland Biogas, LLC v. The Board of County Commissioners of Weld County (“Heartland v. BOCC”). That case concerns Heartland’s operation of its organic substrate digester processing system and handling facility (the “Facility”). See [#27-1]. There, Heartland initially sued the BOCC, the Colorado Department of Agriculture (“CDA”), the Colorado Department of Public Health and Environment (“CDPHE”), and four employees of CDPHE. See [#27-1]. Heartland later dismissed all claims against CDA and CDPHE and then filed an action in Denver County District Court against those entities (“State Court Action”). See [#27-2]. The remaining parties in Heartland v. BOCC exchanged initial disclosures pursuant to F.R.C.P. 26(a)(1). At that time, the BOCC produced to Heartland more than 2600 pages of documents, not including “emails and other communications.” See [#27-7]. All other discovery is currently stayed in Heartland v. BOCC pending final resolution of motions to dismiss that action. See [#27-3]. In relevant part, a Recommendation of United States Magistrate Judge [#105] was entered on August 30, 2017, recommending that the District Judge grant in part and deny in part the BOCC’s motion to dismiss.
In the State Court Action, Heartland served the BOCC with a Subpoena to Produce Documents on June 20, 2018. See [#27-4]. There, Heartland sought production of the following: (1) Weld County’s file relating to USR 1704[2] and MUSR 14-0030;[3] (2) all e-mails and other communications between anyone at Weld County and anyone at the CDPHE regarding the Facility; (3) all e-mails and other communications between anyone at Weld County and anyone at the CDA regarding the Facility; (4) all documents, communications, and electronically stored information relating to Certificate 9931[4] for the Facility; (5) all documents, communications, and electronically stored information relating to LSA[5] at the Facility; and (6) all agreements or drafts of agreements between Weld County or its subdivisions with Heartland. See id. In opposition to the subpoena, the BOCC argued that Heartland could conduct discovery from or receive initial disclosures from CDA and CDPHE containing all such emails or communications CDA and CDPHE had with the BOCC or Weld County employees concerning Heartland’s Facility. Thus, according to the BOCC, Heartland sought from the BOCC duplicative information that would impose an undue burden on BOCC wholly disproportionate to the needs of the State Court Action and that would be burdensome and oppressive to the BOCC. However, after consideration of these arguments, the judge in the State Court Action ordered the BOCC to respond to Heartland’s subpoena. See [#27-8]. The BOCC did so by serving Heartland with a series of objections and responses and a cost invoice, requesting that Heartland pay the invoice in advance of production pursuant to the Colorado Open Records Act, Colo. Rev. Stat. § 24–72–205(1)(b) (“CORA”) and Colo. R. Civ. P. 26, although Heartland has so far refused to pay those costs. See[#27-9, #27-10]. As a result, the BOCC has not yet produced any documents responsive to the subpoena in the State Court Action, pending further court order there.
*2 The Subpoena at issue in the present case is similar, but broader, than the one at issue in the State Court Action. See [#27-5]. Here, Heartland seeks production of the following: (1) all documents and communications relating to USR 1704; (2) all documents and communications relating to MUSR 14-0030; (3) all documents and communications relating to Certificate 9931 for the Facility; (4) all documents and communications relating to the Certificate of Designation for the Facility; (5) all documents and communications relating to LSA at the Facility; (6) all agreements or drafts of agreements between Weld County and Heartland or EDF Renewable Development, Inc.; (7) all documents and communications between anyone at Weld County and anyone at A-1 Organics regarding the Facility; (8) all documents and communications between anyone at Weld County and anyone at the CDPHE regarding the Facility; (9) all documents and communications between anyone at Weld County and anyone at the CDA regarding the Facility; and (10) all documents and communications among anyone at Weld County regarding the Facility. See id. The BOCC avers that the majority of these requests are substantively identical to requests for production Heartland served on the BOCC in Heartland v. BOCC, but which the BOCC need not yet answer due to the stay of discovery in that case. See [#27-6].
Non-party BOCC asserts three arguments in opposition to the Subpoena’s requests. First, it argues that the production requests thwart the stay of discovery in place in Civil Action No. 16-cv-03183-RM-NYW. Motion [#27] at 6-9. Second, it argues that the production requests are unreasonable, oppressive, and duplicative. Id. at 9-11. Third, it argues that the production requests impose unreasonable expense on the BOCC. Id. at 11-12. As a result, BOCC asks the Court to quash the Subpoena pursuant to Fed. R. Civ. P. 45 or to enter a protective order pursuant to Fed. R. Civ. P. 26(c).
II. Analysis
A. Request to Quash the Subpoena
Fed. R. Civ. P. 45 governs discovery from non-parties by subpoena. Rule 45requires that the recipient of a subpoena may timely file a motion to quash or modify the subpoena if the subpoena (1) fails to allow a reasonable time to comply, (2) requires a person to comply beyond the geographical limits specified in Rule 45(c), (3) requires disclosure of privileged or other protected matter, or (4) subjects a person to undue burden. See Fed. R. Civ. P. 45(d)(3)(A). The objecting party has the burden of showing that the discovery requested is objectionable. Klesch & Co. v. Liberty Media Corp., 217 F.R.D. 517, 524 (D. Colo. 2003).
Non-party BOCC’s arguments all appear to fall under the fourth category, i.e., that compliance with the Subpoena would subject it to undue burden. Motion [#27] at 6-12. Courts are required to balance the need for discovery against the burden imposed when parties are ordered to produce information or materials, and the status of a person or entity as a non-party is a factor which weighs against disclosure. Echostar Commc’n Corp. v. News Corp. Ltd., 180 F.R.D. 391, 394 (D. Colo. 1998) (citing Am. Standard Inc. v. Pfizer, Inc., 828 F.2d 734, 738 (Fed. Cir. 1987)). However, if the objecting party claims that a subpoena is unduly burdensome, the alleged burden must usually be established “by affidavit or other reliable evidence.” Hertz v. Luzenac Am., Inc., No. 04-cv-1961-LTB-CBS, 2006 WL 994431, at *12 (D. Colo. Apr. 13, 2006) (citing Burton Mech. Contractors, Inc. v. Foreman, 148 F.R.D. 230, 233 (N.D. Ind. 1992)).
1. The Stay of Discovery in Heartland v. BOCC
On December 1, 2017, the Magistrate Judge in Heartland v. BOCC stayed the case “as to the Scheduling Order and discovery until the Honorable Raymond P. Moore’s disposition of the pending Recommendation and further Order of this court ....” (internal citation omitted). Here, Non-party BOCC argues:
Requiring the BOCC to respond to the subpoena would undermine the stay of discovery that has been ordered in the 2016 Federal Action, if not render it essentially meaningless. The issue is stated plainly: by the subpoena directed to the BOCC, Heartland is attempting the precise thing against the BOCC which it cannot do in the 2016 Federal Action. If Heartland did this against the BOCC in the 2016 Federal Action by means of discovery requests to the BOCC, the BOCC would be wholly within its rights to object and seek a protective order against such discovery, which, due to the stay, the federal court would grant as a matter of course. Given the force of the federal court stay, which has persisted for almost nine months, the situation before the Court invokes the doctrine of comity, which “[i]n parallel litigation... is an important and omnipresent factor” that should be considered....
*3 The Court should engage in appropriate docket control and enter a Protective Order quashing the subpoena because the BOCC, which is faithfully abiding by the stay imposed upon both Heartland and the BOCC in the 2016 Federal Action, would be at a severe disadvantage in the 2016 Federal Action by Heartland’s pursuit in the Instant Action of the same information it sought from the BOCC but which the Federal District Court prevented it from obtaining, while the BOCC elects to abide by the existing, well-grounded Stay Order. Indeed, the BOCC is unsure whether it can even comply with the subpoena without violating the Stay Order in the 2016 Federal Action, which predates Heartland’s subpoena to the BOCC by several months, because as set forth above Heartland is seeking from the BOCC in the Instant Action the very documents which the Federal District Court actively prevented Heartland from seeking in the 2016 Federal Action.
Heartland is also attempting to engage in unilateral discovery by seeking the information listed in the Instant Subpoena. Because the BOCC is not a party to either the State Court Action or the Instant Action, it has no such similar mechanism to seek information from Heartland during the pendency of the stay in the 2016 Federal Action. Further, the BOCC understands that trial is not imminent in the Instant Action and, therefore, there is no prejudice to Heartland should the Court issue a protective order. Therefore, Heartland cannot justify its request for the Court in the Instant Action to essentially overrule the stay order issued in the 2016 Federal Action on the basis that it will prejudice Heartland in the Instant Action should it not have this information.
Motion [#27] at 6-9 (internal citations omitted).
The Court is unpersuaded by the BOCC’s argument for several reasons. First, there is no indication in the stay order entered in Heartland v. BOCCthat it was intended to affect or bind any other case except that action itself. Second, Heartland’s stay order was entered on December 1, 2017, approximately five months before the present action was filed, and so the Magistrate Judge there had no occasion to consider the effect of her order on litigation which had not even been filed at that time. Third, pursuant to Fed. R. Civ. P. 26(b)(1), parties are entitled to discovery on any matter “relevant to any party’s claim or defense.” Here, the BOCC makes no argument that the requested production of documents is not relevant to thisaction, regardless of what may be happening in Heartland v. BOCC.
Fourth, the BOCC makes no argument that the present litigation was filed as a means to evade the stay order issued in Heartland v. BOCC. In fact, Plaintiff in this action and Heartland’s co-Defendant in this action are not parties in either Heartland v. BOCC or the State Court Action. Fifth, the Court is aware of no authority which supports the proposition that, simply because the requested discovery may be relevant to both this action and Heartland v. BOCC, a stay in one action means that a party cannot obtain that discovery in this action. Sixth, there has been no request for consolidation of these actions for the purpose of discovery or otherwise. Seventh, the Court finds it highly unlikely that the BOCC would be sanctioned in Heartland v. BOCC for providing discovery ordered to be produced by a judge in a separate action. Eighth, the Court sees no reason why Plaintiff here must have its case delayed indefinitely on the basis that Defendants here are awaiting purportedly necessary discovery, simply because Heartland v. BOCC is stayed.
Finally, to the extent the BOCC asserts a comity argument, see Motion[#27] at 7-8; Reply [#40] at 3-4, the Court is dubious that it would apply in a situation like the one presented here, where there are two federal cases over which the same District Judge presides, where only party is the same, where that one party is a plaintiff in one action and a defendant in another action, where the claims are unique, where there is a stay in one action, and where a subpoena to produce documents by a third-party is served in the other action. See, e.g., MacArthur v. San Juan County, 497 F.3d 1057, 1066-67 (10th Cir. 2007) (stating that comity “is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws”) (quoting Hilton v. Guyot, 159 U.S. 113, 164 (1895)). Regardless, comity is a discretionary doctrine, see MacArthur, 497 F.3d at 1067, and, based on the considerations outlined above, the Court does not find that it should be exercised here.
*4 Accordingly, the Court rejects the BOCC’s argument that the Subpoena should be quashed based on the stay in place in Civil Action No. 16-cv-03183-RM-NYW.
2. Unreasonable, Oppressive, and Duplicative Discovery
The Court takes each of the BOCC’s arguments regarding unreasonableness in turn. First, the BOCC argues:
In connection with its Rule 26(a)(1) disclosures in the 2016 Federal Action, the BOCC already produced to Heartland its entire file concerning the Facility, which included the USR 1704, MUSR 14-0030, and any formal written agreements between Weld County and Heartland through the end of 2016. Thus, the production of all such documents again would be duplicative at this juncture.
Motion [#27] at 9-10 (internal citation omitted). Under Fed. R. Civ. P. 26(b)(2)(B)(i), “the court must limit the frequency or extent of discovery otherwise allowed ... if it determines that ... 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 ....” Certainly if, as the BOCC asserts, Heartland already has these documents, then it is more convenient, less burdensome, and less expensive in all ways to not require the BOCC to produce them again. However, the Court is not in a position on the record before it to determine that all such documents covered by this first argument are clearly duplicative. The BOCC must respond to the Subpoena and state precisely which documents it has previously provided to Heartland and which Heartland therefore must already have in its possession.
Second, the BOCC argues:
[B]ecause CDPHE is a party to the State Court Action, in which Heartland seeks nearly indentical [sic] communications to those sought by the Instant Subpoena, Heartland has a perfectly reasonable alternative for obtaining all emails and correspondence between personnel for the State and the BOCC or employees of Weld County as to the Heartland Facility. Further, to the extent Heartland seeks communications between “anyone at the County and anyone at A-1 Organics,” Heartland may seek this information from A-1 Organics, which is the Plaintiff in the Instant Case. As such, Heartland is or could be in possession of all the information its subpoena requests without burdening the BOCC one iota. For this reason, the considerations in F.R.C.P. 26(b)(2)(C)(i) and F.R.C.P. 26(c)direct that the BOCC would incur undue burden or expense if it were compelled to generate a substantive response to Heartland’s subpoena, and hence that a Protective Order should issue quashing the subpoena, as Heartland is merely seeking to “cover its bases” at the BOCC’s sole expense.
Motion [#27] at 10. The BOCC’s argument here fails because it has not adequately shown that shifting the burden of production to the CDPHE or to A-1 Organics is overall less convenient, less burdensome, or less expensive way for Heartland to obtain the documents at issue here. Rather, such action would simply shift the burden away from the BOCC and onto other entities. The BOCC has provided no legal authority, and the Court is aware of none, permitting it to quash a subpoena solely on that basis.
*5 Next, the BOCC argues:
Moreover, relating to the requests for liquid soil amendment (“LSA”) and Certificate 9931 communications (which the BOCC assumes is a certificate obtained by Heartland’s predecessor-in-interest, Heartland Renewable Energy, and not Heartland), the general assembly charged CDPHE, not the BOCC, with the responsibility of creating and administering a solid waste management program. Accordingly, the BOCC has no jurisdiction over LSA and would not have maintained a file relating to LSA or Certificate 9931 separate from the entire file it already disclosed.
Motion [#27] at 10 (internal citations omitted). Again, the Court is not in a position on the record before it to determine the veracity of the BOCC’s statement. Regardless, the Court cannot find that it presents an undue burden for the BOCC to respond to the Subpoena and state precisely which requested documents the BOCC does not have in its possession and therefore cannot produce.
Because the Court finds that the BOCC has not satisfied its burden of showing that the Subpoena is unduly burdensome, the Motion [#27] is denied to the extent that the BOCC seeks an order quashing the Subpoena.
B. Request for Protective Order
As an alternative to quashing the subpoena, the BOCC requests that the Court issue a protective order regarding the requested documents. The decision to issue a protective order rests within the sound discretion of the trial court. Wang v. Hsu, 919 F.2d 130, 130 (10th Cir. 1990). Fed. R. Civ. P. 26(c) allows the Court to limit the discovery of certain information. A protective order may issue upon 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). The good cause standard of 26(c) is not met by the conclusory statements of the opposing party. Klesch & Co. Ltd. v. Liberty Media Corp., 217 F.R.D. 517, 524 (D. Colo. 2003). Instead, “the party seeking a protective order must show that disclosure will result in a clearly defined and serious injury to that moving party.” Id. (citing Exum v. U.S. Olympic Committee, 209 F.R.D. 201, 206 (D. Colo. 2002)). As a general rule, the “good cause” calculation requires that the Court balance “the [moving] party’s need for information against the injury which might result from unrestricted disclosure.” Id. (citations omitted). In addition, the Court should consider any privacy interests that may be implicated and whether the case involves issues that may be important to the public. Id.
In accordance with the discussion above, the Court finds that the BOCC has not shown that it will suffer a serious injury in the absence of a protective order covering the subpoenaed materials. In other words, the BOCC has not shown good cause for the protective order at this time.
Accordingly, the Motion [#27] is denied without prejudice to the extent the BOCC seeks a protective order.[6]
C. Costs
*6 Finally, the BOCC argues that Heartland should be required to pay for the production of documents. Motion [#27] at 11-12 (citing Colo. Rev. Stat. § 24–72–205(1)(b); Fed. R. Civ. P. 45(d)). Pursuant to Fed. R. Civ. P. 45(d)(2)(B)(ii), the Court “must protect a person who is neither a party nor a party’s officer from significant expense resulting from compliance.” The BOCC estimates its total cost to comply with the Subpoena to be $8,350.20 (consisting of $4,545.00 in time costs and $3,805.20 in technology costs). See [#27-10].
The Court denies the request without prejudice for two reasons. First, given the Court’s commentary above regarding, among other things, duplicative production of documents, it is unclear whether this estimate is still even remotely accurate. Second, under the circumstances of this case, it makes more sense for the Court to determine this issue later, if necessary, once an actual cost of production is determined rather than a mere estimate. The BOCC may, if it so desires, file a renewed motion for the payment of cost of compliance after it has occurred.[7]
III. Conclusion
In short, the Court finds that the BOCC’s request to quash the subpoena is without merit, and that the requests for a protective order and for costs are premature. Accordingly,
IT IS HEREBY ORDERED that the Motion [#27] is DENIED as to the request to quash the subpoena and DENIED without prejudice as to the requests for a protective order and for costs.
“[#27]” is an example of the convention the Court uses to identify the docket number assigned to a specific paper by the Court’s case management and electronic case filing system (CM/ECF). This convention is used throughout this Order.
“USR 1704” means the Use by Special Review Permit relating to the Facility and issued by the Board on July 21, 2010. See [#27-5] at 5.
“MUSR 14-0030” means the Minor Amendment to the Site Specific Development Plan issued by the Weld County Planning Director on February 25, 2015. See [#27-5] at 5.
“Certificate 9931” means the Certificate of Registration 9931 to distribute LSA as a commercial fertilizer, soil conditioner, and plant amendment. See [#27-5] at 4.
The Court makes no comment regarding the appropriateness of a protective order if Heartland files a motion to compel after the BOCC provides its initial response to the Subpoena.
The Court takes no position at this time on whether such motion would be granted.