GEMSTONE FOODS, LLC et al., Plaintiffs, v. AAA FOODS ENTERPRISES INC., et al., Defendants MICHAEL ENSLEY, et al., Plaintiffs, v. BEN O. TURNAGE, et al., Defendants CASE NO. 5:15 CV-2207-MHH, CASE NO. 5:15 CV-1179-MHH United States District Court, N.D. Alabama, Northeastern Division Reported and Recommended September 04, 2019 Filed September 04, 2019 Counsel John Nisbett, Pro Hac Vice, Michael A. Heilman, Heilman Law Group PA, Jackson, MS, Michael A. Akers, Akers Law Group PLLC, Brandon, MS, for Plaintiffs. M. Jefferson Starling, III, Katherine Clements Hill, Ryan M. Hodinka, Balch & Bingham LLP, Birmingham, AL, for Defendants Annette Carr, Portioning Partners, Matthew Welborne, Deborah Campos, A&M Consulting Firm LLC, Cooper Hill & Lecroix CPAs, Shane Pass, Edward L. Hill, Gary Hill, Michael Webster, Farm Fresh Foods LLC, Michael Claude Ensley, AAA Foods Enterprises Inc. Daniel J. Fortune, James Allen Sydnor, Jr., Huie, Fernambucq & Stewart, LLP, M. Jefferson Starling, III, Katherine Clements Hill, Ryan M. Hodinka, Balch & Bingham LLP, Birmingham, AL, for Defendant Matthew Wester. Ryan M. Hodinka, Balch & Bingham LLP, Birmingham, AL, for Defendant Rhonda Beasley. Mayo, Jr., Cal, Special Master SPECIAL MASTER’S REPORT AND RECOMMENDATION ON DEFENDANTS’ MOTION TO QUASH, FOR PROTECTIVE ORDER, AND FOR SANCTIONS AS TO PLAINTIFF’S SUBPOENA TO GOLD CREEK FOODS [DOC. 179] *1 This dispute concerns Defendant’s Motion to Quash, for Protective Order, and for Sanctions as to Plaintiff’s Subpoena to Gold Creek Foods [Doc. 179]. The Special Master reports and recommends as follows: I. Background This consolidated action concerns disputes between various people and entities in the poultry processing industry. In the primary action (2207), Plaintiffs Gemstone Foods, LLC, and RCF, LLC, seek relief against Defendants AAA Foods Enterprises, Inc., A&M Consulting Firm, LLC, Portioning Partners, Farm Fresh Foods, LLC, Cooper, Hill & LeCroix, CPA, and various owners and employees of these companies under the Racketeer Influenced and Corrupt Organizations Act for violations of 18 U.S.C. §§ 1962(a), (c), and (d) and the Computer Fraud and Abuse Act, and for breach of contract, tortious breach of contract, tortious interference with contractual relations, breach of fiduciary duty, fraud, misrepresentation, conversion, negligence, gross negligence, and wantonness, civil conspiracy, breach of the duty of good faith and fair dealing, conversion, unjust enrichment, and money paid by mistake. Gemstone and RCF demand compensatory damages, treble damages, punitive damages, a constructive trust, an accounting, attorney fees and expenses, interests, and injunctive relief. In the other action (1179), Michael Ensley and A&M Consulting seek relief against Ben Turnage, Gemstone Foods, LLC, Gemstone Holdings, LLC, Gemstone Ventures Decatur, LLC, Gemstone Ventures, LLC, Jamas Capital Management, LLC, and RCF, LLC, for breach of contract, quantum meruit, unjust enrichment, civil conspiracy, and breach of the covenant of good faith and fair dealing. Ensley and A&M request compensatory damages, punitive damages, interest, and attorney fees. The discovery process has moved at a snail’s pace due to a variety of causes, including numerous discovery disputes and, most recently, discovery of Gemstone emails on the laptop of a former Gemstone and current Farm Fresh Foods employee. Earlier in this litigation, Plaintiffs filed Notices of Intent to Serve Subpoena Duces Tecum to several non-parties [Docs. 61-70]. Defendants moved to quash the subpoenas [Doc. 71]. This Court quashed those subpoenas without prejudice as premature. See Order [Doc. 77]. Consistent with the Special Master’s directions and by agreement of the parties as to the procedure, Plaintiffs served Defendants, before filing Notices of Intent, with several new subpoenas directed to many of the same non-parties for testimony and documents. Defendants filed Motions to Quash and for Protective Order and Sanctions as to each subpoena. This Report and Recommendation addresses the subpoena directed to Gold Creek Foods, LLC, a former employer of Michael Ensley with a possible business relationship with certain Defendants. Specifically, the subpoena seeks to compel a witness to testify for the company on eight listed topics and seeks production of certain documents, abbreviated as: Testimony Topics: 1. Manner of communication with Ensley from January 1, 2011, through December 31, 2015; *2 2. Nature of business relationship with Ensley and his entities from January 1, 2011, through December 31, 2015; 3. Agreements with Carr and her entity from January 1, 2011, through December 31, 2015; 4. Agreements with Ensley and his entities concerning poultry transactions from January 1, 2011, through December 31, 2015; 5. Agreements with Carr and her entity concerning poultry transactions from January 1, 2011, through December 31, 2015; 6. Documents produced in response to the subpoena; 7. Cause of conclusion of relationship with Ensley, Carr and their entities; and 8. Any claims or litigation with Ensley, Carr and their entities. Document Production Requests: 1. Documents, communications, and agreements related to Michael Ensley for January 1, 2011, through December 31, 2015; 2. Documents which evidence the business relationship between Gold Creek and Ensley and related entities for January 1, 2011, through December 31, 2015; 3. Documents which evidence the business relationship between Gold Creek and Annette Carr and a related entity for January 1, 2011, through December 31, 2015; 4. Contracts with Ensley and related entities for January 1, 2011, through December 31, 2015; 5. Contracts with Carr and a related entity for January 1, 2011, through December 31, 2015; 6. Documents with the last known contract information for any employees who conducted business with Ensley, Carr or their entities for January 1, 2011, through December 31, 2015; 7. Bills of Ladings for business conducted with Ensley, Carr or their entities for January 1, 2011, through December 31, 2015; 8. Documents detailing business conducted with Ensley, Carr or their entities for January 1, 2011, through December 31, 2015, including nature, volume, transaction type, product type, and identity of involved entity; 9. Documents concerning conclusion of relationship with Ensley, Carr or their entities; and 10.Documents concerning litigation with Ensley, Carr or their entities. Defendants move to quash the subpoena as violating a directive of the Special Master and, under Rule 45(d)(3)(A)(ii), as requiring compliance outside the geographical limits of Rule 45(c) and seek a protective order under Rule 26(c) for the reasons provided in Rule 26(b)(2)(C)(i-iii). Defendants also seek sanctions. Plaintiffs argue Defendants lack standing to challenge the subpoena and have otherwise failed to show entitlement to a protective order or sanctions. II. Analysis A. Motion to Quash Generally, a party lacks standing to challenge a non-party subpoena. See Rondini v. Bunn, No. 7:17-cv-1114, 2019 U.S. LEXIS 96447, at *4, 2019 WL 2409134 (N.D. Ala. June 7, 2019). A party may establish standing based on that party’s “personal right or privilege” as to the information sought by subpoena. Id. Here, Defendants have not asserted any such personal right or privilege. Instead, Defendants contend the subpoena violates an earlier directive of the Special Master and complain about required compliance beyond the geographical scope permitted under Rule 45(c)(2). Defendants misread the intent of the timeframe referenced in the Special Master’s email summary of the May 29, 2018 conference [Doc. 179-1]. The “relevant time period” discussed in the email related to searches of ESI databases. Throughout the discovery process, the parties have used a variety of temporal scopes to limit different discovery requests depending on the subject matter at issue. The time period referenced by the Special Master and set by agreement of the parties for ESI searches does not apply as a blanket “relevant time period” for all discovery. *3 As to the geographical scope, the proposed subpoena indicates the date, place and time for the deposition and document production are “TBD”, i.e., to be determined. Presumably, Plaintiffs will complete this portion of the subpoena when served. Regardless, Gold Creek Foods may raise or waive this geographic limitation. Defendants lack standing to challenge the subpoena on this ground. B. Motion for Protective Order Defendants also request entry of a protective order under Rule 26(c). A court “may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ...”. See Rule 26(c)(1). Defendants have the burden “to demonstrate good cause, and must make ‘a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements’ supporting the need for a protective order.” See Rondini, 2019 U.S. LEXIS 96447, at *5 (quoting Meide v. Pulse Evolution Corp., 2019 U.S. Dist. LEXIS 59639, 2019 WL 1518959, at *5 (M.D. Fla. Apr. 8, 2019). The decision to enter a protective order is discretionary for the court. Id. Citing Rule 26(b)(2)(C), Defendants argue (i) “the subpoena seeks unreasonably cumulative or duplicative information that can be obtained from a more convenient, less burdensome, less expensive source”, (ii) “Plaintiffs had ample opportunity to obtain the information sought during party discovery”, and (iii) “the subpoena seeks documents outside the scope permitted by Rule 26(b)(1)’s relevance and proportionality requirements.” 1. Cumulative or Duplicative Information Otherwise Available According to Defendants, Plaintiffs “seek the details of all of the poultry business conducted between Gold Creek” and Ensley, Carr and related entities, citing document requests 1-5 and 7-8 from the subpoena and referencing Plaintiffs’ 80 document requests and over 100 search terms used to search Defendants’ ESI database. Plaintiffs’ requests are broader than communications in an ESI database and include agreements and other types of documents which might not exist in an ESI database. Moreover, the time period in the subpoena precedes the creation of Farm Fresh Foods and the time when Ensley and the other individual defendants associated with Farm Fresh Foods, so Defendants may not possess some of the documents sought by Plaintiffs. The Special Master does not find the requests in the subpoena are cumulative or duplicative. Defendants do not specify a more convenient, less burdensome, or less expensive alternative source for this information. 2. Ample Opportunity During Party Discovery Defendants argue that Plaintiffs had ample opportunity to obtain this information at an earlier point during discovery. However, discovery remains open. Neither party has taken a deposition. This is an appropriate time to obtain non-party discovery. Were the parties at the end of or beyond the close of discovery, the analysis might differ. See, e.g., Hespe v. City of Chicago, No. 13 C 7998, 2016 U.S. Dist. LEXIS 173357, at **21-23, 2016 WL 7240754 (N.D. Ill. Dec. 15, 2016) (upholding magistrate judge’s ruling denying motion to compel production of electronic device made at eve of close of discovery); and AGSouth Genetics, LLC v. Ga. Farm Services, LLC, 1:09cv186, 2013 U.S. Dist. LEXIS 147053, **3-4, 2013 WL 5603231 (M.D. Ga. Oct. 11, 2013) (granting motion to quash subpoena served on party for document production at trial when serving party had ample opportunity to obtain information during discovery). The Special Master does not find this factor supports imposition of a protective order as to discovery sought from Gold Creek Foods through the subpoena. 3. Relevance and Proportionality *4 In balancing relevance and proportionality, Rule 26(b)(1) requires consideration of 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 issues, and the balance between the burden or expense of the discovery and its likely benefit. Defendants contend the examination areas and document requests in the subpoena “flunks Rule 26’s proportionality requirements” as “Plaintiff has not identified any basis for the supposed relevance” of the testimony areas and document requests and the “overbroad requests are not in any way proportional to the needs of the case.” Defendants do not provide any further analysis of the proportionality factors. Courts construe the term “relevant” in Rule 26(b)(1) broadly to include matter that bears on or could reasonably lead to other matter that bears on any issue that is or may be in the case. Hibbett Patient Care v. Pharmacists Mut. Ins. Co., CA 16-231, 2017 U.S. Dist. LEXIS 216327, at **3-4 (S.D. Ala. January 26, 2017) (citing 4 J. Moore, Federal Practice ¶ 26.56[1], p. 26-131 n. 34 (2d ed. 1976) and Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 98 S. Ct. 2380, 2389 (1978)). By the plain language of the Rule, “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Here, Gemstone alleges the information sought relates to its fraud and RICO claims which extend beyond Defendants and include information about and documentation of Defendants’ interactions with other persons and companies engaged in the poultry industry. The Special Master finds the information sought in the testimony topics and the document production requests is relevant, with the limitations as to the document requests as outlined below. Although Defendants only referenced the balancing factors in a conclusory manner, the Special Master finds (i) the issues at stake in this complex commercial litigation are important, as the actions involve RICO and fraud claims across large operating entities potentially involving numerous people, (ii) the amount in controversy is in the millions of dollars, (iii) the parties do not necessarily have equal access to relevant information, as Defendants possess information which Plaintiffs need to support their claims and to prove damages, (iv) the parties apparently have sufficient resources to engage in protracted discovery, (v) the information sought has some importance to the issues before the Court, and (vi) based on the information available at this point, the benefit of the discovery to Plaintiffs outweighs any production burden on Defendants. In the end, Plaintiffs do not seek the discovery in the subpoena from Defendants but from a non-party. To the extent one of the parties bears the cost of this discovery, Plaintiffs will, and not Defendants. The Special Master reports and recommends imposition of a protective order limiting the document production requests as outlined below. C. Motion for Sanctions Defendants seek imposition of sanctions under Rule 45(d)(1). However, the subpoena is not directed to Defendants, so they are not the “person subject to the subpoena”. Moreover, as already discussed, Defendants lack standing to challenge the subpoena. Gold Creek Foods can assert objections and seek relief as necessary and appropriate under Rule 45. The Special Master does not recommend imposition of sanctions against Plaintiffs and in favor of Defendants. III. Conclusion The Special Master recommends as follows: 1. The Court deny Defendants’ Motion to Quash Subpoena to Gold Creek Farms; 2. The Court issue a protective order to limit the document requests in the subpoena to documents which reflect: a. Communications with Ensley following termination of his employment with Gold Creek Foods; *5 b. Agreements with Ensley, Carr, A&M Consulting Firm, LLC, AME Foods, LLC, or AAA Foods Enterprises, Inc., concerning the poultry industry made or performed from January 1, 2011, through December 31, 2015; c. Contact information for employees or representatives of Gold Creek Foods who conducted poultry business with Ensley, Carr, A&M, AME, or AAA from January 1, 2011, through December 31, 2015; d. Details, to the extent reasonably available, of transactions with Ensley, Carr, A&M, AME, or AAA from January 1, 2011, through December 31, 2015, including (i) volume of poultry involved by pound and dollar value on a monthly basis, (ii) whether the transactions were purchases, sales, fee for processing, or other transactions, (iii) specific type of poultry involved, and (iv) name of person or entity involved (e.g., Ensley, Carr, A&M, etc.); e. Conclusion or termination of relationship with Ensley, Carr, A&M, AME, or AAA; and f. Actual or threatened litigation with Ensley, Carr, A&M, AME, or AAA. 3. The Court deny Defendants’ Motion for Sanctions. SO REPORTED AND RECOMMENDED, this the 4th day of September, 2019. J. CAL MAYO, JR. SPECIAL MASTER