Maag Audio, LLC v. Earbyte, Inc.
Maag Audio, LLC v. Earbyte, Inc.
2020 WL 12707953 (E.D. Mich. 2020)
November 19, 2020

Stafford, Elizabeth A.,  United States Magistrate Judge

Protective Order
Failure to Produce
Proportionality
Download PDF
To Cite List
Summary
The court granted Maag's motion to compel discovery and denied Antelope's motion for a protective order. The court found that Maag's requests for documents sufficient to show Antelope's ownership and organizational arrangements were relevant to the case and proportional to the needs of the case. The court also ordered Antelope to produce documents responsive to RFPs 19 and 23 by December 3, 2020.
MAAG AUDIO, LLC., Plaintiff,
v.
EARBYTE, INC. d/b/a ANTELOPE AUDIO, Defendant
Civil Action No.: 20-10444
United States District Court, E.D. Michigan, Southern Division
Filed November 19, 2020

Counsel

James T. Burton, Michael Eixenberger, Kirton & McConkie, Salt Lake City, UT, Leslie Charles Morant, Morant Law PLLC, Grand Rapids, MI, for Plaintiff.
Bryan G. Harrison, Locke Lord LLP, Atlanta, GA, Carl F. Jarboe, The Jarboe Law Firm, PLC, Grosse Pointe Farms, MI, for Defendant.
Stafford, Elizabeth A., United States Magistrate Judge

ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL AND DENYING DEFENDANT'S MOTION FOR PROTECTIVE ORDER [ECF NOS. 20, 23]

I. Introduction
*1 Maag Audio, LLC, moves to compel discovery and Earbyte, d/b/a Antelope Audio moves for a protective order.[1] [ECF No. 20, ECF No. 23]. After a hearing on November 16, 2020, the Court grants Maag's motion and denies Antelope's.
II. Relevant Factual Issues
Maag makes the EQ4, an equalizer for recording equipment. Maag has trademarked a hardware version of the EQ4, an Air Band control on the EQ4 and a software plugin that emulates the hardware version of the EQ4. Maag alleges that the Antelope MG4, the Antelope MG4+ and Antelope's Sky Band use trademarks belonging to Maag and that Antelope has engaged in unfair competition. Maag now seeks discovery about Antelope's ownership and employees, and Antelope seeks to preclude Maag from noticing the depositions of Nikolay Momchev and Vladimir Dimitrov, who Antelope says are not its employees.
In its motion for protective order, Antelope says that its “management is based in Sofia, Bulgaria.” [ECF No. 23, PageID.402]. But, in this litigation, Antelope has shrouded in secrecy the identity of its management. It identifies no one in its initial disclosures as being an Antelope principal or employee. [ECF No. 23-1, PageID.428-429]. It lists six people who are likely to have discoverable information, with five of them being employees of Elektrosfera Ltd.[2] [Id.]. The Elektrosfera employees Antelope lists are Igor Levin (CEO), Momchev (Software Developer), Dimitrov (Product Design), Blaga Miteva (e-Commerce Manager) and Stefan Stainov (no title stated). [Id.]. Even though Antelope does not identify any of these witnesses as its employee, it says that each should be contacted “[v]ia Antelope's counsel.” [Id.].
Other evidence shows Levin, Momchev and Dimitrov as having positions at Antelope. According to the Michigan Department of Licensing and Regulatory Affairs, Levin is Earbyte's president, treasurer, secretary and only listed director. [ECF No. 26-1, PageID.581]. Defendant admits that Earbyte does business as Antelope Audio. [See ECF No. 23-1]. At the hearing, Antelope's attorney said that his failure to identify Levin's relationship with Antelope in its initial disclosures was a mistake that he intends to correct.
Antelope continues to maintain that Momchev and Dimitrov are employees of Elektrosfera only—that they are not Antelope employees—but the only “proof” Antelope offers is its attorney's representations. [ECF No. 23, PageID.412, citing ECF No. 23-1, PageID.427-429, 473-474]. And Maag shows that Momchev and Dimitrov represent in their LinkedIn profiles that they work for Antelope:


[ECF No. 26-1, PageID.584-585, 588]. Neither Momchev's nor Dimitrov's LinkedIn profile mentions Elektrosfera. [Id.].
*2 Another question is Antelope's relationship with Elektrosfera. In its motion for protective order, Antelope first describes Elektrosfera as its parent company and then as its affiliate. [See ECF No. 23, PageID.402, 412]. Antelope says in its reply brief that it is a third-party distribution company through which Elektrosfera does business. [ECF No. 29, PageID.863-864]. But Antelope also cites its “End-User License Agreement” and a “Privacy Policy of Antelope Audio,” which say that Elektrosfera makes and distributes Antelope Audio products and that “Antelope Audio” is merely a trade name used by Elektrosfera. [ECF No. 29-1, PageID.878, 880]. The License Agreement says that “Antelope Audio is the trade name[ ] under which the company Elektrosfera ltd., registered” in Bulgaria. [Id., PageID.878]. The “legally bound Licenser under this agreement is Elektrosfera ltd.” [Id.]. The Privacy Policy says, “Elektrosfera Ltd. (hereinafter referred to as ‘Antelope Audio’) is a business organization engaged in the production, distribution and promotion of professional hi-end audio equipment of the brand Antelope Audio and Antelope.” [Id., PageID.880]. Antelope describes the License Agreement and Privacy Policy as “publicly-available documents from Elektrosfera's website (www.antelopeaudio.com).” [ECF No. 29, PageID.862]. This raises the question: if they are separate companies, why would Elektrosfera's website be in Antelope Audio's name?
The Court also finds it notable that everyone Antelope identifies in its initial disclosures as being “likely to have discoverable information” about the design and development of Antelope's MG4 and MG4+ digital emulation plugins is an Elektrosfera employee, including Levin, Momchev and Dimitrov. [ECF No. 23-1, PageID.428-429]. This record refutes Antelope's representations that it is a distinct company from Elektrosfera and, as described below, undermines Antelope's objections to discovery.
III. Analysis
Maag moves to compel responses to requests for production of documents (RFP) numbers 19 and 23, which it says are intended to identify relevant witnesses to depose. [ECF No. 20, PageID.296]. In RFP 19, Maag requested that Antelope produce “all documents and things sufficient to identify all persons with an ownership interest in Antelope.” [ECF No. 20-2, PageID.352]. Antelope objected that the request was not relevant to a claim or defense and that it “improperly seeks to elicit the thought processes and mental impressions of its counsel.” [Id.]. In RFP 23, Maag asked for “a current organizational chart of Antelope.” [Id., PageID.354]. Antelope objected that this request also was irrelevant to a claim or defense of the parties. [Id.]. The Court finds that these RFPs request relevant discovery and that Antelope's objections lack merit.
At the hearing, Antelope correctly argued that Maag's reliance on the scope of discovery described in Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978), was misplaced. Interpreting the then current version of Federal Rule of Civil Procedure 26(b)(1), the Oppenheimer Court said, “The key phrase in this definition—‘relevant to the subject matter involved in the pending action’—has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Id. at 351. Now, Rule 26(b)(1) does not include the “key phrase” cited in Oppenheimer; the amended rule more narrowly allows discovery that “is relevant to any party's claim or defense and proportional to the needs of the case.” Rule 26(b)(1). So it is “inappropriate to continue to cite to Oppenheimer for the purpose of construing the scope of discovery under amended Rule 26(b)(1).” Cole's Wexford Hotel, Inc. v. Highmark Inc., 209 F. Supp. 3d 810, 820-23 (W.D. Pa. 2016); see also Michael G. Stag, LLC v. Stuart H. Smith, LLC, No. CV 18-3425, 2019 WL 4918050, at *3 (E.D. La. Oct. 4, 2019) (Oppenheimer is “a forty-year-old Supreme Court decision that correctly applied the version of the Rule in effect at the time of that decision four decades ago.”).
But Antelope errs by construing Rule 26(b)(1) too narrowly. “A variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses raised in a given action.” Rule 26, Advisory Committee Notes (2015). For example, “[i]nformation about organizational arrangements” are discoverable if they are “likely to yield or lead to the discovery of admissible information.” Id. The Court agrees with Maag that the identification of Antelope's owners and organizational arrangements would lead to the discovery of admissible evidence and is discoverable under Rule 26(b)(1).
*3 In its responsive brief, Antelope said for the first time that no organizational chart exists. [ECF No. 27, PageID.629-630]. But Antelope has not made that claim in a written response, as required by Federal Rule of Civil Procedure 34(b)(2)(A). Antelope's written response must be signed under Federal Rule of Civil Procedure 26(g)(1).
The Court rejects Antelope's objection that Maag's request for documents sufficient to show Antelope's ownership seeks to elicit counsel's mental impressions. A “sufficient to show” request for production aligns with Rule 26(b)(1)’s aim for proportional discovery. See Hon. Elizabeth D. Laporte, Jonathan M. Redgrave, A Practical Guide to Achieving Proportionality Under New Federal Rule of Civil Procedure 26, 9 Fed. Cts. L. Rev. 19, 54-55 (2015) (describing “productions limited to information ‘sufficient to show[ ]’ ” as an example of an approach to discovery that “can yield practical solutions for all parties and the court.”). A “sufficient to show” request is therefore favored over a request for any and all documents about a subject.
Antelope's objections to disclosing the basic information requested about it in RFPs 19 and 23 is not well-taken.
In its initial disclosures, Antelope named Momchev and Dimitrov as witnesses who are likely to have discoverable information about the “[d]evelopment of MG4 and MG4+ digital emulation plugins” and said that they should be contacted “[v]ia Antelope's counsel.” [ECF No. 23-1, PageID.428-429]. Yet with the clock ticking on the fact discovery period, scheduled to end on December 30, 2020, Antelope seeks to preclude Maag from taking Momchev's and Dimitrov's depositions. [ECF No. 12; ECF No. 23]. Antelopes asks the Court to require Maag first to seek a deposition of the corporation under Federal Rule of Civil Procedure 30(b)(6). [ECF No. 23, PageID.403].
Maag has been trying to arrange Momchev's and Dimitrov's depositions since September. First, Maag served subpoenas through the office of Antelope's counsel based on Maag's “understanding that these individuals should be contacted through” that office. [ECF No. 23-1, PageID.453]. Antelope had, after all, said that Momchev and Dimitrov should be contacted through Antelope's counsel. [Id., PageID.428-429]. But Antelope's counsel responded that he was “not authorized to acknowledge service of the deposition subpoenas” and that he wished to coordinate with Maag's counsel a plan for “third-party” discovery in Eastern Europe. [Id., PageID.461]. Maag then served deposition notices under Federal Rule of Civil Procedure 30 on Antelope's counsel, saying that “Dimitrov and Momchev are parties to this action as employees of Defendant.” [Id., PageID.464-468]. The notices said that the depositions would be conducted remotely by Zoom. [Id.]. Antelope then moved for a protective order.
Rule 26(c)(1) allows a party from whom discovery is sought to move for a protective order to protect it from “annoyance, embarrassment, oppression, or undue burden.” The movant bears the burden of showing good cause for a protective order. Nix v. Sword, 11 F. App'x 498, 500 (6th Cir. 2001). “To show good cause, a movant for a protective order must articulate specific facts showing ‘clearly defined and serious injury’ resulting from the discovery sought and cannot rely on mere conclusory statements.” Id. (citation and quotation marks omitted).
*4 Here, Antelope requests that the Court “protect the Third-Party Witnesses from being compelled to appear for deposition via a mere notice.” [ECF No. 23, PageID.413]. The Court rejects Antelope's claim that Momchev and Dimitrov are third-party witnesses and finds that Maag properly noticed their depositions under Rule 30.
“Depositions of officers, directors, or managing agents of a party corporation may be taken by noticing the deposition of that particular person pursuant to Federal Rule of Civil Procedure 30(b)(1).” Stacey v. ZF Lemforder Corp., No. 05-CV-72777-DT, 2007 WL 201018, at *1 (E.D. Mich. Jan. 23, 2007). For a witness who is not a corporate party's officer, director or managing agent, the examining party may not notice the deposition under Rule 30(b)(1). Id. Instead, the examining party must subpoena the deponent under Federal Rule of Civil Procedure 45 or, for a foreign witness, the examining party must use the procedures of an applicable treaty, such as the Hague Convention. Id.
The law about the definition of “managing agent” is “sketchy” and its meaning must be assessed case-by-case because of the “vast variety of factual circumstances to which the concept must be applied.” Stacey, 2007 WL 201018 at *2 (citation and quotation marks omitted). Whether a witness is a managing agent depends “largely on the functions, responsibilities and authority of the individual involved respecting the subject matter of the litigation.” Id. (citation and quotation marks omitted) (emphasis added in Stacey). An employee need not have ultimate decision-making to be a managing agent. Id. at *2-*3. “Whether a proposed deponent falls into a particular category of employees or agents is therefore less relevant than the individual's specific functions and authority.” United States v. Afram, 159 F.R.D. 408, 413 (S.D.N.Y. 1994). In fact, “the deponent need not have a formal association with the corporation to be deemed to be its managing agent” and “need not be associated with the corporation at the time of his deposition.” Libbey Glass, Inc. v. Oneida, Ltd., 197 F.R.D. 342, 350 (N.D. Ohio 1999).
The examining party bears the burden of presenting evidence that the proposed deponent is a managing agent, but a court should resolve cases that “fall into the ‘grey area’ ” in the examining party's favor. Stacey, 2007 WL 201018 at *2 (citation and quotation marks omitted). “As in all matters appertaining to discovery, it is the ends of justice that are to be served.” Id. (citation and quotation marks omitted).
Maag meets its burden of showing that Momchev and Dimitrov had responsibilities and authority related to Antelope's MG4 and MG4+ digital emulation plugins—the subject matter of this litigation. Antelope's initial disclosures state that Momchev is a software developer and Dimitrov is a product designer, and that they know about those Antelope products. [ECF No. 23-1, PageID.428-429]. Antelope identifies no other software developer or product designer who likely knows about the MG4 and MG4+ digital emulation plugins, [Id.], which suggests that Momchev and Dimitrov were leaders in their respective roles in developing the products.
The facts here are like those in Schindler Elevator Corp. v. Otis Elevator Co., No. 06 CIV.5377CMTHK, 2007 WL 1771509 (S.D.N.Y. June 18, 2007). In Schindler, the defendant requested that the court find an inventor of a patent a managing agent, allowing his deposition to be noticed under Rule 30. Id. at *1. The plaintiff countered that the inventor was “merely an independent contractor.” Id. at *6. The court found the inventor to be a managing agent, reasoning in part that the inventor led the development of the patent and that the plaintiff had described the inventor as one of three people most knowledgeable about the facts alleged in the complaint. Id. at *7. The same reasoning applies here even if Momchev and Dimitrov were not Antelope employees.
*5 Besides, Momchev's and Dimitrov's LinkedIn profiles say that they do work for Antelope, and Elektrosfera's website describes Antelope Audio as a trade name belonging to Elektrosfera. Antelope's claim that Momchev and Dimitrov are third-party witnesses is not supported by the record.
Thus, the ends of justice support resolving this dispute in Maag's favor and finding that Momchev and Dimitrov are managing agents of Antelope. Maag has a right to serve notice of their depositions under Rule 30(b)(1) and there is no good cause to grant Antelope's motion for protective order.
IV. Conclusion
The Court GRANTS Maag's motion to compel [ECF No. 20] and ORDERS Antelope to produce documents responsive to RFPs 19 and 23 by December 3, 2020. If no organizational chart exists, as requested by RFP 23, Antelope must provide a written response by the same date saying so and it must be signed by its counsel under Rule 26(b). The Court DENIES Antelope's motion for protective order [ECF No. 23].

Footnotes

The Honorable Matthew F. Leitman referred these motions to the undersigned for hearing and determination under 28 U.S.C. 636(b)(1)(A). [ECF No. 21; ECF No. 24].
The sixth witness Antelope lists is Maag's president and CEO.