Cici Enters. LP v. Mucho Pizza LLC
Cici Enters. LP v. Mucho Pizza LLC
2023 WL 5167604 (N.D. Tex. 2023)
July 20, 2023

Toliver, Renee H.,  United States Magistrate Judge

Failure to Produce
Protective Order
General Objections
Sanctions
Cost Recovery
Cooperation of counsel
Proportionality
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Summary
The Court granted the motion in part and ordered Plaintiffs to file amended responses to RFPs 1-11 and remit $3,500.00 to Defendants. With respect to ESI, the Court found that the RFPs sought discovery that was relevant and proportional to the needs of the case, and imposed a temporal restriction with respect to RFP 9, limiting the communications produced in response to 2021 and later.
CICI ENTERPRISES LP AND YES CAPS LLC, PLAINTIFFS,
v.
MUCHO PIZZA LLC, SUN HOLDINGS INC., GUILLERMO PERALES, AND PAPA TEXAS LLC, DEFENDANTS
CASE NO. 3:22-CV-33-M (BK)
United States District Court, N.D. Texas, Dallas Division
Filed July 20, 2023

Counsel

J. David Apple, Apple & Fink LLP, Coppell, TX, Aaron-Michael Hanchett Sapp, Pro Hac Vice, Charles J. Hoover, Pro Hac Vice, Cheng Cohen LLC, Chicago, IL, for Plaintiffs.
Charlene Cantrell Koonce, Brown Fox PLLC, Dallas, TX, Brent Merrill Davis, Pro Hac Vice, Justin M. Klein, Pro Hac Vice, Marks & Klein LLP, Red Bank, NJ, for Defendants.
Toliver, Renee H., United States Magistrate Judge

ORDER

*1 Pursuant to 28 U.S.C. § 636(b) and the district judge's Order of Reference, Doc. 59, the Court now considers Defendants' Expedited Motion to Compel Production of Documents and Motion to Extend the Discovery Deadline, Etc., Doc. 57. For the reasons detailed herein, the motion is GRANTED IN PART. Because the parties have filed a Notice of Agreement to Modify Deadlines in Scheduling Order, Doc. 61, Defendants' request for an extension of the discovery deadline is TERMINATED AS MOOT.
I. PROCEDURAL HISTORY
According to the operative complaint, Plaintiff Cici Enterprises (“Cici's”) is the national franchisor of more than 300 Cici's restaurants operating under a variety of franchise agreements (“Agreements”). Doc. 45 at 3. Plaintiff Yes Caps owns Cici's trademarks and certain intellectual property and licenses that intellectual property to Cici's, which sublicenses it to Cici's franchisees for use in connection with their operation of Cici's restaurants pursuant to the terms of the Agreements. Doc. 45 at 4. Plaintiffs allege that Defendants,[1] while franchisees of 17 Cici's restaurants, impermissibly began competing with Cici's in early 2021 by developing and opening or otherwise acquiring franchises of Papa John's pizza restaurants. Doc. 45 at 5-8. To be specific, Defendants allegedly acquired 69 Papa John's restaurants in 2021, acquired another 90 in 2022, and have agreed to develop 100 more by 2029. Doc. 45 at 9. Plaintiff alleges that Defendants violated federal and state trade secrets acts and breached the confidentiality and noncompetition covenants in the parties' Agreements. Doc. 45 at 13-17. During the course of discovery, a dispute arose concerning several requests for production (“RFPs”) Defendants propounded on Plaintiffs. The instant motion followed.
II. APPLICABLE LAW
The Federal Rules of Civil Procedure specify the scope of discovery in all civil cases. Unless otherwise limited by the court,
[p]arties 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). More simply, under Rule 26(b)(1), discoverable matter must be relevant and proportional to the needs of the case. Samsung Elecs. Am., Inc. v. Yang Kun Chung, 321 F.R.D. 250, 279 (N.D. Tex. 2017). “To be relevant under Rule 26(b)(1), a document or information need not, by itself, prove or disprove a claim or defense or have strong probative force or value.” Id. at 280. The party opposing discovery bears the burden of showing how the discovery sought is not relevant or is otherwise objectionable. Mir v. L-3 Commc'ns Integrated Sys., L.P., 319 F.R.D. 220, 224 (N.D. Tex. 2016). A party may move for an order compelling production against another party when the latter fails to produce documents. FED. R. CIV. P. 37(a)(3)(B).
III. ANALYSIS[2]
*2 Plaintiffs responded to these RFPs, “subject to” their objections, and also “incorporated” their “general objections” in their responses. Doc. 58 at 21-24. Defendants assert they cannot determine whether Plaintiffs have withheld responsive documents “subject to” the objections and request that the Court compel Plaintiffs to amend their responses to omit these objections and clarify whether any responsive documents are being withheld. Doc. 57 at 5-6. In response, Plaintiffs do not attempt to defend these objections but, rather, generally argue they should not be required to produce responsive documents until Defendants rectify their own alleged deficient discovery responses. Doc. 62, passim.
Upon consideration, the Court concurs with Defendants—and Defendants' own allegedly deficient production is not the subject of this motion. See Lopez v. Don Herring Ltd., 327 F.R.D. 567, 581 (N.D. Tex. 2018) (providing that a party cannot “refuse to comply with an opposing party's discovery requests ‘simply because he believes that the opposing parties have not fully complied with his discovery requests to them.’ ”) (citation omitted). A party served with written discovery is required to “fully answer each ... document request to the full extent that it is not objectionable and affirmatively explain what portion of ... [a] document request is objectionable and why, affirmatively explain what portion of the ... document request is not objectionable and the subject of the answer or response, and affirmatively explain whether any responsive information or documents have been withheld.” Samsung Elecs. Am. Inc. v. Yang Kun “Michael” Chung, 325 F.R.D. 578, 590 (N.D. Tex. 2017) (quoting Heller v. City of Dallas, 303 F.R.D. 466, 485 (N.D. Tex. 2014)). Responding in this manner is manifestly confusing (at best) and misleading (at worse), and has no basis at all in the Federal Rules of Civil Procedure.” Heller, 303 F.R.D. at 487 (citation omitted). Accordingly, this practice has been described as “abusive,” lacking in “a factual or legal basis,” and “invalid.” Id.; Orchestrate HR, Inc. v. Trombetta, 178 F. Supp. 3d 476, 507 (N.D. Tex. 2016), objections overruled sub nom. Orchestratehr, Inc. v. Trombetta, No. 3:13-CV-02110-KS-BH, 2016 WL 5942223 (N.D. Tex. Oct. 13, 2016) (Starrett, J.).
Plaintiffs are thus ORDERED to file amended responses to RFPs 1-8 and 10-11, omitting their “subject to” and general objections. It is also Plaintiffs' responsibility to provide meaningful responses to the RFPs and identify which documents are responsive to which RFPs. Id. at 510. Plaintiffs' specific objections to certain of these RFPs are addressed below.
RFP 4 requests documents that “evidence, refer, or relate to Plaintiffs' efforts, practices, or policies intended to maintain the confidentiality of their claimed Trade Secrets.” Doc. 58 at 15. RFP 5 requests “documents evidencing, referring, or related to the independent economic value, actual or potential, arising from Plaintiffs' claimed Trade Secrets not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.” Doc. 58 at 15-16. Plaintiffs responded they would produce non-privileged documents “subject to” their objections that the RFPs were “overbroad and unduly burdensome as the definition of ‘Trade Secrets’ encompasses a substantial amount of confidential and proprietary information that is irrelevant and disproportional to the needs of this case.” Doc. 58 at 21-22.
Defendants argue that RFP 4 relates directly to the elements of Plaintiffs' trade secrets claims and are proportional to the needs of the case. Doc. 57 at 6-7. As to RFP 5, Defendants maintain that the economic value of Plaintiffs' alleged trade secrets is a direct element of Plaintiffs' misappropriation claims and their objections are thus improper. Doc. 57 at 8. In response, Plaintiffs assert that “if defendants seek to compel specific documents from Cici's, they must identify what it is they believe is missing.” Doc. 62 at 5. This argument belies common sense. First, how would Defendants know? Second, this inverts the discovery burden.
*3 It is the party seeking to resist discovery that bears the burden to demonstrate how the requested discovery is overly broad and unduly burdensome by submitting affidavits or other evidence revealing the nature of the burden. Merrill v. Waffle House, Inc., 227 F.R.D. 475, 477 (N.D. Tex. 2005); see also S.E.C. v. Brady, 238 F.R.D. 429, 437 (N.D. Tex. 2006) (“A party asserting undue burden typically must present an affidavit or other evidentiary proof of the time or expense involved in responding to the discovery request.”). “Failing to do so, as a general matter, makes such an unsupported objection nothing more than unsustainable boilerplate.” Heller, 303 F.R.D. at 490.
Here, Plaintiffs have submitted no such evidence. Moreover, the Court finds that the RFPs seek discovery that is relevant and proportional to the needs of the case. Samsung Elec. America Inc., 325 F.R.D. at 590. Plaintiffs are thus ORDERED to file amended responses to RFPs 4 and 5.
These RFPs request “internal communications regarding or relating to any Defendants and Plaintiffs' claimed Trade Secrets” and “[c]ommunications between Plaintiffs and any non-party regarding Plaintiffs' allegations that any of the Defendants Misappropriated any Trade Secret,” respectively. Doc. 58 at 16. Plaintiffs responded with the same overbreadth objection described above which, as the Court has found, is unsupported and thus insufficient. Heller, 303 F.R.D. at 490. Plaintiffs further objected that a response to RFP 9 would involve a “substantial number” of documents given the duration of the parties' franchise relationship. Doc. 58 at 23-24.
Defendants argue that the communications are at the heart of Plaintiffs' claims, and the parties' Agreed Protective Order, Doc. 42, negates any confidentiality concerns. Doc. 57 at 8-9. Plaintiffs reply that RFPs 9 and 10 have no temporal limitation and “encompass a substantial amount of information that is irrelevant and disproportional to the needs of this case.” Doc. 62 at 6.
The latter objection is insufficient for the reasons described previously herein. The Court further finds that the RFPs seek discovery covered by the parties' Agreed Protective Order, Doc. 42, and which is both relevant and proportional to the needs of the case. Samsung Elecs. Am. Inc., 325 F.R.D. at 590. Nevertheless, the Court will impose a temporal restriction with respect to RFP 9, given that the parties' business relationship began in 2010. Accordingly, Plaintiffs are ORDERED to file amended responses to RFPs 9 and 10, but may limit the communications produced in response to RFP 9 to 2021 and later.
Defendants request the amount of $3,500.00 for the reasonable fees incurred in bringing this motion, pursuant to Rule 37(a)(5)(A). Doc. 57 at 9-10; Doc. 58 at 7-8 (Davis Decl.). Counsel avers that he and local counsel spent at least four hours each working on the motion at hourly rates of $575.00 and $435.00, respectively. Doc. 58 at 7-8 (Davis Decl.). Plaintiffs oppose this relief on the basis of Defendants' alleged failure to confer before filing this motion. Doc. 62 at 8. The Court has already rejected that argument. See n.2.
Rule 37(a) provides that, if a motion to compel is granted, “the court must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” FED. R. CIV. P. 37(a)(5)(A). The exception to the rule is that “the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Id. Upon consideration, the Court finds that Plaintiffs have not established that their nondisclosure, responses, or objections at issue were substantially justified or that other circumstances make an award of expenses under Rule 37(a)(5) unjust. The Court further finds that an award of fees in the amount of $3,500.00 is inherently reasonable.
IV. CONCLUSION
*4 For the reasons set forth above, Defendants' Expedited Motion to Compel Production of Documents and Motion to Extend the Discovery Deadline, Etc., Doc. 57, is GRANTED to the extent stated herein. Plaintiffs are ordered to produce their amended responses to RFPs 1-11 and remit $3,500.00 to Defendants by August 4, 2023.
SO ORDERED on July 20, 2023.

Footnotes

For ease of reference, the Court will collectively refer to Defendants although the allegations against them vary to a degree.
Despite Plaintiffs' representations to the contrary, the Court finds that Defendants adequately conferred on the subject matter of this motion as required by Local Rule 7.1 and the