24 Hour Floors, LLC v. Polytek Surface Coatings, LLC
24 Hour Floors, LLC v. Polytek Surface Coatings, LLC
2023 WL 8476592 (S.D. Fla. 2023)
November 1, 2023
Louis, Lauren F., United States Magistrate Judge
Summary
The Plaintiffs filed a motion to compel better responses to their discovery requests regarding the Defendants' allegedly false advertising of a coating product. The court found that the Defendants' document production index was not sufficient and ordered them to amend their responses and provide relevant documents. The court also addressed deficiencies in the Defendants' responses to specific requests and ordered them to provide samples of their coating products, despite the Defendants' objections.
24 HOUR FLOORS, LLC, and TRU COLORS CONTRACTING, INC., Plaintiffs,
v.
POLYTEK SURFACE COATINGS, LLC, et al., Defendants
v.
POLYTEK SURFACE COATINGS, LLC, et al., Defendants
Case No. 0:23-cv-60994-LFL
United States District Court, S.D. Florida
Signed November 01, 2023
Counsel
Edward Herbert Zebersky, Mark S. Fistos, Zebersky Payne Shaw Lewenz LLC, Fort Lauderdale, FL, Kenneth Jay Sobel, Sobel Legal, Fort Lauderdale, FL, for Plaintiffs.Albert Eugene Blair, Rebecca Jean Williams, Conroy, Simberg, Ganon, Krevans, Abel, Lurvey, Morrow & Sche, Hollywood, FL, Jeffrey David Smith, Honigman LLP, Kalamazoo, MI, Michael Frank Jacobson, Jaffe, Raitt, Heuer & Weiss, PC, Southfield, MI, for Defendants.
Louis, Lauren F., United States Magistrate Judge
ORDER
*1 THIS CAUSE is before the Court upon Plaintiffs 24 Hour Floors, LLC (“24 Hour Floors”) and Tru Colors Contracting, Inc.’s Motion to Compel Better Responses to Plaintiffs’ Requests to Produce Documents and Interrogatories. (ECF No. 58). Defendants Polytek Surface Coatings, LLC d/b/a Penntek Industrial Coatings (“Polytek”), Penntek Industrial Coatings, LLC (“Penntek”), Brian Johnson, and Scott Weyer filed a Response (ECF No. 63), to which Plaintiffs filed a Reply (ECF No. 64). With leave of court, Defendants filed a Sur-reply. (ECF No. 74). This case has been reassigned to the undersigned by the Honorable K. Michael Moore, United States District Judge, pursuant to the Parties’ Consent to Proceed Before a United States Magistrate Judge. (ECF Nos. 76, 77). A hearing was held on Plaintiffs’ Motion on October 19, 2023, and a discovery status conference was held on October 25, 2023. Having reviewed the Motion, Response, Reply, Sur-reply, the docket as a whole, with the benefit of argument at the hearing and the status conference, and being otherwise fully advised, Plaintiffs’ Motion is GRANTED. This Order memorializes but does not alter the rulings made in open court at the hearing and at the status conference.
I. BACKGROUND
Plaintiffs initially filed this action on March 31, 2023, in the Circuit Court for the Seventeenth Judicial Circuit in and for Broward County, Florida. Defendants removed this case to this Court on May 26, 2023. Plaintiffs filed the operative First Amended Complaint (“Amended Complaint”) on July 5, 2023.
Plaintiffs allege in the Amended Complaint that Defendants manufacture and market a coating product that Plaintiffs have purchased and installed on numerous outdoor surfaces in residential and commercial concrete garages, patios, and decks. Plaintiffs allege that Defendants falsely advertised certain characteristics of this coating product, such as its suitability to be used on outdoor surfaces in Florida. Plaintiffs allege that they relied on Defendants’ advertisement in purchasing and using the coating product. Plaintiffs assert that the coating product has failed in over 92 of Plaintiffs’ residential and commercial customers, and resulted in damage to not only the coating, but also homeowner and commercial property on which it was installed. Plaintiffs assert that they have had to replace the coatings and settle claims with these customers at Plaintiffs’ expense. Plaintiffs allege that Defendants were notified of the coating product's failures, and induced Plaintiffs to purchase additional coating product by asserting that the issue had been fixed. Plaintiffs allege claims for breach of the implied warranty of merchantability, breach of the implied warranty of fitness for particular purpose, common law indemnity, fraudulent inducement, misleading advertising, and unjust enrichment.
In July of 2023, Plaintiffs served Defendants with their First Requests for Production, Interrogatories, and Corrected Second Requests for Production. Defendants served written responses to the First Requests on August 2 and 4, 2023, with amended responses on August 24, 2023. Defendants served unverified answers to Plaintiff's Interrogatories on July 17 and 18, 2023. Defendants Penntek and Polytek served verified responses on August 24, 2023. The individual Defendants served verified responses on August 31, 2023.[1] Defendants served responses to the Second Requests on August 18, 2023. Plaintiffs now move to compel Defendants to identify by Bates stamp number which documents they produced respond to which Requests and to which Interrogatories; to produce webpages, videos, and advertisements mentioned in the Amended Complaint and identified in Plaintiffs’ Rule 26 disclosures and all other relevant advertisements; to provide outstanding discovery by a date certain; to provide samples of the requested products they possess or control; and to provide the documents and information not produced.
II. DISCUSSION
A. Defendants’ Discovery Responses
*2 Plaintiffs argue that Defendants’ responses to their Requests are not sufficient because the responses do not identify which documents pertain to which requests. Plaintiffs argue that Defendants have not produced documents as they were kept in the usual course of business but rather the documents were culled, reformatted, and made available through Defendants’ counsels’ ShareFile portal. Plaintiffs additionally assert that the production identifies one of defense counsel's employees as the creator of the documents produced and that the singular production was made without differentiating which Defendants produced which documents.
Defendants assert that they have provided Plaintiffs a detailed index of Defendants’ document production which allows Plaintiffs to determine which documents are responsive to which Requests and, as such, Defendants are not required to amend their responses.
Federal Rule of Civil Procedure 34 permits a party to produce documents “as they are kept in the usual course of business or [a party] must organize and label them to correspond to the categories in the request.” Fed. R. Civ. P. 34(b)(2)(E)(i). In producing documents kept in the usual course of business, Defendants have “an obligation to organize the documents in such a manner that Plaintiffs may obtain, with reasonable effort, the documents responsive to their requests.” Williams v. Taser Int'l, Inc., No. CIVA1:06-CV-0051-RWS, 2006 WL 1835437, at *7 (N.D. Ga. June 30, 2006). “It is beyond reasonable dispute that a party fails to meet its obligations under Rule 34 if it simply provides boxes of files in an undifferentiated mass.” In re Mentor Corp. Obtape Transobturator Sling Prod. Liab. Litig., No. 4:08-MD-2004, 2009 WL 152495, at *2 (M.D. Ga. Jan. 22, 2009).
Defendants represent that they have produced their documents as they are kept in the usual course of business. However, their production of 3,771 documents through ShareFile with defense counsel's employee as the creator of the documents produced is akin to providing a “box of files in an undifferentiated mass.” See id. This production, which fails to even provide attachments to all emails produced, does not satisfy Defendants’ obligation under Rule 34.
Defendants’ proffered index does not cure the deficiency. To satisfy a party's obligation under Rule 34, “[c]ourts typically require the producing party to provide ‘some modicum of information’ regarding how documents are ordinarily kept in the course of business, which would ideally include ‘the identity of the custodian or person from whom the documents were obtained, assurance that the documents have been produced in the order in which they are maintained, and a general description of the filing system from which they were recovered.’ ” Mizner Grand Condo. Ass'n, Inc. v. Travelers Prop. Cas. Co. of Am., 270 F.R.D. 698, 701 (S.D. Fla. 2010) (alterations omitted). Defendants represent that the index sufficiently describes the documents within their document production. The index, as proffered, does not identify the custodian of each document, does not provide assurance that the documents have been produced in the order in which they are maintained, nor does it provide a general description of the filing system from which the documents were recovered. Accordingly, Defendants have not met their discovery obligations in responding to Plaintiffs’ discovery requests.
Defendants offered, at the hearing and in their Response, to address these deficiencies and amend their responses to identify which documents produced respond to which Requests by Bates stamp number. After the undersigned noted that Defendants’ discovery responses generally were insufficient, beyond merely this identification failure, Defendants represented they would amend their responses to Plaintiffs’ Requests for Production and Interrogatories. Defendants in amending their discovery responses must provide meaningful responses to Plaintiffs’ discovery requests.
*3 Defendants additionally represented that they had a production of 1,500 relevant documents prepared to produce to Plaintiffs. Accordingly, Defendants were ORDERED to serve that production by October 23, 2023.
In producing documents, Defendants are to provide their documents in a manner that Plaintiffs can sort, with families and custodial information intact. Defendants, in amending their responses, shall also rectify the deficiencies raised in Plaintiffs’ Motion that Defendants failed to address in their Response. For example, Defendants’ answers to Interrogatory Nos. 2 and 3 state “See Training Manual previously produced,” and “See Safety Data Sheets previously produced,” respectively. (ECF No. 58-7 at 4). These are deficient responses because Defendants refer generally to documents produced without “specifying the records that must be reviewed, in sufficient detail” to enable Plaintiffs the ability to locate and identify them readily as required under Federal Rule of Civil Procedure 33. Fed. R. Civ. P. 33(d)(1).[2]
B. Request for Production No. 4
Defendants object to Plaintiffs’ Second Request for Production No. 4, which asks for samples of Defendants’ coating products from dates certain. Defendants object to this request because, they aver, any samples Defendants might possess have expired and are thus not a representative sample of their products and not relevant. Plaintiffs represented at the hearing that Defendants offer a fifteen-year and lifetime warranty for the products that Plaintiffs are requesting samples of. Plaintiffs argue that the samples’ possible expiration should not be a basis to deny Plaintiffs’ access to the samples nor does their expiration determine their relevancy. The samples of the coating products are patently relevant to the central issues in this case; Defendants’ unsubstantiated objections are OVERRULED.[3]
Defendants additionally objected to Request No. 4 because they assert they do not have samples of the product, but that BayVex Technologies LLC (“BayVex”) does. BayVex is Defendants’ in-house manufacturer of their coating products. In their Reply, Plaintiffs argue that Penntek should be compelled to produce these samples even if they are in BayVex's possession because Penntek has control over BayVex sufficient to demand their production. Plaintiffs argue that Penntek's control is demonstrated by the companies having the same CEO, being founded in the same city, and Penntek's publishing promotional videos of BayVex to its social media.
Defendants argued at the hearing that the samples are not within their possession nor within their control because BayVex is a separate company and Penntek could not command production of said samples from BayVex. In Defendants’ Sur-reply,[4] Defendants argue that Plaintiffs have failed to meet their burden to demonstrate that Penntek has control over BayVex.
*4 Under Federal Rule of Civil Procedure 34, a party may seek from another party items in the responding party's “possession, custody, or control.” Fed. R. Civ. P. 34(a)(1). “The burden is on the party seeking discovery to establish that the opposing party has ‘control’ over documents held by an affiliate.” Costa v. Kerzner Int'l Resorts, Inc., 277 F.R.D. 468, 473 n.2 (S.D. Fla. 2011). In determining whether a party has control over documents and information in the possession of nonparty affiliates, the Court may analyze the following factors: “(1) the corporate structure of the party and the nonparties; (2) the nonparties’ connection to the transaction at issue in the litigation; and (3) the degree to which the nonparties benefit from the outcome of the litigation.” Id. at 471; In re Zantac (Ranitidine) Prod. Liab. Litig., No. 20-MD-2924, 2021 WL 1522449, at *5 (S.D. Fla. Apr. 16, 2021). “The ‘control’ inquiry is highly factual.” In re Zantac (Ranitidine) Prod. Liab. Litig., 2021 WL 1522449, at *2.
At the October 19, 2023 hearing on Plaintiffs’ Motion, Plaintiffs presented a promotional video from Penntek's Facebook page, which was played in open court. The video advertised the closeness between Penntek and its in-house manufacturer, BayVex, even including a statement by Penntek that it was “proud to have [its] own manufacturing company in-house to ensure any product that leaves [its] door is held to the highest and best standards in the coatings industry.” The video included a tour of BayVex's facilities utilized for testing and formulating Penntek's coating products. Penntek touted the closeness of its relationship with BayVex by further presenting their logos side by side in the facilities and by promoting BayVex's testing capabilities on its own social media platform. Plaintiffs presented specific compelling evidence that Penntek in fact has control over BayVex's documents on the particular subject at issue of creation, testing, and formulation of the coating products by BayVex. Defendants[5] were provided an opportunity to respond to this compelling evidence in a sur-reply. Defendants were warned, and they acknowledged, that the control inquiry is highly factual and that their sur-reply should address that Penntek in fact did not have the ability to command BayVex to produce the relevant documents or rebut the strong factual evidence already presented by Plaintiffs. Other than continuing to vaguely deny their control, Defendants presented neither facts nor evidence to substantiate their objection.
Instead, Defendants cited to caselaw to argue that Plaintiffs have not met their burden of demonstrating Penntek's control. As Defendants note, it is not sufficient evidence that Penntek and BayVex share the same CEO. (ECF No. 74 at 4); see In re Zantac (Ranitidine) Prod. Liab. Litig., 2021 WL 1522449, at *7 (“[T]he mere fact that the two entities share(d) a CEO is not by itself sufficient.”). This, however, was not the only evidence of Penntek's control over BayVex that Plaintiffs’ argument travelled on, which included Penntek's own promotion of its closeness to its in-house manufacturer. Plaintiffs additionally represented that Defendants and BayVex were represented by the same firm in this case and in the related proceeding, 24 Hour Floors, LLC v. BayVex Technologies, LLC, 0:23-mc-61971-LFL. The Court further observes that in support of its position resisting certain disclosures to Plaintiffs, non-party BayVex advanced an affidavit by an expert who attests that his retention in this matter is on behalf of both BayVex and Penntek. The apparent ability of Defendant Penntek to control non-party BayVex, at least in the context of this lawsuit, is adequately evidenced by the record.
*5 Defendants additionally cite to In re Takata Airbag Products Liability Litigation and note that that plaintiffs in that case did not meet their burden of demonstrating control for BMW North America (“BMW NA”) over BMW AG, the parent company, when “[t]he only material fact proven by [plaintiff's evidence] is that BMW AG has provided documents and information to BMW NA for the limited purpose of responding to [the National Highway Traffic Safety Administration's] inquiries and investigations.” No. 15-02599-MD, 2017 WL 8812733, at *4 (S.D. Fla. Feb. 16, 2017). Plaintiffs in this case have provided evidence that Penntek touts its closeness to BayVex, which remains unrebutted as Defendants have failed to advance evidence either at the Motion Hearing, discovery status conference, or in their sur-reply that would suggest otherwise. Having viewed Penntek's video in conjunction with the sur-reply buttressed without evidence, Defendant Penntek continues to raise legal objections, but no facts much less evidence to substantiate what appears to be a reliance on artificial corporate separateness. I find Penntek enjoys sufficient control over BayVex as to demand its production of samples as Plaintiffs demand. Accordingly, Defendants are ordered to amend their responses to Defendants’ discovery requests to include any relevant information and documents within BayVex's possession on the particular subject at issue of creation, testing, and formulation of the coating products by BayVex.
As the discovery in this case is complex and ongoing, a discovery status conference is set November 13, 2023, at 2:00 P.M. in Miami Division before the undersigned at the United States Courthouse, Clyde Atkins Bldg., 11th Floor, 301 North Miami Avenue, Miami, Florida.
III. CONCLUSION
Based on the foregoing, Plaintiffs’ Motion to Compel Better Responses to Plaintiffs’ Requests to Produce Documents and Interrogatories (ECF No. 58) is GRANTED.
An award of reasonable attorney's fees and costs is mandatory under Federal Rule of Civil Procedure 37(a)(5) if a motion to compel is granted, unless the court finds the objections to the discovery substantially justified, the motion was filed prior to making good faith efforts to resolve the dispute, or other circumstances would render such an award unjust. While the Court finds that Defendants’ objections were not substantially justified, no costs will be shifted. Plaintiffs have declined to advance proof of their costs incurred noting that they have elected not to seek any such award. Moreover, Defendants have undertaken substantial efforts to remedy their previous discovery shortcomings, at significant cost. Thus, any award pursuant to Rule 37 would, I find, be unjust under the circumstances unique to this dispute.
DONE AND ORDERED in open court at Miami, Florida, this 1st day of November, 2023.
Footnotes
The verification pages of the Interrogatory answers were only served on September 8, 2023, after Plaintiffs filed their Motion to Compel. (ECF No. 63 at 7).
At the status conference on October 25, 2023, Defendants represented that they have already produced amended responses to Plaintiffs’ Requests for Production. Accordingly, Defendants are ordered to provide their amended answers to Plaintiffs’ Interrogatories on or before November 7, 2023.
At a motion hearing on October 26, 2023 in a related case, 24 Hour Floors, LLC v. BayVex Technologies, LLC, 0:23-mc-61971-LFL (S.D. Fla.), BayVex Technologies LLC represented that it would be creating samples of the coating product for 24 Hour Floors to test rather than providing the expired samples.
At the hearing, Defendants argued they were not given proper notice of the dispute of control over BayVex to demand production because Plaintiffs first asserted this argument in their Reply. Accordingly, the undersigned granted Defendants leave to file a sur-reply.
Defendants’ Response in Opposition is advanced on behalf of all Defendants and offers no arguments specific to one or the others. The Court replicates herein the use of “Defendants” to refer to all Defendants collectively and without any distinction among them.