Damsi v. Tarpstop, LLC
Damsi v. Tarpstop, LLC
2023 WL 9186657 (N.D. Ohio 2023)
October 19, 2023
Clay, Darrell A., United States Magistrate Judge
Summary
The court granted in part and denied in part motions to compel discovery related to ESI, including financial statements, tax returns, and communications between the parties and third parties. The court also ordered the parties to revise their responses and produce responsive documents within 30 days.
EVEREST DAMSI, Plaintiff/Counter-Defendant,
v.
TARPSTOP, LLC, Defendant/Counter-Plaintiff
v.
TARPSTOP, LLC, Defendant/Counter-Plaintiff
CASE NO. 3:21-CV-0953
United States District Court, N.D. Ohio, Western Division
Filed October 19, 2023
Counsel
Donald P. Screen, Chandra Law, Cleveland, OH, Jeffrey M. Stopar, Semro Henry & Spinazze, Toledo, OH, for Plaintiff/Counter-Defendant.Jeffrey M. Stopar, Semro Henry & Spinazze, Toledo, OH, for Plaintiff/Counter-Defendant.
Nicholas T. Stack, Thomas P. Dillon, Shumaker, Loop & Kendrick, Toledo, OH, for Defendant/Counter-Plaintiff.
Clay, Darrell A., United States Magistrate Judge
ORDER REGARDING DISCOVERY MOTIONS
[ECF #53, 54]
JUDGE JEFFREY J. HELMICK
INTRODUCTION
*1 On April 4, 2023, Judge Jeffrey Helmick referred this matter to me for final disposition of the “pending discovery disputes and related motions ....” (Non-document entry of April 4, 2023; see also 28 U.S.C. § 636(b)(1)(A)). Pursuant to a prior order I issued, two motions to compel were ultimately filed: Plaintiff Everest Damsi's Motion to Compel Production of Documents Sought in Plaintiff's First and Second Sets of Requests for Production of Documents (ECF #54), and Defendant Tarpstop, LLC's Motion to Compel (ECF #53). Each party filed a brief in opposition to the other party's motion (ECF #57, 59) and a reply memorandum in support of their own (ECF #60, 61).[1] Following review of the motions, briefs, and exhibits, and for the reasons that follow, I GRANT in part and DENY in part each motion.
BACKGROUND FACTS
A. General Allegations of the Litigation
At this time, the operative pleadings are Mr. Damsi's Amended Complaint (ECF #27), Tarpstop's Answer to the Amended Complaint (ECF #28), Tarpstop's Answer to the Original Complaint that asserted a Counterclaim against Mr. Damsi, and a Third-Party Complaint by Tarpstop against Tri County Tarp, LLC and Harrison Truck & Body, Inc. (ECF #6). Taken together, they outline the following dispute:
Mr. Damsi has a background in tarp products used for tractor trailers and trucks. (ECF #27 at PageID 231). He holds a number of domestic and foreign patents. (Id.). In 2011, he met one of the primary owners of Tarpstop, which led to him working as a consultant for the company for a little over a year. (Id.). In 2012, Mr. Damsi relocated from his home in Canada to Perrysburg, Ohio, to assume a position as a Tarpstop employee. (Id. at PageID 232).
Effective August 1, 2012, Mr. Damsi and Tarpstop entered into three agreements: an Agency Agreement (ECF #27-1), a Confidentiality and Non-Competition Agreement (ECF #27-2), and an Agreement Regarding Intellectual Property (ECF #27-3). Subsequently, Mr. Damsi and Tarpstop entered into a Modification Agreement that was effective September 1, 2016. (ECF #27-5). Included in the Modification Agreement was a provision setting forth the parties’ “mutual agreement” that Mr. Damsi's employment at Tarpstop would cease as of September 10, 2016. (Id. at PageID 265).
*2 Before and after the Modification Agreement, Mr. Damsi alleges Tarpstop mailed letters to other companies in the tarp industry that he contends were false and intended “to injure Damsi's business reputation and to prohibit him from working.” (ECF #27 at PageID 239). And he alleges that in April 2021, Tarpstop stopped making required monthly payments to him. (Id. at PageID 233).
Mr. Damsi's Amended Complaint seeks the following relief:
- Declaratory judgment that Tarpstop committed a material breach of Paragraph 17 of the Agency Agreement.[2] (Id. at PageID 233-35).
- Declaratory judgment that Mr. Damsi can compete under the Confidentiality and Non-Competition Agreement. (Id. at PageID 235-36).
- Declaratory judgment that Mr. Damsi is entitled to choose a remedy under Section 5 of the Agreement Regarding Intellectual Property.[3] (Id. at PageID 236-37).
- Damages for breach of contract when Tarpstop ceased making monthly payments required under the Modification Agreement. (Id. at PageID 237).
- Damages for breach of contract relating to intellectual property rights. (Id.).
- Damages for tortious interference with business relationships. (Id. at PageID 238).
- Damages for defamation. (Id. at PageID 238-39).
Tarpstop admits entering into each of the four agreements with Mr. Damsi. (ECF #28 at PageID 287-88). It also admits sending letters to certain tarp industry companies concerning Mr. Damsi, though it avers at least one exemplar letter attached to the Amended Complaint “appears to be an altered copy ....” (Id. at PageID 288). And it “admits that it ceased making payments to Damsi.” (Id. at PageID 289). But Tarpstop denies that Mr. Damsi is entitled to any of the relief he seeks. (Id. at PageID 289-93).
*3 In its Counterclaim and Third-Party Complaint, Tarpstop “seeks to hold Damsi accountable for several material, significant, and incurable breaches of the express obligations he owed to Tarpstop.” (ECF #6 at PageID 57). It also
seeks to hold Damsi's secret employers – Tri County Tarp, and [Harrison Truck & Body] – liable for their unfair competition, knowing and willful misrepresentations in commerce and breaches of Tarpstop's exclusive ownership in and licenses to use certain intellectual property, and brazen attempt to facilitate the attempted circumvention of the express terms of Damsi's agreements with Tarpstop.
(Id.).
B. Discovery Issues That Have Arisen
Once discovery began, Mr. Damsi issued two sets of Requests for Production to Tarpstop. The first set, containing 23 requests, generally seeks production of Tarpstop's financial statements and supporting documentation for various categories of income and expenses shown on company reports. (See ECF #54 at PageID 564-72). Mr. Damsi also requested Tarpstop's federal income tax returns for 2015 through 2021, as well as those of its two principals. (Id. at PageID 571-72). The second, containing 13 requests, sought various communications between Tarpstop and others relating to Mr. Damsi, a settlement agreement from another case involving Tarpstop, and documents “relating to the Bracket Technology, including documents related to sublicenses granted by Tarpstop to third parties.” (Id. at PageID 573-77).[4]
In its responses, Tarpstop offered a variety of objections, including that the requests were overly broad, unduly burdensome, not relevant, and not proportional to the needs of the case. (Id. at PageID 564-77). For some, it stated the request sought “third-party information not in the possession, custody, or control of Tarpstop.” (Id. at PageID 572). “Subject to and without waiving” its objections, for most requests Tarpstop indicated it would produce “responsive financial statements with compilation reports and supplementary information” or “responsive documents.” (Id.). For others, it made no such representation, instead standing on its objections. (Id. at PageID 571-72).
Meanwhile, Tarpstop issued a combined set of Requests for Admission, Requests for Production, and Interrogatories to Mr. Damsi.[5] Tarpstop describes its discovery as “request[ing] that Damsi produce all correspondence and documents of his interactions with several specific competitors of Tarpstop, as well as general requests related to competitive conduct.” (ECF #53 at PageID 513). It also sought “all communications and documents related to his conduct on behalf of Engtarp-DD Corp. (‘Engtarp’), a Canadian tarp company owned and operated by Damsi as ‘President’ for several years.” (Id.).
Tarpstop alleges that Damsi “refused to produce any documents or communications in his possession related to Engtarp.” (Id.). Further, it says he provided a “stock response” regarding “his interactions with over twenty of Tarpstop's competitors.” (Id.). “Accordingly, Damsi must be ordered to provide complete responses.” (Id.).
LAW AND ANALYSIS
A. General Discovery Standards
A district court “has broad discretion over discovery matters ... and in deciding discovery disputes, a magistrate judge is entitled to that same broad discretion, and an order of the same is overruled only if the district court finds an abuse of discretion.” State Farm Mut. Auto. Ins. Co. v. Pointe Physical Therapy, 255 F. Supp. 3d 700, 704 n.1 (E.D. Mich. 2017) (citing 12 Wright, Miller & Marcus, Federal Practice and Procedure § 3069, 350 n.20 (2d ed. 1997 & Supp. 2010)), report and recommendation aff'd, 2017 WL 3116261 (E.D. Mich. July 21, 2017); see also id. (“An abuse of discretion exists when the court applies the wrong legal standard, misapplies the correct legal standard, or relies on clearly erroneous findings of fact.”).
Parties may obtain discovery on “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” FED. R. CIV. P. 26(b)(1). Moreover, “[i]t is now ‘the power—and duty—of the district courts actively to manage discovery and to limit discovery that exceeds its proportional and proper bounds.’ ” Helena Agri-Enterprises, LLC v. Great Lakes Grain, LLC, 988 F.3d 260, 224 (6th Cir. 2021) (quoting Noble Roman's, Inc. v. Hattenhauer Distrib. Co., 314 F.R.D. 304, 306 (S.D. Ind. Mar. 24, 2016)). While a plaintiff should “not be denied access to information necessary to establish her claim,” a plaintiff may not be “permitted to go fishing and a trial court retains discretion to determine that a discovery request is too broad and oppressive.” In re: Ohio Execution Protocol Litigation, 845 F.3d 231, 236 (6th Cir. 2016) (citation omitted), cert. denied, 583 U.S. 875 (2017); see also Gallagher v. Anthony, No. 16-cv-00284, 2016 WL 2997599, at *1 (N.D. Ohio May 24, 2016) (“[D]istrict courts have discretion to limit the scope of discovery where the information sought is overly broad or would prove unduly burdensome to produce.”); Tottenham v. Trans World Gaming Corp., No. 00 Civ. 7697(WK), 2002 WL 1967023, at *2 (S.D.N.Y. 2002) (“Discovery, however, is not intended to be a fishing expedition, but rather is meant to allow the parties to flesh out allegations for which they initially have at least a modicum of objective support.”) (citation omitted).
“The role of discovery ... is to find support for properly pleaded claims, not to find the claims themselves.” Samsung Elecs. Am., Inc. v. Chung, No. 3:15-cv-4108-D, 2017 WL 2832621 at *26 (N.D. Tex. June 26, 2017) (quotation omitted). This is because “[t]he discovery rules are designed to assist a party to prove a claim it reasonably believes to be viable without discovery, not to find out if it has any basis for a claim.” Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318, 1327 (Fed. Cir. 1990) (emphasis in original).
With respect to proportionality, a court examines six factors: (1) “the importance of the issues at stake in the action”; (2) “the amount in controversy”; (3) “the parties’ relative access to relevant information”; (4) “the parties’ resources”; (5) “the importance of the discovery in resolving the issues”; and (6) “whether the burden or expense of the proposed discovery outweighs its likely benefit.” FED. R. CIV. P. 26(b)(1). “[D]eterminations as to proportionality are subject to change with the circumstances of the case.” Natural-Immunogenics Corp. v. Newport Trial Grp., No. SACV 15-2034 JVS (JCGx), 2019 WL 3110021, at *7 (C.D. Cal. Mar. 19, 2019). In part, this is because proportionality considerations “can include reviewing whether discovery production has reached a point of diminishing returns.” Abbott v. Wyoming Cty. Sheriff's Office, No. 15-CV-531W, 2017 WL 2115381, at *2 (W.D.N.Y. May 16, 2017). When the “marginal utility” of further document production may be low, the proportionality principles of Rule 26 counsel in favor of taking steps to limit discovery. Alaska Elec. Pension Fund v. Bank of Am. Corp., No. 14-CV-7126 (JMF), 2016 WL 6779901, at *3 (S.D.N.Y. Nov. 16, 2016). “[A]t some point, discovery yields only diminishing returns and increasing expenses.” Updike v. Clackamas Cty., No. 3:15-CV-00723-SI, 2016 WL 111424, at *1 (D. Or. Jan. 11, 2016).
*5 Where a responding party objects to a discovery request, it “must show specifically how each discovery request is burdensome and oppressive by submitting affidavits or offering evidence revealing the nature of the burden. The mere statement by a party that an interrogatory or request for production is overly broad, burdensome, oppressive and irrelevant is not adequate to voice a successful objection.” In re Heparin Prod. Liab. Litig., 273 F.R.D. 399, 410–11 (N.D. Ohio 2011) (cleaned up). Good cause for refusing discovery “is not established solely by showing that discovery may involve inconvenience and expense.” Isaac v. Shell Oil Co., 83 F.R.D. 428, 431 (E.D. Mich. 1979).
At the very least, where a party claims burdensomeness, it must explain why that is so. It should also propose alternatives, if such might be possible, that could enable some degree of production. Where a party explains the difficulties that compliance would create, the requesting party must be heedful, and not simply knee-jerk dismissive of those explanations.
In re Heparin, 273 F.R.D. at 411.
B. Damsi's Discovery to Tarpstop
1. First Set of Requests for Production
In Requests 1 through 13 of Mr. Damsi's First Set of Requests for Production, he seeks “all documents and e-mails” for the five-year period of 2016 to 2021 relating to the company's year-end financial statements and 12 categories of expenses shown on the “Reconciliation Report.” Request 20 seeks “all documents relating to the Company's year-end financial statements for fiscal years 2011 through 2021.” Requests 14 through 16 seek documents concerning payments Tarpstop made to certain specific entities, while Request 17 seeks documents concerning payments Tarpstop made to “any other person or entity affiliated with or related to any member of the Company.” Request 18 seeks documents “relating to the Company's monthly sales for years 2011 through 2021,” while Request 19 seeks documents “relating to the Company's monthly sales of Fastrak 2 for years 2015 through 2021.” Request 21 seeks “all copies of the Company's federal income tax return for years 2015 through 2021.” Mr. Damsi claims he needs these materials to confirm the accuracy (or lack of accuracy) of the company's calculation of payments made to him under the parties’ agreements.
Mr. Damsi argues he is entitled to these materials based on contractual, statutory, and Rules-based justifications. He notes that Section 17 of the Agency Agreement states he “shall be entitled to receive from the Company, upon request, copies of the Company's financial statements and such other information regarding the financial affairs, business affairs, and opportunities of the Company, as (and to the same extent as) a member holding a minority equity interest in the Company would be entitled to.” (ECF #54 at PageID 529; see also ECF #60 at PageID 715). He also invokes § 1706.33(A) of the Ohio Revised Code, which provides as follows:
Upon reasonable notice provided to the limited liability company, a member may inspect and copy during regular business hours, at a reasonable location specified by the limited liability company, any record maintained by the limited liability company, to the extent the information is material to the member's rights and duties under the operating agreement or this chapter.
*6 Tarpstop responds that Mr. Damsi's request for “granular” discovery is unnecessary and inappropriate. It maintains that it produced documents in compliance with the parties’ obligations, further corroborated by its “voluntary[ ] produc[tion] in discovery of tax returns for the years 2016 through 2020.” (ECF #57 at PageID 702). It further argues that Mr. Damsi's Amended Complaint does not assert a claim for miscalculation or underpayment of any monies owed to him. (Id.). It further asserts that the Modification Agreement materially modifies Mr. Damsi's right to seek information pursuant to the Agency Agreement. (Id.). Finally, it generally asserts that these requests are overly broad, unduly burdensome, and not proportional to the needs of the case. (Id. at PageID 704-05). But Tarpstop did not provide an affidavit in support of these claims, nor provide any specific detail regarding the effort it would have to expend in responding to the disputed discovery requests.
Having reviewed the parties’ arguments, and in light of the legal principles outlined above, I conclude as follows:
The request to compel a response to Requests 1 and 20 is DENIED. As written, Request 1, seeking “all documents and e-mails relating to” Tarpstop's year-end financial statements for 2016 through 2021, arguably sweeps within its ambit every piece of information relating to all income the company earned, and all expenses the company paid, during that seventy-two month period. The same goes for Request 20, seeking “all documents relating to the Company's year-end financial statements for the fiscal years 2011 through 2021.”
A similar request was at issue in Audiotext Communications v. U.S. Telecom, Inc., No CIV. A. 94-2395-GTV, 1995 WL 18759 (D. Kan. Jan. 17, 1995). There, the propounding party sought “all supporting documents used in preparing [the responding party's] financial records.” Id. at *1. The court declined to compel a response, concluding the request was “overbroad and unduly burdensome on [its] face.” Id. It went on explain:
Requests which are worded too broadly or are too all inclusive of a general topic function like a giant broom, sweeping everything in their path, useful or not. They require the respondent either to guess or move through mental gymnastics which are unreasonably time-consuming and burdensome to determine which of many pieces of paper may conceivably contain some detail, either obvious or hidden, within the scope of the request. The court does not find that reasonable discovery contemplates that kind of wasteful effort.
Id. Ono the record before me, I conclude these requests are likely to yield diminishing returns while substantially increasing the expense of discovery. Further, applying the proportionality considerations of Rule 26(b), I conclude the information they seek is disproportionate to the needs of this case.
For the same reason, the request to compel a response to Requests 2 through 13 is DENIED. Absent some explanation not currently found in Mr. Damsi's briefing, it is unclear why these particular categories of expenses (versus any others) were placed at issue. I conclude that, on the record before me, these requests amount more to a generalized “fishing expedition” than a targeted search for evidence in support of a properly pled cause of action.
That Mr. Damsi may have certain rights to inspect financial documentation pursuant to Section 17 of the Agency Agreement does not overcome the constraints imposed when the request is made pursuant to a discovery request in litigation. In other words, Rule 26 still applies despite the Agreement's language. Moreover, the right granted by Section 17 is for Mr. Damsi to inspect and to copy, while his requests for production appear to shift the financial burden of copying responsive materials to Tarpstop. I also note that Request 20 seeks information predating Mr. Damsi's association with Tarpstop; therefore, for that period, such records would appear to be outside of any statutory or contractual right of inspection he may have.
*7 The same considerations lead me to DENY the request to compel a response to Requests 14, 15, 16, and 17 concerning payments, if any, Tarpstop made to other companies and to “any other person or entity affiliated with or related to any member of the Company.” “The party seeking discovery must be able to ‘articulate the possible linkage between the discovery sought and admissible evidence.’ ” Allen v. Howmedica Leibinger, GmhH, 190 F.R.D. 518, 522 (W.D. Tenn. 1999) (quoting 7 MOORE'S FEDERAL PRACTICE § 37.22[2][B]). Mr. Damsi's memorandum in support provides no explanation of how such payments (if indeed any were made) meet this requirement. His reply memorandum goes somewhat further, noting that “[i]nformation establishing Tarpstop's ‘Net Profit,’ then, is vital to Damsi's ability to determine what he is owed.” (ECF #60 at PageID 717). But that assertion is conclusory at best. In any event, I conclude that, at this time, Mr. Damsi has not sufficiently demonstrated his need for access to the information sought by Requests 14, 15, 16, and 17.
Requests 18 and 19 seek information about Tarpstop's monthly sales, including specifically sales of its Fastrak 2. The amount of monthly sales appears relevant to claims that Mr. Damsi has advanced in this litigation. But Requests 18 and 19 go much further, seeking not just the amount of sales each month, but “all documents relating to the Company's monthly sales ....” This reaches too far. Written this way, these requests are “far too broad and [are] not limited to relevant information or reasonably calculated to lead to the discovery of admissible evidence and the burden of such an unlimited Request outweighs the likely benefit of the same.” Phoenix Life Ins. Co. v. Raider-Dennis Agency, Inc., No. 07-CV-15324, 2010 WL 1782251, at *2 (E.D. Mich. May 3, 2010). Also, the time period for Request No. 18 (2011 through 2021) is, in my view, too expansive in light of the allegations of the Complaint and is disproportionate to the needs of the case after considering the Rule 26(b)(1) factors. Therefore, I will compel production in response to these requests as they are set forth below:
REVISED REQUEST FOR PRODUCTION NO. 18: Produce documents setting forth the Company's monthly sales for years 2016 through 2021.REVISED REQUEST FOR PRODUCTION NO. 19: Produce documents setting forth the Company's monthly sales of Fastrak 2 for years 2016 through 2021.
As revised, Tarpstop must provide responsive materials within 30 days from the date of this Order. Accordingly, I GRANT IN PART and DENY IN PART Mr. Damsi's motion as regards Requests 18 and 19.
Request 21 seeks Tarpstop's tax returns for 2016 through 2021. “Tax returns do not enjoy an absolute privilege from discovery. Nevertheless, a public policy against unnecessary public disclosure arises from the need, if the tax laws are to function properly, to encourage taxpayers to file complete and accurate returns.” Premium Serv. Corp. v. Sperry & Hutchinson Co., 511 F.2d 225, 229 (9th Cir. 1975) (citations omitted). Tax returns are discoverable where they are relevant to the action or the issues raised thereunder and the material is not otherwise readily available. See Credit Life Ins. Co. v. Uniworld Ins. Co. Ltd., 94 F.R.D. 113, 121 (S.D. Ohio 1982); Cooper v. Hallgarten & Co., 34 F.R.D. 482, 484 (S.D.N.Y. 1964).
As noted earlier, Tarpstop represents it has produced its tax returns for 2016 through 2020. (ECF #57 at PageID 702). Mr. Damsi does not dispute this assertion. Therefore, the only open question is whether I should compel production of its 2021 tax return. I conclude Mr. Damsi has established a sufficient basis to seek this material. Accordingly, as respects Request 21, I GRANT Mr. Damsi's request to compel production of Tarpstop's 2021 federal income tax return. All other aspects of the request to compel production in response to Request 21 are DENIED AS MOOT. See, e.g., GATX Corp. v. Appalachian Fuels, LLC, No. 09-41-DLB, 2010 WL 5067688, at *1 (E.D. Ky. Dec. 7, 2010) (denying motion to compel where non-movant's response brief contained prior e-mails sent to the movant responding to interrogatories, and movant failed to file a reply brief disputing those e-mails).
*8 Finally, Requests 22 and 23 seek the federal tax returns for Andy Knepper and Ken Weschke. Mr. Damsi represents that these two individuals are “principals” of Tarpstop. (ECF #54 at PageID 528). His motion notes that “[h]e does not at this time seek to compel their production,” i.e., production of the requested tax returns. (Id.). Accordingly, his motion to compel a response to Requests 22 and 23 is DENIED AS MOOT.
2. Second Set of Requests for Production
In Request 1 from his Second Set of Requests for Production, Mr. Damsi sought copies of “all communications between Tarpstop and third parties relating to Damsi.” Tarpstop objected that this request was overly broad and unduly burdensome, seeks information subject to attorney-client privilege, and was not proportional to the needs of the case. (ECF #54 at PageID 573). Subject to and without waiving those objections, it agreed to produce responsive documents. (Id.). And it appears Tarpstop did produce some documents from 2016 and 2021 falling within the ambit of this request. (Id. at PageID 579-632). What is not clear, however, is whether this represents the full spectrum of responsive materials. It is also not clear whether Tarpstop withheld copies of any responsive documents based on its assertion of attorney-client privilege.
Because documents responsive to this request could relate directly and specifically to claims Mr. Damsi has asserted in this matter, including for tortious interference and defamation, I GRANT Mr. Damsi's motion seeking to compel production of any other documents responsive to Request 1. Within 30 days from the date of this Order, Tarpstop must (i) produce any materials not previously produced that are responsive to Request 1 and as to which it does not invoke attorney-client privilege, and (ii) provide a privilege log, consistent with FED. R. CIV. P. 26(b)(5), as to any other responsive materials as to which it does invoke attorney-client privilege.
Request 2 seeks a copy of all settlement agreements in the matter of Tarpstop, LLC v. Ford, et al., Lucas County Common Pleas Court, Case No. CI-2020-03792. Tarpstop did not object to this request. (ECF #54-5 at PageID 573). In fact, it appears Tarpstop produced a copy of this agreement. (Id. at PageID 633-38). Mr. Damsi says nothing more about this request in his briefing. Because it appears this request was fully satisfied, I DENY AS MOOT this portion of Mr. Damsi's motion to compel. See GATX Corp., 2010 WL 5067688, at *1.
Request 3 seeks “all documents relating to the Bracket Technology,” including documents related to sublicenses Tarpstop granted to third parties. Tarpstop objected that this request was overly broad, unduly burdensome, and not proportional to the needs of the case. (ECF #54 at PageID 573). Subject to and without waiving those objections, it stated it “has no documents relating to sublicenses granted to third parties relating to the Bracket Technology.” (Id.). This, of course, only addresses the later, more specific portion of Request 3, but says nothing about the more general request for “all documents relating to Bracket Technology.”
The Agreement Regarding Intellectual Property defines “Bracket Technology” as “technology related to or derived from the bracket assembly developed, invented, designed or produced by” Mr. Damsi, “and any technology described in the patent application for the bracket assembly.” (ECF #27-3 at PageID 257). Mr. Damsi's Amended Complaint specifically seeks to enforce rights under the Agreement Regarding Intellectual Property as regards the Bracket Technology. For these reasons, and after considering the proportionality considerations of Rule 26, I GRANT Mr. Damsi's Motion to Compel as it relates to Request 3. Tarpstop must produce materials responsive to this request within 30 days of the date of this Order.
*9 Requests 4 through 11 seek communications between Tarpstop and “any representative of” eight specific entities “relating to Damsi.” Tarpstop again objected on grounds that each of these requests were overly broad, unduly burdensome, and not proportional to the needs of the case, but it did not raise an attorney-client privilege objection. (ECF #54 at PageID 574-77). It did, however, note that each request was “duplicative of Request for Production No. 1 from Plaintiff's Second Requests for Production.” (Id.). Subject to those objections, it agreed to provide responsive documents. (Id.). I agree with Tarpstop that any materials responsive to any of these requests would be equally responsive to Request 1. Thus, for the same reasons I granted Mr. Damsi's motion with respect to that request, I GRANT his motion with respect to these requests. To the extent that Tarpstop did not produce to Mr. Damsi any documents responsive to Requests 4 through 11, it must do so within 30 days of the date of this Order.
Requests 12 and 13 seek information concerning, respectively, “payments in 2015 and 2021 from the Company to Alpha Kilo, LLC” and “payments in 2015 and 2021 from the Company to any other person or entity affiliated with or related to any member of the Company.” These requests are similar to Requests 16 and 17 in the first set of document production requests. For the same reasons that I outlined above with respect to those requests, I DENY Mr. Damsi's motion as it relates to Requests 12 and 13 from the second set.
C. Tarpstop's Discovery to Damsi
Tarpstop moves to compel Mr. Damsi “to produce additional documents” responsive to the Requests for Production it propounded to him. (ECF #53 at PageID 512). Tarpstop notes that in response to its 46 requests, Mr. Damsi only produced 22 pages of documents. (Id. at PageID 514). Also, in response to numerous requests, Mr. Damsi's only response was “I do not recall anything.” Tarpstop says it “knows these responses to be false.” (Id.).
In response, Mr. Damsi asserts Tarpstop did not “articulate the exact claimed deficiencies before filing” its motion. (ECF #59 at PageID 709). He also notes he “has no further documents responsive to Tarpstop's requests” concerning communications with third parties. (Id. at 710).
I agree that Tarpstop's motion could have addressed the disputed discovery responses with a greater degree of precision. Indeed, Local Civil Rule 37.2 specifically describes the form a discovery motion should take, including that the moving party “shall include in his or her brief in support of said motion, immediately preceding the discussion and authorities relevant thereto, the interrogatory, document request, deposition question or request for admission in full and any response thereto alleged to be evasive or incomplete; the request for inspection; or the deposition notice, as may be appropriate.” But then again, Mr. Damsi's motion did not strictly adhere to these requirements, so I reject his procedural objection to Tarpstop's motion. I address Tarpstop's motion to the extent I can comprehend its specific requests for relief.
First, Tarpstop raises concerns about the sufficiency of Mr. Damsi's responses to Requests for Production 17-40. Each of these ask about communications Mr. Damsi had with other persons and entities since January 1, 2016. In each instance, Mr. Damsi responded: “I do not recall anything.” I agree with Tarpstop that this statement does not fully satisfy Mr. Damsi's obligations in response to a request for production, particularly where, as here, he has not objected. A party's obligation in responding to a request for production includes a “duty under Rule 34 to conduct a diligent search and reasonable inquiry in [their] effort to obtain responsive documents.” Kaur v. Alameida, No. CV F 05 276 OWW DLB, 2007 WL 1449723, at *2 (E.D. Cal. May 15, 2007). Furthermore, a “responding party has an affirmative duty to reasonably seek information requested under Rule 34(a) from its agents or others under its control.” Lopez v. Florez, No. 08-cv-01975-LJO-JLT, 2013 WL 1151948, at *2 (E.D. Cal. Mar. 19, 2013). Finally, of course, under Rule 26(e), a party has a duty to make timely supplementation or correction of a response where “the party learns that in some material respect the disclosure or response is incomplete or incorrect ....” FED. R. CIV. P. 26(e)(1)(A). This duty extends to requests for production issued under Rule 34. See, e.g., Taylor v. Union Inst., 30 Fed. App'x 443, 451 (6th Cir. Feb. 19, 2002).
*10 That said, case law directs that where a party has unequivocally stated it does not possess requested documents, a court should not compel a further response. This is because a party “cannot produce what it does not have.” Solorzano v. Shell Chem. Co., No. Civ. A.99-2831, 2000 WL 1145766, at *7 (E.D. La. Aug. 14, 2000). Put another way: “Clearly, the court cannot compel [a responding party] to produce non-existent documents.” Beasley v. First Am. Real Est. Info. Servs., Inc., No. 3-04-CV-1059-B, 2005 WL 1017818, at *4 (N.D. Tex. Apr. 27, 2005); see also Roden v. Floyd, No. 2:16-CV-11208, 2019 WL 1098918, at *3 (E.D. Mich. Mar. 8, 2019) (“The Court notes that, in general, it cannot compel a party to provide information that he or she does not possess any more than it can compel that party to produce documents that do not exist or are not in his possession, custody or control.”). And “[t]he fact that a party may disbelieve or disagree with a response to a discovery request ... is not a recognized ground for compelling discovery, absent some indication beyond mere suspicion that the response is incomplete or incorrect” or the requesting party's belief, without more, that a discovery production is not complete. Heller v. City of Dallas, 303 F.R.D. 466, 486 (N.D. Tex. 2014) (cleaned up); accord Edeh v. Equifax Info. Servs., LLC, 291 F.R.D. 330, 336 (D. Minn. 2013) (“[A] mere belief, without any evidence, that a party has not produced documents or information in its possession, is insufficient to support a motion to compel.”).
Because Mr. Damsi has, through counsel, expressly stated he has no further materials regarding communications with third parties (see ECF #59 at PageID 710), I DENY Tarpstop's motion to compel as it relates to Requests 17 through 40.[6] I note that Tarpstop has the option to make inquiry from Mr. Damsi regarding the specific efforts he made to satisfy his Rule 34 obligations. If it turns out that Mr. Damsi's efforts were inadequate or otherwise in derogation of his duties, then Tarpstop can consider whether to raise that issue with Judge Helmick at an appropriate time.
Second, Tarpstop takes issue with Mr. Damsi's response to Requests 1 and 2. Request 1 sought all correspondence Mr. Damsi, “as an agent or representative of Engtarp-DD Corp., ha[s] sent or received since January 1, 2016.” Request 2 sought all documents in Mr. Damsi's “possession, custody, or control that relate in any way to [his] conduct on behalf of Engtarp-DD Corp. since January 1, 2016.” In response to both, Mr. Damsi stated:
I conclude that this response is deficient. Engtarp-DD Corp.’s status as “a Canadian company” is not a permissible basis for Mr. Damsi to refuse to provide responsive materials in his possession, custody, or control. And the apparent statement that Mr. Damsi has “no independent documents related to this matter” is virtually incomprehensible when measured in light of his Rule 34 obligations. Either Mr. Damsi possesses responsive documents, in which case he must produce them; or he does not possess any responsive documents, in which case he must say so. Accordingly, I GRANT Tarpstop's motion with respect to its Requests 1 and 2. Within 30 days of the date of this Order, Mr. Damsi must provide revised responses to these Requests that fulfill his Rule 34 obligations, including producing responsive documents in his possession, custody, or control.
Third, Tarpstop challenges Mr. Damsi's responses to Requests 3 through 13. In particular, Tarpstop takes issue with statements by Mr. Damsi that documents are (i) on the laptop he used at Tarpstop; (ii) on someone else's laptop; (iii) the property of someone else; or (iv) in Tarpstop's possession. Any objection based on responsive materials being the property of someone else is misplaced. If Mr. Damsi has possession, custody, or control of responsive materials, he is obliged to produce them regardless of who may be the “owner” of them. But if the materials are only possessed by a third person over whom Mr. Damsi has no control, then he may not be obligated to produce them. Because in my view Mr. Damsi's responses to Requests 3 through 13 raise objections that are misplaced, I GRANT Tarpstop's motion as to these and direct Mr. Damsi to provide supplemental responses to each that comply with his Rule 34 obligations, including producing responsive documents in his possession, custody, or control. Such supplemental responses are to be provided to Tarpstop within 30 days of the date of this Order.
*11 Finally, Tarpstop's motion raised no concerns about Mr. Damsi's response to Request 15. Therefore, I decline to address that request here.
D. Tarpstop's Subpoena to Engtarp
Finally, Tarpstop seeks to “compel[ ] Damsi, on behalf of EngTarp DD Corp. (‘EngTarp’), to produce the documents requested in Tarpstop's September 26, 2022 subpoena ....” (ECF #53 at PageID 512). Tarpstop represents that on September 29, 2022, during a deposition of another witness in the case, Mr. Damsi's attorney “agreed to accept the Subpoena ....” (Id. at PageID 514). Tarpstop alleges this was effective service on EngTarp because “[o]n that date,” Mr. Damsi was “owner and President of Engtarp ....” (Id.). Tarpstop further notes that EngTarp has not responded to the subpoena. (Id.).
In response, Mr. Damsi argues that after July 29, 2022, he was no longer a director or employee of EngTarp, “so any service upon him after that date is ineffective.” (ECF #59 at PageID 710). He provided a declaration, executed pursuant to 28 U.S.C. § 1746, stating that he “was formerly a director of a Canadian company known as EngTarp DD Corp.” but that “[e]ffective July 29, 2022, I was no longer an owner, director, officer or employee of EngTarp DD Corp.” (ECF #59-2 at PageID 714). His opposition brief further states that neither of his counsel of record “are counsel for that Canadian Company and have not been authorized to accept service of process on behalf of that Company.” (ECF #59 at PageID 711).
Rule 45 of the Federal Rules of Civil Procedure governs third-party subpoenas. It permits parties in legal proceedings to command a non-party to attend a deposition, produce documents, and/or permit inspection of premises. FED. R. CIV. P. 45(a)(1). As to service, Rule 45(b)(1) states as follows: “Serving a subpoena requires delivering a copy to the named person and, if the subpoena requires that person's attendance, tendering the fees for 1 day's attendance and the mileage allowed by law.”
Many courts have construed Rule 45’s reference to “delivering a copy” to mean only personal service. See, e.g., Taylor v. Countrywide Home Loans, No. 08–13258, 2009 WL 1913417, at *5 (E.D. Mich. June 30, 2009) (stating that Rule 45 requires personal service); McClendon v. TelOhio Credit Union, Inc., No. 2:05–CV–1160, 2006 WL 2380601, at *2 (S.D. Ohio Aug. 14, 2006) (holding that Rule 45 requires personal service of a subpoena and does not permit service by certified mail); Hall v. Sullivan, 229 F.R.D. 501, 502 (D. Md. 2005) (recognizing that a majority of courts requires personal service of subpoenas under Rule 45). But a growing number of other courts have interpreted “delivering a copy” more broadly and thus authorized service by certified mail or other means if the method of service is accomplished in a manner that reasonably ensures the witness actually receives the subpoena. See, e.g., Halawani v. Wolfenbarger, No. 07–15483, 2008 WL 5188813, at *3 (E.D. Mich. Dec. 10, 2008) (holding that service of a subpoena by certified mail may assure proper delivery); Cartier v. Geneve Collections, Inc., No. CV 2007–0201, 2008 WL 552855, at *1 (E.D.N.Y. Feb. 27, 2008) (finding that alternative service is authorized under Rule 45 if it is designed to reasonably ensure the witness actually receives the subpoena). Courts that have sanctioned alternative means of service under Rule 45 have often done so only after the party requesting the accommodation diligently attempted to effectuate personal service. Id.
*12 Rule 45 does not expressly address proper methods of serving a subpoena on juridical entities or other non-natural persons. The Sixth Circuit has not spoken on this issue. See Provana, LLC v. Golden Spiral, LLC, No. 3:23-mc-00005, 2023 WL 3937459, at *2 (M.D. Tenn. June 9, 2023). Courts in other jurisdictions have looked to the service requirements of Rule 4 of the Federal Rules of Civil Procedure. See, e.g., Blankenship v. Superior Controls, Inc., No. 13-12386, 2014 WL 12659919, at *2 (E.D. Mich. Oct., 2, 2014); Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Americas, 262 F.R.D. 293, 305-06 (S.D.N.Y. 2009); Khachikian v. BASF Corp., No. 91-CV-573, 1994 WL 86702, at *1 (N.D.N.Y. 1994) (“In situations such as the present one in which personal service must be made on a corporation ...Rule 45(b) provides no guidance as to what constitutes such service. Therefore, courts have looked to Rule 4(d)(3) of the Federal Rules of Civil Procedure.”); O’-Neil v. Robinson (In re Pappas), 214 B.R. 84, 85 (Bankr. D. Conn. 1997) (“Because Rule 45 does not specify what constitutes personal service upon a corporation, courts look to Fed. R. Civ. P. 4 for guidance.”); 9 James Wm. Moore et al., MOORE'S FEDERAL PRACTICE (3d ed. 2009) ¶ 45.21[1] (“When a subpoena is to be served on a corporation ... or other artificial entity, the concept of ‘personal’ service is somewhat obscured, because the entity is not a ‘person’ on whom service can be directly made. Accordingly, service of a subpoena on an artificial entity may be made by using the analogous method for service of process on that entity under Rule 4.”).
In pertinent part, Rule 4(h) of the Federal Rules of Civil Procedure provides two methods for serving a corporation, partnership, or unincorporated association in a judicial district of the United States. First, service may be accomplished “in the manner prescribed by Rule 4(e)(1) for serving an individual,” i.e., by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made.” FED. R. CIV. P. 4(h)(1)(A), 4(e)(1). Under Rule 4.2 of the Ohio Rules of Civil Procedure, service may be made upon a domestic of foreign corporation “by serving the agent authorized by appointment or by law to receive service of process; or by serving the corporation at any of its usual places of business by a method authorized under Civ.R. 4.1(A)(1); or by serving an officer or a managing or general agent of the corporation.” Ohio R. Civ. P. 4.2(F). Second, service may be accomplished “by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and—if the agent is one authorized by statute and the statute so requires—by also mailing a copy of each to the defendant.” FED. R. CIV. P. 4(h)(1)(B).
I turn to examining each of these alternatives. According to the publicly available records of the Ontario Business Registry,[7] EngTarp DD Corp. is a Canadian corporation, specifically an Ontario Business Corporation. Tarpstop provides no evidence that Mr. Damsi is “the agent authorized by appointment or by law to receive service of process” for EngTarp DD, nor does the Ontario Business Registry. Therefore, I cannot find that Tarpstop served an authorized agent of EngTarp DD pursuant to Ohio Civil Rule 4.2.
Second, the record contains no evidence that Tarpstop served EngTarp DD “by serving the corporation at any of its usual places of business by a method authorized under Civ.R. 4.1(A)(1).” Therefore, I cannot find that Tarpstop properly served EngTarp DD pursuant to this option of Ohio Civil Rule 4.2.
Third, and finally, I must resolve whether Tarpstop served EngTarp DD “by serving an officer or a managing or general agent of the corporation” pursuant to Ohio Civil Rule 4.2, or “by delivering a copy of the summons and of the company to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process” pursuant to Fed. R. Civ. P. 4(h)(1)(B). Mr. Damsi's declaration swears that when the subpoena was presented to his attorney on September 29, 2022, he was no longer an officer of EngTarp DD. (ECF #59-2 at PageID 714). He also says that he was not an owner, director, or employee of the company. (Id.).
*13 On its face, disclaiming the roles of officer, owner, director, and employee does not necessarily exclude the possibility that Mr. Damsi nevertheless was a managing agent or a general agent of EngTarp DD. “[T]he well-established definition of a managing or general agent is a person invested by the corporation with general powers involving the exercise of judgment and discretion, as distinguished from an ordinary agent who acts in an inferior capacity and under the direction and control of a superior authority, both in regard to the extent of his duty and the manner of executing it.” D'Amico Dry d.a.c. v. McInnis Cement Inc., 469 F. Supp. 3d 185, 190 (S.D.N.Y. 2020) (cleaned up); see also Bridgeport Music, Inc. v. Rhyme Syndicate Music, 376 F.3d 615, 624 (6th Cir. 2004) (“A managing agent is one authorized to transact all business of a particular kind at a particular place and must be vested with powers of discretion rather than being under direct superior control.”). “In other words, a ‘managing or general agent’ is one who operates at [the organization's] highest levels, or ... has overall authority to make high-level decisions on the part of the enterprise.’ ” D'Amico Dry d.a.c., 469 F. Supp. 3d at 190 (quoting Cooney v. Barry Sch. of Law, 994 F. Supp. 2d 268, 270 (E.D.N.Y. 2014)). Though it may be aberrational, it is not outside the realm of possibility that someone who is not an officer, owner, director, or employee of a corporation could still qualify as a managing or general agent.
Mr. Damsi's affidavit also does not completely exclude the possibility that he qualifies as “any other agent authorized by appointment ... to receive service of process.” “Although authority to receive service of process need not be explicit, it must be either express or implied from the type of relationship which has been established between the defendant and the alleged agent.” Arthur v. Litton Loan Servicing LP, 249 F. Supp. 2d 924, 929 (E.D. Tenn. 2002). And merely because “an alleged agent actually accepts process for the defendant is not enough to constitute valid service of process.” Id.
When sufficiency of service of process is challenged, the burden rests with the serving party to establish by a preponderance of the evidence that service was properly accomplished. Cf. Howard v. Krull, 438 F. Supp. 3d 711, 714 (E.D. La. 2020) (noting that because the defendant challenged sufficiency of service of process, plaintiff “has the burden of demonstrating by a preponderance of the evidence the validity of service”) (footnote omitted). Tarpstop advances a number of arguments regarding apparent connections between Mr. Damsi and Tarpstop. Tarpstop did not, however, provide any supporting affidavits or declarations regarding the alleged connections between Mr. Damsi and Tarpstop. It produced no documentary evidence establishing the alleged connections between Mr. Damsi and EngTarp DD as of September 29, 2022. It offered no testimony from any witnesses to establish any such connections. It provided no evidence confirming that Mr. Damsi had sufficient authority on behalf of EngTarp DD such that he qualifies as a managing or general agent. Absent such evidence, I can only conclude that Tarpstop has not established sufficient service of the subpoena on EngTarp DD. See Arthur, 249 F. Supp. 2d at 929 (“There is no probative proof in the record showing that Weiss was a corporate officer, managing agent, or other agent of Litton authorized by appointment or law to receive service of process for Litton.”).
For these reasons, I DENY Tarpstop's motion as it relates to compelling a response to the subpoena to EngTarp DD.
CONCLUSION
For the foregoing reasons, I GRANT in part and DENY in part Mr. Damsi's Motion to Compel Production of Documents Sought in Plaintiff's First and Second Sets of Requests for Production of Documents (ECF #54) and Tarpstop's Motion to Compel (ECF #53).
IT IS SO ORDERED.
Footnotes
At the time of the referral from Judge Helmick, there were three other discovery motions pending: a Motion to Quash Subpoena and for Protective Order filed by Tarpstop, LLC (ECF #45); a Motion to Quash Subpoena Duces Tecum and Motion for Protective Order filed by non-party Titus & Urbanski, Inc. (ECF #49); and a Motion to Quash Subpoena to Titus & Urbanski filed by Tarpstop (ECF #50). The former related to a subpoena Mr. Damsi issued to Mong & Associates, while the latter two related to a subpoena Mr. Damsi issued to Titus & Urbanksi, Inc.
On May 26, 2023, Mr. Damsi filed a Notice of Withdrawal (ECF #55) stating he was “withdraw[ing] the subpoenas previously issued to Mong & Associates (ECF #45) and Titus & Urbanski, Inc. (ECF #49).” (ECF #55 at PageID 687). By withdrawing the subpoenas to those non-parties, the issues raised by the Motions to Quash and for Protective Orders were rendered moot.
“Section 17. Information. During the term of this Agreement, Damsi shall be entitled to receive from the Company, upon request, copies of the Company's financial statements and such other information regarding the financial affairs, business affairs, and opportunities of the Company, as (and to the same extent as) a member holding a minority equity interest in the Company would be entitled to.” (ECF #27-1 at PageID 249).
“5. If the Company commits a Material Breach of the Related Agreements, Grantor shall have the right, in his sole and absolute discretion, to either (1) terminate this Agreement and all rights of Grantee to use, practice and employ Grantor's Tarp Technology and the Bracket Technology; or (2) continue this Agreement in full force and effect but convert Grantee's exclusive right to use, practice and employ Grantor's Tarp Technology and the Bracket Technology into a non-exclusive right to use, practice and employ such Grantor's Tarp Technology and the Bracket Technology; provided, however, that the Company may dispute that it has committed a Material Breach of the Related Agreements by initiating arbitration seeking a determination as to the validity of the Material Breach of the Related Agreements within 14 days after receipt of written notice from Grantor stating that a Material Breach has occurred. Grantor and the Company covenant and agree that, within fourteen (14) days of commencement of such arbitration, or as soon thereafter as may be arranged with the arbitrator, a hearing shall be held for the limited purpose of determining whether a sufficient likelihood of the existence of a Material Breach of the Related Agreements exists (a ‘Likely Breach’) so as to entitle Grantor to immediate relief under this [sic]. Absent a finding at such hearing of the existence of a Likely Breach, during the pendency of such arbitration proceeding, Grantor shall continue to abide by the terms of this Agreement until a final determination is made by the arbitrator.” (ECF #27-3 at PageID 260).
For the sake of convenience, Mr. Damsi's Requests for Production from both sets to Tarpstop are reprinted in their entirety in Appendix A.
For the sake of convenience, Tarpstop's Requests for Production to Mr. Damsi are reprinted in their entirety in Appendix B. These were obtained from the parties’ joint letter of March 17, 2023 submitted to Judge Helmick, which his Chambers provided to me.
Although they are not specifically addressed in Tarpstop's motion, I also hold the same as to Requests 14 and 16, because Mr. Damsi's response there was the same: “I do not recall anything.”
