Sagewater, LLC v. Hossfeld
Sagewater, LLC v. Hossfeld
2024 WL 3466475 (E.D. Va. 2024)
June 7, 2024

Vaala, Lindsey R.,  United States Magistrate Judge

Third Party Subpoena
Failure to Produce
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Summary
Plaintiff's motion to compel production of documents from third party Gryphon Investors, a private equity firm, was denied by the court due to the requested documents being duplicative and the burden outweighing the potential benefit. The court has previously established guidelines to keep the parties focused on the main allegations and has largely denied attempts to obtain discovery from non-party entities.
Additional Decisions
SAGEWATER, LLC, Plaintiff,
v.
David HOSSFELD, et al., Defendants
Civil Action No. 1:23-cv-0770 (MSN/LRV)
United States District Court, E.D. Virginia, Alexandria Division
Signed June 07, 2024

Counsel

Adam Lee Massaro, Akerman LLP, Denver, CO, Andrew Paul Gold, Jason Oletsky, Marc Jonathan Gottlieb, Scott J. Miller, Akerman LLP, Fort Lauderdale, FL, John M. Neary, Akerman Senterfitt LLP, Washington, DC, Julian Dayal, Akerman LLP, Chicago, IL, Maureen Elizabeth Carr, Robert Thomas Hicks, Bean Kinney & Korman PC, Arlington, VA, James Clark, Ninth Street, NW, Washington, DC, for Plaintiff.
Roya Vasseghi, Erin Nicole Schiffman, Vasseghi Law Group, Fairfax, VA, for Defendant David Hossfeld.
Craig Crandall Reilly, Law Office of Craig C. Reilly, Alexandria, VA, Amy Epstein Gluck, Pierson Ferdinand LLP, Washington, DC, Christopher J. Esbrook, Jordan Leigh Powers, Kasun Wijegunawardana, Kirk Watkins, Stephen Robert Brown, Zachary Lea Sorman, Esbrook P.C., Chicago, IL, for Defendant National Renovations, LLC.
Vaala, Lindsey R., United States Magistrate Judge

ORDER

*1 This matter comes before the Court on Plaintiff SageWater, LLC's Motion to Compel Production of Documents from Third Party Gryphon Investors (Dkt. No. 235). The Motion is fully briefed (see Dkt. Nos. 235, 247, 252).[1] Finding that oral argument would not aid in the decisional process, the Court cancelled the hearing on Plaintiff's Motion. (See June 4, 2024 docket entry.) Having reviewed the Motion, third-party Gryphon Investors' Opposition, and Plaintiff's Reply, and having further considered the full record in this matter, the Court will DENY Plaintiff's Motion to Compel.
Third-party Gryphon Investors, a private equity firm, purchased Defendant Repipe Specialists in January 2022. Plaintiff asks the Court to compel Gryphon Investors to produce internal documents regarding (1) Defendant Repipe Specialists' multi-family growth strategy, (2) the compensation scheme for Daniel Johnson and Defendant David Hossfeld, both of whom are employees of Defendant Repipe Specialists, (3) Repipe Specialists' hiring of SageWater employees, (4) The Independent, and (5) the lawsuit against Defendants Hossfeld and Repipe Specialists, including communications regarding a cease and desist letter sent by Plaintiff to Defendants. Plaintiff asserts that the documents sought from Gryphon Investors are “likely to be highly probative of... Defendants' intentions with respect to SageWater and SageWater's highly valuable Confidential Information and Trade Secrets.” (Dkt. No. 236 at 2.)
This is a case about the alleged use of Plaintiff's trade secrets by Defendants David Hossfeld and Repipe Specialists. Despite this discrete focus, an enormous amount of discovery has been requested and exchanged between the parties. The undersigned has heard numerous discovery disputes submitted by the parties and through its rulings and guidance has established guardrails to try to keep the parties focused on the crux of the allegations in this case.[2]
Plaintiff's arguments as to why it purportedly must seek from Gryphon Investors the information requested in the Requests for Production at issue are unavailing. To the extent the information sought is even relevant to resolution of Plaintiff's claims regarding Defendants' alleged use of Plaintiff's trade secrets, Defendants unquestionably are the appropriate source for such documents and information. Plaintiff fails to persuade the Court that the documents and information it asks the Court to compel from Gryphon Investors are not duplicative and cumulative of the voluminous discovery already exchanged between the parties to date. Case law cited by both Plaintiff and Gryphon Investors makes clear that a more demanding variant of the proportionality analysis applies regarding whether a subpoena issued to a non-party under Rule 45 should be modified or quashed. Va. Dep't of Corr. v. Jordan, 921 F.3d 180, 189 (4th Cir. 2019); see also Peninsula Pathology Assocs. v. Am. Int'l Indus., 2022 WL 19574484, at *2 (E.D. Va. Dec. 23, 2022). Pertinent to that analysis “is whether the benefits of the discovery to the requesting party outweigh the burdens on the recipient.” Jordan, 921 F.3d at 189. Here, Plaintiff has not established that it is unable to obtain comparable information from Defendants. The Court also finds that the burden of the requests to Gryphon outweighs the benefit of any information that might be received. The requested information is not likely to offer value over and above what Plaintiff already has received in discovery and much of what is sought exceeds the scope of the claims at issue in the litigation—whether Defendants used Plaintiff's trade secrets. See id. at 189–90.
*2 Accordingly, it is hereby ORDERED that Plaintiff's Motion to Compel Production of Documents from Third Party Gryphon Investors (Dkt. No. 235) is DENIED.

Footnotes

The Court cites to the publicly available versions of the pleadings and notes that some of the material in support of and in opposition to the pending Motion were filed under seal.
For example, the Court has largely denied the parties' attempts to obtain discovery from non-party entities that own or have invested in Plaintiff or Defendant Repipe Specialists.