White Cap, LP v. Heyden Enters., LLC
White Cap, LP v. Heyden Enters., LLC
2024 WL 4486031 (S.D. Fla. 2024)
August 20, 2024
Maynard, Shaniek M., United States Magistrate Judge
Summary
The Heyden Defendants filed two motions seeking clarification and a protective order regarding the production of ESI in response to the plaintiff's discovery requests. The court granted in part and denied in part both motions, addressing issues such as relevance, overbreadth, and privilege. The Heyden Defendants sought to limit the relevant time period and protect personal and confidential information contained on certain devices, while the plaintiff argued for the production of non-user generated files and review of personal computers.
Additional Decisions
WHITE CAP, L.P., Plaintiff,
v.
HEYDEN ENTERPRISES, LLC, d/b/a Heyden Supply, BRIAN WELSH, MIGUEL RIVAN, WAYNE ROSENBLUM, TIMOTHY KAVNEY, and GOMER BLACK, JR., Defendants
v.
HEYDEN ENTERPRISES, LLC, d/b/a Heyden Supply, BRIAN WELSH, MIGUEL RIVAN, WAYNE ROSENBLUM, TIMOTHY KAVNEY, and GOMER BLACK, JR., Defendants
CASE NO. 23-14248-CIV-MARTINEZ/MAYNARD
United States District Court, S.D. Florida
Entered on FLSD Docket August 20, 2024
Counsel
Luis Eduardo Suarez, Heise Suarez Melville PA, Coral Gables, FL, Robert C. Stevens, Pro Hac Vice, Seyfarth Shaw LLP, Atlanta, GA, Alexander Charles Meier, Atlanta, GA, for Plaintiff.Anthony D. Lehman, Claire A. Williamson, Pro Hac Vice, Hudson Lambert Parrot LLC, Atlanta, GA, Justin B. Levine, Palm Beach, FL, Samantha Shallani Jairam, Palm Beach, FL, Lizza C. Maldonado, Tre'Ana Lynnae Thompson, Cole, Scott, Kissane, P.A., Palm Beach, FL, for Defendants Heyden Enterprises, LLC, Brian Welsh, Miguel Rivan, Wayne Rosenblum, Timothy Kavney.
John M. Miller III, Boy Agnew Potanovic Miller, PLLC, Fort Myers, FL, Katherine Cook, Fort Myers, FL, for Defendant Gomer Black Jr.
Maynard, Shaniek M., United States Magistrate Judge
OMNIBUS ORDER ON THE HEYDEN DEFENDANTS’ MOTION FOR CLARIFICATION [DE 290] AND MOTION FOR PROTECTIVE ORDER [DE 291]
*1 THIS CAUSE is before me upon the above two Motions filed by Heyden Enterprises LLC d/b/a Heyden Supply (“Heyden Supply”), Brian Welsh (“Welsh”), Miguel Rivan (“Rivan”), Wayne Rosenblum (“Rosenblum”), and Timothy Kavney (“Kavney”) (collectively the “Heyden Defendants”). The Motion for Clarification “seeks clarification as to whether all objections raised in response to Plaintiff's First Set of Discovery were overruled.” [DE 290 at 2]. The separate Motion for Protective Order seeks entry of an Order precluding the production of alleged irrelevant and confidential documents contained on certain devices. Plaintiff has filed responses in opposition, [DE 296, DE 297], and the Heyden Defendants have filed a single reply addressing both Motions [DE 301].
Being fully advised, the Motion for Clarification [DE 290] is GRANTED IN PART AND DENIED IN PART, and the Motion for Protective Order [DE 291] is GRANTED IN PART AND DENIED IN PART consistent with the terms of this Order.
BACKGROUND
On July 3, 2024, after hearing from counsel at an interim discovery status conference, I issued an Order memorializing my rulings as follows:
PAPERLESS ORDER MEMORIALIZING DISCOVERY RULINGS: On June 4, 2024, I ordered the Heyden Defendants to provide full, complete, and verified answers to Plaintiff's first set of discovery requests. DE 262. To date, they have not done so. At today's interim discovery status conference, I made certain rulings for reasons stated in open court. This Order serves to memorialize these rulings. First, by July 12, 2024, the Heyden Defendants (not including Defendant Black) shall file any motion for protective order/clarification, if deemed appropriate, regarding responsive documents or information they seek to withhold from production. Said motion shall be specific, concise, and strictly comply with my five-page limit for discovery motions. Second, by July 12, 2024, counsel for Defendant Timothy Kavney shall issue an appropriate subpoena to the third-party cellular phone provider requesting all responsive cell phone records pertaining to Defendant Timothy Kavney during the relevant timeframe. Counsel shall immediately thereafter file an appropriate notice in the record to confirm issuance of the subpoena. Third, by July 19, 2024, the Heyden Defendants (not including Defendant Black) shall serve an appropriate privilege log on Plaintiff's counsel. Any information responsive to Plaintiff's first set of discovery requests not produced in compliance with my June 4, 2024 order must be either the subject of arguments made in the Heyden Defendants’ motion for protective order/clarification, or identified in a privilege log that complies with the requirements of Federal Rule of Civil Procedure 26(b)(5). As indicated at the status conference, failure to comply with my orders will result in appropriate sanctions. Signed by U.S. Magistrate Judge Shaniek Mills Maynard on 7/3/2024.
DE 273.
In the Motion for Clarification, the Heyden Defendants assert that they provided amended discovery responses in compliance with the above Order wherein they removed some objections but maintained others for alleged overbreadth, undue burden, relevance, and privilege. Plaintiff counters that the Motion for Clarification improperly seeks reconsideration, not clarification, and the Heyden Defendants fail to justify their objections—some of which are newly asserted—or explain why I should revisit my prior rulings. In their reply, the Heyden Defendants assert that prior Orders have not specifically addressed the assertion of objections and the Heyden Defendants therefore seek clarification on such objections. Regarding privilege, in their reply, the Heyden Defendants indicate that they have specifically explained the categories of privilege objections raised and that they also produced privilege logs to Plaintiff on July 19, 2024.
*2 In the Motion for Protective Order, the Heyden Defendants identify eleven (11) devices potentially holding information related to this case, including a thumb drive, personal and business cell phones, and personal and business laptops. The Heyden Defendants maintain that the personal devices contain irrelevant and private information relating to the individual Defendants such as family photos, music, personal finances, and personal calendar entries. Further, the business-related devices allegedly contain irrelevant information about other customers and unrelated transactions. Moreover, according to the Heyden Defendants, the devices and thumb drive contain “non-user generated files” such as system and registration files that are irrelevant to the issues in this case and have accordingly been “de-nisted”[1] to facilitate document review “as they hold no evidentiary value” [DE 291 at 5]. The Heyden Defendants further claim that Welsh's desktop contains privileged information such as exchanges of information with counsel on a work-related injury. Lastly, the Heyden Defendants assert that Kavney and Rivan's personal computers were never imaged “as these are their personal devices and devices used by family members in their household” [Id. at 6]. Thus, the Heyden Defendants seek an Order precluding the production of irrelevant categories of documents on these devices and protecting against the imaging of Kavney and Rivan's personal computers.
Plaintiff does not oppose the Heyden Defendants’ motion to preclude the production of the individual Defendants’ family life, medical events, or spam emails contained on the at-issue devices. However, Plaintiff maintains that non-user generated files are “critical in misappropriation cases” to determine how a user interacts with a particular file, relevant web browser, or any file deletion, and therefore should be produced [DE 296 at 2-3]. Plaintiff also contends that Kavney and Rivan's personal computers may have relevant information relating to their employment at White Cap and the devices should be reviewed for responsive information and activity. Plaintiff adds that the Heyden Defendants impermissibly ask the Court to sustain relevance limitations regarding temporal scope and outstanding requests for company-wide information relating to Heyden Supply's financials or marketing. According to Plaintiff, these relevance objections are without merit.
In their omnibus reply, the Heyden Defendants state that there are no improper relevance limitations, Rivan and Kavney's personal computers were imaged since the Motion for Protective Order was filed “in an abundance of caution” but the information on these devices is not relevant, and non-user generated files are not relevant and need not be produced.
DISCUSSION
Because there is overlap in the issues raised in the two Motions and related briefing, I find it most efficient to categorically address the key issues raised in this single Order. At the outset, I note that I will treat the Motion for Clarification as one seeking clarification as opposed to reconsideration since I never squarely addressed objections pertaining to temporal scope, privilege, and confidential information. That said, I tend to agree with Plaintiff's position that the Heyden Defendants broadly invoke numerous objections to well over a dozen requests with reference to a small subset of examples, which is far from my expectation of a “relatively narrow subset of requests” discussed at the interim discovery status conference. See DE 289 at 23. In this Order, I endeavor to bring clarity to the key disputed issues and categories of objections addressed in the parties’ briefing so that the parties can move forward in fulfilling their discovery obligations.
Before turning to the issues raised, I begin with the familiar standards of discovery that apply here. Under Federal Rule of Civil Procedure 26, “[p]arties may obtain discovery regarding any non-privileged 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). While the Federal Rules of Civil Procedure “strongly favor full discovery whenever possible,” trial courts have wide discretion in setting limits on the scope of discovery. Farnsworth v. Procter & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985). A party is not entitled to receive every piece of relevant information, but instead is subject to “reasonable limits on discovery” based on “the common-sense concept of proportionality.” In re: Takata Airbag Prod. Liab. Litig., 2016 WL 1460143, at *2 (S.D. Fla. Mar. 1, 2016).
*3 An opposing party may object to a discovery request that is unreasonable or otherwise unduly burdensome. Alvar v. No Pressure Roof Cleaning, LLC, 2018 WL 1187777, at *2 (S.D. Fla. Mar. 7, 2018). The grounds for objecting to a discovery request must be stated with specificity. See Fed. R. Civ. P. 33(b)(4) and 34(b)(2)(B). Objections simply stating that a request is overly broad or unduly burdensome, without specifying the ground on which such objections are based, are meaningless and without merit. Rivera v. 2K Clevelander, LLC, 2017 WL 5496158, at *2 (S.D. Fla. Feb. 22, 2017). The objecting party bears the burden to establish a lack of relevancy or some other basis for resisting production. Glatter v. MSC Cruises S.A., 2019 WL 1300896, at *1 (S.D. Fla. Feb. 7, 2019).
On a showing of good cause, a court may issue an order protecting a party from oppressive discovery, including “forbidding the disclosure or discovery;” and/or “forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters.” Fed. R. Civ. P. 26(c)(1). “A district court has broad discretion when fashioning protective orders.” Id. at 357. When evaluating whether a movant has established “good cause” for a protective order to issue, “a court should balance the non-moving party's interest in obtaining the requested discovery and preparing for trial against the moving party's proffer of harm that would result from mandating the discovery go forward as scheduled.” Turner v. Ramo LLC, 2010 WL 11479360, at *2 (S.D. Fla. Nov. 8, 2010).
The Heyden Defendants assert relevance objections that generally fall into three main categories. First, they seek to limit the relevant time period to May 2022 for Welsh and to January 2023 for the other Individual Defendants. Second, the Heyden Defendants contend that requested documents relating to other litigation involving White Cap and Heyden Supply are not relevant. Third, the Heyden Defendants assert that information on Heyden-issued devices regarding the company's overall financial performance or branches other than Ft. Pierce are not relevant.
1. Relevant Time Period[2]
As to the first category, the Heyden Defendants contend that the relevant time for discovery in this case should be from January 1, 2023 for Rivan, Kavney, and Rosenblum who were terminated from White Cap in July 2023; and from May 2022 for Welsh as Welsh was terminated by White Cap in May 2022. In their Reply, the Heyden Defendants clarify that this proposed limit of time did not apply “to documents that contained a ‘White Cap’ logo or any other type of identification.” DE 301 at 4. The Heyden Defendants agree that White Cap identifiable documents are relevant and have been produced “without any limitation of time.” Id. For instance, in response to White Cap's statement that “[i]f any Individual Defendant has White Cap files created before this [proposed timeframe] ... that information may qualify as confidential or a trade secret, and their continued possession of that information would be relevant to White Cap's claims,” DE 296 at 4, the Heyden Defendants agree such information is relevant such that there “is simply no restricted time applicable to ‘White Cap’ identifiable documents.” DE 301 at 4.
*4 Accepting the Heyden Defendants’ representation that all White Cap identifiable documents have already been produced with no time limitation, I agree with the Heyden Defendants that a reasonable time frame for all other responsive documents is from January 1, 2023 for Rivan, Kavney, and Rosenblum who were terminated from White Cap in July 2023. However, because the months leading up to Welsh's May 2022 termination from White Cap may encompass relevant information, I find that a reasonable scope of time for discovery pertaining to Welsh is from January 1, 2022.
2. Documents Relating to Other Litigation Involving These Parties
The Heyden Defendants flag RFP No. 20 as seeking allegedly irrelevant information. This request seeks “all documents produced and depositions of Heyden Supply employees or corporate representatives taken in any litigation filed by White Cap against Heyden Supply or any of its employees.” DE 297-1 at 12-13. The Heyden Defendants objected on several grounds, including that documents or depositions in other lawsuits do not bear on the claims and defenses in this lawsuit. Id. I agree and sustain this objection. I am not persuaded by Plaintiff's argument that this request is intended to “avoid the need for duplicative deposition testimony or document production” in this case and other cases involving these same parties, including apparently one separately pending case in Georgia. For starters, to the extent these or similar requests were made in the separate litigation, Plaintiff presumably already has possession of these documents. More importantly, the disputed issues in this case specifically entail allegations that the named individual Defendants improperly solicited customers and took trade secrets from Plaintiff without authorization in connection with their employment at Plaintiff's Ft. Pierce branch. Discovery requests in this case should be tailored to these specific allegations. Requests for discovery exchanged in other cases involving these parties are disproportionate to the needs of this case.
3. Financial Net Worth Discovery
Plaintiff is correct that discovery regarding Heyden Supply's current financial net worth is relevant to Plaintiff's claim for punitive damages, however the scope of allowable discovery into financial net worth is not without boundaries. See McGennis v. Sedgwick Claims Mgmt. Servs., Inc., 2021 WL 4170455, at *2 (S.D. Fla. Sept. 14, 2021) (citing Rafael Hurtado v. Balerno Int'l Ltd., 2019 WL 917404, at *2 (S.D. Fla. Feb. 25, 2019) (ordering Defendant to produce its 2019 and 2020 tax returns and its profit and loss statements where Plaintiff asserted a punitive damages claim); Gottwald v. Producers Grp. I, LLC, 2013 WL 1776154, at *3 (S.D. Fla. Apr. 25, 2013) (“Because [plaintiff] has pressed a claim for punitive damages, evidence of the defendants’ financial worth is relevant to his claim.”); Belniak v. The Fla. Highway Patrol, 2013 WL 12177835, at *2 (M.D. Fla. March 14, 2013) (“Though the scope of allowable discovery is broad, and financial net worth discovery relevant due to the Plaintiff's punitive damages claims, the scope of allowable discovery is not boundless.”).
Contrary to Plaintiff's assertions, I fail to see how marketing information documents are relevant. I similarly fail to see how documents relating to “outside funding, equity sale, capital infusion or new lines of credit for Heyden Supply” are relevant here. See DE 297-1 at 14. I therefore sustain the Heyden Defendants’ objections regarding any requests for this type of information.
However, I find that certain of Heyden Supply's financial documents are relevant to the punitive damages claim. Plaintiff's RFP No. 26 seeks “Heyden Supply's balance sheet, monthly revenue, profit and loss statements, and any similar aggregation of financial information from June 1, 2022, to the present.” DE 297-2 at 19. The Heyden Defendants have agreed to produce this requested information but only beginning in June 2023. DE 301 at 5. This unilaterally-imposed temporal limitation is unjustified. Also, to the extent Defendants maintain that Plaintiff is only entitled to financial information “of the Fort Pierce branch relative to the projects alleged to have been taken by the individual Defendants,” DE 290 at 4, I disagree. Plaintiff is entitled to company-wide information, not just one branch. RFP No. 26's request for company-wide information from June 2022 to present coincides with what the case law generally allows. I therefore order Heyden Supply to produce to Plaintiff its company-wide balance sheets, monthly revenues, and profit and loss statements, from June 1, 2022, to the present.
*5 In their Motion for Protective Order, the Heyden Defendants indicated that Rivan and Kavney's personal computers “were never imaged, as these are their personal devices and devices used by family members in their household” [DE 291]. The Heyden Defendants claim these devices would not have relevant information because Rivan and Kavney no longer have access to their White Cap emails. This is an unconvincing argument. Even if other family members use the personal devices, this is not a valid justification to not review these devices for responsive documents. This is especially true considering that there is evidence in this case suggesting that the individual Defendants forwarded emails to their personal email accounts while still employed by White Cap and it is entirely possible that their personal devices contain information stored locally relating to their White Cap employment and their activities relating to their transition to Heyden Supply.
As of the date of their reply, the Heyden Defendants acknowledged having imaged Rivan and Kavney's personal computers through the process of the parties’ briefing. I now order that these devices be appropriately reviewed for any relevant responsive information or documents pertaining to Rivan and Kavney's departure from White Cap and transition to Heyden Supply. It is not enough to simply say that any relevant information that could exist on these devices has already been produced. If these devices do not contain relevant evidence or if they contain evidence that has already been produced, then Kavney and Rivan can specifically and clearly indicate as much after the devices have been appropriately reviewed.
In their Motion for Protective Order, the Heyden Defendants assert that non-user generated files were “denisted” as part of the e-Discovery process “to eliminate irrelevant data from a document collection” [DE 301 at 6]. Plaintiff counters that these files constitute system-level information that is “critical” in misappropriation cases to determine how a user interacted with a particular file, browsed the web, or deleted documents [DE 296 at 2].
The process of deNISTing is an eDiscovery tool aimed at eliminating background files that are necessary for an operating system to run but that users do not even know exist. See DE 301-2, DeNISTing in Ediscovery: What it is and Why You Should Care, also available at: www.jdsupra.com/legalnews/denisting-inediscovery-what-it-is-and-8161133/ (last accessed August 14, 2024). This process is intended to facilitate document review in cases with a high volume of electronically stored documents by removing files that users do not typically create or interact with and that “computers use to operate on the back end.” Id.
At this juncture, I am unpersuaded by Plaintiff's argument that these files are “critical” here. Plaintiff relies solely on out-of-circuit and non-binding cases that discuss non-user generated files after court-ordered forensic examinations. See, e.g., Azenta, Inc. v. Andrews, 2023 WL 8845604, at *3 (S.D. Cal. Dec. 21, 2023) (discussing non-user generated files after forensic examination was conducted); Keating v. Jastremski, 2020 WL 1809139, at *6 (S.D. Cal. Apr. 9, 2020) (discussing non-user generated files to identify destruction of relevant evidence by defendant following a forensic examination); Int'l Fin. Co., LLC v. Jabali-Jeter, 2019 WL 2268961, at *5 (E.D. Pa. May 28, 2019) (also involving forensic examination). Here, by contrast, no forensic examination has been requested or ordered. As things currently stand, the requested non-user generated files are neither relevant nor presently proportional to the needs of this case.[3] Thus, the Heyden Defendants need not produce non-user generated files at this time.
*6 The Heyden Defendants object to over a dozen specified requests on grounds of attorney-client privilege, work product doctrine, and joint common interest doctrine. As examples, the Heyden Defendants point to (1) requested text messages and chats between the individual Defendants and anyone else relating to White Cap, Heyden Supply, building supplies, credit applications, pricing, takeoffs, placement plans, or rebar fabrication, and (2) requested “internal strategy documents” related to lateral hiring, trade secrets, or restrictive covenants. While it may be true generally that these exemplar requests could encompass some documents that are privileged, it is equally true that there may be responsive information that is not subject to privilege protection. For example, there may be text messages or chats between individual Defendants and non-attorneys regarding the relevant at-issue projects. In their reply, the Heyden Defendants contend that privilege logs were produced on July 19, 2024, however no party has attached a copy of said privilege log as part of the briefing relating to the two Motions under review in this Order.
To clarify, as I indicated at the interim status conference, I do not find that the Heyden Defendants have broadly waived all assertion of privilege. As Plaintiff points out, courts apply “a holistic analysis taking into account several factors to determine whether the privilege has been waived.” DE 297 at 5 n. 4 (quoting Pitts v. Francis, 2008 WL 2229524, at *4 (N.D. Fla. 2008)). Such a holistic analysis under the circumstances here counsels against a broad finding of general waiver. However, I am unable to make an informed assessment of the Heyden Defendants’ assertions of privilege in a vacuum. Plaintiff shall review the privilege logs provided by the Heyden Defendants and confer with defense counsel regarding any deficiencies or concerns regarding documents identified on the privilege logs as being withheld from disclosure on grounds of privilege. To the extent disputes remain following this conferral, an appropriate motion may be filed with reference to attached privilege log(s) entries.[4]
CONCLUSION
Based on the foregoing, it is hereby ORDERED AND ADJUDGED that (1) the Motion for Clarification [DE 290] is GRANTED IN PART AND DENIED IN PART, and (2) the Motion for Protective Order [DE 291] is GRANTED IN PART AND DENIED IN PART consistent with the terms of this Order. By or before Tuesday, September 3, 2024, the Heyden Defendants shall provide a supplemental production of additional documents and information to which Plaintiff is entitled in accordance with the findings and directives contained within this Order.
DONE AND ORDERED in Chambers at Fort Pierce, Florida, this 20th day of August, 2024.
Footnotes
“NIST” refers to the National Institute of Standards and Technology. The process of deNISTing generally refers to the removal of program files with extensions like “.EXE,” “.HLP,” “.DLL,” or “.LST” that are typically not needed for purposes of producing responsive discovery material. See eDiscovery for Corporate Counsel § 12:7, eDiscovery Challenges and Strategies for Data Collection, Processing, Review, and Production.
As the Heyden Defendants acknowledge, their overbreadth and undue burden objections are “narrowly related to the lack of time scope in the requests” and consistent with these objections, the “Defendants limited the time scope from January 2023 for Kavney, Rivan, and Rosenblum, and from May 2022 for Welsh.” DE 301 at 2-3. Accordingly, this discussion of relevant time period in the context of relevancy objections also applies with equal force to objections on grounds of overbreadth and undue burden.
I note that Plaintiff has filed an Expedited Motion to Compel Regarding Withheld Non-Privileged Materials and Motion for Hearing and Order to Show Cause [DE 302] raising serious claims of alleged “intentional destruction of a computer or information on it by one or more of the defendants.” [Id. at 10]. This motion is newly-filed and not fully briefed. However, based on my cursory review of this new motion, it appears at least plausible that Plaintiff will be able to establish that certain non-user generated files are relevant and proportional to the claims in this case which may lead me to revisit this issue at a later appropriate time.
The new motion described in the preceding footnote attaches an entire privilege log and privilege log excerpts. It also includes more detailed argument relating to assertions of privilege. That motion, its arguments, and its attachments will be more fully reviewed once that motion becomes ripe for review.