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EmployBridge, LLC v. Riven Rock Staffing, LLC

United States District Court, D. New Mexico

December 16, 2016

EMPLOYBRIDGE, LLC et al., Plaintiffs,
v.
RIVEN ROCK STAFFING, LLC et al., Defendants.

          ORDER DENYING MOTION TO COMPEL

          KIRTAN KHALSA, UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on Plaintiffs' Motion to Compel with Memorandum of Law in Support (Doc. 49), filed November 10, 2016. The Court, having meticulously reviewed the parties' submissions and the relevant law, and being otherwise fully advised, FINDS that the motion is not well taken and should be DENIED.

         1. Factual Background and Procedural History

         In their Amended Complaint for Damages and Injunctive Relief, Plaintiffs EmployBridge, LLC and Employment Solutions Management, Inc. assert claims against Defendant Riven Rock Staffing, LLC (“Riven Rock”), and individual Defendants L. Shaun Shepherd, Catherine Olinger, Terry Miller, and Timothy Jacquez, under the Defend Trade Secrets Act, the New Mexico Uniform Trade Secrets Act, and state contract and tort law. (See generally Doc. 23.) Specifically, Plaintiffs contend that Defendants have misappropriated Plaintiffs' trade secrets and confidential information, breached non-competition, non-solicitation, and/or non-disclosure agreements in the individual Defendants' employment contracts, and tortiously interfered with Plaintiffs' contractual and business relations and prospective economic advantage. (Id. at 22-38.) Plaintiffs and Defendant Riven Rock both operate specialty staffing businesses in the Albuquerque, New Mexico market; the individual Defendants left Plaintiffs' employment and went to work for Defendant Riven Rock shortly after the latter company was formed. (Id. at 3-4, 15-17; Doc. 64-1 at 24-26.)

         Plaintiffs contend that the discovery requests at issue in their motion to compel are “part of a broader effort to understand who owns, runs, and is involved with [Defendant] Riven Rock.” (Doc. 64-1 at 115 (emphasis added).) More particularly, Plaintiffs contend the requests are designed to uncover evidence that non-parties D. Stephen Sorensen, Deborah Munoz, [1] Arlita Purser, Dave Tonick, and/or Marko Gortinski have conspired with Defendant Riven Rock to unfairly compete with Plaintiffs. (Doc. 49 at 2-3.) Specifically, Plaintiffs posit that these individuals have conspired with Defendant Riven Rock to “hire the [i]ndividual Defendants in violation of their non-competition/non-solicitations agreements, ” “target clients with whom the [i]ndividual Defendants worked while at EmployBridge, ” and “abscond[] with [Plaintiffs'] confidential and trade secret information.” (Doc. 66 at 13.) Plaintiffs hypothesize this conspiracy-which is not alleged in Plaintiffs' Amended Complaint-based on various past and present business connections between Defendant Riven Rock's two principals (Ashkan Abtahi and Donyelle Rose), and Mr. Sorensen, Ms. Munoz, Ms. Purser, Mr. Tonick, and Mr. Gortinski, all of whom own, operate, or work for businesses in the staffing industry. (Doc. 49 at 5-10.)

         According to Plaintiffs, Mr. Abtahi and Ms. Rose worked at a business called Select Staffing when Mr. Sorensen was its Chief Executive Officer. (Doc. 49 at 4, 7-8.) Select Staffing later merged with Plaintiffs, and Plaintiffs terminated Mr. Sorensen's employment shortly thereafter. (Doc. 49 at 4); see Sorensen v. New Koosharem Corp., Civ. No. 2:15-1088 RGK/PJW, “New Koosharem Corporation's Answer to First Amended Complaint and Koosharem, LLC's First Amended Counterclaims, ” Doc. 65-8 at 2-3, Doc. 65-9 at 2, and Doc. 65-10 at 2-3 (C.D. Cal. filed Jul. 23, 2015). The Court takes judicial notice that Mr. Sorensen has been involved in litigation regarding his termination with New Koosharem Corporation, Plaintiffs' holding company, in the United States District Court for the Central District of California that began in February 2015. (Doc. 53 at 4); see generally Sorensen v. New Koosharem Corp., Civ. No. 2:15-1088 RGK/PJW (C.D. Cal.). The Court will not further detail the alleged former and ongoing business connections between Defendant's principals and Plaintiffs, Mr. Sorensen, Ms. Munoz, Ms. Purser, Mr. Tonick, and Mr. Gortinski here, except to say that Plaintiffs have presented no evidence that any of the listed individuals has ever had an ownership interest in, or control over, Defendant Riven Rock. (See generally Docs. 49, 64, 66.)

         In the motion presently before the Court, Plaintiffs seek to compel Defendant Riven Rock to respond to Plaintiffs' Interrogatories Nos. 11 to 14 and Requests for Production Nos. 15 to 24. (Doc. 49 at 1.) These requests include prefatory instructions and definitions, which, inter alia, define Defendant Riven Rock to include “its parent, subsidiary, or affiliated companies, and its and their respective officers, directors, employees, representatives, agents, and attorneys, and all other persons or entities acting at the direction or on behalf of it or them.” (Doc. 64-1 at 3, 13.) The term “Riven Rock Affiliate” is defined with similar breadth. (Id.) The instructions and definitions define “Sorensen” to mean Mr. Sorensen and “all representatives, successors, agents, investigators, attorneys, or other persons or entities acting at the direction or on behalf of them, ” and “Sorensen Affiliate” to include

Sorensen, relatives of Sorensen, Esperer [Holdings, Inc.], Butler [America Holdings, Inc.], any individual or entity directly or indirectly controlling, controlled by, or under common control with any of the aforementioned persons or entities, and all individuals, officers, directors, employees, representatives, agents, and attorneys, and all other persons or entities acting at the direction or on behalf of any of them.

(Id. at 3-4, 13-14.) The term “[c]ommunications” is defined to include any “verbal intercourse, whether oral or written, ” and “[d]ocuments” to include “all written or graphic matter of every kind or description . . . and all tangible things.” (Id. at 4, 14.) “Related [t]o” and “[r]elating [t]o” are defined to mean “being in any way legally, logically or factually connected with the matter discussed.” (Id. at 6, 16.)

         Pursuant to these definitions and instructions, in Interrogatories Nos. 11 to 14 and Requests for Production Nos. 15 to 24, Plaintiffs asked Defendant Riven Rock: (a) to identify, and produce documents sufficient to show, its “current and former creditors”; (b) to identify, and produce all documents relating to, any “agreements” between a Riven Rock Affiliate and a Sorensen Affiliate; (c) to identify all persons, including any Sorensen Affiliates, who have agreed to pay attorneys' fees relating to this lawsuit; (d) to produce all documents relating to any payments between a Riven Rock Affiliate and a Sorensen Affiliate, or by one affiliate on the other's behalf; (e) to produce all documents relating to any services a Sorensen Affiliate provided to a Riven Rock Affiliate or vice versa, and any services a Riven Rock Affiliate provided to a “company that Deborah Munoz, Arlita Purser, or David Tonick owns, is employed by, or is otherwise affiliated with”; and finally, (f) to produce all “[c]ommunications” between a Riven Rock Affiliate and a Sorensen Affiliate, Ms. Munoz, Ms. Purser, or Mr. Tonick. (Doc. 64-1 at 9, 18-19.)

         Defendant Riven Rock objected to these requests, asserting that they are overbroad, overburdensome, and harassing, and seek information that is confidential and not relevant or reasonably calculated to lead to the discovery of admissible evidence. (Doc. 64-1 at 30-32, 41-45.) Plaintiffs moved to compel Defendant to respond to the requests on November 10, 2016. (Doc. 49 at 1.) In its response in opposition to the motion, inter alia, Defendant notes that Plaintiffs served the disputed discovery requests on August 23, 2016, but shortly thereafter omitted Mr. Sorensen, Ms. Munoz, Ms. Purser, Mr. Tonick, and Mr. Gortinski from their Rule 26 initial disclosures.[2] (See Doc. 53 at 7-9; Doc. 53-2 at 1-5; Doc. 64-1 at 10, 20.) Plaintiffs did supplement their initial disclosures to include these individuals (except Mr. Gortinski), but not until November 1, 2016, after Defendants' counsel had pointed out the earlier omission in the context of this discovery dispute. (Doc. 49-1 at 102, 106-09.)

         2. Analysis

         According to Federal Rule of Civil Procedure 26, parties in a federal civil action “may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Factors the Court is to consider in determining whether discovery is “proportional to the needs of the case” are:

the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or ...

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