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EmployBridge, LLC v. Riven Rock Staffing, LLC

United States District Court, D. New Mexico

January 26, 2017

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

          ORDER ON DISCOVERY MOTIONS REGARDING SUBPOENAS

          KIRTAN KHALSA, UNITED STATES MAGISTRATE JUDGE

         THIS MATTER comes before the Court on the following motions: (1) Plaintiffs' Notice of Motion to Compel Compliance with Subpoenas or, in the Alternative, to Transfer (Misc. Civ. No. 16-45 WJ, Doc. 1[1]) (“Motion to Compel Compliance”), filed November 18, 2016; (2) Plaintiffs' Emergency Motion to Enforce Subpoenas against Non-Party Sorensen (Doc. 63) (“Motion to Enforce Subpoenas”), filed December 8, 2016; and, (3) the parties' Joint Motion for Hearing (Doc. 80), filed January 12, 2017. The Court, having reviewed the parties' and Mr. Sorensen's submissions and the relevant law, and being otherwise fully advised, FINDS that Plaintiffs' Motion to Compel Compliance and Motion to Enforce Subpoenas are well-taken in part and should be GRANTED IN PART and DENIED IN PART. The Court further finds that the parties' Joint Motion for Hearing 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.) Plaintiffs contend that Defendants have misappropriated Plaintiffs' trade secrets and confidential information, breached non-competition, non-solicitation, and/or nondisclosure 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 Albuquerque, New Mexico; 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.)

         In their Motion to Compel Compliance and Motion to Enforce Subpoenas, Plaintiffs initially sought to enforce two subpoenas-a document subpoena and a deposition subpoena- that their counsel issued to non-party D. Stephen Sorensen.[2] (Doc. 63 at 2; Misc. Civ. No. 16-45 WJ, Doc. 1-1 at 4-5.) Both Defendant Riven Rock and Mr. Sorensen filed pleadings in opposition to Plaintiffs' motions, Defendant Riven Rock on December 22, 2016, and Mr. Sorensen on January 3, 2017. (Doc. 71; Misc. Civ. No. 16-45 WJ, Docs. 14-16.) On January 5, 2017, Plaintiffs filed a reply in support of the motions, in which they stated that they have “withdrawn the document subpoena previously served on [Mr.] Sorensen, ” and now seek only to depose Mr. Sorensen for no more than three (3) hours at a mutually convenient time, date, and location.[3] (Doc. 75 at 3-4, 7.)

         Plaintiffs attached new evidence to their reply, i.e., the Declaration of David Bell, a managerial employee of Plaintiff EmployBridge, LLC. (Doc. 75 at 29-30.) With the Court's leave, Defendant Riven Rock filed a surreply to address this new evidence on January 12, 2017. (Docs. 79, 82.) On the same date, the parties jointly filed a motion for a hearing on the Motion to Compel Compliance and Motion to Enforce Subpoenas. (Doc. 80.) Finally, and again with the Court's leave, Plaintiffs filed a surresponse on January 18, 2017. (Docs. 84, 85.)

         2.Analysis

         a. Plaintiffs' Motion to Compel Compliance and Motion to Enforce Subpoenas

         As an initial matter, insofar as Plaintiffs' Motion to Compel Compliance and Motion to Enforce Subpoenas sought to enforce the document subpoena Plaintiffs' counsel issued to Mr. Sorensen on October 29, 2016, the motions are moot, because Plaintiffs have withdrawn this subpoena and no longer seek to enforce it. (Doc. 75 at 3, 7.) The Court will therefore deny that portion of Plaintiffs' motions. However, for the reasons set forth below, the Court will grant Plaintiffs' motions insofar as they seek to compel Mr. Sorensen to appear to be deposed for no more than three (3) hours at a mutually convenient time, date, and location. (Id. at 4, 7.)

         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 expense of the proposed discovery outweighs its likely benefit.

Id. “The court's responsibility, using all the information provided by the parties, is to consider these . . . factors in reaching a case-specific determination of the appropriate scope of discovery.” Fed.R.Civ.P. 26(b)(1), 2015 Amendment, Advisory Committee Notes. “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Fed.R.Civ.P. 26(b)(1). However, the “legal tenet that relevancy in the discovery context is broader than in the context of admissibility should not be misapplied so as to allow fishing expeditions in discovery.” Martinez v. Cornell Corr. of Tex., 229 F.R.D. 215, 218 (D.N.M. 2005) (citation omitted). Rather, discovery “is meant to allow the parties to flesh out allegations for which they initially have at least a modicum of objective support.” Id. (citation omitted).

         In its December 16, 2016 Order Denying Motion to Compel in this matter, the Court observed that Plaintiffs had failed to produce even a modicum of objective support for their theory that Mr. Sorensen conspired with Defendants to engage in the conduct alleged in Plaintiffs' Amended Complaint, or has otherwise been involved in Defendant Riven Rock's formation, funding, and/or operation. (Doc. 69 at 7-10.) Mr. Bell's declaration, however, provides the missing modicum of objective support. (Doc. 75 at 29-30.) And, if Plaintiffs' theory is correct in whole or in part, then Mr. Sorensen will indeed have at least some information that is relevant to the parties' claims and defenses. Fed.R.Civ.P. 26(b)(1). Moreover, even if their theory is wholly mistaken, Mr. Sorensen appears to have an ongoing professional relationship with Ashkan Abtahi, one of Defendant Riven Rock's principals, and may have learned from him discoverable information about the formation, funding, and/or operation of the enterprise. (Doc. 49 at 6, 8-9; Doc. 66 at 3.)

         Defendant Riven Rock disputes the accuracy of Mr. Bell's declaration, which it is certainly entitled to do, and argues that the declaration is largely based on hearsay. (Doc. 82 at 2-3, 7.) However, as Plaintiffs correctly observe, they have not offered the declaration for its truth at an evidentiary hearing to which the Federal Rules of Evidence apply, nor is the Court considering it for that purpose. (Doc. 85 at 3-5.) Thus, it is not hearsay, and the Court may properly consider it in determining whether Plaintiffs seek to depose Mr. Sorensen to obtain information that is relevant to the parties' claims and defenses and proportional to the needs of the case. Fed.R.Evid. 801(c) (hearsay is out-of-court statement offered in evidence “to prove the truth of the matter asserted”); Fleming v. Parnell, 2014 WL 25621, at *2 (W.D. Wash. Jan. 2, 2014) (statements in declaration submitted to support motion to compel were not hearsay); Arista Records, LLC ...


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