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Kennicott v. Sandia Corp.

United States District Court, D. New Mexico

January 30, 2019

LISA A. KENNICOTT, LISA A. GARCIA, SUE C. PHELPS, and JUDI DOOLITTLE, on behalf of themselves and a class of those similarly situated, Plaintiffs,
v.
SANDIA CORPORATION d/b/a SANDIA NATIONAL LABORATORIES, Defendant.

          Gretchen Mary Elsner Elsner Law & Policy, LLC Santa Fe, New Mexico Outten & Golden LLP San Francisco, California, Adam T. Klein Cheryl-Lyn D. Bentley Elizabeth V. Stork Outten & Golden LLP New York, New York, David Lopez Outten & Golden LLP Washington, D.C., Kelly Maureen Dermody Anne Brackett Shaver Lin Yee Chan Tiseme Gabriella Zegeye Michael Ian Levin-Gesundheit Shira J. Tevah Lieff Cabraser Heimann & Bernstein, LLP San Francisco, California Attorneys for the Plaintiffs

          Justin E. Poore Cindy Jean Lovato-Farmer Sandia Corporation Albuquerque, New Mexico, Grace E. Speights Michael S. Burkhardt Krissy A. Katzenstein Morgan, Lewis & Bockius LLP Washington, D.C., Scott D. Gordon Theresa W. Parrish Jeffrey L. Lowry Paola Jaime Saenz Stephanie L. Latimer Rodey, Dickason, Sloan, Akin & Robb, P.A. Albuquerque, New Mexico Attorneys for the Defendant

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on Plaintiffs' Letter from Anne B. Shaver, Lieff, Cabraser, Heimann & Bernstein, LLP, to the Court (dated December 6, 2018), filed December 6, 2018 (Doc. 194)(“Letter”). The Court held a hearing on December 11, 2018. See Clerk's Minutes at 1, filed December 11, 2018 (Doc. 198). The primary issues are: (i) whether the Court should order Defendant Sandia Corporation d/b/a Sandia National Laboratories (“Sandia Labs”) to produce discovery on its current -- post-April, 2017 -- employment policies and practices; and (ii) whether the Court should order Sandia Labs to produce data on its employees' prior pay. In the Letter from Krissy A. Katzenstein, Morgan Lewis, to the Court (dated December 10, 2018), filed December 10, 2018 (Doc. 196)(“Letter Response”), Sandia Labs concedes that it will produce discovery on the prior pay data. See Letter Response at 4. Accordingly, the Court need not order Sandia Labs to produce such information. Because discovery postdating April, 2017, is relevant to the Plaintiffs'[1] claims and because the Court can order Sandia Labs to produce discovery that is proportional to the Plaintiffs' needs, the Court will order Sandia Labs to produce its 2018, policy documents and electronically stored information (“ESI”) related to the “vice president of human resources post-transition” -- now “associate laboratory director of human resources” (hereinafter, “vice president” or “vice president of human resources”). Draft Transcript of Hearing at 20:11-13 (taken December 11, 2018)(Levin-Gesundheit)(“Tr.”); id. at 22:8 (Levin-Gesundheit).[2] The Court, therefore, grants the Plaintiffs' requests in part and denies them in part.

         FACTUAL BACKGROUND

         The Court recited this case's facts and early procedural history in its Memorandum Opinion and Order at 2-3, 2018 WL 6069635, at *1, filed November 20, 2018 (Doc. 190)(“MOO”). The Court incorporates that recitation here.

Plaintiffs Lisa A. Kennicott, Lisa A. Garcia, Sue C. Phelps, and Judi Doolittle allege that Sandia Labs, “a federally-funded research and development contractor operating under contract for the Department of Energy and managed by Sandia Corporation, ” First Amended Class Action Complaint ¶ 1, at 1, filed July 5, 2018 (Doc. 146)(“First Amended Complaint”), has “policies, patterns, and practices, ” which result in female employees earning lower compensation and fewer promotions than “their male counterparts, ” First Amended Complaint ¶ 3, at 2. According to the Plaintiffs, Sandia Labs applies uniform policies in its offices throughout the United States of America. See First Amended Complaint ¶¶ 22-23, at 5-6. The Plaintiffs allege that Sandia Labs' employee performance evaluation process, see First Amended Complaint ¶¶ 26-30, at 6-7, initial salary calculations, see First Amended Complaint ¶¶ 31-35, at 7-8, and promotion system, see First Amended Complaint ¶¶ 36-40, at 8-9, disadvantage women, see First Amended Complaint ¶¶ 26-40, at 6-9.

MOO at 2, 2018 WL 6069635, at *1.

         PROCEDURAL BACKGROUND

         Kennicott, Garcia, and Phelps sue Sandia Labs on behalf of themselves and a class of those similarly situated. See Class Action Complaint, filed February 7, 2017 (Doc. 1)(“Complaint”).[3] Doolittle joined Kennicott, Garcia, and Phelps as a named plaintiff when the Plaintiffs amended their Complaint. See First Amended Complaint at 1. In the First Amended Complaint, the Plaintiffs assert: (i) that Sandia Labs engages in intentional discrimination, violating Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-15 (“Title VII”); and (ii) that Sandia Labs engages in disparate impact discrimination in violation of Title VII. See Amended Complaint ¶¶ 85-99, at 21-23. Kennicott asserts individual Title VII claims against Sandia Labs for retaliation and constructive discharge. See Amended Complaint ¶¶ 100-08, at 23-24.

         MOO at 2, 2018 WL 6069635, at *1. In the MOO, the Court issues an updated case schedule:

Event

Original Deadline

Stipulated discovery stay ends

November 26, 2018

Sandia [Labs] completes production of ESI, including final privilege log

January 15, 2019

Pre-class certification discovery deadline

March 11, 2019

Plaintiffs submit motion for class certification and expert reports

March 25, 2019

Sandia [Labs] submits opposition to class certification and expert reports

May 16, 2019

Plaintiffs submit reply motion and expert reports

June 18, 2019

Class certification hearing

July 1, 2019

         MOO at 66, 2018 WL 6069635, at *27. On December 6, 2018, the Plaintiffs filed the letter, requesting the Court's assistance with discovery disputes so that the parties can meet the case deadlines. See Letter at 1.

         1.The Letter.

         The Plaintiffs notify the Court of two discovery disputes. See Letter at 1. The Plaintiffs first complain that Sandia Labs refuses to produce discovery on policies and practices that postdate April, 2017. See Letter at 1. The Plaintiffs explain that, on May 1, 2017, “management of Sandia National Laboratories . . . transferred from Sandia Corporation, a subsidiary of Lockheed Martin Corporation, to National Technology and Engineering Solutions of Sandia (‘NTESS'), LLC, a subsidiary of Honeywell International, Inc.” Letter at 1-2 (citing Corporate Disclosure Statement at 1-2, filed March 17, 2017 (Doc. 16)). According to the Plaintiffs, Sandia Labs has taken the position that its policies and practices postdating the transfer are not relevant. See Letter at 2. The Plaintiffs, however, contend that their Complaint and Amended Compliant allege “ongoing violations of Title VII.” Letter at 2 (emphasis in original). The Plaintiffs request that the Court order Sandia Labs to produce the requested discovery for the period from May, 2017, through December, 2018. See Letter at 3.

         The Plaintiffs next aver that Sandia Labs has withheld information regarding its employees' prior pay data. See Letter at 3. The Plaintiffs describe that they requested information on employees' “compensation histories” in May, 2017, Letter at 3 (quoting Defendant's Objections and Responses to Plaintiffs' First Set of Requests for Production of Documents, Request No. 5, at 8, filed March 19, 2018 (Doc. 100-1)), and, according to the Plaintiffs, compensation from prior employers is “an essential component of this information” and relevant to the Plaintiffs' claims. Letter at 3. The Plaintiffs request that the Court order that Sandia Labs produce the requested information within one week so that the Plaintiffs may analyze the information before the deadline for their class certification motion. See Letter at 4.

         2.The Letter Response.

         Sandia Labs responds in a letter dated December 10, 2018. See Letter Response at 1-5. Sandia Labs first contends that it did not refuse to provide prior pay data; rather, according to Sandia Labs, it told the Plaintiffs that they had not requested production of such documents. See Letter Response at 2. Sandia Labs quotes the Plaintiffs' discovery request and emphasizes that the Plaintiffs desired “prior job history within and outside of Sandia.” Letter Response at 2 (emphasis in Letter Response)(quoting Defendant's Objections and Responses to Plaintiffs' First Set of Requests for Production of Documents, Request No. 5, at 8). Sandia Labs explains that, in July, 2018, it provided the Plaintiffs information on its employees' job histories, such as “prior employers, prior employment dates, and positions held, ” and that the Plaintiffs did not indicate, at that time, any problems with the production. Letter Response at 3. Sandia Labs explains that, in October, 2018, the Plaintiffs requested the prior pay data about which they now complain. See Letter Response at 3. According to Sandia Labs, after it informed the Plaintiffs that they had not previously requested such information, the Plaintiffs served a request for production seeking information on: “compensation in dollar terms, whether in terms of annual salary, hourly wage, bonus compensation AND/OR any other form of compensation, previously received or requested prior to hire AND/OR offer of employment for DEFENDANT's EMPLOYEES AND applicants.” Letter Response at 3 (quoting Plaintiffs' Fourth Set of Requests for Production of Documents, Request No. 39, at 5, filed December 10, 2018 (Doc. 196-3)(capitalization in Plaintiffs' Fourth Set of Requests for Production of Documents)). Sandia Labs concedes that, despite its complaints, it will produce to the Plaintiffs the requested information. See Letter at 4.

         Sandia Labs next contends that the Plaintiffs cannot ground their claims on policies and practices that postdate the transition from Sandia Corporation to National Technology and Engineering Solutions of Sandia (“National Technology”). See Letter at 4. Sandia Labs first avers that, because Sandia Labs primarily employed the named Plaintiffs during Sandia Corporation's management, the Plaintiffs cannot base a class claim on later policies and practices. See Letter Response at 4. Second, Sandia Labs argues that, to the extent that the Plaintiffs base their claims on their starting pay, any policy or practice postdating April, 2017, is irrelevant, because Sandia Labs hired each named Plaintiff at least “thirteen years before the transition date.” Letter Response at 4 (emphasis in original). Last, Sandia Labs protests that it has already produced documentation on thousands of Sandia Labs' employees, and so, if the Plaintiffs cannot develop a theory from that discovery, no theory exists. See Letter Response at 4-5.

         3. The Letter Reply.

         Also on December 10, 2018, the Plaintiffs replied to the Letter Response. See Letter from Anne B. Shaver, Lieff, Cabraser, Heimann & Bernstein, LLP, to the Court (dated December 10, 2018), filed December 10, 2018 (Doc. 196)(“Letter Reply”). The Plaintiffs first consider the dispute about discovery postdating April, 2017. See Letter Reply at 1. The Plaintiffs argue that their claims do not rest solely on Sandia Labs' policies and practices, and that three of the four named Plaintiffs continued working for Sandia Labs after the transition to National Technology. See Letter Reply at 1. Further, the Plaintiffs note that designing injunctive relief “to Sandia's human resources practices” requires knowledge about current policies and practices. Letter Reply at 1. The Plaintiffs additionally comment that, although Sandia Labs has produced considerable discovery already, they require information about employment procedures under National Technology to determine whether Sandia Labs' policies and practices changed. See Letter Reply at 1. The Plaintiffs concede that, because Sandia Labs agreed to produce employees' compensation histories, the dispute regarding “prior pay data” is moot. Letter Reply at 2. The Plaintiffs conclude by noting that Sandia Labs mischaracterizes their claims. See Reply Letter at 2. According to the Plaintiffs, “Plaintiffs' allegation regarding the role of prior pay in salary setting at hire does not represent the sum of Plaintiffs' claims, ” and the Plaintiffs argue, moreover, that “reliance on prior pay to set salaries at the time of hire may cause gender disparities in compensation for years after an employee was initially hired.” Reply Letter at 2.

         4. The Hearing.

         At the hearing on December 11, 2018, the Court began by clarifying whether the parties had resolved their dispute about the prior pay data. See Tr. at 4:7-15 (Court). The Plaintiffs affirmed the Court's assessment, see Tr. at 4:19-20 (Levin-Gesundheit), with the caveat that Sandia Labs produce the prior pay data “by the end of this year so we have plenty [of] opportunity to review it, analyze it[, ] and prepare for the class certification briefing and expert report deadlines, ” Tr. at 4:20-23 (Levin-Gesundheit). In response to the Court's prompting about a possible deadline, Sandia Labs confirmed that it could produce the discovery in the requested time. See Tr. at 5:4-10 (Court, Katzenstein).

         The Plaintiffs turned to the dispute about documents postdating April, 2017, and reiterated their Letter's arguments. See Tr. at 6:5-11 (Levin-Gesundheit). The Plaintiffs requested that Sandia Labs produce updated policy documents, updated internal complaints for 2018, employee's checks for 2018, see Tr. at 9:11-17 (Levin-Gesundheit), and “documents collected from the agreed upon custodians through the end of December 2018, ” Tr. at 19-20 (Levin-Gesundheit). In response to a question from the Court regarding the April, 2017, date, the Plaintiffs explained that they did not attach much significance to the date, but, that near that date, Sandia Labs' management changed. See Tr. at 10:7-17 (Levin-Gesundheit). According to the Plaintiffs, they filed their Complaint “a couple months prior” to the transition, Tr. at 17-18 (Levin-Gesundheit), and the Amended Complaint in July, 2018, see Tr. at 10:18-19 (Levin-Gesundheit). The Plaintiffs explained that National Technology undertook Sandia Corporations' liabilities, see Tr. at 10:19-11:5 (Levin-Gesundheit), and, according to the Plaintiffs, although some upper-level management changed in the transition, many managers retained their original positions, see Tr. at 11:5-9 (Levin-Gesundheit). The Plaintiffs concluded that, “at least with respect to policy” documents, Tr. at 11:22 (Levin-Gesundheit), they do not seek voluminous production, and believe that their discovery request “is proportional, ” Tr. at 12:5 (Levin-Gesundheit). See id. at 11:21-12:8 (Levin-Gesundheit).

         Sandia Labs responded by indicating that the First Amended Complaint's core focuses on events occurring before May, 2017. See Tr. at 12:13-16:22 (Katzenstein). Sandia Labs first reiterated the arguments from its Letter Response. See Tr. at 12:21-13:17 (Katzenstein). Sandia Labs contended that the Plaintiffs cannot form a class on events after April, 2017, because the named Plaintiffs and others in the proposed class did not work long, if at all, under National Technology. See Tr. at 13:18-24 (Katzenstein). Further, according to Sandia Labs, under National Technology, new management -- unconnected to the actions of which the Plaintiffs complain -entered Sandia Labs. See Tr. at 23:19-25 (Katzenstein).

         Sandia Labs further argued that rule 23 of the Federal Rules of Civil Procedure allows limited discovery to prepare for class certification, and that the discovery relating to the five-and-a-half years preceding May, 2017, should satisfy that requirement. See Tr. at 14:5-15:21 (Katzenstein). Sandia Labs asserted that, although the Plaintiffs request a small number of policy documents, the ESI requested involves thousands of documents and poses a substantial burden for Sandia Labs. See Tr. at 15:22-16:22 (Katzenstein). For the ESI, Sandia Labs must pull emails from the ESI custodians, run searches for relevant information, and review the documents recovered. See Tr. at 18:7-24 (Katzenstein).

         The Court asked the Plaintiffs whether they seek ten to twelve documents or thousands of documents. See Tr. at 18:20-21 (Court). The Plaintiffs responded that they seek around twelve policy documents. See Tr. at 18:23 (Levin-Gesundheit). According to the Plaintiffs, at the core, they seek Sandia Labs' policy documents, and the Plaintiffs noted that Sandia Labs had, for months, opposed the discovery on relevance grounds and had only just raised arguments about the discovery's burden. See Tr. at 18:23-19:6 (Levin-Gesundheit). The Plaintiffs, however, admitted that they desire ESI discovery and believe it foundational to their case, because ESI may reveal management's knowledge about discriminatory actions. See Tr. at 19:16-13 (Levin-Gesundheit). The Plaintiffs indicated that, to show their good faith, they would limit their ESI request to a request for information from the “vice president.” Tr. at 20:11-13 (Levin-Gesundheit). The Court asked how many documents the Plaintiffs seek from the vice president. See Tr. at 20:14-17 (Court). The Plaintiffs stated that they do not have an exact number. See Tr. at 20:18-21:1 (Levin-Gesundheit). The Court asked what, beyond policy documents, the Plaintiffs seek from the vice-president, see Tr. at 21:14-21 (Court), and the Plaintiffs asserted that they desired ESI, because the vice president is “intimately involved in administering, supervising the implementation of Sandia's human resource policies, ” Tr. at 21:24-22:1 (Levin-Gesundheit). See id. at 22:4-13 (Levin-Gesundheit).

         The Court returned to Sandia Labs to ask how many documents Sandia Labs would expect to produce in ESI limited to the vice president of human resources. See Tr. at 22:14-18 (Court). Sandia Labs could not estimate a number, and, when the Court inquired about the burden Sandia Labs' anticipated in producing the policy documents and ESI, Sandia Labs replied that it considered any discovery to impose a burden and that it still disputed the discovery's relevance. See Tr. at 23:3-24:3 (Katzenstein). The Court concluded that it could not limit discovery as Sandia Labs proposed, because the First Amended Complaint discusses Sandia Labs' current activities. See Tr. at 24:4-14 (Court). The Court stated that it would order Sandia Labs to produce the policy documents and ESI related to the vice president of human resources, and that it would grant the Plaintiffs' request as modified. See Tr. at 24:15-23 (Court).

         LAW REGARDING DISCOVERY

         Rule 34 governs discovery requests for tangible objects and states:

A party may serve on any other party a request within the scope of Rule 26(b):
(1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party's possession, custody, or control:
(A) any designated documents or electronically stored information -including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations -- stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form; or
(B) any designated tangible things; or
(2) to permit entry onto designated land or other property possessed or controlled by the responding party, so that the requesting party may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.

         Fed. R. Civ. P. 34(a). Discovery's proper scope is “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). The factors that bear upon proportionality 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.” Fed.R.Civ.P. 26(b)(1).

         Discovery's scope under rule 26 is broad. See Gomez v. Martin Marietta Corp., 50 F.3d 1511, 1520 (10th Cir. 1995); Sanchez v. Matta, 229 F.R.D. 649, 654 (D.N.M. 2004)(Browning, J.)(“The federal courts have held that the scope of discovery should be broadly and liberally construed to achieve the full disclosure of all potentially relevant information.”). The federal discovery rules reflect the courts' and Congress' recognition that “mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation.” Hickman v. Taylor, 329 U.S. 495, 507 (1947). A district court is not, however, “required to permit plaintiff to engage in a ‘fishing expedition' in the hope of supporting his claim.” McGee v. Hayes, 43 Fed.Appx. 214, 217 (10th Cir. 2002)(unpublished)(quoting Munoz v. St. Mary-Corwin Hosp., 221 F.3d 1160, 1169 (10th Cir. 2000)).[4] “Discovery . . . 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.” Rivera v. DJO, LLC, No. CIV 11-1119 JB/RHS, 2012 WL 3860744, at *1 (D.N.M. Aug. 27, 2012)(Browning, J.)(internal quotation marks omitted)(quoting Tottenham v. Trans World Gaming Corp., No. Civ. 00-7697 (WK), 2002 WL 1967023, at *2 (S.D.N.Y. 2002)(Knapp, J.)). “[B]road discovery is not without limits and the trial court is given wide discretion in balancing the needs and rights of both plaintiff and defendant.” Gomez v. Martin Marietta Corp., 50 F.3d at 1520 (internal quotation marks omitted)(quoting Scales v. J.C. Bradford & Co., 925 F.2d 901, 906 (6th Cir. 1991)).

         The 2000 amendments to rule 26(b)(1) began narrowing discovery's substantive scope and injected courts deeper into the discovery process. See Simon v. Taylor, No. CIV 12-0096 JB/WPL, 2015 WL 2225653, at *23 (D.N.M. April 30, 2015)(Browning, J.). Before the 2000 amendments, rule 26(b)(1) defined the scope of discovery as follows:

Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending actions, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

         Fed. R. Civ. P. 26(b)(1) (1996). The 2000 amendments made the following changes, shown here with the deleted language stricken and the added material underlined:

Parties may obtain discovery regarding any matter, not privileged, that which is relevant to the subject matter involved in the pending actions, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant The information sought need not be admissible at the trial if discovery the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

         Fed. R. Civ. P. 26(b)(1). Putting aside the last sentence's changes -- which the advisory committee's notes make clear was a housekeeping amendment to clarify that inadmissible evidence must still be relevant to be discoverable -- the 2000 amendments have two effects: (i) they narrow discovery's substantive scope in the first sentence; and (ii) they inject courts into the process in the entirely new second sentence.

In 1978, the Committee published for comment a proposed amendment, suggested by the Section of Litigation of the American Bar Association, to refine the scope of discovery by deleting the “subject matter” language. This proposal was withdrawn, and the Committee has since then made other changes in the discovery rules to address concerns about overbroad discovery. Concerns about costs and delay of discovery have persisted nonetheless, and other bar groups have repeatedly renewed similar proposals for amendment to this subdivision to delete the “subject matter” language. Nearly one-third of the lawyers surveyed in 1997 by the Federal Judicial Center endorsed narrowing the scope of discovery as a means of reducing litigation expense without interfering with fair case resolutions. [Federal Judicial Center, Thomas Willging, John Shapard, Donna Stienstra, & Dean Miletich, Discovery and Disclosure Practice, Problems, and Proposals for Change] 44-45 (1997). The Committee has heard that in some instances, particularly cases involving large quantities of discovery, parties seek to justify discovery requests that sweep far beyond the claims and defenses of the parties on the ground that they nevertheless have a bearing on the “subject matter” involved in the action.
The amendments proposed for subdivision (b)(1) include one element of these earlier proposals but also differ from these proposals in significant ways. The similarity is that the amendments describe the scope of party-controlled discovery in terms of matter relevant to the claim or defense of any party. The court, however, retains authority to order discovery of any matter relevant to the subject matter involved in the action for good cause. The amendment is designed to involve the court more actively in regulating the breadth of sweeping or contentious discovery. The Committee has been informed repeatedly by lawyers that involvement of the court in managing discovery is an important method of controlling problems of inappropriately broad discovery. Increasing the availability of judicial officers to resolve discovery disputes and increasing court management of discovery were both strongly endorsed by the attorneys surveyed by the Federal Judicial Center. See Discovery and Disclosure Practice, supra, at 44. Under the amended provisions, if there is an objection that discovery goes beyond material relevant to the parties' claims or defenses, the court would become involved to determine whether the discovery is relevant to the claims or defenses and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject matter of the action. The good-cause standard warranting broader discovery is meant to be flexible.
The Committee intends that the parties and the court focus on the actual claims and defenses involved in the action. The dividing line between information relevant to the claims and defenses and that relevant only to the subject matter of the action cannot be defined with precision. A variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses raised in a given action. For example, other incidents of the same type, or involving the same product, could be properly discoverable under the revised standard. Information about organizational arrangements or filing systems of a party could be discoverable if likely to yield or lead to the discovery of admissible information. Similarly, information that could be used to impeach a likely witness, although not otherwise relevant to the claims or defenses, might be properly discoverable. In each instance, the determination whether such information is discoverable because it is relevant to the claims or defenses depends on the circumstances of the pending action.
The rule change signals to the court that it has the authority to confine discovery to the claims and defenses asserted in the pleadings, and signals to the parties that they have no entitlement to discovery to develop new claims or defenses that are not already identified in the pleadings. In general, it is hoped that reasonable lawyers can cooperate to manage discovery without the need for judicial intervention. When judicial intervention is invoked, the actual scope of discovery should be determined according to the reasonable needs of the action. The court may permit broader discovery in a particular case depending on the circumstances of the case, the nature of the claims and defenses, and the scope of the discovery requested.
The amendments also modify the provision regarding discovery of information not admissible in evidence. As added in 1946, this sentence was designed to make clear that otherwise relevant material could not be withheld because it was hearsay or otherwise inadmissible. The Committee was concerned that the “reasonably calculated to lead to the discovery of admissible evidence” standard set forth in this sentence might swallow any other limitation on the scope of discovery. Accordingly, this sentence has been amended to clarify that information must be relevant to be discoverable, even though inadmissible, and that discovery of such material is permitted if reasonably calculated to lead to the discovery of admissible evidence. As used here, “relevant” means within the scope of discovery as defined in this subdivision, and it would include information relevant to the subject matter involved in the action if the court has ordered discovery to that limit based on a showing of good cause.
Finally, a sentence has been added calling attention to the limitations of subdivision (b)(2)(i), (ii), and (iii). These limitations apply to discovery that is otherwise within the scope of subdivision (b)(1). The Committee has been told repeatedly that courts have not implemented these limitations with the vigor that was contemplated. See 8 Federal Practice & Procedure § 2008.1 at 121. This otherwise redundant cross-reference has been added to emphasize the need for active judicial use of subdivision (b)(2) to control excessive discovery. Cf. Crawford-El v. Britton, [523 U.S. 574] (1998)(quoting Rule 26(b)(2)(iii) and stating that “Rule 26 vests the trial judge with broad discretion to tailor discovery narrowly”).

         Fed. R. Civ. P. 26 advisory committee's notes.

         The Court gets the impression from reading the advisory committee's notes that the amendment is not intended to exclude a delineable swath of material so much as it is intended to send a signal to district judges to become more hands-on in the process of regulating -- mostly limiting -- discovery on relevance grounds alone. The “two effects” of the 2000 amendments might, thus, be only one effect: directing district judges to roll up their sleeves and manage discovery, and to do so on a relevance basis. The change in substantive scope from “subject matter, ” to “claim or defense, ” would, therefore, seem to “add teeth” to the relevance standard instead of narrowing that standard. Fed.R.Civ.P. 26 advisory committee's notes. It is not surprising that the Supreme Court of the United States and the United States Congress would want to increase judicial presence: “relevance” is a liberal concept in the context of trial. Fed.R.Evid. 401 (“Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.”).

         Of course, regardless of the Court's musings about the rules, courts should also seek to give substantive content to amendments. Read literally, the rule does not permit parties to discover information relevant only to the claim or defense of another party; they must use discovery only to investigate their own claims and defenses. More problematically, however, the rule may prevent using the Federal Rules' compulsory discovery process to obtain “background” information not specifically relevant to any one claim or defense -- e.g., a plaintiff naming a pharmaceutical company as a defendant and then using discovery to educate itself generally about medicine, biochemistry, and the drug industry by using the defendant's expertise.

         In In re Cooper Tire & Rubber Co., 568 F.3d 1180 (10th Cir. 2009), the United States Court of Appeals for the Tenth Circuit clarified that the 2000 Amendments to rule 26 “implemented a two-tiered discovery process; the first tier being attorney-managed discovery of information relevant to any claim or defense of a party, and the second being court-managed discovery that can include information relevant to the subject matter of the action.” 568 F.3d at 1188. The Tenth Circuit further stated that,

when a party objects that discovery goes beyond that relevant to the claims or defenses, “the court would become involved to determine whether the discovery is relevant to the claims or defenses and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject matter of the action.” This good-cause standard is intended to be flexible. When the district court does intervene in discovery, it has discretion in determining what the scope of discovery should be. “[T]he actual scope of discovery should be determined according to the reasonable needs of the action. The court may permit broader discovery in a particular case depending on the circumstances of the case, the nature of the claims and defenses, and the scope of the discovery requested.”

568 F.3d at 1188-89 (quoting the advisory committee's notes (citations and footnote omitted)(alteration in original)).

         The 2015 amendments to rule 26(b)(1) continued narrowing discovery's substantive scope and injecting courts further into the discovery process. The 2015 amendment made notable deletions and additions, both of which emphasized the need to make discovery proportional to the needs of the case and are noted in the quotation below. See Fed.R.Civ.P. 26(b)(1). Rule 26(b)(1), provides:

(1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense including the existence, description, nature, custody, condition and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C) and proportional to the needs of the case, considering 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. Information within this scope of discovery need not be admissible in evidence to be discoverable.

         Fed. R. Civ. P. 26(b)(1) (alterations added).

         The advisory advisory committee's notes state that the first deletion does not make a substantive change. Rather, the deletion was made because “[d]iscovery of such matters is so deeply entrenched” in standard discovery that including it would be “clutter.” Fed.R.Civ.P. 26(b) advisory committee's notes.[5]

         On the second deletion, the advisory committee's notes explain that the former provision for discovery of relevant but inadmissible information that appears “reasonably calculated to lead to the discovery of admissible evidence” is also deleted. Fed.R.Civ.P. 26(b) advisory committee's note.

The phrase has been used by some, incorrectly, to define the scope of discovery. As the Committee Note to the 2000 amendments observed, use of the “reasonably calculated” phrase to define the scope of discovery “might swallow any other limitation on the scope of discovery.” The 2000 amendments sought to prevent such misuse by adding the word “Relevant” at the beginning of the sentence, making clear that “‘relevant' means within the scope of discovery as defined in this subdivision. . . .” The “reasonably calculated” phrase has continued to create problems, however, and is removed by these amendments. It is replaced by the direct statement that “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Discovery of nonprivileged information not admissible in evidence remains available so long as it is otherwise within the scope of discovery.

         Fed. R. Civ. P. 26 advisory committee's note. The deletion, therefore, did not necessarily change discovery's scope, but clarified it.[6] Accordingly, “[r]elevance is still to be ‘construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on' any party's claim or defense.” State Farm Mut. Auto. Ins. v. Fayda, No. CIV 14-9792 WHP/JCF, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015)(Francis IV, M.J.)(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)).

         The most notable addition to rule 26(b) is the proportionality concept. Rule 26(b)(2)(C)(iii) has always limited overly burdensome discovery and required proportionality. See Fed.R.Civ.P. 26(b)(2)(C)(iii) (pre-2015 version). The proportionality requirement was relocated to 26(b)(1) to address the “explosion”[7] of information that “has been exacerbated by the advent of e-discovery.”[8] Fed.R.Civ.P. 26(b) advisory committee's note. Describing how e-discovery is the driving factor in the 2015 amendment, the advisory committee's notes state:

The burden or expense of proposed discovery should be determined in a realistic way. This includes the burden or expense of producing electronically stored information. Computer-based methods of searching such information continue to develop, particularly for cases involving large volumes of electronically stored information. Courts and parties should be willing to consider the opportunities for reducing the burden or expense of discovery as reliable means of searching electronically stored information become available.

         Fed. R. Civ. P. 26(b) advisory committee's note.

         The 2015 Year-End Report on the Federal Judiciary written by the Honorable John Roberts, Chief Justice of the Supreme Court of the United States, indicates that the addition of proportionality to rule 26(b) “crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality.”[9] Chief Justice John Roberts, 2015 Year-End Report on the Federal Judiciary at 6, Supreme Court of the United States, available at https://www.supremecourt.gov/publicinfo/year-end/year-endreports.aspx (last visited Jan. 11, 2019)(“2015 Year-End Report”) He states that the proportionality concept seeks to “eliminate unnecessary or wasteful discovery, ” and to impose “careful and realistic assessment of actual need.” 2015 Year-End Report at 7. This assessment may, as a practical matter, require “judges to be more aggressive in identifying and discouraging discovery overuse by emphasizing the need to analyze proportionality before ordering production of relevant information.” State Farm Mut. Auto. Ins. v. Fayda, 2015 WL 7871037, at *2 (internal quotation marks omitted)(quoting Fed.R.Civ.P. 26(b)(1) advisory committee's notes). The burden of demonstrating relevance remains on the party seeking discovery, and the newly revised rule “does not place on the party seeking discovery the burden of addressing all proportionality considerations.” Fed.R.Civ.P. 26(b)(1) advisory committee's notes. See Dao v. Liberty Life Assurance Co. of Boston, No. CIV 14-4749-SI (EDL), 2016 WL 796095, at *3 (N.D. Cal. Feb. 23, 2016)(LaPorte, M.J.)(observing that the 2015 amendment “reinforces the Rule 26(g) obligation of the parties to consider these factors in making discovery requests, responses or objections”); Williams v. U.S. Envtl. Servs., LLC, Civil Action No. 15-0168-RLB, 2016 WL 617447, at *1 n.2 (M.D. La. Feb. 16, 2016)(Bourgeois, M.J.). In general, “the parties' responsibilities . . . remain the same” as they were under the rule's earlier iteration so that the party resisting discovery has the burden of showing undue burden or expense. Fed.R.Civ.P. 26(b)(1) advisory committee's notes. See Dao v. Liberty Life Assurance Co. of Boston, 2016 WL 796095, at *3 (noting that, “while the language of the Rule has changed, the amended rule does not actually place a greater burden on the parties with respect to their discovery obligations”).

         Like with the 2000 amendments, it is unsurprising that the drafters are unable to articulate precise language narrowing the discovery's substantive scope. Instead of being Aristotelian and trying to draft rules, the drafters largely opted to make federal judges Plato's enlightened guardians. They have decided that no single general rule can adequately take into account the infinite number of possible permutations of different claims, defenses, parties, attorneys, resources of parties and attorneys, information asymmetries, amounts in controversy, availabilities of information by other means, and other factors. They have dropped all discovery disputes into judges' laps. The drafters have decided that this determination requires the individualized judgment of someone on the scene, and that presence is what the rulemakers want when they: (i) encourage district judges to take a firmer grasp on the discovery's scope; and (ii) put their thumbs on the scale in favor of narrower discovery in the rule's definition of the scope of discovery.

         Rule 34 allows a party to serve requests to produce certain items “on any other party . . . in the responding party's possession, custody, or control.” Fed.R.Civ.P. 34(a)(1) (emphasis added). See Hickman v. Taylor, 329 U.S. at 504 (explaining that rule 34 “is limited to parties to the proceeding, thereby excluding their counsel or agents”). Applying this standard, courts have found that corporations control documents in their subsidiaries' hands, clients control case files in their attorneys' hands, and patients control health records in their healthcare providers' hands. See Simon v. Taylor, No. CIV 12-0096 JB/WPL, 2014 WL 6633917, at *35 (D.N.M. Nov. 18, 2014)(Browning, J.)(citing United States v. Stein, 488 F.Supp.2d 350, 360-62 (S.D.N.Y. 2007)(Kaplan, J.)); CSI Inv. Partners II, L.P. v. Cendant Corp., No. CIV. 00-1422 (DAB) (DF), 2006 WL 617983, at *6 (S.D.N.Y. March 13, 2006)(Eaton, M.J.)(compelling a client's attorney to disclose documents in the attorney's possession regarding the attorney's representation of that particular client, but only insofar as the documents were relevant)). An employee's or corporation's ability to access the documents in the normal course of business weighs in favor of finding control. See, e.g., Gerling Int'l Ins. v. Comm'r of Internal Revenue, 839 F.2d 131, 1441 (3d Cir. 1988)(stating that where “agent-subsidiary can secure documents of the principal-parent to meet its own business needs . . . the courts will not permit the agent-subsidiary to deny control for purposes of discovery”); Camden Iron & Metal v. Marubeni Am. Corp., 138 F.R.D. 438, 442 (D.N.J. 1991)(Simandle, M.J.)(including “demonstrated access to documents in the ordinary course of business” in list of factors to be considered in determining control). Applying that standard, the Court, in Simon v. Taylor, determined that a racing commission had legal control over test samples from horses, because the commission “has the legal right to have those horses' samples tested upon demand.” 2014 WL 6633917, at *35. In another case, the Court concluded that an oil company had control over the payroll records a third-party payroll company possessed, because the oil company had the practical ability to request that payroll company, with which it contracted, to produce those payroll records on demand. See Landry v. Swire Oilfield Servs. LLC, 323 F.R.D. 360, 397 (D.N.M. 2018)(Browning, J.).

         Courts have specifically considered whether clients control information in their attorneys' hands. Because a client has the right “to obtain copies of documents gathered or created by its attorneys pursuant to their representation of that client, such documents are clearly within the client's control.” Am. Soc'y For Prevention of Cruelty to Animals v. Ringling Bros. and Barnum & Bailey Circus, 233 F.R.D. 209, 212 (D.D.C. 2006)(Facciola, M.J.). See Poppino v. Jones Store Co., 1 F.R.D. 215, 219 (W.D. Mo. 1940)(Otis, J.)(“It is quite true that if an attorney for a party comes into possession of a document as attorney for that party his possession of the document is the possession of the party.” (emphasis in original)). Consequently, a party may be required to produce a document that it has given to its attorney when the document relates to the attorney's representation of that client on a specific matter. See Ruppert v. Repper (In re Ruppert), 309 F.2d 97, 98 (6th Cir. 1962)(per curiam); Hanson v. Garland S.S. Co., 34 F.R.D. 493, 495-96 (N.D. Ohio 1964)(Connell, J.)(concluding that witness statements taken by a party's attorney in preparation of the case were within the party's control and subject to production under rule 34 on a proper showing); Kane v. News Syndicate Co., 1 F.R.D. 738, 738-39 (S.D.N.Y. 1941)(Mandelbaum, J.)(determining that a plaintiff in an action for copyright infringement could require the defendants' attorneys to produce a document from which the plaintiff hoped to ascertain whether material had been obtained from his copyrighted works).

The mere fact, however, that the attorney for a party has possession of a document does not make his possession of the document the possession of the party. The paper may be one of his private papers which he had before the relation of attorney and client was established. It is inconceivable that he should be required to produce such a paper for the inspection of his client's adversary. The paper which he has in his possession may be the property of some other client. It is inconceivable that he should be compelled to produce the document belonging to another client because the adversary of one of his clients demands it.

Poppino v. Jones Store Co., 1 F.R.D. at 219. See Hobley v. Burge, 433 F.3d 946, 949-52 (7th Cir. 2006)(observing that a party may not have had control over its former attorney's documents); Ontario Inc. v. Auto Enters., Inc., 205 F.R.D. 195 (E.D. Mich. 2000)(Duggan, J.). Simply put, if a person, corporation, or a person's attorney or agent can pick up a telephone and secure the document, that individual or entity controls it. See Simon v. Taylor, 2014 WL 6633917, at *34 (“Control is defined as the legal right to obtain documents upon demand.”).

         LAW REGARDING RULE 12(b)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). The Complaint's sufficiency is a question of law, and, when considering a rule 12(b)(6) motion, a court must accept as true all well-pled factual allegations in the complaint, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiffs favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)(“[O]nly if a reasonable person could not draw . . . an inference [of plausibility] from the alleged facts would the defendant prevail on a MTD [(motion to dismiss)].”); Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)(“[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pled factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.” (citing Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006))).

         A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555.

         To survive a motion to dismiss, a plaintiffs complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complainant must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). The Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570). See Gallegos v. Bernalillo Cty. Bd. of Cty. Comm'rs, 278 F.Supp.3d 1245, 1259 (D.N.M. 2017)(Browning, J.).

         “When a party presents matters outside of the pleadings for consideration, as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'” Brokers' Choice of Am., Inc. v. NBC Universal Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(quoting Alexander v. Oklahoma, 382 F.3d 1206, 1214 (10th Cir. 2004)). There are three limited exceptions to this general principle: (i) documents that the complaint incorporates by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322; (ii) ”documents referred to in the complaint if the documents are central to the plaintiffs claim and the parties do not dispute the documents' authenticity, ” Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002); and (iii) “matters of which a court may take judicial notice, ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322. See Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d at 1103 (holding that the district court did not err by reviewing a seminar recording and a television episode on a rule 12(b)(6) motion, which were “attached to or referenced in the amended complaint, ” central to the plaintiff's claim, and “undisputed as to their ...


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