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Environmental Dimensions, Inc. v. Energysolutions Government Group, Inc.

United States District Court, D. New Mexico

March 28, 2019

ENVIRONMENTAL DIMENSIONS, INC., A New Mexico Corporation, Plaintiff,
v.
ENERGYSOLUTIONS GOVERNMENT GROUP, INC. n/k/a Atkins Energy Government Group, Inc., a foreign for profit corporation, Defendant.

          MEMORANDUM OPINION AND ORDER

          JERRY H. RITTER U.S. MAGISTRATE JUDGE.

         This matter comes before the Court on Energy Solutions Government Group, Inc.'s (“ESGG”) Motion to quash Environmental Dimension, Inc.'s (“EDi”) Subpoenas to the Department of Energy (“DOE”) and National Nuclear Security Administration (“NNSA”) and for a Protective Order [Doc. 87');">87');">87');">87');">87');">87');">87');">87], filed September 27, 2018. The Court has considered EDi's Response[1" name="FN1" id= "FN1">1]and ESGG's Reply briefs, as well as all pertinent authority. Having done so, the Court concludes that ESGG's Motion to quash and for a protective order must be denied.

         I. BACKGROUND

         EDi is in the business of providing environmental services to the United States DOE and other governmental agencies. [Doc. 1-1, p.3]. As such, during the relevant time period it was competing for contracts with Los Alamos National Laboratory (“LANL”) which were set aside for small businesses in New Mexico. [Id.]. Ultimately, EDi was awarded a contract with Los Alamos National Security (“LANS”) which provided that EDi would manage, treat, and package radioactive waste for LANS at the LANL facility. [Id., p. 4]. Prior to the award of the LANS contract, EDi contracted with ESGG, the prior prime contractor to LANS, to “provide expert waste management personnel experienced in the LANS [Transuranic] Waste Program and knowledgeable of specific processes and procedures.” [Id.]. Included among these duties was “waste treatment and packaging for shipment to the DOE Waste Isolation Pilot Plaint (hereinafter ‘WIPP').” [Id., p. 5].

         The WIPP facility is an underground repository for the disposal of transuranic and other radiological waste. [Doc. 87');">87');">87');">87');">87');">87');">87');">87, p. 4]. Prior to the contract underlying this case, ESGG was the prime contractor responsible for remediating and repackaging waste at LANL under LANS' direction. [Id.]. On February 14, 2014, there was a release of radiological materials at the WIPP facility “allegedly from” a drum of transuranic waste that had been repackaged and shipped to WIPP from LANL by ESGG. [Id., p. 6');">p. 6]. In the meantime, on April 16, 2014, LANS notified EDi that it had been awarded the prime contract relating to waste disposal. [Id.].

         After the parties' relationship soured, EDi sued ESGG in New Mexico State Court asserting that ESGG engaged in unfair trade practices by failing to divulge its deficiencies in managing Transuranic Waste Operations while it was the prime contractor to LANS. Specifically, EDi alleges that:

28. DEFENDANT ESGG was a major contractor to LANS at the LANL facility in Los Alamos, New Mexico, prior to the award of the contract by LANS to PLAINTIFF EDi.
29. DEFENDANT ESGG was grossly negligent in its operations and contract work at LANL for LANS as described in the Department of Energy (DOE) Accident Investigation Board (AIB) Report dated April 16, 2015.
30. DEFENDANT ESGG knew or should have known that its conduct was grossly deficient and would result in punitive measures being taken against it by LANS when the DOE AIB Report was released.
31. Said punitive measures were underscored by the AIB Report identifying serious findings against ESGG's LANL Transuranic Waste Operations (TRU waste).
32. DEFENDANT ESGG knew or should have known that its prior conduct would cause LANS to void or reduce the tasks assigned thereunder, or alter the contract held by PLAINTIFF EDi in a manner that would seriously damage the work PLAINTIFF EDi anticipated receiving under the contract in Paragraphs 3 &amp. 4 above.
33. DEFENDANT ESGG knew or should have known that its conduct was going to be an issue in any future deadlines (e.g., those where PLAINTIFF EDi was engaging DEFENDANT ESGG as a subcontractor) on LANS contracts whether as a prime or subcontractor.

[See Doc. 1-1, pp. 9-11]. Based on allegations that are substantively similar, EDi brings a claim for tortious damage to reputation and contract. [See Doc. 1-1, pp. 11-12]. ESGG timely removed this matter to federal court on September 23, 2016. [See generally Doc. 1].

         The instant dispute pertains to an “alleged”[2] settlement agreement between ESGG and the DOE/NNSA resulting from ESGG's actions when it was the prime contractor to LANS. These allegations have framed two of the discovery disputes that this Court has decided. [See Docs. 73, 76]. In the first, EDi sought to compel production of the alleged settlement agreement from LANS by virtue of a subpoena. [See Doc. 73]. The Court denied EDi's motion because it failed to subpoena LANS the entity, instead subpoenaing a LANS employee who had neither possession nor control of the alleged agreement. [Id., p. 2]. In the second, EDi sought to compel production of the alleged agreement ...


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