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

United States District Court, D. New Mexico

May 24, 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

         This matter comes before the Court on EnergySolutions Government Group's (“ESGG's”) Objections to Memorandum Opinion and Order Denying ESGG's Motion to Quash Environmental Dimension's (“EDi's”) Subpoenas to the Department of Energy (“DOE”) and National Nuclear Security Administration (“NNSA”) and for a Protective Order (Doc. 126), filed April 11, 2019. The Court, having reviewed Magistrate Judge Jerry H. Ritter's Memorandum Opinion and Order of March 28, 2019 (Doc. 123), as well as EDi's Response in Opposition to ESGG's Objections (Doc. 129), filed April 25, 2019, and ESGG's Reply in Support of its Objections (Doc. 136), filed May 17, 2019, hereby overrules the objections and adopts Magistrate Judge Ritter's Memorandum Opinion and Order. ESGG's Motion to Stay Compliance with Magistrate Judge Ritter's Order (Doc. 127), filed April 11, 2019, and fully briefed on May 17, 2019 (Doc. 137), is, accordingly, denied as moot.

         I. LEGAL STANDARDS

         Pursuant to statute, this Court must review a magistrate judge's ruling when a party timely files written objections. Objections to non-dispositive rulings are reviewed under 28 U.S.C. § 636(b)(1)(A) and Fed.R.Civ.P. 72(a). Discovery is a nondispositive matter, and magistrate judges have the authority to issue discovery-related orders. Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997) (citing 28 U.S.C. § 636(b)(1)(A); Ocelot Oil Corp. v. Sparrow Industries, 847 F.2d 1458, 1462 (10th Cir. 1988)).

         Under Section 363(b)(1)(A) and Rule 72(a), this Court must defer to the magistrate judge's ruling unless it was clearly erroneous or contrary to law. Allen v. Sybase, 468 F.3d 642, 658 (10th Cir. 2006) (citing Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997); 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a)). “The clearly erroneous standard … requires the reviewing court affirm unless it ‘on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'” Ocelot Oil Corp., 847 F.2d at 1464 (quoting United States v. United Staes Gypsum Co., 333 U.S. 364, 395 (1948)).[1] Thus, “[t]he clearly erroneous standard is intended to give the magistrate [judge] a free hand in managing discovery issues.” New Mexico v. Volkswagen Group of America, Inc., CV 16-0147 MCA/LF, 2016 WL 4072342, at * 1 (D.N.M. 2016) (citation omitted). “Under the ‘contrary to law' standard, the district judge conducts a plenary review of the magistrate judge's legal determinations, setting aside the magistrate judge's order only if it applied an incorrect legal standard.” Coll v. Stryker Corp., CV 14-1089 KG/SMV, 2017 WL 3190658, at *7 (D.N.M. 2017) (cited authority omitted). “In sum, it is extremely difficult to justify alteration of the magistrate judge's non-dispositive actions by the district judge.” Id. “Finally, ‘theories raised for the fist time in objections to the magistrate judge's order are deemed waived.'” Id. (quoting United States v. Garfinkle, 261 F.3d 1030, 1031 (10th Cir. 2001)).

         II. BACKGROUND[2]

         As stated by ESGG, “[o]n May 29, 2018, EDi served subpoenas on DOE and NNSA, requesting documents relating to a radiological release event at the Waste Isolation Pilot Plant (‘WIPP Incident'), including an alleged settlement agreement between ESGG and the government contractor (Los Alamos National Security (‘LANS')) charged with operating remediation activities at Los Alamos National Laboratory (‘LANL').” Doc. 126, p. 2. ESGG objected to the subpoenas and filed its Motion to Quash on September 27, 2019. Doc. 87. In its Motion, ESGG took the position that EDi's subpoenas should be quashed because they sought irrelevant information to EDi's claims in this litigation. See generally Id. Additionally, ESGG argued that EDi was seeking discovery that it was previously denied by Magistrate Judge Ritter. See id., p. 16. In conclusion, ESGG argued that “EDi is not entitled to discovery into liability for the WIPP Incident as a whole, including any alleged settlement agreement between ESGG and LANS.” Id., p. 16.

         Meanwhile, the Department of Justice (on behalf of DOE and NNSA) conferred with counsel for EDi, and the parties ultimately reached an agreement as to what would be produced in the event that the Court denied ESGG's motion to quash. See Doc. 126-1. Of note, the Department has not sought to intervene in this action or otherwise challenged the validity of EDi's subpoenas. Id. On the contrary, the Department has “located a requested settlement agreement” and indicated that, if the motion to quash is denied, then it will be producing the same to EDi subject to “the terms of the existing protective order.” Id.

         Nonetheless, ESGG litigated its Motion to Quash to fruition, arguing in its Reply Brief that: (1) EDi's Response had been served one day late, and that the Motion to Quash should therefore be granted under this Court's Local Rules; (2) the discovery sought by EDi is irrelevant to its claims; (3) EDi's subpoenas are overly burdensome; and, (4) the alleged settlement agreement is confidential. See Doc. 95. Magistrate Judge Ritter rejected these arguments. See Doc. 123. First, Magistrate Judge Ritter concluded that EDi's Response was timely. Id., p. 1. Second, he determined that ESGG lacked standing to challenge the subpoenas because it refused to admit to the existence of the “alleged” settlement agreement. Id., p. 6 (reasoning that ESGG would have demonstrated standing had it admitted to the existence of the agreement, but that its assertions of confidentiality were “conclusory, at best, and insufficient to establish standing to challenge the subpoenas.”). Alternatively, Magistrate Judge Ritter determined that ESGG's Motion should be denied on its merits. Id., p. 6. Magistrate Judge Ritter reasoned that there was no absolute rule precluding EDi from subpoenaing third parties where its previous efforts to compel production of the alleged agreement failed. Id., pp. 6-7. Moreover, Magistrate Judge Ritter reasoned that the alleged agreement would be relevant to EDi's claims for unfair trade practices and tortious damage to reputation and contract. Id., p. 7. Finally, Magistrate Judge Ritter found that ESGG lacked standing to object to the subpoenas as unduly burdensome, and rejected its position that the confidential nature of the alleged agreement should preclude its disclosure to EDi, given that the parties could easily enter into a stipulated protective order in this case. Id., pp. 8-9.

         ESGG now objects to Magistrate Judge Ritter's Order. First, ESGG argues that Magistrate Judge Ritter incorrectly calculated EDi's response deadline and that, because it was filed one day late, ESGG's Motion to Quash should have been granted regardless of its merit as a matter of this Court's Local Rules. Doc. 126, p. 5. Next, ESGG argues that it has standing to move to quash because it has a privacy interest in the alleged settlement agreement. Id., p. 7. ESGG then explains that its failure to admit to the existence of the agreement was a matter of technical truth; it knew which agreement EDi was referring to but “could not” admit to its existence because EDi did not name the correct agreement. Id., p. 8. Alternatively, ESGG argues that EDi cannot burden non-parties for discovery that should have been sought from ESGG, and that EDi should not be able to receive from a non-party the settlement agreement that Judge Ritter previously denied it. Id., pp. 9-11. Finally, ESGG objects that the subpoenas seek irrelevant discovery. Id. at 12.

         III. ANALYSIS

         A) Timeliness of EDi's Response to the Motion to Quash

         The Court agrees with ESGG that it is technically right, insofar as it appears that Magistrate Judge Ritter may have miscalculated EDi's Response deadline, and that it was, in fact, filed one day late under this Court's Local Rules. See D.N.M.LR-Civ.7.4(a) (“A response must be served and filed within fourteen (14) calendar days after service of the motion…. These time periods are computed in accordance with FED. R. CIV. P. 6(a) and (d).”). It is also true that under this Court's Local Rules “[t]he failure of a party to file and serve a response in opposition to a motion within the time prescribed for doing so constitutes consent to grant the motion.” D.N.M.LR-Civ.7.1(b). As such, ESGG is technically correct, Magistrate Judge Ritter could have granted its Motion as a matter of procedure under this Court's Local Rules.

         However, the Court is not here dealing with a substantial delay, it is dealing with a response brief that was filed one day late. In such circumstances, the Court prefers to rule on the merits of the Motion, and it does not fault Magistrate Judge Ritter for turning to the Motion's substance rather than dwelling on this procedural technicality. Moreover, the Local Rules “may be waived by a Judge to avoid injustice[, ]” D.N.M.LR-Civ.1.7, and the Court notes that they should “be construed consistently with the Federal Rules of Civil Procedure[, ]” D.N.M.LR-Civ.1.4, which are to be “construed, administered, and employed by the Court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed.R.Civ.P. 1. When read together, the Court is confident that these provisions support analysis of the merits of ESGG's Motion rather than granting it a technical win especially where, as here, the Court agrees its Motion should be denied.

         B) ...


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