Fertilizantes Tocantins S.A. v. TGO Agriculture (USA) Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

FERTILIZANTES TOCANTINS S.A.,

Plaintiff,

v. Case No: 8:21-cv-2884-VMC-JSS

TGO AGRICULTURE (USA) INC.,

Defendant.

___________________________________/

ORDER

Defendant moves the court for an order compelling Plaintiff to produce

documents related to a transaction between Plaintiff and a non-party and to produce

employees of Plaintiff with knowledge of the transaction for deposition testimony.

(Motion, Dkt. 60.) Plaintiff opposes the Motion. (Dkt. 65.) The court held a hearing

on the Motion on October 19, 2022. (Dkt. 71.) Upon consideration and for the

reasons stated below, Defendant’s Motion (Dkt. 60) is denied.

BACKGROUND

Plaintiff brings this action against Defendant for an alleged breach of contract

for Defendant’s failure to deliver 45,000 megatons of fertilizer to Plaintiff. (Dkt. 1.)

Plaintiff seeks approximately $7.3 million in damages. (Dkt. 69.) Discovery in this

matter closed on September 13, 2022. (Dkt. 53.)

With the instant Motion, Defendant seeks to reopen discovery to compel the

production of documents and testimony regarding a transaction between Plaintiff and

a company affiliated with Defendant, TGO-Singapore (TGO-S) (the Non-Party

Transaction). (Dkt. 60.) The Non-Party Transaction relates to a separate transaction

for the delivery of goods between Plaintiff and TGO-S. (Id.) Defendant asserts that

Plaintiff withheld its claimed damages in this action from its payment owed to TGO-

S in the Non-Party Transaction and advised TGO-S “that it will not make timely

payment for the shipment . . . because [Plaintiff] is owed money by [Defendant] as

claimed in this litigation.” (Id. at 2.) Defendant asserts that the information sought

through its Motion is relevant to Plaintiff’s damages and its duty to mitigate in this

action, and that Defendant needs the opportunity to explore whether the Non-Party

Transaction gives rise to a compulsory claim against Plaintiff. (Id. at 4.)

In response, Plaintiff argues that information related to the separate Non-Party

Transaction is neither relevant to the claims in this action nor proportional to the needs

of this case. (Dkt. 65.) Plaintiff asserts that allowing this discovery would be unduly

burdensome as Defendant seeks to depose Plaintiff’s CEO and individuals would need

to travel from Brazil to the United States for depositions. (Id. at 5–11.) Despite its

opposition however, Plaintiff has provided Defendant with the Deferred Payment

Agreement and the accompanying Promissory Note from the Non-Party Transaction,

in which it agreed to pay the full amount owed to TGO-S by September 2023. (Dkts.

64, 64-1.)

APPLICABLE STANDARDS

The court has broad discretion in managing pretrial discovery matters and in

deciding motions to compel. Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d

1292, 1306 (11th Cir. 2011); Perez v. Miami-Dade Cnty., 297 F.3d 1255, 1263 (11th Cir.

2002). Federal Rule of Civil Procedure 26(b) provides that “[p]arties 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);

Washington v. Brown & Williamson Tobacco Corp., 959 F.2d 1566, 1570 (11th Cir. 1992)

(“Discovery should be tailored to the issues involved in the particular case.”). In

determining the scope of permissible discovery under Rule 26(b)(1), courts consider,

among other things, “the parties’ relative access to relevant information, . . . 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); Tiger

v. Dynamic Sports Nutrition, LLC, No. 6:15-cv-1701-ORL41TBS, 2016 WL 1408098, at

*2 (M.D. Fla. Apr. 11, 2016) (“Proportionality requires counsel and the court to

consider whether relevant information is discoverable in view of the needs of the

case.”). Further, Rule 26(b)(2)(C) requires a court to limit discovery if “the discovery

sought is unreasonably cumulative or duplicative, or can be obtained from some other

source that is more convenient, less burdensome, or less expensive . . . or [] the

proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P.

26 (b)(2)(C).

ANALYSIS

Upon consideration of the parties’ submissions and the arguments of counsel,

the court finds that the discovery sought by Defendant’s Motion is neither relevant nor

proportional to the needs of the case. See, e.g., Benz v. Crowley Logistics, Inc., No. 3:15-

cv-728-J-25MCR, 2016 WL 11587289, at *3 (M.D. Fla. June 17, 2016) (concluding

plaintiff had not met her initial burden of showing how the information sought is

relevant to her claims); Jones v. Z.O.E. Enters. of Jax, Inc., No. 3:11-cv-377-J-32MCR,

2012 WL 3065384, at *2 (M.D. Fla. July 27, 2012) (denying a motion to compel when

the moving party failed to make an adequate initial showing of relevancy). The Non-

Party Transaction is between Plaintiff and a non-party to this action and arises from

circumstances distinct from the alleged breach of contract in this matter. To the extent

that the Non-Party Transaction may be relevant to Plaintiff’s damages in this action,

Plaintiff has provided Defendant with the Deferred Payment Agreement and

Promissory Note, which describe Plaintiff’s obligations in the Non-Party Transaction.

See (Dkt. 64-1.)1 Thus, Defendant has already received the most significant

information sought through its Motion. The negotiation of that agreement and the

individuals involved in that negotiation are not relevant to this breach of contract

action arising from a wholly separate alleged agreement and transaction. See Bright v.

Frix, No. 8:12-cv-1163-T-35MAP, 2016 WL 1011441, at *1 (M.D. Fla. Jan. 22, 2016)

(“The proponent of a motion to compel discovery bears the initial burden of providing

that the information sought is relevant.”).

The discovery sought is further not proportional to the needs of the case when

comparing its lack of relevance against the burden imposed on Plaintiff in having to

transport individuals from Brazil to the United States for depositions and because

1 Defendant also appears to have received additional information sought by the Motion through a

deposition of one of Plaintiff’s employees. See (Dkt. 63-1.)

Defendant may potentially have access to the information through its affiliated

company, TGO-S, or their shared parent. See Fed. R. Civ. P. 26(b)(1) (directing courts

to consider “the parties’ relative access to relevant information, . . . and whether the

burden or expense of the proposed discovery outweighs its likely benefit”); Fed. R.

Civ. P. 26(b)(2)(C) (requiring court to limit discovery that “can be obtained from some

other source that is more convenient, less burdensome, or less expensive”); Gonzalez v.

GEICO Gen. Ins. Co., No. 8:15-cv-240-T-30TBM, 2016 WL 7734076, at *2 (M.D. Fla.

Apr. 15, 2016) (“Although the federal rules generally allow for liberal discovery in civil

matters, such is not unbounded. The Court must consider proportionality to the needs

of the case.”).

Defendant does not provide any authority for its assertion that “it could be

bound by the doctrine of res judicata if it does not pursue a claim it learned about during

the discovery period of this action . . . and if appropriate, seek leave to file an amended

answer and/or assert a counterclaim” and counsel did not expand on this point during

the hearing. (Dkt. 60 at 4.) However, to the extent that Defendant asserts that the

requested discovery is necessary to explore a compulsory counterclaim against

Plaintiff, the court agrees with Plaintiff that any claim arising from the Non-Party

Transaction would at most be a permissive claim. See Fed. R. Civ. P. 13(a)(1) (“A

pleading must state as a counterclaim any claim that – at the time of its service – the

pleader has against an opposing party if the claim: (A) arises out of the transaction or

occurrence that is the subject matter of the opposing party's claim.”) (emphasis added); see VP

Properties & Devs., LLLP v. Seneca Specialty Ins. Co., 645 F. App’x 912, 916 (11th Cir.

2016) (“A permissive counterclaim is a claim against the plaintiff that arises out of a

different transaction or event.”) (citing Fed. R. Civ. P 13(b)); see also Fed. R. Civ. P.

13(e) (“The court may permit a party to file a supplemental pleading asserting a

counterclaim that matured or was acquired by the party after serving an earlier

pleading.”). Defendant’s Answer was filed in April 2022, and the events giving rise to

the Non-Party Transaction stem from a separate shipment, contract, and resolution

that occurred in August or September 2022 between Plaintiff and non-party TGO-S.

See Satterfield v. CFI Sales & Mktg., Inc., No. 6:09-cv-1827-ORL-28, 2012 WL 640740,

at *4 (M.D. Fla. Feb. 28, 2012) (finding counterclaim failed Eleventh Circuit’s logical

relationship test to be a compulsory counterclaim where claims in complaint and

counterclaim “involve different time periods, different contracts, and different pay

arrangements”). As discussed above, the requested discovery is neither relevant nor

proportional to the needs of this matter, and Defendant has not demonstrated

sufficient justification to reopen discovery to explore whether the Non-Party

Transaction gives rise to a permissive claim against Plaintiff, especially because

Defendant has already been provided the agreement between Plaintiff and TGO-S. See

(Dkt. 64-1).

Accordingly, it is ORDERED that Defendant’s Motion to Compel (Dkt. 60) is

DENIED.

ORDERED in Tampa, Florida, on October 25, 2022.

. af yee

JULIE &. SNEED

UNITED STATES MAGISTRATE JUDGE

Copies furnished to:

Counsel of Record

-7-