MR. DEE'S INC.,et al v. INMAR, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

MR. DEE’S INC., et al., )

)

Plaintiffs, )

)

v. ) 1:19CV141

)

INMAR, INC., et al., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

This case comes before the Court on items (B) and (C) of

“Plaintiffs’ Emergency Motion (A) to Postpone [Certain] Briefing

Deadlines, (B) to Compel, and (C) for a Status Conference” (Docket

Entry 166 at 1 (emphasis and all-caps font omitted) (the “Emergency

Motion”)). (See Docket Entry dated Oct. 26, 2020 (referring

Emergency Motion to undersigned Magistrate Judge); see also Text

Order dated Oct. 10, 2020 (finding as moot in part and denying in

part item (A) of Emergency Motion).) For the reasons that follow,

the Court will grant item (B) of the Emergency Motion and will deny

without prejudice item (C) of the Emergency Motion.

INTRODUCTION

“This case arises in the coupon processing industry . . . .

Defendants . . . [and] International Outsourcing Services, LLC

(‘IOS’) are coupon processors . . . [who allegedly] conspired to

allocate customers and markets and to fix prices. This [case] is

brought on behalf of a class of [allegedly] overcharged purchasers

of coupon services for violations of the Sherman Act.” (Docket

Entry 145 at 1-2; see also Docket Entry 141 at 3 (“Defendant

Carolina Manufacturer’s Services, Inc. (‘CMS’) processes coupons on

behalf of the issuing manufacturers. Defendant Carolina Coupon

Clearing, Inc. (‘CCC’) processes coupons on behalf of retailers who

receive the coupons from customers. Purported Defendant ‘Carolina

Services’ is not a separate entity, but a d/b/a of CCC. Defendant

Inmar, Inc. is the parent of CMS and CCC.”).)1 Shortly after the

case’s transfer from another district (see Docket Entry 113), this

Court (per United States District Judge William L. Osteen, Jr.)

lifted a decade-long stay (see Docket Entry 122), whereupon

Plaintiffs served Defendants with document requests (see Docket

Entry 139-2) and Defendants responded (see Docket Entry 139-3).

From July 19, 2019, through September 19, 2019, the parties

(through counsel) communicated about Defendants’ responses to

Plaintiffs’ document requests. (See, e.g., Docket Entry 139-4;

Docket Entry 139-6.) On December 12, 2019, Plaintiffs’ counsel e-

mailed Defendants’ counsel as follows: “During our September 19

call, [Defendant] Inmar stated it was still in the process of

restoring transactional data. Please let us know if this process

has been completed and if and when we should expect to receive any

additional transactional and financial data.” (Docket Entry 139-5

1 Where a Docket Entry contains documents with different page

numbers on a single page, pin citations refer to the page number(s)

in the footer appended to the filing upon docketing via the CM/ECF

system (not original pagination on documents within the filing).

2

at 6 (emphasis added).) That same day, counsel for Defendants

replied: “We have (and have had for some time) all of the

pertinent CMS data. We continue to work on the restoration of the

CCC data. . . . We have not yet been able to restore all of the

data.” (Id. (emphasis added) .)

On December 14, 2019, Plaintiffs’s counsel proposed another

“meet and confer,” for the purpose of “discuss[ing Defendants’ ]

outstanding productions ... .” (Id.) A telephone conference

then took place on December 23, 2019, after which Plaintiffs’

counsel immediately e-mailed Defendants’ counsel to recount that:

During the call, [Defendants’ counsel] stated that [they]

did not believe the CMS and CCC transactional data was

responsive to one of Plaintiffs’ [document requests].

[Plaintiffs’ counsel] were surprised to hear this, as

[they] believed [] Defendants were in the process of

producing the data, as discussed during the parties’

September 19 call. This data is responsive to several

[document requests] ... . Accordingly, please promptly

produce this data.

(Id. at 3 (emphasis added) .)

On December 26, 2019, Defendants’ counsel reported back that:

[They] reviewed the [document requests] identified and

[did] not believe that th[osJe requests, let alone

[Defendants’] responses, could ever be construed to seek

the complete granular multi-year transaction data of CMS

and CCC that [counsel for the parties] ha[d] been

discussing (or an agreement to produce it). The [cited

document requests] sought fee and pricing information and

[Defendants] agreed to produce the contracts (and hal[d]

done so). All that said, however, if [Plaintiffs] ma[d]le

a written request for the data, [Defendants would] be

happy to provide it.

(Id. at 2 (emphasis added).) On January 3, 2020, while

“disagree[ing] that the transactional data [wa]s not responsive [to

prior requests],” Plaintiffs served Defendants with a “request[

for] th[e] data.” (Id. (emphasis added) .)

Specifically, Plaintiffs requested “[a]ll coupon processing

transactional data, including but not limited to the CMS and CCC

transactional data referenced by Defendants’ counsel in his

December 26, 2019 email to Plaintiffs’ counsel.” (Docket Entry

141-2 at 11 (the “ACPTD Request”) (emphasis added).) A week later,

Defendants responded, in pertinent part, that:

Defendants object to the [ACPTD] Request[] to the extent

that [it is] inconsistent with or outside the scope of

permissible discovery under the Federal Rules of Civil

Procedure.

Defendants object to the [ACPTD] Request[] to the extent

[it] doles] not include a temporal limitation and

therefore . . . the production of such information would

be unreasonably burdensome and expensive in light of the

immateriality of such information, the needs of the case,

the amount in controversy, the limitations on Defendants’

resources, and the importance of the issues at stake in

the litigation.

Subject to and without waiving these objections,

Defendants respond as follows to [the ACPTD Request]:

. . . Defendants also object that the term “all coupon

processing transactional data” is vague and ambiguous in

this context making a reasonable response unduly

burdensome and expensive and, depending upon the

interpretation placed upon the words in that phrase, is

overbroad making production of such documents unduly

burdensome and expensive. Defendants will produce

information reflecting transactions for the period

2000-09 to the extent that such information is extant and

reasonably available. By way of further explanation,

such data for [CMS] is available and will be provided

contemporaneously with this response. Data for [CCC] is

in the process of restoration and checking and will be

provided to the extent it is capable of being restored

when available.

(Docket Entry 141-3 at 2-4 (internal paragraph numbers omitted)

(emphasis added) .)

From January 2020 through April 9, 2020, Defendants produced

documents in response to the ACPTD Request. (See, e.g., Docket

Entry 142-2 at 2-4; Docket Entry 146 at 1.) In the midst of that

production, Plaintiffs moved for an “exten[sion of] the class

certification and expert report and disclosure deadlines by six (6)

months in light of Defendants’ failure to [timely] produce highly

relevant transactional, revenue, and margin data central to

Plaintiffs’ class certification expert report and their ability to

move for class certification.” (Docket Entry 139 at 1 (emphasis

added).) Defendants opposed that motion and faulted Plaintiffs for

“fail[ling] to timely request the purportedly crucial data... .”

(Docket Entry 141 at 6 (emphasis added) .)

In resolving that dispute, the undersigned Magistrate Judge

“accept[ed] that [Plaintiffs’ document requests before the ACPTD

Reguest] . . . did not ‘describe with reasonable particularity

[coupon processing transactional data as a] category of items to be

inspected,’ Fed. R. Civ. P. 34(b) (1) (A).” (Docket Entry 147 at 12

(citing Docket Entry 141 at 7-8 (noting that some prior requests

mention “fees” and “prices,” but not “categor[ies] broad enough to

encompass data about individual transactions,” that another prior

request “seeks communications about pricing, not data about the

prices charged on particular transactions,” as well as that “[d]ata

showing the daily transactions between Defendants and their

customers does not show either operating profits or margins and,

thus, is not responsive to [other prior requests],” and that,

because the only other potentially applicable prior request “seeks

‘interim and annual financial statements, . . . [d]aily transaction

data does not fall within [it]”)).) The undersigned Magistrate

Judge, however, also agreed with Plaintiffs that “‘Defendants’

arguments that Plaintiffs ha[d] not been diligent in seeking

[coupon processing transaction data] . . . ignore[d] the parties’

lengthy history of meet and confer efforts during which Defendants

repeatedly indicated [such] data was forthcoming.’” (Docket Entry

147 at 13 (quoting Docket Entry 142 at 1).)

“Given th[e] course of events and exchanges from July through

September 2019, as well as in December 2019 . . ., the Court [would

]not countenance Defendants’ contention that ‘Plaintiffs had no

reasonable basis to believe that transaction-level data had been

requested or would be produced.’” (Docket Entry 147 at 15

(internal citation omitted) (citing Docket Entry 141 at 8)

6

(emphasis added).)2 Plaintiffs thereafter filed their Motion for

Class Certification (Docket Entry 150) and (on August 31, 2020)

Defendants responded in opposition (Docket Entry 158). That same

day, Defendants also moved to exclude the report and testimony of

Plaintiffs’ expert witness, Dr. Kathleen Grace. (Docket Entry 160

(“Grace Exclusion Motion”).) By prior order, Plaintiffs had

received an extension until October 3, 2020, to file any reply as

to the Motion for Class Certification. (See Docket Entry 155.)

They also obtained an extension until October 10, 2020, to respond

to the Grace Exclusion Motion. (See Docket Entry 165.)

On September 28, 2020, Plaintiffs filed the Emergency Motion,

requesting as to item (A) extensions of the deadlines to reply as

to the Motion for Class Certification and to respond to the Grace

Exclusion Motion (see Docket Entry 166 at 1-2), requesting as to

item (B) compelled production of “Defendants’ complete transaction

data, including withheld data concerning coupon processors’

ancillary fees” (id. at 2), and requesting as to item (C) “a

telephonic status conference with the Court to discuss how to

expeditiously address discovery issues going forward” (id.). In

advance of any judicial action on the Emergency Motion, Plaintiffs

2 After further analysis, the Court found “good cause under

Federal Rule of Civil Procedure 16(b)(4) to extend the time for

Plaintiffs to serve their expert report(s)/disclosures supporting

class certification and to file their class certification motion.”

(Docket Entry 147 at 16-17; see also id. at 18 (“conclud[ing] that

81 days . . . represent[ed] a reasonable figure on which to base

the extension” and “add[ing] those 81 days from April 9, 2020”).)

7

timely filed their Reply as to the Motion for Class Certification.

(Docket Entry 172.) Upon referral of the Emergency Motion, the

undersigned Magistrate Judge deemed “moot[] any issue as to an

extension of th[at reply] deadline” and denied the other extension

request because, “based on the content of [the timely filed] Reply

and [its] attachments . . ., it appear[ed] that Plaintiffs

possess[ed] a basis to respond to [the Grace Exclusion] Motion,

without need of an extension of that filing deadline.” (Text Order

dated Oct. 7, 2020; see also Docket Entry dated Oct. 6, 2020

(referring Emergency Motion to undersigned Magistrate Judge).)3

That Text Order also deferred any ruling as to item (B) and

item (C) of the Emergency Motion, pending an opportunity for

Defendants to respond. (See Text Order dated Oct. 7, 2020.)

Defendants now have responded (Docket Entry 178), and Plaintiffs

have replied (Docket Entry 179). Plaintiffs also have filed a

Supplement to the Emergency Motion. (Docket Entry 186.)

DISCUSSION

As to item (B), the Emergency Motion “seek[s] to compel

[production of] Defendants’ complete transaction data, including

withheld data concerning coupon processors’ ancillary fees.”

(Docket Entry 166 at 2 (emphasis added); see also id. (“[T]he

3 The Text Order states that, “[i]f the Court ultimately

orders additional production [for item (B) of the Emergency

Motion], that order could allow Plaintiffs to make a supplemental

filing as to [the] Motion [for Class Certification] and/or [the

Grace Exclusion] Motion.” (Text Order dated Oct. 7, 2020.)

8

withheld data is relevant to the issues of class-wide impact and

damages, two issues that are contested in the context of

Plaintiffs’ Motion for Class Certification and [the Grace Exclusion

Motion].”).) Plaintiffs’ Memorandum supporting the Emergency

Motion points to the deposition of Defendants’ corporate designee,

Dawn Grubbs, to establish that Defendants withheld coupon

processing transactional data, including particularly as to

ancillary fees. (See Docket Entry 167 at 12-14 (discussing and

quoting Docket Entry 167-14); see also Docket Entry 167-14 at 6

(documenting Grubbs’s acknowledgment that she appeared “as a

corporate representative for [Defendant] Inmar and its

subsidiaries” as well as that her “testimony will be testimony on

behalf of [Defendant Inmar]”).) Grubbs’s deposition testimony, in

fact, does confirm that Defendants possess coupon processing

transaction data regarding ancillary fees that they did not produce

to Plaintiffs; specifically, Grubbs testified as follows:

Q. . . . With respect to data -- transaction data at

CMS, would CMS be aware of fees charged to its

manufacturer clients by retail processors such as IOS,

NCH or CCC?

A. Yes, they would.

. . . .

Q. . . . [I]f NCH submits an invoice to [] CMS for a

CMS manufacturer client and that invoice contains

shipping and handling fees, . . . would CMS’s

transactional data reflect [] the shipping and handling

fees NCH was charging and identify NCH as the

organization charging?

9

A. Yes, that data was maintained in the CMS system.

. . . .

Q. . . . [CMS] ha[s] data that identifies which

organization charged the fees, but [CMS] didn’t produce

that in discovery?

A. To my knowledge, it was never requested.

Q. Is that -- is the data maintained?

A. It is maintained.

Q. . . . CMS would have the data that identified the

shipping and handling fees of IOS, NCH and CCC and other

retail processors?

A. They would. CMS would have that information on

backup tapes.

Q. . . . [A]nd those backup tapes are still available,

correct?

A. Yes, going back to the time frame that we previously

discussed.

. . . .

Q. What was not reflected [in the data CMS produced] is

what the actual charges were by the retail processors

that are being reimbursed, correct?

A. That is correct.

Q. But that data exists. It just wasn’t produced to

[P]laintiffs in this case?

A. That data does exist. And to my knowledge, as I

said before, it was never requested. Never seen anything

with a request for that.

. . . .

Q. And so CMS has data on each of the fees that the

retail processors charge that identifies which retail

processors charge which fee, correct?

10

A. They do.

Q. And that goes back to [] 2001 or . . . back to 1999?

A. I am not certain that it goes back to 1999. . . .

The other data that you’re questioning may only go back

as far as the oldest backup tape, which is 2001.

. . . .

Q. Would [that data] identify each individual fee by

fee type?

A. There [] are a few exceptions to that. But in

general, yes, it would identify each individual fee.

(Docket Entry 167-14 at 40-47 (emphasis added).)

Defendants’ response to the Emergency Motion does not deny

that they withheld the data identified by Grubbs in the preceding

block quotation; instead, they contend that she “was exactly right

that Plaintiffs never requested data showing each and every

ancillary charge that each and every non-party retailer processor

billed to one of CMS’s manufacturer clients.” (Docket Entry 178 at

10.) That contention cannot stand, given that the ACPTD Request

solicited “[a]ll coupon processing transactional data, including

but not limited to the CMS and CCC transactional data referenced by

Defendants’ counsel in his December 26, 2019 email to Plaintiffs’

counsel” (Docket Entry 141-2 at 11 (emphasis added)). At her

deposition, Grubbs (on behalf of Defendants) clearly agreed that

the data she described as possessed (but not produced) by

Defendants constituted “transaction data at CMS” (Docket Entry 167-

14 at 40) and “CMS’s transactional data” (id. at 41).

11

“[T]ransaction data at CMS” (id. at 40) and/or “CMS’s transactional

data” (id. at 41) undeniably falls within the broad term “[a]Jll

coupon processing transactional data” (Docket Entry 141-2 at 11).’

Defendants nonetheless would have the Court rule that they

“did not withhold, intentionally or otherwise, any data responsive

to [the ACPTD R]lequest” (Docket Entry 178 at 12), because, after

stating objections, “Defendants produced what they said they would”

4 The ACPTD Request’s express denotation that the term “[a]J1ll

coupon processing transactional data” (Docket Entry 141-2 at 11)

“includ[es] but [is] not limited to the CMS and CCC transactional

data referenced by Defendants’ counsel in his December 26, 2019

email to Plaintiffs’ counsel” (id. (emphasis added)) reinforces the

conclusion above and defeats Defendants’ effort to limit the scope

of the ACPTD Request by positing that, “[w]hen the [ACPTD R]equest

was served, it was intended to capture the prices and fees that CCC

or CMS charged” (Docket Entry 178 at 12 (citing Docket Entry 139-5

at 2) (emphasis added})). In that regard, by explicitly including

“CMS and CCC transactional data referenced by Defendants’ counsel

in his December 26, 2019 email to Plaintiffs’ counsel” (Docket

Entry 141-2 at 11), the ACPTD Request demanded “the complete

granular multi-year transaction data of CMS and CCC” (Docket Entry

139-5 at 2), which (in their e-mail of December 26, 2019)

Defendants’ counsel had described as broader than just “fee and

pricing information” (id. (emphasis added)). Moreover, if

Plaintiffs had “intended” (Docket Entry 178 at 12) for the ACPTD

Request only “to capture the prices and fees that CCC or CMS

charged” (id.), Plaintiffs presumably would have worded the ACPTD

Reguest as “all coupon processing transactional data capturing the

prices and fees that CCC or CMS charged.” The plain language of

the ACPTD Request, however, eschews that narrower linguistic option

which Defendants effectively want the Court to substitute for the

actual (broader) wording of the ACPTD Request. (See Docket Entry

141-2 at 11.) Simply put, Defendants’ rhetoric charging that

(A) Plaintiffs have “attempt[ed] to reimagine the[ ACPTD R]equest

nine months after it was served” (Docket Entry 178 at 12), (B) that

“the [ACPTD] Request is being reinterpreted [by Plaintiffs]” (id.),

and (C) that Plaintiffs have “take[n] whatever interpretation of

th[e ACPTD Rlequest is most expedient in the moment” (id.) more

aptly describes Defendants’ approach here.

12

(id. at 11), i.e., “data compris[ing] all of the ‘information

reflecting transactions’ that Defendants committed to produce [in

their response to the ACPTD Request]” (id. at 12 (quoting Docket

Entry 141-3 at 4); see also id. at 13 (“Plaintiffs served an overly

broad, vague [ACPTD R]lequest. Defendants objected and interpreted

the [ACPTD R]equest with reasonable limitations consistent with the

context in which it was served, then followed up by producing what

they promised.”)). The Court declines to rule in Defendants’ favor

on that basis for two reasons.

First, as shown in the preceding discussion, Defendants did

withhold “data responsive to [the ACPTD R]Jequest” (id. at 12).

Second, apart from their objection that the omission of a “temporal

limitation” from the ACPTD Request made responding to it

“unreasonably burdensome and expensive” (Docket Entry 141-3 at 3),

Defendants did not adequately state objections or otherwise respond

to the ACPTD Request in compliance with Federal Rule of Civil

Procedure 34 (“Rule 34”), which (as to such matters) mandates:

(B) Responding to Each Item, For each [request], the

response must either state that inspection .. . will be

permitted as requested or state with specificity the

grounds for objecting to the request, including the

reasons. The responding party may state that it will

produce copies of documents . . . instead of permitting

inspection. The production must then be completed no

later than the time for inspection specified in the

request or another reasonable time specified in the

response.

(C) Objections. An objection must state whether any

responsive materials are being withheld on the basis of

13

that objection. An objection to part of a request must

specify the part and permit inspection of the rest.

Fed. R. Civ. P. 34(b) (2) (emphasis added); see also Fed. R. Civ. P.

34 advisory committee notes, 2015 amend. (“Rule 34(b) (2) (B) is

amended to require that objections to Rule 34 requests be stated

with specificity. . . . The specificity of the objection ties to

the new provision in Rule 34(b) (2) (C) directing that an objection

must state whether any responsive materials are being withheld on

the basis of that objection.”).

As quoted in the Introduction, in responding to the ACPTD

Reguest, Defendants lodged these four objections that potentially

bear upon their opposition to item (B) of the Emergency Motion:

1) “inconsistent with or outside the scope of permissible

discovery under the Federal Rules of Civil Procedure” (Docket Entry

141-3 at 2 (emphasis added));

2) “doles] not include a temporal limitation and therefore

. . production of such information would be unreasonably

burdensome and expensive in light of the immateriality of such

information, the needs of the case, the amount in controversy, the

limitations on Defendants’ resources, and the importance of the

issues at stake in the litigation” (id. at 3 (emphasis added));

3) “the term ‘all coupon processing transactional data’ is

vague _ and ambiguous in this context making a reasonable response

unduly burdensome and expensive” (id. at 4 (emphasis added)); and

14

4) “depending upon the interpretation placed upon the words in

thle] phrase [*‘all coupon processing transactional data,’ that

term] is overbroad making production of such documents unduly

burdensome and expensive” (id. (emphasis added)).°

The first of those four objections does not “state with

specificity . . . the reasons,” Fed. R. Civ. P. 34(b) (2) (B), the

ACPTD Request supposedly seeks information “inconsistent with or

outside the scope of permissible discovery under the Federal Rules

of Civil Procedure” (Docket Entry 141-3 at 2). (See id. (offering

no reasons to support such objection) .) The second of the four

foregoing objections lists only lack of “a temporal limitation” as

a “specific[] . . . reason[],” Fed. R. Civ. P. 34(b) (2) (B), why

“production of [] information [responsive to the ACPTD Request]

would be unreasonably burdensome and expensive” (Docket Entry 141-

3 at 3). Finally, the third and fourth (above-quoted) objections,

i.e., that “making a reasonable response” (id. at 4) and/or “making

production of [] documents [responsive]” (id.) to the ACPTD Request

would qualify as “unduly burdensome and expensive” (id.}), both rest

on interconnected “reasons,” Fed. R. Civ. P. 34(b) (2) (B): “the

5 Defendants also generally objected “to the [ACPTD] Request []

to the extent [it] purport[s] to require production of information

that is subject to the attorney-client privilege and/or work

product doctrine, or any other applicable claim of privilege or

related protective doctrine” (Docket Entry 141-3 at 3) and “to the

extent [it] request[s] the production of information which is not

. . or is no longer within Defendants’ possession, custody, or

control” (id.). Those objections do not inform their opposition to

item (B) of the Emergency Motion. (See Docket Entry 178 at 10-20.)

15

term ‘all coupon processing transactional data’ is vague and

ambiguous in this context . . . and, depending upon the

interpretation placed upon the words in that phrase, is overbroad”

(Docket Entry 141-3 at 4 (emphasis added)). Those twin objections,

however, do not provide adequate “specificity,” Fed. R. Civ. P.

34(b) (2) (B), for their underlying “reasons,” id. In particular,

Defendants offered no explanation about how or why “the term ‘all

coupon processing transactional data’” (Docket Entry 141-3 at 4)

suffers from “vague[ness] and ambiguous[ness] in this context”

(id.) or what “interpretation placed upon the words in that phrase”

(id.) would render it “overbroad” (id.). (See id.)

Defendants thus properly made only one objection, i.e., that

the ACPTD Request “do[es] not include a temporal limitation and

therefore. . . production of such information would be

unreasonably burdensome and expensive” (id. at 3 (emphasis added)).

As to the other three objections - “inconsistent with or outside

the scope of permissible discovery” (id. at 2), “vague and

ambiguous in this context making a reasonable response unduly

burdensome and expensive” (id. at 4), and “overbroad making

production of such documents unduly burdensome and expensive” (id.)

— Defendants “fail[ed] to present valid objections to the[ ACPTD

R]egquest[ and thereby] ‘waived any legitimate objection [they] may

have had,’” Kinetic Concepts, Inc. v. ConvaTec Inc., 268 F.R.D.

226, 247 (M.D.N.C. 2010) (quoting Mancia v. Mayflower Textile

16

Servs. Co., 253 F.R.D. 354, 364 (D. Md. 2008)); see also American

Humanist Ass’n v. Perry, No. 5:15CT3053, 2017 WL 11534764, at *3

(E.D.N.C. Mar. 17, 2017) (unpublished) (granting motion to compel

where objections “assert[ed] that the [document] requests [we]re

overly broad, vague, and/or burdensome with little further

explanation or justification,” as such “objections are

insufficient” and “subject to waiver’); Tucker v. Momentive

Performance Materials USA, Inc., No. 2:13CV4480, 2016 WL 8252929,

at *3 n.2 (S.D.W. Va. Nov. 23, 2016) (unpublished) (“[The

pllaintiff must state specific reasons for the objections to the

. . request for documents. [The p]laintiff’s objections...

are insufficient. [The p]laintiff has failed to provide specific

reasons for his objection in his response to the [document]

request.” (internal citation omitted)).°®

6 Alternatively (and to the extent, irrespective of any

waiver, the Court, “on its own,” Fed. R. Civ. P. 26(b) (2) (C), must

assess the propriety of the ACPTD Request), the record does not

support a finding that (apart from its lack of a time-limit) the

ACPTD Request extends beyond the authorized scope of discovery and/

or imposes an undue burden/expense as a result of vagueness/

ambiguity or overbreadth. As an initial matter, generally, “[a]

party claiming that a discovery request is unduly burdensome must

present an affidavit or other evidence that specifically describes

the process of obtaining the responsive documents or information

and the time and expense involved in responding to the request.”

Futreal v. Ringle, No. 7:18CV29, 2019 WL 137587, at *10 (E.D.N.C.

Jan. 7, 2019) (unpublished) (emphasis added). “[Defendants] ha[ve]

not presented these types of materials,” id.; to the contrary, the

declaration on which they rely to show the burden of further

responding to the ACPTD Request (see Docket Entry 178 at 20 (citing

Docket Entry 178-1 at 8-9})) states only that “[rletrieving

[unproduced] data back to 2000 would require between 40 and 60

(continued...)

17

Furthermore, “Defendants’ response[ to the ACPTD Request is]

deficient in that they fail[fed] to identify whether responsive

documents [we]re being withheld on the basis of the objections.”

6(...continued)

hours of time from one of [their] engineers” (Docket Entry 178-1 at

9 (emphasis added)). Defendants’ decision to address only “the

time . . . involved in responding,” without “specifically

describ[ing] the process of obtaining the responsive documents

. . . and expense involved,” Futreal, 2019 WL 137587, at *10

(emphasis added), precludes a finding that compelled production of

data withheld by Defendants would exceed the bounds of discovery

“proportional to the needs of the case,” Fed. R. Civ. P. 26(b) (1),

because —- absent evidence “specifically describ[ing] the process of

obtaining the responsive documents . . . and expense involved,”

Futreal, 2019 WL 137587, at *10 - the Court cannot conclude that

“the burden or expense of the proposed discovery outweighs its

likely benefit,” Fed. R. Civ. P. 26(b6) (1), particularly given

Plaintiffs’ plausible rebuttal to Defendants’ attack on the

withheld data’s significance (compare Docket Entry 179 at 9-12,

with Docket Entry 178 at 14-18) and existing uncertainty as to

whether “Defendants already restored their transactional data”

(Docket Entry 167 at 23). Additionally, Grubbs’s testimony refutes

the notion that “the term ‘all coupon processing transactional

data’ is vague and ambiguous in this context” (Docket Entry 141-3

at 4), as she readily agreed that the unproduced data constituted

“transaction data at CMS” (Docket Entry 167-14 at 40) and “CMS’s

transactional data” (id. at 41), which (in turn) a reasonable

person familiar with “this context” (Docket Entry 141-3 at 4) would

understand as captured by the term “[aJll coupon processing

transactional data” (Docket Entry 141-2 at 11). Lastly, the Court

agrees with Plaintiffs that the breadth of the ACPTD Request stems

directly from the fact that “Defendants previously argued that

Plaintiffs’ discovery requests were too narrow to encompass

transaction data, such that production of data wasn’t required.”

(Docket Entry 179 at 5 (citing and parenthetically quoting Docket

Entry 141 at 7 (arguing Plaintiffs could have used broader language

in prior requests, such as “‘all documents stating a fee’ [or]

‘each and every document reflecting a fee’” (comma omitted))).)

The Court declines to “place[ Plaintiffs] in a ‘damned if you do,

damned if you don’t’ position,” Greenwood v. Koven, 880 F. Supp.

186, 197 (S.D.N.Y. 1995), for accepting Defendants’ representation

that, if Plaintiffs served a broadly-worded request, Defendants

would produce “the complete granular multi-year transaction data of

CMS and CCC” (Docket Entry 139-5 at 2).

18

Stephenson v. McCoy, No. 6:17CV1805, 2018 WL 671500, at *2 (D.S.C.

Feb. 1, 2018) (unpublished) (citing Fed. R. Civ. P. 34(b) (2) (C) and

granting motion to compel). Instead, “[s]lubject to and without

waiving the[ir] objections, Defendants respond[ed]” (Docket Entry

141-3 at 4) that they “will produce information reflecting

transactions for the period 2000-09 to the extent that such

information is extant and reasonably available” (id. (emphasis

added)) and “further expla[ined that] such data for [CMS] is

available and will be provided contemporaneously with this

response” (id.), as well as that “[d]Jata for [CCC] is in the

process of restoration and checking and will be provided to the

extent it is capable of being restored when available” (id.).

Except as concerns the date restriction (to “the period from 2000-

09” (id.)), “an individual reviewing [that] response[] would not

know . . . whether [Defendants] had withheld any otherwise

responsive documents and whether documents were withheld on one (or

more) of the four [objections] . . . identified in the [response]

. .” Futreal, 2019 WL 137587, at *5.’

7 By including a date restriction in the description of what

they would produce, Defendants’ response to the ACPTD Request gave

(at least implied) notice that they had withheld documents from

outside that period based on their undue burden/expense objection

arising from the ACPTD Request’s failure to “include a temporal

limitation” (Docket Entry 141-3 at 3). See Fed. R. Civ. P. 34

advisory committee notes, 2015 amend. (approving of response to

request “stat[ing] that the responding party will limit the search

to documents . . . within a given period of time,” coupled with a

“statement [identifying] what has been . . . ‘withheld’ [as]

(continued...)

19

In the well-chosen words of a neighboring court:

The [] Rules are designed to remove this kind of guessing

game from the discovery process. Parties should not need

to bring the court into the middle of the discovery

process . . . to find out if otherwise responsive

documents have been withheld because of a[n objection].

Instead, attorneys should unambiguously state when they

have withheld documents responsive to discovery requests

. . . . [Defendants’] response[ to the ACPTD Request]

failed to meet this standard and did not comply with the

[] Rules.

Id. at *6; see also Lee v. Max Int’l, LLC, 638 F.3d 1318, 1322

(10th Cir. 2011) (“Discovery is not supposed to be a shell game,

where the hidden ball is moved round and round and only revealed

after so many false guesses are made and so much money is

squandered.”).

Given all these considerations, the Court will order

Defendants to produce, for the period from 2000-09,8 “[a]ll coupon

processing transactional data” (Docket Entry 141-2 at 11) and will

permit Plaintiffs to use such data to make supplemental filings

7(...continued)

anything beyond the scope of the search specified”). Conversely,

because Defendants’ response to the ACPTD Request elsewhere employs

vague language to report what they would produce, i.e.,

“information reflecting transactions . . . to the extent that such

information is extant and reasonably available” (Docket Entry 141-3

at 4), Defendants inadequately “specified what [they] believed, in

good faith, was the appropriate scope of discovery,” Futreal, 2019

WL 137587, at *5, and obfuscated whether they “rel[ied] on

[objections] to withhold otherwise responsive documents,” id.

8 Plaintiffs have not contested the propriety of a

restriction of the ACPTD Request to that period. (See Docket Entry

166 at 2; Docket Entry 167 at 21-25; Docket Entry 179 at 3-13.)

20

supporting their Motion for Class Certification and opposing the

Grace Exclusion Motion.9

As a final matter, item (C) of the Emergency Motion “seek[s]

a telephonic conference with the Court to discuss how to

expeditiously address discovery issues going forward, including the

need to search over 1,000 boxes of hard copy documents, seven years

of annual network server backups, and images of two key executives’

computers . . . .” (Docket Entry 166 at 2-3; see also Docket Entry

186 at 2-3 (providing clarifying information about imaging of

computers).) According to Plaintiffs, “deficiencies uncovered in

Defendants’ productions have caused Plaintiffs to become gravely

concerned about whether Defendants adequately searched these

repositories for responsive material, particularly given the

limited quantity and low quality of Defendants’ document production

thus far.” (Docket Entry 167 at 25.) Plaintiffs therefore want

the Court to use the requested conference to “require[ Defendants]

to disclose what they did to search for and produce documents

9 Upon granting a motion to compel, a “court must, after

giving an opportunity to be heard, require the party . . . whose

conduct necessitated the motion . . . to pay the movant’s

reasonable expenses incurred in making the motion, including

attorney’s fees.” Fed. R. Civ. P. 37(a)(5)(A). Only three

exceptions apply to the foregoing mandate: “(i) the movant filed

the motion before attempting in good faith to obtain the disclosure

or discovery without court action; (ii) the opposing party’s

nondisclosure, response, or objection was substantially justified;

or (iii) other circumstances make an award of expenses unjust.”

Id. Accordingly, the Court also will order the parties to meet and

confer about expense-shifting and thereafter to file a joint notice

setting out their position(s) on that issue.

21

responsive to Plaintiffs’ discovery requests.” (Id. at 26; see

also id. (“Defendants’ counsel wouldn’t disclose this information

when asked by Plaintiffs’ counsel, and [Grubbs] was instructed not

to answer questions regarding these issues on the basis of the

attorney-client privilege and work product doctrine.”).)

The Rules “impose[] an affirmative duty to engage in pretrial

discovery in a responsible manner that is consistent with the

spirit and purposes of Rules 26 through 37.” Fed. R. Civ. P. 26

advisory committee’s notes, 1983 amend., subdiv. (g). “[T]he

spirit of the [R]ules is violated when advocates attempt to use

discovery tools as tactical weapons rather than to expose the facts

and illuminate the issues . . . .” Fed. R. Civ. P. 26 advisory

committee’s notes, 1983 amend. Consistent with that vision, the

Rules impose a certification requirement as to all discovery

papers, which “obliges each attorney to stop and think about the

legitimacy of a discovery request, a response thereto, or an

objection.” Fed. R. Civ. P. 26 advisory committee’s notes, 1983

amend., subdiv. (g). By signing that certification, an attorney

“certifies that [he or she] has made a reasonable effort to assure

that the client has provided all the information and documents

available to [the client] that are responsive to the discovery

demand.” Id.; see also Fed. R. Civ. P. 37 advisory committee’s

notes, 1993 amend., subdiv. (a) (“[Discovery requests] should not

be read or interpreted in an artificially restrictive or

22

hypertechnical manner to avoid disclosure of information fairly

covered by the discovery request . . . .”).

Each time Defendants’ counsel served discovery responses, said

counsel certified compliance with the foregoing standards. See

Buchanan v. Consolidated Stores Corp., 206 F.R.D. 123, 125 (D. Md.

2002) (“Production and certification by counsel already certifies

that [the d]efendant is, in good faith, producing all responsive

documents . . . .”). In the face of such certifications by an

officer of the Court, Plaintiffs’ generalized criticism of the

“limited quantity and low quality of Defendants’ document

production” (Docket Entry 167 at 25) or Plaintiffs’ bald assertion

that “the computers of two executives centrally involved in

assessing and negotiating Defendants’ agreements with IOS . . .

have not been searched for responsive documents” (Docket Entry 179

at 13) does not warrant judicial intervention, see generally

Kinetic Concepts, 268 F.R.D. at 252 (“[E]ven an informed suspicion

that additional non-privileged documents exist . . . cannot support

an order compelling production of documents.”). Nor does the Court

infer a breach of Defendants’ (and their counsel’s) discovery

obligations from the mere fact that – consistent with Federal Rule

of Civil Procedure 26(e)(1)(A) – Defendants supplemented their

prior production in advance of Grubbs’s deposition (see Docket

Entry 167 at 11 (grousing that, “[o]n August 26, [2020,] Defendants

produced 1,328 new documents”)), as one would expect additional

23

responsive documents to come to light at that juncture, given that

preparation for corporate depositions “requires a good faith effort

to find out the relevant facts — to collect information, review

documents, and interview employees with personal knowledge,” Dorsey

v. TGT Consulting, LLC, 888 F. Supp. 2d 670, 685 (D. Md. 2012)

(internal quotation marks omitted).

As concrete “deficiencies uncovered in Defendants’

productions” (Docket Entry 167 at 25), Plaintiffs’ Memorandum

supporting the Emergency Motion identifies only the fact that,

“[d]uring [a] deposition of a third-party witness . . ., Defendants

introduced documents that had never been produced in discovery but

that were responsive to Plaintiffs’ requests” (id. at 10 (citing

Docket Entry 167-5 and referencing Docket Entry 167-6)). The

record reflects that, after that deposition (on July 22, 2020),

Plaintiffs’ counsel e-mailed Defendants’ counsel to inquire about

three documents, asking, inter alia, “[w]hy weren’t these [three]

documents produced in discovery?” (Docket Entry 167-5 at 2; see

also id. (“Why did you choose to omit the 3rd page of the Milano

letter from the deposition, which shows that Mike Milano signed the

document?”).) The next day, Defendants’ counsel responded:

The first document was not produced because it was not

responsive to any of your requests. (It is a comparison

of CMS and CRC.)

The second document was not produced because it also does

not mention IOS. To the extent that “Promotion Analysis”

is part of IOS, it might be responsive and I am happy to

produce it with a bates number if you like.

24

The third document – the Milano letter – was produced by

you all. It was produced to us in an extremely small and

barely legible way and when it was blown up and copied

for the deposition, the bates number was excluded. I did

not choose to omit the third page; it was never produced

to us.

(Docket Entry 167-8 at 3-4; see also id. at 3 (documenting

subsequent reply from Plaintiffs’ counsel that “[b]oth CRC and

Promotion Analysis were part of IOS and the two unproduced

documents [Defendants] used in [the] deposition were clearly

responsive to Plaintiffs’ document requests”).)

In opposing “a status conference aimed at obtaining . . .

‘discovery on discovery’” (Docket Entry 178 at 20), Defendants have

argued that Plaintiffs’ false accusation that Defendants improperly

withheld the Milano letter, when it “in fact came from

[Plaintiffs’] own production” (id. at 21 n. 20), reveals the poor

“quality of their critique” (id.), and that, “even assuming the

[other two] documents should have been produced, the late

production of two documents does not provide a basis for Plaintiffs

to take discovery on Defendants’ process of responding to

Plaintiffs’ numerous, broad requests” (id. at 22 n. 20 (emphasis

added)). Plaintiffs’ mistaken decision to seize upon the Milano

letter as a justification to attack the adequacy of Defendants’

document production does undercut the force of Plaintiffs’

protestations; however, Defendants’ dismissal of their failure to

produce the other two documents as a mere “late production” (id.)

also strikes a false note. In that regard, Defendants did not

25

simply belatedly uncover those two documents and produce them to

Plaintiffs pursuant to the duty of supplementation; rather, as the

block quotation above indicates, Defendants intentionally withheld

those documents after deeming them non-responsive because they do

not mention IOS, notwithstanding the fact that they reference two

other entities (“CRC and Promotion Analysis” (Docket Entry 167-8 at

3; see also Docket Entry 167-6 at 2, 4)), which Plaintiffs describe

as “part of IOS” (Docket Entry 167-8 at 3).

Viewed from that perspective, Defendants’ withholding of those

two documents may represent a symptom of a larger problem, i.e.,

lack of “reasonable effort [by Defendants’ counsel] to assure that

[Defendants] provided all the information and documents available

to [them] that are responsive to [Plaintiffs’] discovery

demand[s],” Fed. R. Civ. P. 26 advisory committee’s notes, 1983

amend., subdiv. (g), and/or “read[ing] or interpret[ing discovery

requests] in an artificially restrictive or hypertechnical manner

to avoid disclosure of information fairly covered by the discovery

request[s],” Fed. R. Civ. P. 37 advisory committee’s notes, 1993

amend., subdiv. (a). For example, if Defendants limited their

document searches such that they only retrieved documents

containing the word “IOS,” without considering whether they also

should have searched for documents that discuss “part of IOS”

(Docket Entry 167-8 at 3), they (and their counsel) may not have

complied with their discovery obligations.

26

At present, the Court considers a telephone conference an ill-

suited and/or premature mechanism for assessing that potential

problem. Instead, the Court will direct:

1) Plaintiffs to identify for Defendants five document

requests as to which Plaintiffs hold a good-faith concern that

Defendants have not conducted a proper search and/or have not

produced responsive documents Plaintiffs expected to receive;

2) Defendants to serve Plaintiffs with “an affidavit

describing the efforts made to locate documents responsive to

[those] requests,” Buchanan, 206 F.R.D. at 125;

3) Plaintiffs to notify Defendants of any objections to the

adequacy of those efforts and of any additional efforts Plaintiffs

propose, after which the parties shall meet and confer; and

4) the parties to file a joint notice setting out their

positions on any disputes that remain following that process.

In closing, the Court once more reminds the parties of Chief

Justice John Roberts’s admonitions regarding the proper conduct of

litigation, as recently excerpted by a neighboring court:

[T]o avoid litigation “degenerating into wasteful

clashes,” [Federal] Rule [of Civil Procedure] 1 place[s]

on lawyers the obligation to control the expense and time

demands of litigation, which would otherwise be stymied

by “antagonistic tactics, wasteful procedural maneuvers,

and teetering brinksmanship.” . . . [It] charge[s]

counsel to “affirmatively search out cooperative

solutions, chart a cost-effective course of litigation,

and assume shared responsibility with opposing counsel to

achieve just results.”

27

Stultz v. Virginia, No. 7:13CV589, 2019 WL 4741315, at *1 (W.D. Va.

Aug. 15, 2019) (unpublished) (internal brackets omitted) (quoting

Chief Justice John Roberts, “2015 Year-End Report on the Federal

Judiciary,” https://www.supremecourt.gov/publicinfo/year-

end/2015year-endreport.pdf), adopted as modified, 2019 WL 4740241

(W.D. Va. Sept. 27, 2019) (unpublished).

CONCLUSION

Defendants did not properly respond to the ACPTD Request and

additional reasonable questions exist about the adequacy of

Defendants’ compliance with their discovery obligations.

IT IS THEREFORE ORDERED that the Emergency Motion (Docket

Entry 166) is GRANTED as to item (B) therein, in that, on or before

November 18, 2020, Defendants shall produce to Plaintiffs, for the

period from 2000-09, “[a]ll coupon processing transactional data”

(Docket Entry 141-2 at 11);

IT IS FURTHER ORDERED that, on or before November 25, 2020,

the parties shall meet and confer about expense-shifting as to item

(B) of the Emergency Motion.

IT IS FURTHER ORDERED that, on or before December 2, 2020, the

parties shall file a joint notice setting out their position(s) on

expense-shifting as to item (B) of the Emergency Motion, including

whether and in what amount the Court should order expense-shifting.

IT IS FURTHER ORDERED that, on or before December 9, 2020,

Plaintiffs may file a supplement of no more than 10 pages in

28

support of their Motion for Class Certification (Docket Entry 150),

limited to discussion of the coupon processing transactional data

produced by Defendants in compliance with this Order.

IT IS FURTHER ORDERED that, on or before December 9, 2020,

Plaintiffs may file a supplement of no more than 10 pages in

opposition to the Grace Exclusion Motion (Docket Entry 160),

limited to discussion of the coupon processing transactional data

produced by Defendants in compliance with this Order.

IT IS FURTHER ORDERED that the Emergency Motion (Docket Entry

166) is DENIED WITHOUT PREJUDICE as to item (C) therein, in that

the Court declines to set a telephone conference at this time.

IT IS FURTHER ORDERED that, on or before November 9, 2020,

Plaintiffs shall identify for Defendants five document requests as

to which Plaintiffs hold a good-faith concern that Defendants have

not conducted a proper search and/or have not produced responsive

documents Plaintiffs expected to receive.

IT IS FURTHER ORDERED that, on or before November 16, 2020,

Defendants shall serve Plaintiffs with “an affidavit describing the

efforts made to locate documents responsive to [those] requests,”

Buchanan, 206 F.R.D. at 125.

IT IS FURTHER ORDERED that, on or before November 23, 2020,

Plaintiffs shall notify Defendants of any objections to the

adequacy of those efforts and of any proposals for additional

efforts.

29

IT IS FURTHER ORDERED that, on or before November 30, 2020,

the parties shall meet and confer about any such objections and/or

proposals.

IT IS FURTHER ORDERED that, on or before December 7, 2020, the

parties shall file a joint notice setting out their position(s) on

any remaining disputes about any such objections and/or proposals.

/s/ L. Patrick Auld

L. Patrick Auld

United States Magistrate Judge

November 4, 2020

30