Twin Bridges Waste and Recycling, LLC v. County Waste and Recycling Service, Inc.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

TWIN BRIDGES WASTE AND

RECYCLING, LLC,

Plaintiff,

V. 1:21-CV-263

(DNH/DJS)

COUNTY WASTE AND RECYCLING

SERVICE, INC., et al.,

Defendants.

APPEARANCES: OF COUNSEL:

DREYER BOYAJIAN LLP JAMES R. PELUSO, JR., ESQ.

Counsel for Plaintiff

75 Columbia Street

Albany, New York 12201

NIXON PEABODY WILLIAM REYNOLDS, ESQ.

Counsel for Defendant

677 Broadway

10" Floor

Albany, New York 12207

DANIEL J. STEWART

United States Magistrate Judge

DECISION and ORDER

I. BACKGROUND

For purposes of the present discovery dispute, the relevant facts are drawn from

Plaintiffs Amended Complaint, filed on May 28, 2021, and the District Court’s

Memorandum-Decision and Order granting in part and denying in part Defendants’

Motion to Dismiss, dated September 14, 2021. Dkt. Nos. 21 & 28. This case arises out

of claims of unfair business practices relating to competing waste hauling companies.

Id. As noted in Judge Hurd’s decision, what presently remains in the case are Plaintiff's

claims in Count I of the Amended Complaint, alleging that the Defendants attempted to

monopolize the trash hauling market through predatory pricing, and the claims

contained in Count II, which allege Defendants attempted to monopolize the market

through anticompetitive conduct. Dkt. No. 28. The remaining Defendants are County

Waste and Recycling Services, Inc., Robert Wright Disposal, Inc., and Waste

Connections, Inc. Dkt. 28 at p. 31. In his decision, Judge Hurd noted that the issues

that remain involve market power, barriers to entry, predatory pricing, and improperly

restrictive contracts. /d. at pp. 2, 7-10, & 13-22. “Predatory pricing may be defined as

pricing below an appropriate measure of cost for the purpose of eliminating competitors

in the short run and reducing competition in the long run.” /d. at p. 16 (quoting Cargill,

Inc. v. Monfort of Colo., Inc., 476 U.S. 104, 117 (1986)). The District Court did note

that predatory pricing claims are difficult to plead and prove. /d. at 17.

On or about August 8, 2022, counsel for Defendants wrote to the Court for

assistance in resolving a longstanding discovery dispute. Dkt. No. 41. Defendants

alleged that they had served Interrogatories on Plaintiff which sought, for the relevant

time period, “the name and service address of each Twin Bridges customer by type of

service, and the characteristics of the services provided to each such customer.” Jd. at

pp. 1-2; Dkt. No. 41-1, Interrogatory Nos. 1, 3, 6, & 7. Defendants also served Requests

for Production seeking documents, including databases and data sheets, upon which the

response to the Interrogatory was based. Dkt. No. 41-1; RFP Nos. 1, 3, 6, & 7. After

some time, Plaintiff's counsel responded and indicated that they would agree to provide

customer information but, primarily upon confidentiality grounds, would not agree to

provide customer names, phone numbers, and email addresses. Dkt. No. 41. In

“)response, and to reach a compromise, Defendants agreed to forgo their request for

customer email addresses and telephone numbers, but still required the customer names.

Id. Plaintiff's counsel continued to object to the production of that particular

information, and as a result, on August 22, 2022, a conference call was held on the issue

with the Court. After hearing from both sides, I requested further documentation, which

has now been received. See Dkt. Nos. 47 & 48.

In their Supplemental Memorandum, counsel for Defendants produced an expert

declaration indicating the need and desire for the customer names to be produced to

complete the expert’s analysis, as well as a representation that this information has been

utilized by them in the past and can be stored safely and confidentially. Dkt. No. 47-1,

Healy Decl. Counsel for the Plaintiff responded by providing exemplars of the

information that they intend upon producing. Dkt. Nos. 48 & 48-1. Plaintiff continues

to object to the production of all customer names on the ground that this identifying

information is not relevant and material to any of the claims or defenses in the action.

Id. Plaintiff maintains that the predatory pricing claim is based upon a statistical analysis

as to whether the Defendants have cut prices below Defendants’ average variable cost,

and not as it relates to a particular customer. /d. Further, the information that they

intend on providing would allow Defendants to identify any customers that Plaintiff

acquired by date and service address, together with the account pricing. Plaintiff also

notes that it would be willing to respond to requests for admissions concerning

customers, and will identify all customers that it intends upon producing as witnesses at

trial. Id.

II. DISCUSSION

As an initial matter, District Courts have broad discretion to direct and manage

the pre-trial discovery process. Wills v. Amerada Hess Corp., 379 F.3d 32, 41 (2d Cir.

2004). This includes not just ruling on what is discoverable, but also the order in which

discovery proceeds. Rule 26(f)(3)(B), for example, permits that discovery “be

“| conducted in phases or be limited to or focused on particular issues.”

The scope of discovery is set forth in Rule 26 of the Federal Rules of Civil

Procedure. That Rule has been amended, on several occasions, to reflect evolving

judgments as to its proper ambit, and to create a balance between the need for evidence

and the avoidance of undue burden or expense. “The touchstone of the scope of

discovery is relevance; discovery sought must in the first instance be relevant to a party’s

claim or defense.” 7.H. by Shepherd v. City of Syracuse, 2018 WL 3738945, at *2

(N.D.N.Y. Aug. 7, 2018). Rule 26 now defines the scope of discovery to consist of

information that 1s relevant to a “claim or defense” of the parties and that is “proportional

to the needs of the case.” FED. R. CIV. P. 26(b)(1). The specific proportionality factors

to be assessed when considering the scope of discovery are: (1) the importance of the

issues at stake in the litigation; (2) the amount in controversy; (3) the parties’ relative

access to relevant information; (4) the parties’ resources; (5) the importance of the

discovery in resolving the issues; and (6) whether the burden or expense of the discovery

is outweighed by the benefit. FED. R. CIV. P. 26(b). Enveloping the interpretation of

4) Rule 26 is the general standard set forth in Rule 1, which requires that the Federal Rules

of Civil Procedure “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; see also FED. R. CIv. P. 1, Advisory Committee’s note

to 2015 amendment (noting that “the parties share the responsibility” to employ the rules

consistently with the standards of Rule 1, and that “[e]ffective advocacy is consistent

“| with—and indeed depends upon—cooperative and proportional use of procedure’’).

In general, Rule 26(c) grants the Court broad power to protect a party or person

from any unduly burdensome or embarrassing disclosure. In balancing the interests of

the parties seeking evidence to prove their case and the individuals seeking to protect

their privacy, the Federal Rules of Civil Procedure and related case law provide

numerous additional tools to protect privacy interests, including the redaction of

documents, L.R. 8.1, authorizing and directing protective orders to limit disclosure, FED.

R. Civ. P. 26(c)(1), limiting disclosure to “attorney’s eyes only,” Brown v. City of

Oneonta, 160 F.R.D. 18, 21 (N.D.N.Y. 1995), the use of pseudonyms, Doe v. Colgate

University, 2016 WL 1448829 (N.D.N.Y. Apr. 12, 2016), sealing records after weighing

the public’s interest in disclosure, United States v. Amodeo, 71 F.3d 1044, 1050-51 (2d

Cir. 1995) (noting that the “privacy interests of innocent third parties. . . should weigh

heavily in a court’s balancing equation” in determining the public’s access to judicial

documents), authorizing targeted electronic discovery, Moore v. Publicis Groupe, 287

F.R.D. 182 (S.D.N.Y. 2012), and the use of a court-appointed special master to

“| coordinate disclosure. FED. R. CIv. P. 53.

Considering the nature of the case, the competitive nature of the industry, the

customers’ individualized privacy interests, and the general requirements of Rule 1, the

Court will not grant Defendants’ Motion to Compel Plaintiff to disclose their entire

customer lists. While Defendants’ expert has expressed a desire for this information

and has noted that in other cases this information has been produced, Healy Decl. at □□

3,4, & 6, this is not always the case. See BASCOM Global Internet Servs., Inc. v. AT&T

Corp., 2017 WL 11490077, at *3 (N.D. Tex. July 31, 2017) (‘Plaintiff's arguments that

the customer names will aid the presentation of their case to a jury does not constitute

an adequate justification for Defendants to produce customer names or outweigh the

expense of production.”). Further, the fact that there is a protective order in place does

not mean that any potential piece of evidence must then be turned over. Wells Fargo

Sec., LLC v. LJM Inv. Fund, L.P., 2022 WL 614399, at *4 (S.D.N.Y. Mar. 2, 2022).

Balancing the interests at stake, the Court directs that Plaintiff's counsel provide

the requested information via the proposed exemplars, which will provide Defendants

with a customer address, date of service, monthly charges, price changes, account

characteristics, route information, pickup frequency, and contract length. Insofar as the

relevant dispute may involve contracts being used by Plaintiff or Defendants, those

contracts can be provided without the need to identify all customers, or if necessary,

initials or pseudonyms can be used. Defendants argue that the issue of switching

customers may well be relevant to the Plaintiff's claims of market control, or

Defendants’ defense to that allegation, but it is not clear to the Court that this statistical

information could not be obtained by using service addresses and without identifying

the totality of the Plaintiff's customer lists. Defendants’ expert has indicated, for her

part, some ability to form the necessary opinions based upon this information. See Healy

Decl at 4 (“This analysis could be done without customer names. . ..”).

Il. CONCLUSION

WHEREFORE, it is hereby

ORDERED, that Defendants’ Letter-Motion to Compel production of the

Plaintiffs complete client lists, Dkt. Nos. 41 & 47, is DENIED as set forth above; and it

is further

ORDERED that the Clerk shall serve a copy of this Decision and Order on the

parties.

IT IS SO ORDERED.

Dated: October 6, 2022

Albany, New York

Zz;

U.S™“Magistrate Judge