The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
________________________________________________________________
JESSICA JONES, MICHELLE VELOTTA,)
and CHRISTINA LORENZEN, on )
Behalf of Themselves and All )
Others Similarly Situated, )
)
Plaintiffs, )
)
v. )
) No. 20-cv-02892-SHL-tmp
VARSITY BRANDS, LLC; VARSITY )
SPIRIT, LLC; VARSITY SPIRIT )
FASHION & SUPPLIES, LLC; U.S. )
ALL STAR FEDERATION, INC.; )
JEFF WEBB; CHARLESBANK CAPITAL )
PARTNERS LLC; and BAIN CAPITAL )
PRIVATE EQUITY, )
)
Defendants. )
________________________________________________________________
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION TO
COMPEL DISCOVERY RESPONSES FROM DEFENDANTS BAIN CAPITAL PRIVATE
EQUITY AND CHARLESBANK CAPITAL PARTNERS LLC
________________________________________________________________
Before the court are the plaintiffs’ Motions to Compel
Discovery from defendants Bain Capital Private Equity (“Bain”) and
Charlesbank Capital Partners LLC (“Charlesbank”), filed on
September 18, 2021. (ECF Nos. 101; 102.) The defendant filed
responses on October 4, 2021. (ECF Nos. 111; 112.) For the reasons
below, the motions are GRANTED IN PART and DENIED IN PART.
I. BACKGROUND
The present case involves anti-trust claims brought against
Varsity Brands, LLC, its affiliated brands and companies, and its
prior and present owners.1 Charlesbank owned Varsity from 2014
through June 2018, when it sold its interest to Bain, who remains
the majority owner. (ECF No. 102-1 at 3.) In brief, the plaintiffs
allege that the defendants conspired to and did in fact form a
monopoly over the cheerleading industry in the United States. The
plaintiffs filed their complaint on December 10, 2020, seeking
class certification, damages, and injunctive relief. (ECF No. 1.)
On September 18, 2021, the plaintiffs filed the present
motions, seeking to compel document discovery from Bain and
Charlesbank.2 (ECF Nos. 101; 102.) In dispute were dozens of
requests for production, multiple proposed document custodians,
the relevant time period of any production, exact search terms to
use for identifying responsive documents, and the types of media
that would be searched. (Id.) An initial hearing on the motion was
1Two other related cases are currently proceeding before U.S.
District Judge Sheryl Lipman: Fusion Elite All Stars, et al. v.
Varsity Brands, LLC, et al., 2:20-cv-02600-SHL-tmp (W.D. Tenn.
Aug. 13, 2020) (“Fusion”) and American Spirit and Cheer Essentials
Inc., et al. v. Varsity Brands, LLC, et al., 2:20-cv-02782-SHL-
tmp (W.D. Tenn. Jul. 24, 2020) (“American Spirit”). Bain and
Charlesbank were initially defendants in American Spirit but were
dismissed from that case on October 28, 2021. (American Spirit ECF
No. 141.) Bain and Charlesbank have filed a similar motion to
dismiss in the present case, but discovery has proceeded while the
motion has been pending. (ECF No. 60.)
2The plaintiffs concurrently filed two other Motions to Compel
against other defendants in this case. (ECF Nos. 100, 103.) One
motion was subsequently resolved by the parties and another was
granted in part by the court. (ECF Nos. 166, 167.) Only the motions
against Charlesbank and Bain remain.
held before Magistrate Judge Charmiane Claxton on October 28,
2021.3 (ECF No. 136.) The case was subsequently transferred to the
undersigned and another hearing was held on November 19, 2021.
(ECF No. 164.) During this hearing, the undersigned scheduled a
hearing for December 6, 2021, solely to address the motions against
Bain and Charlesbank. (Id.) The parties were ordered to meet and
confer and submit an update on the unresolved issues. (Id.) On
December 3, 2021, the parties emailed the court a list of
outstanding disputes, showing no substantive compromise had been
reached. At the December 6 hearing, the parties confirmed that
they were still in dispute over the following:
• Regarding Bain:
o Request Nos. 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 14, 15,
and 20.
3During this hearing, Magistrate Judge Claxton noted that Bain and
Charlesbank had recently been dismissed from the American Spirit
case and that a similar motion was pending before Judge Lipman in
this case. (ECF No. 143 at 4-5.) Judge Claxton declined “to move
forward either way” on the present motions in light of Judge
Lipman’s decision. (Id. at 5.) However, at no point did Judge
Claxton stay or “set aside” discovery as to Bain and Charlesbank
despite their subsequent protestations; she merely declined to
consider the motions against them on that day given Judge Lipman’s
ruling. (Id.) (“I think at this time it would be imprudent to move
forward either way making a decision, given that [Judge Lipman]’s
given such a strong indicator in a related case, what her thoughts
are on that.”) At the November 19 hearing, the undersigned asked
Bain and Charlesbank whether they planned to file a motion to stay
discovery given the pending motions to dismiss. No such motion has
been filed. Because fact discovery in this case is set to close in
two months, the undersigned finds that discovery should proceed
regardless of any pending dispositive motions. (ECF No. 61.)
o Whether Josh Bekenstein, Jay Corrigan, Spencer Dahl,
Ethan Portnoy, Kate Steinman, David Hutchins, Tom
O’Rourke, and Saron Tesfalul are relevant document
custodians.
o Whether the relevant time period for responsive
documents should be January 1, 2018 through June 30,
2020, or January 1, 2015 through present.
o Whether searches for responsive documents should include
hard copy sources, non-custodial files, audio
recordings, and text messages.
• Regarding Charlesbank:
o Request Nos. 5, 6, 7, 9, 10, 11, 12, 13, 15, 16, and 21.
o Whether Kim Davis, Jesse Ge, Neil Kalvelage, David Katz,
Brian Pegno, and Brandon White are relevant document
custodians.
o Whether the relevant time period for responsive
documents should be January 1, 2014 through present, or
January 1, 2015 through June 30, 2020.
o Whether searches for responsive documents should include
hard copy sources, non-custodial files, audio
recordings, and text messages.
However, in an email to the court on December 7, 2021, the parties
indicated that they had agreed on search terms as to Bain custodian
Ryan Cotton, which were responsive to Bain Request Nos. 5, 6, 7,
9, 10, 11, 15, 16, and 20. With this record set, the undersigned
now considers the remainder of the outstanding issues in the
motion.
II. ANALYSIS
A. Scope of Discovery
The scope of discovery is governed by Federal Rule of Civil
Procedure 26(b)(1), which 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). The party seeking discovery is
obligated to demonstrate relevance. Johnson v. CoreCivic, Inc.,
No. 18-CV-1051-STA-tmp, 2019 WL 5089086, at *2 (W.D. Tenn. Oct.
10, 2019). Upon a showing of relevance, the burden shifts to the
party opposing discovery to show, with specificity, why the
requested discovery is not proportional to the needs of the case.
William Powell Co. v. Nat'l Indem. Co., No. 1:14-CV-00807, 2017 WL
1326504, at *5 (S.D. Ohio Apr. 11, 2017), aff'd sub nom. 2017 WL
3927525 (S.D. Ohio June 21, 2017), and modified on reconsideration,
2017 WL 4315059 (S.D. Ohio Sept. 26, 2017). Six factors are
relevant to proportionality: (1) “the importance of the issues at
stake in the action;” (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 proposed discovery outweighs its likely benefit.” Fed. R. Civ.
P. 26(b)(1).
The plaintiffs allege that Charlesbank and Bain actively
participated in a conspiracy to monopolize the cheerleading
industry, namely by providing financial support and guidance to
Varsity in its acquisition of competitors. Charlesbank and Bain
have conceded that many of the materials the plaintiffs have
requested are relevant.4 Considering proportionality, the issues
at stake in this case are national in implication and importance,
with a substantial amount in controversy stemming from allegedly
anticompetitive pricing and trade practices. In terms of the
parties’ resources, Bain and Charlesbank are both sophisticated
investment firms: Charlesbank acquired Varsity in 2014 for $1.4
billion and sold its interest to Bain for $2.5 billion. (ECF No.
102-1 at 3.) Many of the plaintiffs’ claims can only be resolved
through fairly extensive discovery from Charlesbank and Bain, the
only parties who have access to this information. With these
4Specifically, Charlesbank has conceded that Request Nos. 5, 6, 7,
9, 10, 11, 12, 16, and 21 seek relevant information. (ECF No. 102-
1 at 13.) Bain concedes identical requests, although the numbering
is slightly different in their Motion. (ECF No. 101-1 at 14.)
Specifically, Request Nos. 5, 6, 7, and 9 are identical across the
two motions. Charlesbank Request No. 10 is unique to Charlesbank.
Because of this extra request, Bain Request No. 10 corresponds to
Charlesbank Request No. 11, Bain Request No. 11 corresponds to
Charlesbank Request No. 12, and so on until the end of the Motion.
principals in mind, the court will now consider each of the matters
in dispute.
B. Search Terms, Forms of Media, and Relevant Time Period
The requests for production at issue in this case are wide
reaching, seeking to capture nearly all aspects of Bain and
Charlesbank’s acquisition and ownership of Varsity. As courts have
acknowledged, there is “inherent complexity [in] formulating
refined search terms” to return responsive electronically stored
documents; the task involves “the interplay, at least, of the
sciences of computer technology, statistics and linguistics.”5
McMaster v. Kohl’s Department Stores, Inc., No. 18-13875, 2020 WL
4251342, at *3 (E.D. Mich. Jul. 24, 2020) (quoting United States
v. O’Keefe, 537 F. Supp. 2d 14, 23-24 (D.D.C. 2008)). Typically,
“the resolution of such questions [is] beyond the ken of laymen.”
Id. (internal quotation marks removed).
The parties agreed to a list of search terms for the records
of Ryan Cotton, the Managing Director of Bain since 2003 and a
Board Member of Varsity Brands. (ECF No. 100-4 at Ex. 99.) Cotton
“led Bain’s acquisition of Varsity” and Bain concedes he is a
proper custodian. (ECF No. 101-1 at 15.) The search terms agreed
5Ideally, the parties should have been able to engage in good-
faith, meaningful discussions in attempting to reach an agreement
on the outstanding discovery disputes. That was not accomplished
in this case, despite the court providing the parties ample
opportunity to satisfy their discovery obligations.
on for searching Cotton’s records specifically correspond to
Request Nos. 5, 6, 7, 9, 10, 11, 15, 16, 17, and 20 in the Bain
Motion, which are identical to Request Nos. 5, 6, 7, 9, 11, 12,
16, and 21 in the Charlesbank Motion. (ECF No. 100-4 at Ex. 99.)
In light of the parties’ agreement, the court believes using these
terms is the best available method for producing a responsive,
proportional set of documents to the requests specified. These
terms will thus be used in searching the custodians specifically
noted below, which will resolve Bain Request Nos. 5, 6, 7, 9, 10,
11, 15, 17, and 20, as well as Charlesbank Request Nos. 5, 6, 7,
9, 11, 12, 16, and 21. The court understands that these terms will
be used to search “electronic sources to which the custodians have
access in the ordinary course of their work, including their email”
and any accessible shared drives/folders. (ECF No. 111 at 15-16.)
Personal text messages of the custodians are not included; the
plaintiffs do not present evidence that a significant amount of
business at either Bain or Charlesbank is done over text messages,
and a search of all additional custodians’ personal phones would
be overly burdensome and invasive.6 The relevant time period for
6Although the court ordered text messages searchable as to
defendant Jeff Webb, that order is distinguishable. (ECF No. 165.)
Webb is a named individual defendant, the founder of Varsity, and
a central figure in the litigation. A search of his text messages
is appropriate given the lesser burden, the greater likelihood of
discoverable material, and his unique role in the company.
searches will be January 1, 2015 to June 30, 2020 for the
Charlesbank custodians and June 30, 2017 to June 30, 2020 for the
Bain custodians.7
C. Proper Custodians
a. Bain
Bain has already agreed to produce documents from one
custodian: Ryan Cotton, the Managing Director of Bain since 2003
and “a member of the board of managers of the general partner of
Varsity’s indirect parent entity.” (ECF No. 111 at 10.) Cotton led
the “Impact Deal Team” that managed Bain’s acquisition of Varsity
from Charlesbank. However, eight other custodians remain in
dispute.
i. Josh Bekenstein
Josh Bekenstein is the current Co-Chairman of Bain and “is
one of the two most senior people at Bain Capital.” (ECF No. 111
at 11.) The plaintiffs note that Bekenstein’s name was on
preliminary and final offer letters regarding the Varsity deal and
allege that he has “exclusive knowledge concerning Bain’s due
diligence efforts regarding Varsity dating back to 2014.” (ECF No.
101-1 at 15.) Bain states that “Mr. Bekenstein has not had any
7January 1, 2015 to June 30, 2020 is the relevant time period
agreed to for discovery of the Varsity defendants and corresponds
to the statute of limitations in this kind of anti-trust case.
Bain did not acquire Varsity until June 2018 and the time period
is adjusted accordingly.
particular day-to-day involvement in Bain’s ownership of Varsity
since the acquisition” and that he was merely a “high level
advisor” on the Impact Deal Team (ECF No. 111 at 11.)
The undersigned finds that given Bekenstein’s high level
position in Bain, and the lack of any evidence of specific
involvement in the Varsity deal, the presence of his name on offer
letters and in management presentations is a matter of routine
business practice. The plaintiffs have not demonstrated or even
alleged that Bekenstein took an especially active role in the
Varsity deal. Any documents he would possess would likely be
duplicative of those of Cotton and the other, more active members
of the Impact Deal Team. The burden of searching Bekenstein’s
records outweighs any unique benefit that would likely come from
them. The request to add Bekenstein as an additional custodian is
denied.
ii. Jay Corrigan
Jay Corrigan is a Managing Partner and current CFO of Bain.
(Id. at 12.) The plaintiffs point to Corrigan’s signature on an
agreement with a holding company formed to facilitate Bain’s
purchase of Varsity as evidence that Corrigan is “likely to have
documents reflecting Bain’s view of Varsity’s competitive position
and valuation prior to Bain’s acquisition as well as documents
reflecting Bain’s influence on Varsity’s operations.” (ECF No.
101-1 at 16.) Bain argues that Corrigan was not part of the Impact
Deal Team and has not been involved in Bain’s ownership of Varsity.
(ECF No. 111 at 12.)
The undersigned finds that Corrigan’s signature on one
agreement with a company related to the Varsity deal is not enough
to establish the likelihood that he would possess non-duplicative
or responsive documents. Corrigan did not serve on the Impact Deal
Team and his signature is likely a matter of routine business
practice given his role at the company. The burden of searching
Corrigan’s records likely outweighs any unique benefit that would
come from them. The request to add Corrigan as an additional
custodian is denied.
iii. Spencer Dahl, Ethan Portnoy, and Kate Steinman
Spencer Dahl, Ethan Portnoy, and Kate Steinman were all
members of the Impact Deal Team, serving in different capacities
under Ryan Cotton. (Id.) The plaintiffs point to documents that
show the three attended management meetings concerning diligence
on the Varsity deal, meetings that concerned Varsity’s “plans to
target growth,” and that at least Portnoy had access to “the
Jeffries data room, where information and content relating to
Varsity was kept.” (ECF No. 101-1 at 16-17.) Bain argues that all
three were “junior-level employees, working under the supervision
of Mr. Cotton” and that “the documents they have about Varsity
would be low-level or duplicative” of Cotton’s files. (ECF No. 111
at 12.)
The undersigned finds that, even though these employees
worked under Ryan Cotton, their active roles on the Impact Deal
Team and access to the unique data room make it likely that they
will possess responsive documents. While these documents may be
duplicative of those possessed by Cotton, it is unlikely that he
was copied on every responsive document used or possessed by his
team. The burden of searching these employees’ files is outweighed
by the likely benefit that they will possess a number of highly
responsive documents. Therefore, given these employees’ level of
focus on the Varsity deal and involvement in Varsity’s business,
the request to add Dahl, Portnoy, and Steinman as additional
custodians is granted.
iv. David Hutchins
David Hutchins is the current General Counsel for “Bain’s
North American Private Investments.” (Id. at 13.) The plaintiffs
point to his listing as “Secretary” of the holding company formed
to facilitate the Varsity acquisition as evidence that he “will
have knowledge relating to Bain’s view of Varsity’s competitive
position and valuation prior to Bain’s acquisition[.]” (ECF No.
101-1 at 16.) Bain argues that Hutchins was not a member of the
Impact Deal Team and that Ryan Cotton was listed as the President
of the same holding company, making any documents Hutchins has
likely duplicative. (ECF No. 111 at 13.) Further, Bain notes that
Hutchins’s role at Bain is to provide legal advice and that any
non-duplicative documents would likely be privileged and
undiscoverable. (Id.)
The undersigned finds that Hutchins’s listing as Secretary of
the holding company is likely a matter of routine business practice
given his legal role within Bain. Further, Ryan Cotton’s role at
that holding company appears far more active; a search of his
records will likely produce any relevant evidence that Hutchins
possessed. The plaintiffs have not pointed to any evidence that
Hutchins was actively involved in the Varsity deal or the Impact
Deal Team, and Bain’s arguments regarding privilege are well taken.
The request to add Hutchins as an additional custodian is denied.
v. Tom O’Rourke
Tom O’Rourke was a “Principal in the Consumer, Retail & Dining
Vertical area at Bain at the time of Bain’s acquisition of
Varsity.” (Id.) O’Rourke also served on the Board of Directors of
Varsity Brands for almost two years after Bain’s acquisition of
the company, until leaving Bain in April 2020. (Id.) The plaintiffs
argue that O’Rourke’s presence on the Board of Directors, his
designation as “a primary contact at Bain Capital in the Project
Impact Initial Indication Summary” and presence at diligence
sessions concerning Varsity indicate that he likely possesses
responsive documents. (ECF No. 101-1 at 17.) Bain argues that
O’Rourke’s documents would likely “be a duplicative and cumulative
source of documents in this case” since Ryan Cotton’s name is
listed alongside O’Rourke’s on all the documents the plaintiffs
cite. (ECF No. 111 at 14.)
The undersigned finds that O’Rourke’s membership on the Board
of Directors and identification as the primary contact regarding
the Varsity deal’s Initial Indication Summary provide independent
reasons to believe he possesses responsive documents. O’Rourke
served a different role within the company than Cotton and appears
to have provided support for the Impact Deal Team. Further, he
served on the Board of Varsity’s parent company from the time Bain
acquired Varsity until he left Bain. The request to add O’Rourke
as an additional custodian is granted.
vi. Saron Tesfalul
Saron Tesfalul was “a Vice President of Bain at the time of
Bain’s acquisition of Varsity.”8 (Id.) The plaintiffs argue that
Tesfalul was a member of the Impact Deal Team alongside Cotton and
that “she worked with other Bain team members on Varsity Spirit
budgets and was on an email that discussed camps and competitions.”
(ECF No. 101-1 at 18.) The defendants dispute this, stating that
these emails did not discuss camps and competitions and that Ms.
Tesfalul was merely copied briefly before being dropped. (ECF No.
111 at 14.) A review of the court record also shows that Tesfalul
8The plaintiffs list Tesfalul as a “Principal, Consumer Retail &
Dining Vertical.” (ECF No. 101-1 at 18.) The undersigned has used
Bain’s description of her role here.
had access to the data room regarding the Varsity deal that has
been discussed above. (ECF No. 100-3 at 368.)
The undersigned finds that Tesfalul’s access to the data room,
role on the Impact Deal Team, and presence on emails make it likely
that she possesses responsive documents. The request to add her as
an additional custodian is granted.
b. Charlesbank
Charlesbank has already agreed to produce documents from two
custodians: Andrew Janower and Joshua Beer, Charlesbank Managing
Directors who “have sworn under oath that they were involved in
any substantive communications or documents at Charlesbank
regarding Varsity’s cheerleading business.” (ECF No. 112 at 7.)
However, six other custodians remain in dispute.
i. Kim Davis
Kim Davis is a Managing Director and a Founding Partner of
Charlesbank. (ECF No. 102-1 at 10.) The plaintiffs seek to include
Davis as a custodian because they “expect Davis will possess
knowledge of Charlesbank’s acquisition of Varsity and Varsity’s
operations and acquisitions during the relevant time period.”
(Id.) The plaintiffs claim that Davis was a “key figure involved
in the acquisition of Varsity’s rivals EPIC, Mardi Gras Sprit, and
JAM Brands[.]” (Id.) Additionally, the plaintiffs state that
“Davis is expected to possess information regarding Charlesbank’s
role in the overall management of Varsity. Documents show that
Davis was part of the larger discussions and deliberations
regarding ‘All-Star event growth’ and the ‘agreements reached with
Disney.’” (Id.) Finally, the plaintiffs believe Davis also played
a role in the deliberations of “pricing and expense strategies.”
(Id.) To support these claims, the plaintiffs cite to minutes from
the board meeting of Varsity’s indirect parent company, Hercules
VB Holding, Inc., indicating that Davis attended these meetings as
a member of the board. (ECF No. 112 at 9.) Additionally, they cite
to a board deck which includes information about acquisitions.
(Id.)
Charlesbank notes that the minutes do not show Davis as
presenting anything at the board meetings in question. (Id.) They
also claim that there is no evidence that Davis was a “key player”
because the board deck plaintiffs cite to was provided to the
entire board of directors. (Id.) Additionally, the two custodians
that Charlesbank has already agreed to, Andrew Janower and Joshua
Beer, were also present at the board meetings. (Id.)
The undersigned finds that Davis’s mere presence at board
meetings—meetings that were attended by other custodians—is not
sufficient reason to justify adding him as an additional custodian.
The plaintiffs have not demonstrated that Davis took an active
role in Varsity’s business and any documents he would possess would
likely be duplicative of those of other custodian board members.
The burden of searching Davis’s records outweighs any unique
benefit that would likely come from them. The request to add Davis
as an additional custodian is denied.
ii. Jesse Ge
Jesse Ge has been the Senior Vice President of Charlesbank
from 2017 to the present. (ECF No. 102-1 at 10.) The plaintiffs
seek to include Ge as a custodian because “Ge is listed as one of
three ‘Key Team Members’ in Charlesbank’s acquisition and
investment of Varsity.” (Id.) The plaintiffs state that
“[d]ocuments further indicate that Ge will have knowledge of
Charlesbank’s strategies to grow Varsity Spirit.” (Id.)
Additionally, the plaintiffs “expect that Ge will possess
responsive documents related to the valuation of Varsity.” (Id. at
11.) To support these claims, the plaintiffs cite to several emails
authored by Ge regarding the Varsity Spirit business.
Charlesbank states the Ge was “not even employed by
Charlesbank at the time of its acquisition of Varsity’s indirect
parent and hardly could have been a ‘key team member.’” (ECF No.
112 at 12.) They also state that Janower and Beer were copied on
the emails in question, so adding Ge as a custodian would be
duplicative. (Id.)
The undersigned finds that Ge’s role in developing Varsity
Spirit business make it likely that he will possess responsive
documents. While Janower and Beer may be copied on these emails,
it is unlikely that they are copied on every responsive document
used or possessed by Ge. The burden of searching Ge’s files is
outweighed by the likely benefit that he will possess highly
responsive documents. Therefore, the request to add Ge as a
custodian is granted.
iii. Neil Kalvelage
Neil Kalvelage is a former operating partner of Charlesbank
and held the title of CEO for Varsity Brands for “approximately 4
months” in 2017. (ECF No. 102-1 at 11.) The plaintiffs seek to
include Kalvelage as a custodian because “[his] documents,
especially those from the time he was CEO, will be highly relevant
as they will reflect Charlesbank’s influence on Varsity’s
operation.” (Id.) Additionally, the plaintiffs claim that
“Kalvelage worked closely with John Sadlow, Varsity’s director of
Strategy and Business Development and oversaw strategy, evaluated
‘threats’ and acquired Spirit Celebration as a ‘defensive play’
against other independent event producers.” (Id.) The plaintiffs
include emails between Kalvelage and Sadlow regarding the Spirit
Celebration acquisition.
Charlesbank argues that adding Kalvelage as a custodian would
be duplicative. (ECF No. 112 at 13.) The undersigned finds that
Kalvelage’s unique involvement as CEO of Varsity and his prominent
position at Charlesbank make it likely that a search of his files
would recover highly responsive documents. The likely benefit of
adding Kalvelage as a custodian outweighs the burden on
Charlesbank. Therefore, the request to add Kalvelage as a custodian
is granted.
iv. David Katz
David Katz has been a principal at Charlesbank from 2013 to
present. The plaintiffs seek to include Katz as a custodian because
“he is listed as one of the ‘Key Team Members’ in Charlesbank’s
acquisition and investment of Varsity as well as a key member of
the Impact Deal Team.” (ECF No. 102-1 at 11.) The plaintiffs state
that “Katz is expected to possess relevant information regarding
the holdings, increased valuation of Varsity, and Varsity’s
competitive position in the cheer market.” (Id.) The plaintiffs
also add that “before the sale to Bain, Katz played a role in the
strategizing on the acquisitions of rival apparel manufactures.”
(Id.) The plaintiffs cite to emails written by Katz regarding an
acquisition of an apparel company.
Charlesbank argues that Varsity’s “valuation” has no
relevance in this case. (ECF No. 112 at 10.) Additionally,
Charlesbank states “despite having access to Varsity’s entire
production relating to acquisitions, [plaintiffs] cite only three
documents about a short-lived and never consummated transaction in
2015, outside the applicable statute of limitations.” (Id.)
Charlesbank also argues that other Varsity custodians were
included on these emails, so discovery from Katz would be
duplicative. (Id.) Finally, they claim that Katz has not been
significantly involved with Varsity since 2018. (Id.)
The undersigned finds that Katz’s position on the Impact Deal
Team and his involvement in strategizing Varsity acquisitions make
it likely that he will possess responsive documents. The burden of
searching Katz’s files is outweighed by the benefit that he will
likely possess highly responsive documents. Therefore, the request
to add Katz as a custodian is granted.
v. Brian Pegno
Brian Pegno has been an associate at Charlesbank from 2019 to
present. The plaintiffs seek to add Pegno as a custodian because
“[he] was a key member of the Varsity team and is expected to have
knowledge regarding Varsity’s valuation.” (ECF No. 102-1 at 11.)
Charlesbank points out that Pegno has only worked at
Charlesbank since the company sold its majority interest in Varsity
to Bain. (ECF No. 112 at 11.) The plaintiffs have not included any
documents to support Pegno’s inclusion besides a citation to an
older version of Charlesbank’s website which is no longer
accessible. (ECF No. 102-1 at 11.) As a result, the undersigned
finds that the burden of adding Pegno as a custodian outweighs the
likely benefit to the plaintiffs. Therefore, the request to add
Pegno as a custodian is denied.
vi. Brandon White
Brandon White has been a managing director at Charlesbank
from 1997 to present. (ECF No. 102-1 at 11.) The plaintiffs seek
to add White as a custodian because “[he] played a key role in the
acquisition of Varsity and in the management of Varsity after
acquisition.” (ECF No. 102-1 at 11.) The plaintiffs claim that
“White participated in the discussion regarding the acquisition of
Varsity’s largest competitor JamBrands and other key competitors.”
(Id.) The plaintiffs also state that White “possesses knowledge
regarding Charlesbank’s role in formulating Varsity’s business
strategies as a member of Varsity Brands’ Board of Directors.”
(Id.) Additionally, the plaintiffs argue that “White will have
responsive information regarding officer compensation as he
corresponded with Defendant Jeff Webb regarding his equity share
and compensation.” (Id. at 12.) Finally, the plaintiffs say that
“White oversaw the agreement between Varsity and Disney World
Resort.” (Id.) The plaintiffs cite to emails that show White was
included in the discussion of the acquisition of JamBrands and
Omni, an email showing White drafted the agenda for a Varsity board
meeting, and an email chain which shows he was involved with the
contract between Varsity and Disney World Resort.
Charlesbank argues that adding White as a custodian would be
duplicative and cumulative of other custodians. (ECF No. 112 at
11.) The undersigned finds that White’s significant involvement in
various aspects of Varsity’s business and his prominent role at
Charlesbank make it likely that he will be in possession of highly
responsive documents. The burden of searching White’s files is
outweighed by the benefit that he will likely possess highly
responsive documents. Therefore, the request to add White as a
custodian is granted.
D. Production of Financial Analyst Reports
The plaintiffs request production of “[a]ll financial
analysts’ reports by Moody’s, Standard and Poor’s, or other rating
agencies’ reports, including all drafts thereof, concerning the
acquisition of Varsity by Bain or Charlesbank and/or other buyers
who had a proposal or expression of interest concerning any
acquisition merger, consolidation, business combination, or other
similar transaction or series of transactions involving Varsity or
its subsidiaries.” (ECF Nos. 101-1 at 8; 102-1 at 7.) On December
3, 2021, the parties emailed the court a list of outstanding
disputes between the parties. In that email, defendants stated
“[u]pon further inquiry, Bain [and Charlesbank have] determined
[they do] not have documents of the kind described, making this
request moot.” Within seven days of the entry of this order,
defendants are ordered to verify that these documents do not exist
in a discovery response.
E. Production of Joint Defense Agreement and Judgment Sharing
Agreement
The plaintiffs seek production of “documents referring or
relating to any joint defense, contribution, indemnification
Agreements, or judgment sharing Agreement relating to any
investigation, civil or criminal litigation involving the
marketing of Competitive Cheer, Apparel, or Camp.” (ECF Nos. 101-
1 at 9; 102-1 at 8.) They argue that “discovery of any joint
defense agreements is important because it will explain the extent
to which the Defendants have agreed to exchange confidential
information for their mutual benefit, and the extent to which that
information may be protected from disclosure.” (ECF Nos. 101-1 at
10; 102-1 at 9.) They further argue that a judgment sharing
agreement “will be needed to inform assessment of class sales,
damages, and potential settlement factors, such as whether any
sales of settling defendants would be reduced by any agreement.”
(Id.)
Bain and Charlesbank object to the discovery of any joint
defense agreement because any such agreement is not relevant to
the allegations in the complaint and would reveal the defendants’
defense strategy. (ECF Nos. 111 at 11-12; 112 at 13-14.) They also
state the request for a judgment sharing agreement is moot because
no such agreement exists. (ECF Nos. 111 at 12; 112 at 14.)
Pursuant to Rule 26(b)(1), discovery must be “relevant to any
party’s claim or defense[.]” Fed. R. Civ. P. 26(b)(1). This court
finds that the plaintiff has failed to show that a joint defense
agreement is relevant to the claim or defense of any party. See
Broessel v. Triad Guar. Ins. Corp., 238 F.R.D. 215, 218 (W.D. Ky.
2006). For this reason, the undersigned concludes any joint defense
agreements are not discoverable.9 Bain and Charlesbank are ordered
to verify that no judgment sharing agreement exists in a discovery
response within seven days of the entry of this order.
III. CONCLUSION
In sum, it is hereby ORDERED that:
• The search terms listed in ECF No. 100-4, Ex. 99 be used
to search the following custodians:
o Ryan Cotton
o Spencer Dahl
o Ethan Portnoy
o Kate Steinman
o Tom O’Rourke
o Saron Tesfalul
o Andrew Janower
o Joshua Beer
9Although a joint defense agreement is currently not relevant, if
the defendants ever assert the joint defense or common legal
interest privilege to withhold information in discovery, the
agreement may then become relevant. See Blackmon v. Bracken
Construction Company, Inc. 338 F.R.D. 91, 94 (W.D. La. 2021)
(reviewing Joint Defense Agreement in camera and allowing portions
of it to be produced). At that point, defendants’ argument that
such a document would reveal their defense strategy would need to
be addressed.
o Jesse Ge
o Neil Kalvelage
o David Katz
o Brandon White
• The relevant time periods for these searches be January
1, 2015 to June 30, 2020 for the Charlesbank custodians
and June 30, 2017 to June 30, 2020 for the Bain
custodians.
• Bain and Charlesbank verify in a discovery response that
no documents responsive to Bain Request No. 12 and
Charlesbank Request No. 13 exist within seven days of the
entry of this order.
• Bain and Charlesbank verify in a discovery response that
no judgment sharing agreement between the defendants
exists within seven days of the entry of this order.
• The plaintiffs’ request for production of the joint
defense agreement between the defendants in this case be
DENIED.
• The plaintiffs’ requests to add Josh Bekenstein, Jay
Corrigan, David Hutchins, Kim Davis, and Brian Pegno be
DENIED.
IT IS SO ORDERED.
s/ Tu M. Pham ____
TU M. PHAM
Chief United States Magistrate Judge
December 13, 2021_______
Date