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Blue Zenith, LLC v. Rohde

United States District Court, Second Circuit

October 9, 2013

BLUE ZENITH, LLC, Plaintiff,
v.
PATRICK ROHDE, Defendant
v.
CAMPUS LABS, LLC, ERIC REICH, and MICHAEL WESMAN, Counterclaim Defendants.

DECISION AND ORDER

H. KENNETH SCHROEDER, Jr., Magistrate Judge.

This case was referred to the undersigned by the Hon. Richard J. Arcara, pursuant to 28 U.S.C. § 636(b)(1), for all pretrial matters and to hear and report upon dispositive motions. Dkt. #25.

Blue Zenith, LLC ("Blue Zenith"), commenced this action against it's former employee, Patrick Rohde, seeking a declaration that its termination of Mr. Rohde on August 5, 2012 was for cause as defined in its employment agreement with Mr. Rohde, thereby relieving Blue Zenith of liability on an employment contract worth at least $300, 000 in remaining salary and other benefits. Dkt. ##1 & 8. Mr. Rhode asserted counterclaims against Blue Zenith and joined Blue Zenith's predecessor, Campus Labs, LLC ("Campus Labs"), Eric Reich, and Michael Wesman as third party defendants, alleging breach of an employment agreement; breach of a duty of good faith and fair dealing with respect to the employment agreement; age discrimination in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq .; and fraudulent conveyance of the assets of Campus Labs to Higher One Holdings, Inc., for approximately $38.4 million in cash in an effort to render Campus Labs judgment proof, thereby avoiding liability to Mr. Rohde as set forth in the employment agreement. Dkt. #8.

Currently before the Court is defendant's motion to compel the counterclaim defendants to produce all non-privileged documents responsive to his March 14, 2013 request for production of documents and to pay reasonable expenses, including attorney's fees, necessitated by this motion to compel. Dkt. #41. For the following reasons, the motion is granted.

BACKGROUND

Defendant's requests for production of documents from the third party defendants are dated March 14, 2013. Dkt. ##41-3; 41-4 & 41-5. Vincent Miranda, counsel for the third party defendants, affirms that he received an external hard drive containing approximately 465, 000 potentially responsive electronically stored items from his clients on April 5, 2013. Dkt. #43. In light of the volume of documents and counsels' vacation plans, Mr. Miranda requested from defendant's counsel, Justin Bounds, an extension of his April 12th deadline to respond to Mr. Rohde's document demands to May 10, 2013, but Mr. Bounds only granted an extension to April 15, 2013. Dkt. ##43, ¶¶ 3-4 & 43-1. By response dated April 15, 2013, the third party defendants advised that, subject to and without waiving their objections, they would "produce documents at a later date to the extent that responsive documents exist." Dkt. ##41-6; 41-7 & 41-8. Thereafter, the parties negotiated search terms for the electronically stored information ("ESI"). Dkt. ##41-2, ¶ 8; 41-9; 41-10; 43, ¶¶ 7-9 & 43-2.

By e-mail dated April 24, 2013, Mr. Bounds, proposed an extension of the Case Management Order discovery deadline of July 1, 2013 by 90 days. Dkt. #41-11. By letter dated April 26, 2013, Mr. Miranda requested the extension from the Court, advising that due to, inter alia , "a voluminous amount of electronic documents that could amount to over [] 100, 000 documents, the parties are negotiating search terms to facilitate a thorough but efficient discovery exchange." That request was granted by Order entered April 29, 2013. Dkt. #39.

By e-mail dated April 30, 2013, Mr. Bounds asked if he would see proposed search terms today. Dkt. #41-12. Later that day, Mr. Miranda e-mailed Mr. Bounds a red-line of the proposed search terms and advised that Mr. Rohde's mailbox had been deleted following his termination, but that e-mails between Mr. Rohde and internal employees could be obtained. Dkt. #41-13.

On May 1, 2013, Mr. Miranda and Mr. Bounds agreed to the search terms. Dkt. #41-2, ¶ 13.

On May 2, 2013, Mr. Bounds sent an e-mail seeking to narrow the search by removing a custodian from the search list and otherwise requesting the search commence. Dkt. #41-13.

By letter and e-mail dated May 3, 2013, Mr. Bounds requested production of documents by May 9. Dkt. #41-15. Specifically, the letter advised that:

On March 14, 2013, we served your clients, Campus Labs, Eric Reich, and Michael Weisman with Defendant's requests for the production of documents. Documents responsive to those discovery requests were due no later than Tuesday, April 16.
Instead of producing responsive documents, on April 15 your clients merely sent general objections and stated that they would "produce documents at a later date." To that end, I sent e-mails to you on April 22, 23, 24, and 30, and called your office on April 23, 24, 25, and 26, and again on May 1 in an attempt to expedite production. But, to date, your clients have not produced even a single responsive document. Moreover, you have indicated to me by phone that you do not expect to complete your production in May, and you are unsure about June. That timeline is unacceptable.
This letter is the Defendant's good faith attempt to resolve this matter without the need for court intervention. Your clients have already had 50 days to produce the documents. That should suffice. Please have your client provide all non-privileged documents responsive to Defendant's discovery requests no later than the close of business on Thursday, May 9. If we do not receive the documents, Defendant ...

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