Ultra-Mek, Inc. v. Man Wah (USA), Inc.

318 F.R.D. 309, 2016 WL 7471315, 2016 U.S. Dist. LEXIS 179120
District Court, M.D. North Carolina·Decided December 28, 2016·No. 1:16CV41·Published·Cited by 4 cases

Opinion

MEMORANDUM OPINION AND ORDER

N. Carlton Tilley, Jr., Senior United States District Judge

This matter is before the Court on Plaintiff Ultra-Mek, Inc.’s (“Ultra-Mek”) Motion to Compel [Doc. # 19] entitled “Plaintiff Ultra Mek, Ine.’s Motion to Compel Defendant Man Wah to Provide Responses to Discovery Requests and Patent Local Rule Requirements”. In its motion, Ultra-Mek seeks an order requiring Defendant Man Wah (USA), Inc. (“Man Wah”) to (a) produce documents, things, and information in the possession of three of its affiliates, (b) otherwise more completely respond to Ultra-Mek’s interrogatories and requests for production of documents, and (c) fully comply with Local Patent Rules applicable to Man Wah’s invalidity contentions. Man Wah responded with a brief in opposition to the motion [Doe. #30] after which Ultra-Mek replied in further support of its motion [Doc. # 40].

After the motion was fully briefed, on October 14, 2016, Man Wah’s counsel filed a declaration to which he attached “Defendant’s Second Amended and Supplemental Objections and Responses to Plaintiff Ultra-Mek’s First Set of Interrogatories to Defendant Man Wah (USA), Inc.” and “Defendant’s Amended and Supplemental Objections and Responses to Plaintiff Ultra-Mek’s First Set of Requests for Production of Documents”, which had been served on October 14 and October 5, respectively. [Doe. # 47.] Soon thereafter, in response to Ultra-Mek’s objection that the declaration was an unper-mitted sur-reply, Man Wah sought and received the Court’s permission to file a sur-reply in further opposition to the motion, which it then filed on October 19, 2016 and to which it attached the same revised discovery responses as it had attached to counsel’s declaration. [Docs. # 50, 51.] Ultra-Mek then filed its own sur-reply. [Doc. # 55.]

For the reasons explained below, Ultra-Mek’s motion with respect to documents in the possession of three of its affiliates is granted. The motion with respect to Man Wah’s discovery responses is denied. Ultra-Mek’s motion with respect to Man Wah’s invalidity contentions is granted.

I.

“The purpose of discovery is to provide a mechanism for making relevant information available to the litigants.” Fed. R. Civ. P. 26, advisory committee’s notes, 1983 Amendment. Not only does the information “need not be admissible in evidence to be discoverable”, but the “[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).

Rule 34 of the Federal Rules of Civil Procedure provides, in relevant part, that “[a] party may serve on any other party a request within the scope of Rule 26(b)... to produce and permit the requesting party or its representative to inspect, copy, test, or sample [various items] in the responding party’s possession, custody, or control.”

[312]*312Ultra-Mek argues that Man Wah “has possession, custody, or control over relevant information, documents, and things in the possession, custody, or control of its affiliates” namely Man Wah Holdings, Ltd. (“Man Wah Holdings”), Remaco Machinery Technology (Wujiang) Co. Ltd. (“Remaco”), and Man Wah Furniture Manufacturing (Huizhou) Co., Ltd. (“Man Wah Furniture”). (Ultra-Mek’s Mot. to Compel; Ultra-Mek’s Br. in Supp. of Mot. to Compel at 9 [Doc. # 20].) Man Wah disputes this.

In support of its argument, Ultra-Mek directs the Court to Uniden America Corp. v. Ericsson, Inc., 181 F.R.D. 302 (M.D.N.C. 1998), for a discussion of the factors used to determine whether documents in the possession of one corporation can be deemed to be under the control of another corporation. (Ultra-Mek’s Br. in Supp. of Mot. to Compel at 3-6.) On the other hand, Man Wah argues that Uniden is not only not binding precedent, but that it “is in conflict with subsequent decisions by North Carolina federal courts which appear to require more before ordering a subsidiary to produce documents from non-parties.” (Man-Wah’s Opp’n to Mot. to Compel at 10.) Man Wah cites In re: NC Swine Farm Nuisance Litigation, No. 5:15-CV-13-BR, 2016 WL 3661266 (E.D.N.C, July 1, 2016) in support of the proposition that the defendant must have a legal right to the material that the plaintiff seeks. (Id. at 10-11.)

“In ruling on Rule 34 motions to compel a corporation to produce documents from another corporation, the courts have defined ‘control’ to include both the legal right to control the company and the actual ability.” Uniden, 181 F.R.D. at 305; see also Steele Software Sys., Corp. v. DataQuick Info. Sys., Inc., 237 F.R.D. 561, 564 (D. Md. 2006) (“ ‘Control’ has been construed broadly by the courts as the legal right, authority, or practical ability to obtain the materials sought on demand.”).

The court in In re: NC Swine Farm distinguished Uniden, which it described as using “a practical-ability-to-obtain analysis” for determining control, from the Eastern District of North Carolina, which has adopted the legal-right-to-documents test. 2016 WL 3661266, at *4. The court explained that “[documents are deemed to be within the possession, custody, or control of a party if the party has actual possession, custody, or control or the legal right to obtain the documents on demand.” Id. at *3 (emphasis added).

A close look at the court’s opinion in In re: NC Swine Farm further explains the circumstances under which that court adopted the legal-right-to-documents test. “When information is readily attainable through a subpoena duces tecum, no compelling reason exists to expand the definition of control.” Id. at *3 (quoting Bleecker v. Standard Fire Ins. Co., 130 F.Supp.2d 726, 739 (E.D.N.C. 2000)). In In re: NC Swine Farm, “there [was] no dispute that the information sought by Plaintiffs [was] ‘readily attainable through a subpoena,’ and Plaintiffs [had], in fact, served a subpoena.... Therefore, under the circumstances presented, the court need not ‘expand the definition of control.’” Id. at *4 (internal citation omitted).

Here, though, neither party has informed the Court that a subpoena duces tecum has been served on any of Man Wah’s affiliates nor has either party argued, nor is it clear to the Court, that the information sought from these affiliates is readily attainable through a subpoena. In light of these circumstances, the praetical-ability-to-obtain test, as opposed to the legal-right-to-documents test, will be used to determine whether documents in the possession of Man Wah’s affiliates are under Man Wah’s control such that it can be compelled to produce them.

Other district courts within the Fourth Circuit have continued to use this test, as well. As similarly described in Uni-den, the factors courts analyze include

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Ultra-Mek, Inc. v. Man Wah (USA), Inc., 318 F.R.D. 309, 2016 WL 7471315, 2016 U.S. Dist. LEXIS 179120 (M.D.N.C. 2016).

318 F.R.D. 309 (Ultra-Mek, Inc. v. Man Wah (USA), Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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