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Jos. A. Bank Clothiers, Inc. v. J.A.B.-Columbia, Inc.

United States District Court, D. Maryland

January 6, 2017

Jos. A. Bank Clothiers, Inc.
v.
J.A.B.-Columbia, Inc. et al .;

          ORDER

          Sincerely, Stephanie A. Gallagher United States Magistrate Judge.

         Dear Counsel:

         On October 9, 2015, Plaintiff Jos. A. Bank Clothiers, Inc. (“Jos. A. Bank”) filed a complaint against three of its South Carolina franchisees: Defendants J.A.B.-Columbia, Inc., J.A.B.-Harbison, Inc., and J.A.B.-Forest Drive, Inc. (“Franchisees”). [ECF No. 1]. Plaintiff seeks a declaratory judgment regarding a dispute with Defendants over the right, if any, to renew the franchise stores under the parties' franchise agreements. Id. Defendants filed counterclaims for declaratory judgment, breach of contract, and intentional and/or reckless misrepresentation. [ECF No. 10]. The case was referred to me for discovery, specifically Plaintiff's Motion for Protective Order. [ECF No. 42]. Presently pending is Plaintiff's Motion for Protective Order and the opposition and reply thereto. [ECF Nos. 41, 43, 45]. No hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons set forth herein, Plaintiff's Motion for Protective Order, [ECF No. 41], is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         On December 16, 2015, Judge Hollander submitted a draft scheduling order providing a discovery deadline of May 20, 2016. [ECF No. 12]. On January 20, 2016, Judge Hollander held a telephone conference to discuss the discovery schedule. That day, the parties submitted a joint status report stating that they would participate in private mediation. [ECF No. 17]. Accordingly, Judge Hollander entered a scheduling order providing a revised discovery deadline of September 20, 2016. [ECF No. 18]. On August 1, 2016, Judge Hollander, at the parties' request, extended the discovery deadline to November 21, 2016. [ECF No. 31].

         On October 21, 2016, Defendants served Plaintiff a Rule 30(b)(6) deposition notice seeking witness testimony on several topics. [ECF No. 39]. Defendants supplemented their notice on October 28, 2016. Id. On November 10, 2016, the parties met and conferred by telephone to discuss Plaintiff's objections to Defendants' deposition notice, but were unable to resolve their disputes. Id. On November 7, 2016, Defendants sought a further extension of the discovery deadline to February 20, 2017. [ECF No. 32]. On November 17, 2016, Judge Hollander granted Defendants' request in part, and modified the discovery deadline to January 25, 2017. [ECF No. 38]. In her order, Judge Hollander noted that both parties “[bore] some responsibility for the fact that discovery is not yet complete, ” and that “the parties have [not] genuinely satisfied their affirmative duty to cooperate regarding discovery.” Id. On November 21, 2016, Plaintiff filed the instant Motion for Protective Order to strike or limit several 30(b)(6) deposition topics as “demonstrably irrelevant, ” “oppressive, ” and “not reasonably calculated to lead to the discovery of admissible evidence.” [ECF No. 41]. Defendants contend that the deposition topics are relevant and discoverable. [ECF No. 43].

         II. LEGAL STANDARD

         Parties may obtain discovery “regarding any non-privileged matter that is relevant to any party's claim or defense.” Fed.R.Civ.P. 26(b)(1). Under Federal Rule of Civil Procedure 26(b), relevance, rather than admissibility, governs whether information is discoverable. See Fed. R. Civ. P. 26(b)(1); Herchenroeder v. Johns Hopkins Univ. Applied Physics Lab, 171 F.R.D. 179, 181 (D. Md. 1997). Information sought need only “appear[] [to be] reasonably calculated to lead to the discovery of admissible evidence” to pass muster. See Innovative Therapies, Inc. v. Meents, 302 F.R.D. 364, 377 (D. Md. 2014). However, even in the case of relevant information, “the simple fact that requested information is discoverable under Rule 26(a) does not mean that discovery must be had.” Nicholas v. Wyndham Int'l, Inc., 373 F.3d 537, 543 (4th Cir. 2004). Instead, Rule 26(b) inserts a proportionality requirement into the amount and content of the discovery sought, and requires courts to consider the “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). Significantly, Rule 26(c)(1) permits courts to, “for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c)(1).

         Where a protective order is sought, the moving party bears the burden of establishing good cause. Webb v. Green Tree Servicing, LLC, 283 F.R.D. 276, 278 (D. Md. 2012). To determine whether the movant has met his burden, the court must balance the “interest of a party in obtaining the information versus the interest of his opponent in keeping the information confidential or in not requiring its production.” UAI Tech., Inc. v. Valutech, Inc., 122 F.R.D. 188, 191 (M.D. N.C. 1988). In other words, “the Court must weigh the need for the information versus the harm in producing it.” A Helping Hand, LLC v. Baltimore Cnty., Md., 295 F.Supp.2d 585, 592 (D. Md. 2003) (internal quotation marks omitted). Despite the broad discretion conferred on trial courts to “decide when a protective order is appropriate and what degree of protection is required, ” see Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984), the standard for issuance of a protective order is high. Minter v. Wells Fargo Bank, N.A., 258 F.R.D. 118, 125 (D. Md. 2009).

         III. DISCUSSION

         Plaintiff seeks to: (1) strike eight deposition topics regarding Plaintiff's course of dealing and employment of two former managers, Mr. Bell and Mr. Finley; and (2) limit the scope of questioning regarding “the concept of ‘evergreen renewals.'” [ECF No. 41]. For the reasons discussed below, Plaintiff's Motion will be granted in part and denied in part.

         As a preliminary matter, the Court must decide what law to apply. The Court has diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332(a)(1). [ECF No. 1]. Thus, the Court must apply the substantive law of the state in which the action arose, see Nationwide Mut. Ins. Co. v. Welker, 792 F.Supp. 433, 437 (D. Md. 1992) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)), and the choice of law rules of the forum. See Harvard v. Perdue Farms, Inc., 403 F.Supp.2d 462, 466 (D. Md. 2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). Under Maryland choice of law rules, Maryland courts generally enforce choice of law provisions in contracts. See Cunningham v. Feinberg, 441 Md. 310, 326, 107 A.3d 1194, 1204 (2015) (citing Am. Motorists Ins. Co. v. ARTRA Grp., Inc., 338 Md. 560, 572, 659 A.2d 1295, 1301 (1995)). Thus, because the Franchise Agreements expressly provide that they shall be governed by Maryland law, the Court will apply Maryland law.

         As background, under Maryland law, the threshold question in a contract dispute is whether the terms of the contract are ambiguous. Point's Reach Condominium Council of Unit Owners v. Point Homeowners Ass'n, Inc., 213 Md.App. 222, 73 A.3d 1145, 1163 (2013) (holding that “[w]hen a writing is ambiguous, extrinsic evidence is admissible to determine the intentions of the parties to the document.”). Discovery of extrinsic evidence to aid the interpretation of contract language “is only admissible after the court finds the contract to be ambiguous.” Sy-Lene of Washington, Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157, 162, 829 A.2d 540, 544 (2003). Contract language is ambiguous “if, to a reasonably prudent person, the language used is susceptible of more than one meaning and not when one of the parties disagrees as to the meaning of the subject language.” Bd. of Educ. of Charles Cnty., 569 A.2d at 1296; see Sierra Club v. Dominion Cove Point LNG, L.P., 216 Md.App. 322, 86 A.3d 82, 89 (Md. Ct. Spec. App. 2014) (“[T]he mere fact that the parties disagree as to the meaning does not necessarily render [a contract] ambiguous.”). In this case, the parties dispute the interpretation of the franchise agreements' renewal provision. Specifically, that provision grants Defendants the right “to buy a successor franchise for the Store” if certain outlined terms and conditions are satisfied. [ECF No. 1] (citing Exs. 1-3, §§ 16.01, 16.03). Plaintiff claims that this contract language is unambiguous and forecloses Defendants' claim, because it limits Defendants to a single franchise renewal. [ECF No. 41]. Defendants contend, however, that the contract language grants them multiple successor franchises, or that, alternatively, the contract language is ambiguous and warrants the discovery of extrinsic evidence. [ECF No. 43].

         Ultimately, however, the Court need not reach the question of the agreements' alleged ambiguity here.[1] As noted above, Rule 26(b)(2) requires a court, upon receipt of a Motion for Protective Order, to limit discovery to insure that it is proportional to what is in dispute in the litigation. Webb v. Green Tree Servicing LLC, No. CIV. ELH-11-2105, 2012 WL 3139551, at *3 (D. Md. July 27, 2012); see Fed. R. Civ. P. 26(b)(2)(C). The rule identifies the following factors to be considered: whether the discovery sought is unreasonably cumulative or duplicative; whether the information sought is obtainable from some other more convenient, less burdensome or inexpensive source; whether the party seeking the information already has had adequate opportunity to obtain the information; and whether the burden or expense of the proposed discovery outweighs its likely benefit, taking into consideration the following: the needs of the case, the amount in controversy, the resources of the parties, the importance of the issues at stake in the litigation and of the discovery sought to the resolution of the issues. Thompson v. U.S. Dep't of Hous. & Urban Dev., 219 F.R.D. 93, 98 (D. Md. 2003); see Fed. R. ...


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