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holding that a 14-day period cannot be held to be unreasonable
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CIVIL ACTION NO. 03-1496 c/w 03-1664 SECTION: "A" (4)
March 22, 2004
MINUTE ENTRY
On March 1, 2004, the defendant, Offshore Specialty Fabricators, Inc. ("OSFI"), filed a Motion to Compel More Complete and/or Supplemental Discovery Responses (doc. #67) seeking an order compelling the plaintiff to provide responses to OSFI's Interrogatories and Request for Production of Documents propounded on or about January 13, 2004.
On March 2, 2004, the plaintiff, Freeport filed the following motions: 1.) Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon K-1 USA Ventures, Inc. and for Protective Order (doc. #72); 2.) Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon McMoran Exploration Company and for Protective Order (doc. #74); 3.) Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon Randal and Dewey and for Protective Order (doc. #76); 4.) Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon Chevron/Texaco. and for Protective Order (doc. #78); and 5) Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon K-MC Venture I LLC and for Protective Order (doc. #80). A hearing on these motions was held on March 17, 2004. During the hearing, both OSFI and Freeport advanced several arguments regarding the responses and/or documents at issue and the subpoenas served. For the sake of clarity, these arguments will be considered below with the corresponding discovery requests and motions to quash and/or for protective order.
I. Factual and Procedural Background A. Freeport and Mullen
This suit arises from a claim filed by Freeport regarding Purchase and Sale Agreements entered into between Freeport and defendant Mike Mullen Energy Equipment Resource, Inc. ("Mullen"). On June 13, 2001 and January 15, 2002, Freeport and Mullen entered into agreements by which Freeport agreed to sale certain rigs and related equipment located on Freeport's oil and gas platforms, works, structures and facilities.
In the first agreement, entered into on June 13, 2001, Freeport agreed to sale a certain rig and related equipment located on Freeport's Control Platform, and a certain rig and related equipment located on Freeport's Main Pass 299 Production Platform No. 2. Pursuant to the agreement, Mullen agreed to take delivery of the rigs and related equipment at its own expense. Freeport alleges that on June 13, 2001, it assigned the Control Platform Rig and Production Platform Rig No. 2 to Mullen, subject to the terms of the Purchase and Sale Agreement.
In the second agreement, entered into on January 15, 2002, Freeport agreed to sale another rig and additional equipment located on the MPM Facilities. The sale included equipment located in Freeport's Power Plant and a rig and related equipment located on Freeport's Main Pass 299 Production Platform No. 1. Under this agreement Mullen agreed to take delivery of the assets at its own expense. Further, Mullen agreed to take delivery no later than February 28, 2002, to be completed by March 31, 2002. Freeport assigned the assets to Mullen subject to the terms and agreements of the second agreement.
The agreement provided that if Mullen failed in its obligations under the terms of the second agreement, Freeport had the following rights: 1) to collect rent and/or storage fees; 2) to collect extra expenses incurred by Freeport as a result of having to work around the assets; 3) to cause the assets to be removed and to be reimbursed by Mullen; 4) to terminate the agreement and keep the deposit; and 5) to enforce or recover any and all remedies or damages allowed by law.
Freeport alleges that Mullen has failed to take delivery of the Control Platform Rig, the Production Platform No. 1 and the Production Platform No. 2 Rigs. Freeport alleges that as a result of the failure, it has incurred and continues to incur, damages and Freeport is prevented from performing necessary modifications to the MPM facilities.
B. OFSI Involvement 1. OSFI's Dealings with Mullen
Offshore Specialty Fabricators, Inc., is a fabrication company located in Houma, Louisiana, that specializes in construction and removal of offshore mineral platforms. Subsequent to Freeport's January 15, 2002, Purchase and Sale Agreement with Mullen, Mullen and OSFI entered into an agreement. OSFI was to remove only the Power Plant Equipment from the Power Plant Platform in exchange for $55,000 and an assignment by Mullen of one piece of the Power Plant Equipment.
In January and February of 2003, Freeport alleges that at Mullen's request, and absent Freeport's advance knowledge or consent, OSFI removed the Power Plant Equipment from Freeport's MPM facilities and relocated it to OSFI facilities in Houma. However, the assets from the Control Platform Rig, the Production Platform No. 1 Rig and the Production Platform No. 2 Rig, along with related equipment, had still not been removed. Thus, Freeport allegedly instructed OSFI to hold the removed equipment pending Mullen's removal of the remaining purchased assets.
Freeport filed this action on May 27, 2003. In its First Amended and Restated Complaint, Freeport alleges that on May 28, 2003, Mullen demanded that OSFI turn over to Mullen one piece of the equipment in OSFI's possession because Mullen had agreed to sell to a third party. Freeport was notified by OSFI of Mullen's demand on June 2, 2003, and Freeport indicated to OSFI that Mullen did not have proper ownership of the piece of equipment due to its failures under the agreements.
Rec. Doc. No. 1.
Rec. Doc. No. 15.
OSFI refused to turn over the equipment, indicating that the dispute between Mullen and Freeport needed to be resolved. Further, OSFI filed a complaint on June 11, 2003, seeking declaratory judgment of the rightful owner of the equipment. These matters were consolidated on June 20, 2003. OSFI further sought a declaration that it is the rightful owner of the equipment assigned to OSFI by Mullen in exchange for removal and storage services rendered by OSFI to Mullen.
Rec. Doc. No. 3.
Freeport alleges that notwithstanding the dispute, on June 13, 2003, OSFI delivered to Mullen the equipment in dispute. Subsequently, upon OSFI's motion, its complaint for declaratory judgment was dismissed on the grounds that an agreement had been reached with Mullen that resolved the dispute of OSFI. 2. OFSI's Turnkey Contract with Freeport
Rec. Doc. No. 8.
Around March 28, 2002, OSFI and Freeport entered into a Turnkey Contract for the removal, site clearance and scrapping of Main Pass Block 299, Freeport facilities located in the Gulf of Mexico, off the coast of Louisiana. The work was to be done in two phases. Freeport alleges that under phase I, OSFI was to remove all facilities with the exception of certain facilities, including Production Platform No. 1 and Production Platform No. 2.
This phase I work was to be completed as soon as practicable, but no later than 12 months after final government permitting and/or delays from Freeport or Freeport's subcontractors or any shorter time frame as may be practicable and stipulated by the Minerals Management Service ("MMS"). OSFI contends that it received final approval from MMS in August of 2002, and OSFI completed the phase I work on August 5, 2003.
See Rec. Doc. No. 24.
See Rec. Doc. No. 74, OSFI's Memorandum in Opposition to Quash Subpoena Duces Tecum Served Upon K-l USA Ventures, Inc. and for Protective Order, p. 2.
Phase II work was to be complete only upon instruction by Freeport. OSFI urges that it never received notice from Freeport of Freeport's desire for OSFI to move forward with the phase II reclamation activities as contemplated by the Turnkey Contract.
Under the Turnkey Contract, OSFI was entitled to receive certain contingent payments if Freeport received proceeds from sale transactions with Chevron U.S.A. and Canadian Crude Separators. However, an amendment to the Turnkey Contract in August of 2002, provided that compensation for phase I activities would be paid to OSFI in the amount of $13 million.
Further, any obligations performed by OSFI outside of phase I were to be made on a contingent basis as described above. Freeport asserts that also in August of 2002, the Turnkey Contract was orally amended to eliminate OSFI's participation in the alternative uses of the Main Pass 299 facilities.
Id. at 3.
OSFI asserts that Freeport undertook efforts to secure funding sources for the $13 million owed to OSFI under the contract as amended. Freeport contacted oil and gas producers inquiring whether they were interested in purchasing Freeport's oil or sulphur leases and/or pursuing alternative uses of the Main Pass 299 Facilities.
In December of 2002, Freeport, McMoran Exploration Co. (Freeport's parent corporation), and K1 Production Corporation allegedly entered into an agreement ("Venture Agreement") to form a joint venture known as K-MC Venture I, LLC ("K-MC I"). The agreement provided that K-MC Venture I, LLC would acquire Freeport's Main Pass 299 oil lease and facilities. K1 Production Corporation ("K1 USA") agreed to provide credit support for bonding requirements with the MMS relating to Freeport's abandonment obligations for it Main Pass 299 Facilities.
Pursuant to the Venture Agreement, Freeport received $13 million specifically to fund its obligations to OSFI under the amended Turnkey Contract. Additionally, the Venture Agreement gave K-MC I the option to acquire Freeport's Main Pass sulphur facilities (phase II facilities) to pursue alternative uses. Thereafter, however, Freeport developed a project to employ alternative uses of it Main Pass sulphur facilities as an energy hub, known as the "Main Pass Energy Hub" project. The Venture Agreement was then amended in September of 2003, to eliminate K-MC I's option to acquire the phase II facilities.
OSFI received $10,450,000 of the $13 million from Freeport. Freeport alleges that OSFI defaulted in its obligations to complete phase I work in the time specified in the Turnkey Contract. Further, Freeport alleges that OSFI defaulted by turning over the Power Plant Equipment to Mullen.
C. Mullen's Counterclaim
On July 16, 2003, Mullen filed a counterclaim against Freeport alleging that Freeport sold the Power Plant Equipment, namely one 3.5 MW Solar Centaur 50 Gas Turbine Generator, one MW Marathon Diesel Generator, and one Waukesha 700 hp Diesel Engine for $550,000 cash. Mullen alleges that the sale of the Power Plant Equipment was made free and clear of all liens and encumbrances.
Mullen further alleges that it contracted with OSFI to remove the Power Plant Equipment and paid OSFI $55,000 for the removal, and executed a Bill of Sale transferring ownership of the Marathon Diesel Generator. In return for the above consideration, Mullen alleges that OSFI agreed to deliver the remaining Power Plant Equipment to Mullen. Mullen alleges that Freeport interfered with this contractual arrangement between Mullen and OSFI, causing Mullen damages.
Additionally, Mullen alleges that it has paid considerable sums to Freeport for the other assets under the agreement, but Freeport has effectively prevented Mullen from removing all of the assets that have been paid for by Mullen by placing unreasonable demands on Mullen in removing the assets and/or by failing to approve a reasonable removal plan. Mullen seeks to recover all damages resulting from Freeport's alleged intentional interference and breach of contract with Mullen.
D. OSFI's Counterclaim
Subsequent to Freeport filing a Second Supplemental and Amending Complaint, alleging that OSFI had breached the Turnkey Contract, OSFI filed its Answer and Counterclaim on October 17, 2003. In its Counterclaim, OSFI denies any breach of the Turnkey Contract and seeks full compensation including $2.55 million remaining of the $ 13 million agreed upon under the Turnkey Contract. Also, OSFI seeks damages in an amount equal to 50% of the present value of Freeport's net profits from the proposed alternative use of the Main Pass 299 facilities, or a declaration that it is entitled to such an amount.
Rec. Doc. No. 30.
II. Discussion A. Motion to Compel Discovery
The Federal Rules of Civil Procedure govern discovery in all civil actions. Specifically, Rule 26(b)(1) provides that "parties may obtain discovery regarding any matter, not privileged that is relevant to the claim or defense of any party . . ."(emphasis added). Further, discovery may be limited by the court if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit . . ." Fed.R.Civ.P. 26(b)(2) (emphasis added).
As an initial matter, OSFI informed the Court that some of the issues raised in the motion have potentially been resolved, and withdrew the following requests: Request for Production Numbers 1, 2, 3, with the exception of the documents regarding Freeport's filings with the SEC, 4, 6, 13, 14 and 15.
1. Interrogatory No. 6 and Request for Production No. 6:
Interrogatory Number 6 requests that Freeport identify each and every person who is involved with or otherwise has knowledge regarding the development of the Main Pass Energy Hub and/or other proposed uses for the MPM Facilities. Request for Production Number 6 requests that Freeport produce all documents, correspondence, agreements, letters, reports, or e-mails exchanged between Freeport and OSFI, including but not limited to electronic or other recordings of telephone or other communications.
OSFI argues that these requests are overbroad and irrelevant to Freeport's claims against OSFI or OSFI's claims against Freeport. The Court sustained Freeport's objections to both of these requests because of their overbreadth. In sustaining the objections, the Court pointed out that OSFI is asking Freeport to extrapolate from the very broad requests, what Freeport is actually seeking. The Court instructed OSFI to amend its requests and re-serve upon Freeport more specific Interrogatories and Requests for Production of Documents.
2. Interrogatory No. 14
Interrogatory Number 14 requests Freeport to identify all efforts it has undertaken to develop alternative uses for the MPM Facilities. Freeport objected to this request on the basis that information regarding the Main Pass Energy Hub or other proposed uses of the MPM Facilities is irrelevant and beyond the scope of information related to the claims in this matter, and the request is overbroad. Freeport further argued that, Rocky Henderson, the executive at OSFI who negotiated the contract, admitted that there was an oral amendment to the contract which terminated OSFI's rights to participate in any profits gained from alternative uses of the Main Pass Facilities.
OSFI argued that because the contract, in OSFI's interpretation, provides that Freeport is entitled to a percentage of the profits from any alternative uses of the facilities, Freeport should be compelled to produce the documents revealing any alternative uses. OSFI contended that the Main Pass Energy Hub project is to be considered an alternative use.
An excerpt of the contract was provided to the Court, and upon examination, the Court found that because the contract did not provide that Freeport was obligated to undertake any alternative uses, OSFI's request, at this point, is irrelevant to the claims and defenses in this matter.
3. Request for Production No. 3
This request calls for all documents in Freeport's possession relating to OSFI including but not limited to, correspondence, letters, facsimiles, memorandum, investor communications, Securities and Exchange Commission ("SEC") filings and correspondence, financial records, investment records, e-mails and agreements. OSFI withdrew this request, except to the extent it seeks information regarding the SEC filings.
Freeport objected on the basis that the request is overbroad and the information sought is irrelevant. Further, Freeport argued that the SEC filings say what they say, and Freeport takes the position that its SEC filings are not inaccurate in any respect. Further, Freeport argues that the information filed with the SEC is privileged and confidential.
OSFI argued that the information produced by Freeport does not include the SEC filings, which dedicate an entire section to operations with respect to OSFI. OSFI further argued that it is entitled to see the information filed with the SEC to come to its own conclusion about whether there are inconsistencies in Freeport's filings. The Court ordered Freeport to produce the information regarding the filings to the Court along with a privilege log informing the Court why the documents are privileged.
4. Request for Production No. 7
This request seeks all documents relating to the MPM Facilities or the Main Pass Energy Hub. Freeport objected to this request on the basis that it is overbroad, irrelevant and beyond the scope of information related to the claims in this matter.
OSFI argued that this information is needed for OSFI to prove its damages in this matter. OSFI contended that because Freeport takes the position that the project is so speculative, it is entitled to the documents relating to the Main Pass Energy Hub in an attempt to prove otherwise. The Court found that the request itself is too broad and ordered OSFI to narrow the request.
5. Request for Production No. 11
This request calls for all documents exchanged between Freeport and the Minerals Management Service ("MMS") or the United States Coast Guard relating to the Main Pass Energy Hub. Freeport objected on the basis that the request is overbroad and seeks information not relevant to the claims in this matter. Freeport further asserted that the information is privileged, proprietary, or confidential and the non-confidential information has been produced. Freeport contended that the application filed with the Coast Guard regarding the proposed project is highly confidential.
OSFI argued that the request is not overbroad because there is a finite number of documents relating to this project. OSFI informed the Court that it has forwarded requests for production to the MMS and Coast Guard, as well as four other agencies listed in Freeport's press release. However, with regard to any non-confidential filings with the MMS, OSFI contended that Freeport has not even produced that information.
The Court found that Freeport must produce its public filings with the MMS. Further, at a minimum, Freeport must amend its response to inform OSFI where the documents were filed and to the extent they exist, produce them. Further, the filings submitted to the Coast Guard must be produced in camera to the Court.
6. Request for Production No. 12
This request seeks all documents exchanged between Freeport and the MMS since January 1, 2003, relating to the MPM Facilities. Freeport objected on the basis that the request is overbroad and the information sought is irrelevant to the claims in this matter. Freeport further objected on the basis that the information sought is privileged proprietary, or confidential.
The Court sustained Freeport's objections to this request. Further, the Court found that the request is duplicative of Request for Production Number 11.
7. Request for Production No. 18
This request seeks all documents, agreements, memoranda, notes, e-mails, records, letters, etc. relating to the MPM Facilities or the Main Pass Energy Hub exchanged between Freeport and El Paso Natural Gas, its officers, employees or agents. Freeport objected on the basis that because OSFI agreed that OSFI would not participate in any alternative uses of the MPM Facilities, the information sought through this request is irrelevant. Freeport contended that it does not have a deal with El Paso. Freeport further objected on the basis that the request is overbroad and seeks privileged, proprietary, or confidential information.
OSFI argued that Freeport was involved in discussions with El Paso regarding alternative uses of the MPM facilities and it is entitled to these documents in order to determine how Freeport represented its relationship with OSFI in these discussions. OSFI contended that the information is relevant to its damage and liability claims.
The Court found that the information would only be relevant to the damages issue if Freeport did in fact enter into an agreement with El Paso, which would then constitute a replacement transaction as contemplated by 4.2 of the contract excerpt provided to the Court. The Court sustained the objection as to relevancy regarding the alternative use issue. Further, on the liability issue, the Court found that the relevancy of the information sought is too tenuous.
However, the Court did not make its decision here based on the pendency of either the Motion for Partial Summary Judgment and the Motion to Bifurcate Trial.
8. General Objection
OSFI urges a general objection to the documents that have been produced by Freeport as they are not categorized and labeled to indicate what requests the documents are responsive to. The Court ordered Freeport, to the extent the document are responsive, to bate stamp the documents to correlate to the responses and refer to the responsive documents by their bate stamps.
B. Motions to Quash/ for Protective Order
Rule 26 of the Federal Rules of Civil Procedure governs the issuance of protective orders. It provides in pertinent part:
Upon motion by a party or by the person from whom discovery is sought. . . . and for good cause shown, the court in which the action is pending . . . may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
(1) that the disclosure or discovery not be had;
(2) that the disclosure or discovery may be had only on specified terms and conditions, including a designation of the time or place;
(3) that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery;
(4) that certain matters not be inquired into, or that the scope of the disclosure or discovery be limited to certain matters;
(5) that discovery be conducted with no one present except persons designated by the court; If the motion for a protective order is denied in whole or in part, the court, may, on such terms and conditions as are just, order that any party or other person provide or permit discovery.See Fed.R.Civ.P. 26(c).
The decision to enter a protective order is within the court's discretion. Thomas v. International Bus. Mach., 48 F.3d 478, 482 (10th Cir. 1995). Rule 26(c)'s requirement of a showing of good cause to support the issuance of a protective order indicates that "the burden is upon the movant to show the necessity of its issuance, which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements." See In re: Terra International, Inc., 134 F.3d 202, 306 (5th Cir. 1998) (citing United States v. Garrett, 571 F.2d 1323, 1326 n. 3 (5th Cir. 1978)). Freeport's motions for protective orders will be discussed below separately.
1. K-1 USA Ventures. Inc. (doc, #72)
On February 18, 2004, OSFI served a Subpoena Duces Tecum upon K-1 USA Ventures, Inc. ("K-l USA"), a partner of Freeports in the "Main Pass Energy Hub" project. The subpoena called for the production of all documents in K-l USA's possession regarding 1) the formation of the joint venture, K-MC Venture I, LLC,; 2) the Main Pass 299 facilities and the "Main Pass Energy Hub" project; 3) the contracts between OSFI and Freeport; and 4) any indices maintained by K-l USA regarding the "Main Pass Energy Hub". The subpoena called for production on March 3, 2004.
2. McMoran Exploration Company (doc. #74)
On February 18, 2004, OSFI served a Subpoena Duces Tecum upon McMoran Exploration Company ("McMoran"), Freeport's parent company, calling for production on March 3, 2004. The subpoenas called for the production of all documents regarding 1) telephone calls between McMoran executives and OSFI personnel; 2) meetings attended by McMoran executives regarding the "Main
• Pass Energy Hub" project; 3) meetings between McMoran executives and OSFI personnel; and 4) any indices maintained by McMoran regarding the "Main Pass Energy Hub" project.3. Randal and Dewey (doc. #76)
On February 18, 2004, OSFI served a Subpoena Duces Tecum upon Randal and Dewey, a consultant of Freeport's on the "Main Pass Energy Hub" project, calling for production on March 3, 2004. The subpoena called for production of all documents in Randal and Dewey's possession regarding Freeport's use of the Main Pass 299 facilities and the "Main Pass Energy Hub" project.
4. Chevron/Texaco. (doc. #78)
On February 18, 2004, OSFI served a Subpoena Duces Tecum upon Chevron/Texaco, a third party purchaser referenced in the Main Pass 299 Turnkey Contract, calling for production on March 3, 2004. The subpoena called for the production of all documents in Chevron/Texaco's possession regarding the proposed purchase of Freeport's Main Pass 299 oil lease and facilities.
5. K-MC Venture I LLC (doc. #80)
On February 18, 2004, OSFI served a Subpoena Duces Tecum upon K-MC Venture I, LLC ("K-MC I"), the joint venture created with K-l USA Ventures, LLC, calling for production on March 3, 2004. The subpoena called for the production of all documents in K-MCI's possession regarding: 1) the formation of the joint venture; 2) the Main Pass 299 facilities and the "Main Pass Energy Hub" project; 3) the contracts between OSFI and Freeport; and 4) any indices maintained by K-MC I regarding the "Main Pass Energy Hub" project.
B. Freeport's Objections
Freeport makes four main objections to all of the subpoenas served in this matter. Freeport urges the Court to quash the subpoenas served upon these various entities arguing that the subpoena does not allow reasonable time for compliance. Freeport further argues that the subpoenas are overbroad and burdensomely requests considerable quantities of information that will have no possible relevance if the Court grants Freeport's Motion for Partial Summary Judgment on Counts I, III and V of OSFI's Counterclaim.
Freeport argues that the subpoena seeks confidential and proprietary commercial information, which to the extent properly discoverable, has already been obtained from Freeport. Finally, Freeport argues that the subpoena requests are premature in light of Freeport's Motion for Partial Summary Judgment.
1. Reasonable time Objection
All of the subpoenas mentioned above were served upon on February 18, 2004, to be complied with on March 3, 2004. The subpoenas, therefore, allowed the parties served exactly 14 days for compliance. The Federal Rules of Civil Procedure provide that a court may quash a subpoena it "fails to allow a reasonable time for compliance." Fed.R.Civ.P. 45(c)(3)(A)(i). However, the Rule does not specify what length of time is reasonable.
On its face, the 14-day time period cannot be held to be unreasonable. Rather, reasonableness of the time allowed for compliance seems to be judged depending on the underlying circumstances. For example, in Anderson v. Shell Oil Co., 1996 WL 280792 (E.D. La. May 24, 1996), the Court held that, in light of the extensive information requested, a seven-day time period was unreasonable for compliance where the notice of corporate deposition included regulatory filing material over a ten year period. Id. at * 1. Also, in Traina v. Blanchard, the Court found that an attempt to conduct extensive discovery on only six days notice did not pass the reasonableness test. 1998 WL 178762 (E.D. La. April 15, 1998).
Therefore, in the above cases, the Court seemed to have indicated that but for the extensive discovery requests, the six or seven-day compliance period might be found to be reasonable.
2. Overbroad, and Unduly Burdensome and Relevance Objection
The Federal Rules of Civil Procedure govern discovery in all civil actions. Specifically, Rule 26(b)(1) provides that "parties may obtain discovery regarding any matter, not privileged that is relevant to the claim or defense of any party . . . "(emphasis added). Further, discovery may be limited by the court if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit . . ." Fed.R.Civ.P. 26(b)(2) (emphasis added).
3. Confidential/Propriety Commercial Information Objection
A court may quash or modify a subpoena that "requires disclosure of a trade secret or other confidential research, development, or commercial information." Fed.R.Civ.P. 45(c)(3)(B)(i). The party seeking discovery of such information must demonstrate a "substantial need" for the information, and that the need cannot be met "without undue hardship." Fed.R.Civ.P.
However, the party moving for protection of the information must first establish that the information sought is of the nature described above, and no absolute privilege for this type of information exists. See Exxon Chemical Patents, Inc. v. Lubrizol Corp., 131 F.R.D. 668, 671 (S.D. Tex. 1990). Further, "modification of a subpoena is preferable to quashing it." Cmedia, LLC v. Lifekey Healthcare, LLC, 216 F.R.D. 387, 389 (N.D. Tex. 2003) (citing Tiberi v. CIGNA Ins. Co., 40 F.3d 110, 112 (5th Cir. 1994)).
As an initial matter, OSFI informed the Court that it would withdraw the subpoena served upon McMoran Exploration Company, rendering the corresponding motion moot. Further, the Court notes that each of Freeport's objections, to the extent Freeport suggests that the information sought should not be produced pending the resolution of the Motion for Partial Summary Judgment, that the objections are a moot issue as District Judge Jay Zainey has denied the motions regarding summary judgment.
Regarding all of the Motions to Quash and/or for Protective Order, Freeport lodged the objection that the information sought is confidential and proprietary commercial information. However, this bare assertion, without any proof is not sufficient for the Court to grant a motion to quash and/or for protective order. As the noted above, the party moving for protection of the information must first establish that the information sought is of the nature described above, and no absolute privilege for this type of information exists. Exxon Chemical Patents, Inc., 131 F.R.D. at 671.
Because Freeport did not make this showing with respect to any of the entities served, the Court has no substantiated legal basis to any of the remaining motions to quash and/or for protective order based on the limited information provided. OSFI further argued that Freeport does not have standing to come before the Court seeking relief from the subpoenas served upon these various entities. The Court notes the objection, but makes no finding at this time, as the Court has given Freeport a week to submit any further pleadings with the Court.
Accordingly,
IT IS ORDERED that the Motion to Compel More Complete and/or Supplemental Discovery Responses (doc. #67) is DENIED IN PART, GRANTED IN PART and CONTINUED IN PART as follows:
1) DENIED as MOOT with respect to Request for Production Nos. 1, 2, 3 in part, 4, 6, 13, 14 and 15.
2) DENIED as to Interrogatory Nos. 6 and 14 and Request for Production No. 6.
3) DENIED as to Request for Production Nos. 7 and 12.
4) DENIED as to Request for Production 18.
5) GRANTED as to OSFI's request that the responsive documents be bate stamped. Freeport is to bate stamp the documents in the manner ordered by the Court no later than March 31, 2004.
6) GRANTED as to Request for Production No. 11 to the extent that OSFI seeks Freeport's public filings with the MMS, not made confidential, for the time period of January 1, 2001 — Present. Freeport shall produce this information no later than March 29, 2004. Further, Freeport shall amend its response to state where the documents referred to in this request were filed.
7) CONTINUED as to Request No. 11 to the extent OSFI seeks documents filed with the Coast Guard. Freeport shall submit the documents in camera to the Court no later than March 29, 2004. A hearing on this issue will be held on March 31, 2004 WITH ORAL ARGUMENT.
8) CONTINUED as to Request for Production No. 3. Freeport shall produce the internal correspondence leading up to the SEC filings including, letters, faxes and memos for the time period of January 1, 2002 — Present in camera to the Court no later than March 29, 2004. Freeport shall further produce a privilege log and inform the Court why the documents should be subject to any privilege. A hearing on this issue will be held on March 31, 2004 WITH ORAL ARGUMENT. IT IS FURTHER ORDERED that Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon K-l USA Ventures, Inc. and for Protective Order (doc. #72) is DENIED. IT IS FURTHER ORDERED that Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon McMoran Exploration Company and for Protective Order (doc. #74) is DENIED as MOOT. IT IS FURTHER ORDERED that Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon Randal and Dewey and for Protective Order (doc. #76) is DENIED.
IT IS FURTHER ORDERED that Freeport-McMoran Sulphur LLC's Motion to Quash
Subpoena Duces Tecum Served Upon Chevron/Texaco. and for Protective Order (doc. #78) is DENIED. IT IS FURTHER ORDERED that Freeport-McMoran Sulphur LLC's Motion to Quash Subpoena Duces Tecum Served Upon K-MC Venture I LLC and for Protective Order (doc. #80) is DENIED.
To obtain a transcript of the proceedings for the Court's findings, the parties should contact Gaynell Banta, Court Recorder Supervisor, at 589-7720.