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Pittsburgh Logistics Systems, Inc. v. GlobalTranz Enterprises, Inc.

United States District Court, M.D. Florida, Jacksonville Division

May 25, 2018

Pittsburgh Logistics Systems, Inc., Plaintiff,
v.
GlobalTranz Enterprises, Inc., Defendant.

          ORDER

          Patricia D. Barksdale United States Magistrate Judge

         Before the Court are three motions to compel discovery and award expenses: one by Pittsburgh Logistics Systems, Inc. (“PLS”), Doc. 36, and two by GlobalTranz Enterprises, Inc. (“GlobalTranz”), Docs. 21, 27. The motions are opposed, though some issues have been resolved. Docs. 23, 30, 38. The Court heard arguments on January 25 and May 8. Docs. 24, 39. The discovery deadline is June 18. Doc. 41.

         I. Background

         In the complaint, PLS alleges these facts.

         PLS provides transportation logistics services. Doc. 1 ¶ 7. PLS spends significant resources training account executives; gives them access to proprietary and confidential information; and requires them to sign non-compete agreements that restrict them for two years from using or disclosing confidential information, providing competitive logistics services in North America, soliciting PLS customers, and soliciting PLS employees to leave PLS. Doc. 1 ¶¶ 10-12.

         GlobalTranz competes directly with PLS. Doc. 1 ¶ 13. As part of its business model, GlobalTranz foregoes training and pirates experienced account executives from competitors. Doc. 1 ¶ 13. GlobalTranz solicited PLS employees to leave PLS and take PLS customers and confidential information with them despite that PLS warned GlobalTranz they were bound by the non-compete agreements. Doc. 1 ¶¶ 16, 17.

         In October 2016, PLS and GlobalTranz entered a confidential written agreement. Doc. 1 ¶ 18. In the agreement, GlobalTranz promised to not disclose confidential information acquired from PLS, to not disclose the nature or purpose of the agreement, and to not solicit PLS employees for two years. Doc. 1 ¶ 19. To further its continuing and unlawful recruitment of PLS employees, GlobalTranz used and disclosed the confidential information. Doc. 1 ¶ 21.

         Based on those allegations, PLS claims GlobalTranz tortiously interfered with relationships with PLS customers and PLS account executives and breached the agreement. Doc. 1 ¶¶ 30-39. PLS seeks declaratory relief, injunctive relief, damages, costs, and attorney's fees. Doc. 1 at 5-8. According to PLS's expert, PLS has suffered damages exceeding $20 million, including approximately $4 million in lost profits and approximately $7 to $21 million in costs to recruit and train new employees.

         In a prior motion, PLS moved to compel discovery from GlobalTranz. Doc. 12. The Court denied the motion without prejudice to renewing any argument after the parties conferred to resolve the matter. Doc. 17.

         II. Authority

         Federal Rule of Civil Procedure 1 provides that the rules “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” The rule places shared “responsibility to employ the rules in the same way.” Fed.R.Civ.P. 1, Advisory Comm. Notes (2015 Amend.). “Effective advocacy is consistent with-and indeed depends upon-cooperative and proportional use of procedure.” Id.

         Rule 26(b)(1) provides that a party “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, considering 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.”

         If an action is based on diversity jurisdiction, the forum state's law controls attorney-client privilege. Bradt v. Smith, 634 F.2d 796, 800 (5th Cir. Unit A 1981). Under Florida law, “A client has a privilege to refuse to disclose, and to prevent any other person from disclosing, the contents of confidential communications when such other person learned of the communications because they were made in the rendition of legal services to the client.” Fla. Stat. § 90.502(2). The privilege protects only disclosures necessary to obtain informed legal advice. Genovese v. Provident Life and Accident Ins. Co., 74 So.3d 1064, 1067 (Fla. 2011). The burden of establishing the privilege is on the person claiming it. Southern Bell Tel. & Tel. Co., 632 So.2d 1377, 1383 (Fla. 1994).

         Rule 33(b)(4), governing interrogatories, provides that grounds for objecting to an interrogatory must be specific, and any ground not timely stated is waived unless the court excuses untimeliness for good cause. Rule 34(b)(2)(B), governing requests for production, provides, “For each item or category, the response must either state that inspection and related activities will be permitted as requested or state with specificity the grounds for objecting to the request, including the reasons.” The rule further provides, “An objection must state whether any responsive materials are being withheld on the basis of that objection. An objection to part of a request must specify the part and permit inspection of the rest.” Fed.R.Civ.P. 34(b)(2)(C). A party must respond in writing to an interrogatory or request for production within 30 days of service. Fed.R.Civ.P. 33(b)(2); 34(b)(2)(A). “Nowhere in the ...


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