Riley v. PK Management, LLC

          MEMORANDUM AND ORDER

          TERESA J. JAMES, U.S. MAGISTRATE JUDGE

         This matter is before the Court on Plaintiffs' Motion to Compel Discovery (ECF No. 126). Plaintiffs seek an order compelling Defendants Aspen Companies Management, LLC (Aspen) and Central Park Holdings, LLC (Holdings) to produce documents responsive to Plaintiffs' Second Document Requests Nos. 52, 60, and 64, and to answer Interrogatory Nos. 15, 16, 18, and 19 of Plaintiffs' Second Interrogatories. Aspen and Holdings jointly oppose the motion. For the reasons set forth below, the Court will grant the motion in part and deny it in part.

         I. Requested Discovery

         Plaintiffs served their Second Document Requests and Second Interrogatories on Defendants Aspen and Holdings on December 7, 2018. In RFP No. 52 directed to Holdings, Plaintiffs sought a copy of Holdings' LLC operating agreement. In identical requests to Aspen and Holdings, Plaintiffs asked in RFP No. 60 for a copy of all premises inventories Aspen and Holdings had conducted on or after January 1, 2008. And in RFP No. 64, Plaintiffs asked both Aspen and Holdings to produce all Housing Assistance Payments (HAP) contracts between each of them and the U.S. Department of Housing and Urban Development (HUD) for Central Park Towers, and/or between each of them and Plaintiffs Ozburn or Riley.

         Although Holdings produced its operating agreement in response to RFP No. 52, it redacted the names of its members pursuant to objection that their identities are irrelevant. In response to RFP No. 60, Defendants objected on the basis that the request is overbroad and beyond the scope of permissible discovery, with the latter referring to their position that discovery is bifurcated.^[1] Defendants objected to RFP No. 64 on the grounds it is overly broad, beyond the scope of limited discovery (again referring to its bifurcation argument), and that producing contracts for non-party tenants would disclose financial arrangements with them.

         Interrogatory Nos. 15 and 16 seek, among other things, the compensation or salary for each of Aspen's and Holdings' employees, members, agents, owners, managers, and representatives who visited Central Park Towers for any reason during the class period, ^[2] and who worked at Central Park Towers on a regular basis on or after January 1, 2008. Interrogatory No. 18 asked each Defendant to state the monthly rent it charged for each apartment unit during the class period, and Interrogatory No. 19 sought the total amount of rent it received from class members for calendar years 2013 to the present.

         Defendants objected to many subparagraphs of Interrogatory Nos. 15 and 16, but the only remaining subparagraphs at issue are those calling for salary or compensation. Defendants objected that the inquiry improperly seeks personnel information which is currently beyond the scope of discovery at this stage (the bifurcation argument), invades the individuals' privacy rights, and could lead to embarrassment or annoyance. With respect to Interrogatory Nos. 18 and 19, Defendants objected they are overbroad as to time and call for speculation because they call for information before Defendants owned the property, ^[3] unduly burdensome, and premature.

         Plaintiffs conferred with Defendants, as required by Fed.R.Civ.P. 37(a)(1) and D. Kan.37.2, and Plaintiffs have timely filed this motion.

         II. Legal Standard

         Federal Rule of Civil Procedure 26(b)(1) sets out the general scope of discovery. As amended in 2015, it provides as follows:

Parties 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. Information within this scope of discovery need not be admissible in evidence to be discoverable.^[4]

         Considerations of both relevance and proportionality now govern the scope of discovery.^[5] Relevance is still to be “construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on” any party's claim or defense.^[6] Information still “need not be admissible in evidence to be discoverable.”^[7] The amendment deleted the “reasonably calculated to lead to the discovery of admissible evidence” phrase, however, because it was often misused to define the scope of discovery and had the potential to “swallow any other limitation.”^[8]

         The consideration of proportionality is not new, as it has been part of the federal rules since 1983.^[9] Moving the proportionality provisions to Rule 26 does not place on the party seeking discovery the burden of addressing all proportionality considerations. If a discovery dispute arises that requires court intervention, the parties' responsibilities remain the same as under the pre-amendment Rule.^[10] In other words, when the discovery sought appears relevant, the party resisting discovery has the burden to establish the lack of relevancy by demonstrating that the requested discovery (1) does not come within the scope of relevancy as defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevancy that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.^[11]Conversely, when the relevancy of the discovery request is not readily apparent on its face, the party seeking the discovery has the burden to show the relevancy of the request.^[12] Relevancy determinations are generally made on a case-by-case basis.^[13]

         III. Analysis

         The Court considers in turn each of Plaintiffs' challenges to Defendants' timely-asserted objections.

         A. ...