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Rockwell Medical, Inc. v. Richmond Brothers, Inc.

United States District Court, E.D. Michigan, Southern Division

April 14, 2017

RICHMOND BROTHERS, INC., et al., Defendants.



         This court referred Plaintiff's Emergency Motion to Expedite Discovery, (Dkt. #11), to Magistrate Judge Mona K. Majzoub, who entered an order denying the motion, (Dkt. #23). Plaintiff then filed an objection to the order, (Dkt. #25), to which Defendants have filed a response (Dkt. #33). Plaintiff has filed a reply as well. (Dkt. #34.) For the following reasons, the court will overrule Plaintiff's objections.

         I. BACKGROUND

         Plaintiff filed an Emergency Motion for Preliminary Injunction and Leave to Conduct Expedited Discovery (Dkts. ##3, 11), scheduled for hearing on May 3, 2017. Plaintiff seeks an injunction forcing Defendants, prior to the annual shareholder meeting sometime in May or June, to supplement disclosures that Plaintiff alleges are misleading and violative of the Securities and Exchange Act of 1934. Magistrate Judge Majzoub denied Plaintiff's request for an order that Defendants respond to five document requests and undertake four depositions within 15 days of service of the requests. (Dkt. #23.) She found that Plaintiff had failed to show good cause for the broad requests in advance of the normal Rule 26(f) conference or preliminary injunction hearing. She also explained that the requests were not limited to relevant documents and thus did not comport with the proportionality requirement of Federal Rule of Civil Procedure 26(b)(1). She also added that the proposed 15 day deadline was “vexatious and harassing.” Plaintiff objects that expedited discovery is routinely granted prior to preliminary injunction hearings to allow the parties a fair chance to argue the merits. It also contends that its discovery requests were not overbroad and the abbreviated time frame is justified by the urgency of the resolution of the factual questions at issue. Defendants respond that the order denying Plaintiff's motion was well supported and that the recent voluntary dismissal of a Defendant only weakens Plaintiff's case. In reply Plaintiffs insist that discovery is sorely needed prior to the hearing, that the dismissal of certain Defendants is irrelevant to the question at hand, and that expedited discovery will not prejudice Defendants.


         Objections to orders issued by magistrate judges are treated as appeals subject to the “clearly erroneous” standard set forth in 28 U.S.C. § 636(b)(1)(A). Brown v. Rapelje, No. 09-639, 2012 WL 4490769, at *1 (W.D. Mich. Sept. 28, 2012). As such, the “decision and order of a non-dispositive motion by a magistrate judge will be upheld unless it is clearly erroneous or contrary to law.” Koetje v. Norton, No. 13-12739, 2014 WL 2005021, at *1 (E.D. Mich. May 16, 2014).

         “Information is discoverable under revised Rule 26(b)(1) if it is relevant to any party's claim or defense and is proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1) Advisory Committe's Note to 2015 Amendment. In assessing the proportionality the court should look to:

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).

         Here the burden and expense of the proposed discovery is immense and doubtlessly outweighs its likely benefit, even assuming that all other factors favor Plaintiff-and it is not obvious that they do. Plaintiff attempts to minimize the scope of its discovery requests by insisting that it “proposed just five (5) document requests . . .” However, these five requests are exceedingly broad:

1. All documents and communications between Defendants and any other person relating to Rockwell, including telephone records relating to any such communications.
2. All documents or communications relating to any discussions, plans, agreements, or understandings between the Defendants, on the one hand, and any other person that owned or beneficially owned any Rockwell securities, on the other, relating to Rockwell.
3. All documents or communications relating to the discussion, preparation, approval, or filing of any filings required under the Securities Exchange Act of 1934, or any rules promulgated thereunder, by any Defendant.
4. All documents or communications relating to the drafting, discussion, preparation, or approval of the March 1, 2017 Notice of Shareholder Nominations of Individuals for Election as Directors at the ...

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