REA Investments, LLC v. Novel Energy Solutions, LLC

Background

REA Investments, LLC asked the court for relief from the scheduling order so it could reopen fact discovery. REA sought discovery about Novel Energy Solutions, LLC’s relationships and agreements with KeyBanc, Monarch Capital, and North Sky Capital. REA also sought additional text messages, information about Novel’s privilege log for withheld documents, and less-redacted copies of produced documents.

The court addressed only the threshold question of whether discovery should be reopened so that REA could file a motion to compel. It did not decide whether REA was entitled to any of the requested discovery.

Fact discovery had closed on July 26, 2024. The parties had briefed and argued cross-motions for summary judgment, and those motions were under advisement with Chief Judge Schiltz. The scheduling order had called for the case to be ready for trial on April 30, 2025.

Arguments and legal standard

REA argued that Novel had withheld relevant documents and communications concerning relationships that could affect the parties’ liability under the contract at issue. REA also argued that new information had come to light after discovery closed and that it had worked diligently to obtain the requested information.

Novel argued that it had provided sufficient discovery and that REA’s failure to obtain additional information resulted from REA’s lack of diligence during the discovery period.

Under Federal Rule of Civil Procedure 16(b)(4) and District of Minnesota Local Rule 16.3, a scheduling order may be changed only upon a showing of good cause. The primary consideration is the diligence of the party seeking the change. The court also considers the effect of the proposed change on other deadlines and, when appropriate, possible prejudice to the opposing party.

Court’s analysis

The court found that REA had enough notice during the discovery period to alert it to the existence of the information it now sought. The court also found that Novel had shown that the issues had been mentioned in earlier discovery productions. Some of the documents concerning the disputed relationships had been produced by REA or used by REA’s counsel in depositions in this case or in a parallel state-court action.

Because REA had notice of the issues and the information before fact discovery closed, the court concluded that REA had not shown good cause to reopen discovery. The court further found that reopening discovery at that stage would jeopardize the case’s trial-ready status and likely interfere with Chief Judge Schiltz’s consideration of the pending summary-judgment motions.

Disposition

The court denied REA’s Motion for Relief from the Scheduling Order. The order did not decide the merits of a potential motion to compel or the pending summary-judgment motions.