Reichel Foods, Inc. v. Proseal America, Inc.
- Eric Tostrud
- 0:19-cv-02604
- U.S. District Court · District of Minnesota
- 11
In Reichel Foods v. Proseal America, Judge Menendez denied amendment, denied scheduling enforcement, and ordered a response to the discovery motion.
Reichel Foods, Inc. could not add its proposed claims and punitive-damages request. Proseal America, Inc. had to respond to Reichel’s discovery motion and provide materials for the court’s review; both sides had to discuss the confidentiality designations.
What happened
Reichel Foods asked to add eight claims and punitive damages after the deadline for amending its complaint. The court found that Reichel had not shown the required diligence and that the proposed changes would unfairly expand the case.
Reichel also asked Proseal America to produce documents withheld as privileged, while Proseal asked the court to strike that motion as late. The court denied Proseal’s request because its delayed privilege log contributed to the delay and required Proseal to respond to the discovery motion.
In Reichel Foods, Inc. v. Proseal America, Inc., Magistrate Judge Katherine Menendez denied the amendment motion and Proseal’s scheduling-enforcement motion. She also denied Reichel’s request about “Attorney’s Eyes Only” designations without prejudice and directed the parties to discuss it.
The detailed version
- Reichel Foods, Inc. v. Proseal America, Inc. · No. 0:19-cv-02604
- Eric Tostrud
- Apr. 30, 2021
Background
The court addressed three nondispositive motions: Reichel Foods, Inc.’s motion to modify the scheduling order and amend its complaint; Reichel’s motion to compel discovery; and Proseal America, Inc.’s motion to enforce the scheduling order and strike Reichel’s discovery motion.
Reichel sought permission to file a Third Amended Complaint adding eight claims and a request for punitive damages. The proposed claims concerned alleged software installed on tray-packing machines that could remotely make the machines inoperable unless a password was entered. Reichel alleged that the defendants threatened to activate the software unless Reichel made payments the defendants claimed were owed under a contract.
Motion to Amend
The deadline for motions to amend was September 15, 2020. Reichel filed its motion on December 18, 2020. Because the motion was late, Reichel had to show “good cause,” meaning that it had acted diligently but could not meet the deadline.
The court found that Reichel had not shown good cause. Reichel already knew substantial information about the alleged “kill switch” before the deadline, including information about the defendants’ ability to shut down the equipment remotely and demands for payment. Documents produced before the deadline also discussed password-protected programmable logic controller software and scheduled shutdown dates. The court found that Reichel did not pursue discovery specifically directed to the alleged kill switch, did not seek an extension before the deadline, and did not show that its attorney’s later illness prevented timely compliance.
The court also ruled, as an alternative basis, that allowing the amendment would unfairly prejudice the defendants. The proposed changes would substantially expand the case, introduce new legal theories—including a civil claim under the Racketeer Influenced and Corrupt Organizations Act—and require additional discovery and expense after discovery had closed. Reichel’s motion to modify the scheduling order and amend was denied. The court did not decide the defendants’ remaining arguments about bad faith or whether the proposed claims could survive a motion to dismiss.
Discovery and Scheduling Motions
Reichel’s motion to compel sought documents that Proseal America withheld under the attorney-client privilege, a protection for certain confidential communications between a lawyer and client. Reichel argued that the protection did not apply because of the crime-fraud exception and that Proseal America had waived the protection by including Proseal UK personnel in some communications.
The deadline for nondispositive and fact-discovery motions was October 27,
- Reichel filed its motion to compel on January 28,
- Reichel argued that it could not challenge the privilege claims earlier because Proseal America did not provide a privilege log until December 2,
- A privilege log identifies documents withheld and explains the basis for withholding them.
The court found that both parties had contributed to the procedural problems, but Proseal America had not explained its delay in providing the privilege log. The court denied Proseal America’s motion to enforce the scheduling order and required Proseal America to file a memorandum and supporting materials responding to Reichel’s motion to compel within 14 days. Proseal America also had to provide the court with its privilege log and the disputed communications for private judicial review.
The court denied without prejudice Reichel’s request concerning “Attorney’s Eyes Only” designations for portions of Gary Wyatt’s deposition. “Without prejudice” means the ruling did not bar the issue from being raised again. The court directed the parties’ counsel to discuss the designations by telephone within 14 days and to contact the court for a conference if they could not agree. The court separately denied Proseal’s request for fees.
Disposition and Classification
Judge Katherine Menendez denied Reichel’s motion to modify the scheduling order and amend, denied Proseal America’s motion to enforce the scheduling order, required Proseal America to respond to the motion to compel, and directed the parties to meet and confer about the confidentiality designations. This was a procedural order concerning amendment deadlines, discovery, privilege, and confidentiality; the court did not decide the underlying contract or proposed new claims.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.