Core and Main, LP v. McCabe

Background

Core and Main sued former employee Ron McCabe and Dakota Supply Group, Inc. after McCabe left Core and Main to work for Dakota Supply Group. The claims originally included alleged breaches of loyalty, confidentiality, and contract by McCabe, and alleged interference with contractual and prospective business relationships by Dakota Supply Group. After earlier proceedings and an appeal, the surviving claims included Core and Main’s breach-of-contract claim against McCabe and its tortious-interference claims against Dakota Supply Group. The court noted that a separate defense motion to dismiss those claims was still awaiting decision.

Core and Main moved to compel responses to unresolved discovery requests. The first group sought documents exchanged between McCabe and Dakota Supply Group, and documents in McCabe’s possession, concerning “prospective customers.” Core and Main argued that the requests should cover Dakota Supply Group’s prospective customers within the area covered by McCabe’s noncompetition agreement. The defendants argued that the requests should be limited to Core and Main’s own prospective customers. The second group sought all correspondence that “in any way pertains to the subject matter” of the lawsuit, later limited by Core and Main to correspondence with people listed in the defendants’ initial disclosures.

Legal standard

Under Federal Rule of Civil Procedure 26, discovery generally covers nonprivileged information relevant to a claim or defense and proportional to the needs of the case. The party requesting discovery must first show that the information is relevant. The party resisting production then bears the burden of showing that the information is irrelevant or that production would impose an undue burden. Even relevant discovery may be limited when it is cumulative, ambiguous, overly broad, or disproportionate.

Customer-related discovery

The court found that the original requests, as written, were too broad because they sought essentially every document exchanged between McCabe and Dakota Supply Group and nearly all of McCabe’s records, without a subject-matter limit. But Core and Main had narrowed the requests to documents involving prospective customers.

The court concluded that the discovery was relevant while the claims remained pending, even though the defendants argued that the noncompetition provisions might ultimately be unenforceable because they served no legitimate business interest. The court explained that its task at this stage was to decide whether the requested information was relevant to claims actually in the case, not to decide how the claims might look after the pending motion to dismiss.

The court ordered production of correspondence between McCabe and Dakota Supply Group concerning Core and Main’s prospective customers, as long as the communications fell within the noncompetition provision’s temporal, geographic, and subject-matter limits. It also ordered McCabe to produce documents in his possession or control concerning Dakota Supply Group’s prospective customers, subject to those same limits. The agreement’s temporal limit was the 12-month period after McCabe’s separation on June 1, 2021; its geographic limit was a 150-mile radius from each Core and Main office location from which McCabe had provided services.

Litigation-correspondence discovery

The court rejected Core and Main’s request for any correspondence that pertained in any way to the lawsuit’s subject matter. It found the request cumulative of the customer-related discovery and too ambiguous and broad. The court therefore narrowed the request to nonprivileged correspondence that references the civil action itself and ordered the defendants to produce those documents.

Disposition

The court granted in part Core and Main’s motion to compel as to the specified customer-related documents and correspondence. It also denied in part the motion to the extent it sought all correspondence that pertained in any way to the litigation, while modifying the request to require production of correspondence that references the civil action. Any additional production ordered had to be completed within 21 days of the order. Each party was ordered to bear its own costs and fees.