Madgett Law, LLC v. Pravati Capital, LLC

Background

Madgett Law sued Pravati Investment Fund IV, LP and Pravati Capital, LLC, collectively referred to in the opinion as Pravati Capital, for alleged abuse of process, violations of the Minnesota Consumer Protection Act, fraud, and an injunction stopping related arbitration proceedings. The case also names Berkshire Hathaway Direct Insurance Company, doing business as Biberk Insurance Company, as a defendant, although the opinion describes the claims at issue as being against the Pravati defendants.

Madgett Law served Pravati Capital with a notice for an organizational deposition under Federal Rule of Civil Procedure 30(b)(6). That rule requires an organization to identify one or more people to testify about information known or reasonably available to the organization on the topics listed in the notice. Pravati Capital objected to the deposition’s topics and location, and the parties agreed to conduct it by video conference, but the deposition was not completed. Pravati Capital did not timely respond to the motion to compel, and the court considered the motion without a response or oral argument.

Discovery Ruling

The court held that the deposition topics generally concerned information relevant to Madgett Law’s claims, including the alleged contract, the loan file, communications, contacts between the parties, the Pravati defendants’ business practices, and related litigation. The court stated that Pravati Capital’s remedy for allegedly overbroad topics was to meet and confer about narrowing them or seek a protective order. Pravati Capital had not filed a protective-order motion.

The court granted Madgett Law’s motion to compel as limited. Pravati Capital had to meet and confer about the deposition notice by March 6, 2024; identify corporate representatives by March 13, 2024; and complete the deposition by March 20, 2024. The representatives did not need to testify about the identities of Pravati Capital’s investors, except as necessary to answer questions about the remaining topics fully and honestly.

Sanctions, Arbitration, and Scheduling Order

The court denied Madgett Law’s request for sanctions and expenses. It found sanctions inappropriate because Pravati Capital had explained that it could not attend the noticed deposition because of a prior court appearance, and because Pravati Capital had already faced consequences for failing to meet and confer about the motion to compel. The court warned that future noncompliance could result in monetary sanctions.

Madgett Law also asked the magistrate judge to stop the related arbitration. The court stated that an order stopping arbitration is dispositive and must be decided by an Article III judge, so the undersigned magistrate judge could not grant that relief. The court amended the scheduling order by moving the expert-discovery deadline from March 13, 2024, to April 10, 2024. The final order states that the motion to compel was GRANTED IN PART AND DENIED IN PART.