PWV Consultants LLC v. Chebil Realty LLC

Background

PWV Consultants LLC sued Chebil Realty LLC and Eric Chebil. The underlying dispute includes PWV’s allegation that Chebil Realty breached a December 2018 services agreement by failing to pay for services related to the development of a mobile and web real estate application. The opinion did not decide that underlying payment dispute.

A March 10, 2021 scheduling order required all discovery to be completed by September 3, 2021. The defendants asked for a 30-day extension so they could complete document and deposition discovery from nonparty 10X Management LLC. They said 10X had relevant information because it had helped identify PWV’s principal as a software developer and had negotiated the services agreement. The defendants had served 10X with subpoenas for documents and testimony.

On August 31, 2021, Magistrate Judge Kevin Nathaniel Fox denied the defendants’ request, finding that they had not adequately met and conferred, had not complied with Rule 2.A of the court’s individual rules, and had not shown good cause for an extension. On September 3, 2021, the parties jointly sought a 28-day extension, citing additional third-party discovery and information learned during Eric Chebil’s September 2 deposition. Judge Fox denied that request on September 7, treating it as a request for reconsideration or reargument under Local Civil Rule 6.3.

Objection and standard of review

The defendants timely objected to both orders under Federal Rule of Civil Procedure 72(a). Because discovery orders are nondispositive pretrial matters, the district judge could disturb them only if they were clearly erroneous or contrary to law. A clearly erroneous decision is one that leaves the reviewing court firmly convinced that a mistake occurred. A decision is contrary to law when it fails to apply, or misapplies, a relevant statute, case law, or procedural rule.

Court’s analysis

Judge Swain concluded that the August 31 order rested on a critical factual error. The communications submitted with the defendants’ request showed that the parties had discussed third-party discovery from 10X, including possible timing. The fact that defense counsel could not reach plaintiff’s counsel immediately before filing the request did not erase the parties’ earlier efforts to address the issue. Judge Swain therefore set aside the August 31 order.

Because Judge Fox’s September 7 decision was based on the August 31 decision, Judge Swain also set aside the September 7 order. She further stated that treating the parties’ September 3 request as an improper reconsideration motion was misguided to the extent the request relied on evidence newly identified during the September 2 deposition. The court explained that a request based on newly discovered facts is not necessarily barred merely because the court previously denied a different party’s request for an extension on different grounds.

Disposition

The court sustained the defendants’ objection and set aside Judge Fox’s August 31 and September 7, 2021 decisions. It granted the parties an extension of the discovery period, limited to the purposes described in their September 3 joint application, through April 1, 2022. The parties were directed to provide a joint status report to Magistrate Judge Jennifer E. Willis by April 8, 2022. The case remained referred to Judge Willis for general pretrial management.