Kunneman Properties LLC v. Marathon Oil Co.

          OPINION AND ORDER

          JODI F. JAYNE JUDGE

         Before the Court is Plaintiff's First Motion to Compel (ECF No. 50), which is GRANTED IN PART and DENIED IN PART as set forth below.

         I. Factual and Procedural Background^[1]

         This case involves the alleged underpayment, late payment, or non-payment of royalties and oil and gas production proceeds from gas-producing wells operated by Defendant Marathon Oil Company (“Marathon”). Plaintiff Kunneman Properties, LLC owns royalty interests in Marathon-operated wells and purports to bring this action on behalf of itself and others similarly situated in two separate classes. Plaintiff claims Marathon “underpaid royalty by deducting the costs necessary to make gas marketable when Marathon bears the sole burden of shouldering those costs under Oklahoma law.” ECF No. 50 at 4 (citing Compl. ¶¶ 61-89). Proposed Class I consists of all persons who own or owned minerals in Oklahoma subject to an oil and gas lease from September 1, 2011, to present wherein Marathon improperly reduced royalty payments by charging the owners for the cost of marketing, gathering, compressing, dehydrating, treating, processing, or transporting hydrocarbons produced. Proposed Class II consists of all persons or entities who received untimely payments from defendant or its designee for oil and gas proceeds from Oklahoma wells, and whose payments did not include interest required by statute.

         Early in the case, when the parties filed their Joint Status Report, Plaintiff argued that “discovery should not be stayed, limited, or bifurcated.” ECF No. 39. Conversely, Marathon argued that “discovery should be bifurcated, with discovery prior to the class certification hearing being limited to class certification issues and those merits issues directly related to class certification.” Id. On February 6, 2019, United States District Judge John Dowdell issued a scheduling order setting a discovery deadline of January 6, 2020, without making any reference to bifurcation. ECF No. 42. Although the Scheduling Order did not set a trial date or other pretrial motion dates requested by Plaintiff, it otherwise tracks Plaintiff's proposed schedule. Compare ECF No. 39 with ECF No. 42. Accordingly, Judge Dowdell rejected Marathon's proposal to bifurcate discovery into phases and set one discovery deadline governing the case.

         On February 22, 2019, Plaintiff issued the discovery requests currently at issue. On May 24, 2019, upon joint motion of the parties, Judge Dowdell extended all deadlines but did not revisit the issue of bifurcation. That amended scheduling order, which currently governs the litigation, sets a class-certification hearing for April 29, 2020, and sets a discovery deadline of July 20, 2020. ECF No. 49. Shortly after Plaintiff filed the pending motion to compel, Marathon caused new counsel to enter an appearance, and the case was reassigned to United States District Judge Gregory Frizzell. Upon his entry to the case, Judge Frizzell did not issue a new scheduling order or otherwise revisit scheduling issues. On September 24, 2019, Judge Frizzell ruled on Marathon's pending motion to dismiss. Pursuant to this ruling, the remaining Class I claim is breach of lease, and the remaining Class II claims are (1) breach of statutory obligation to pay interest; (2) accounting and disgorgement; and (3) injunctive relief. See ECF No. 83. No class has yet been certified.^[2]

         II. Standard of Review

         Under Rule 26 of the Federal Rules of Civil Procedure, parties may obtain discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Discoverable information need not be admissible at trial. Id. Rule 26 provides six factors to consider regarding proportionality: (1) the importance of the issues at stake in the action; (2) the amount in controversy; (3) the parties' relative access to relevant information; (4) the parties' resources; (5) the importance of the discovery in resolving the issues; and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed.R.Civ.P. 26(b)(1). This analysis often means “that the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Fed.R.Civ.P. 26(b) advisory committee's note (2015 amendment). Rule 26's proportionality requirement is not “intended to permit the opposing party to refuse discovery simply by making a boilerplate objection that it is not proportional.” Fed.R.Civ.P. 26(b) advisory committee's note (2015 amendment).

         Document requests must describe what is being sought with “reasonable particularity.” Fed.R.Civ.P. 34(b)(1)(A). Objections to discovery requests must be stated “with specificity.” Fed.R.Civ.P. 34(b)(2)(B). Mere boilerplate objection language, such as “vague, over-broad, unduly burdensome, not reasonably calculated to lead to discovery of admissible evidence, ” without more, is not sufficient. See Howard v. Segway, Inc., No. 11-CV-688-GKF-PJC, 2013 WL 869955, at *1, *3 (N.D. Okla. Mar. 7, 2013). “When the district court does intervene in discovery, it has discretion in determining what the scope of discovery should be.” In re Cooper Tire & Rubber Co., 568 F.3d 1180, 1189 (10th Cir. 2009). District courts managing discovery matters are subject to review only for abuse of discretion. See Caves v. Beechcraft Corp., No. 15-CV-125-CVE-PJC, 2016 WL 355491, at *1 (N.D. Okla. Jan. 29, 2016).

         III. Parties' Arguments

         In their brief and during the hearing, Marathon raised three principal objections to Plaintiff's discovery requests: (1) the requests are not relevant to class-certification issues; (2) the requests will require extensive searches of Marathon's electronically stored information (“ESI”), which is overly burdensome prior to class certification; and (3) all challenged individual requests are facially overbroad or vague. Defendant contends that, based on the thousands of documents it has already produced related to oil and gas royalty calculations, “both parties will have everything they need to fully analyze and argue class certification” and that the disputed requests are merely designed to “create settlement leverage.” ECF No. 70 at 2.

         In its response and during the hearing, Plaintiff argued: (1) relevance is not limited to class certification issues and, regardless, the disputed requests are relevant to class certification; (2) Marathon's global objection to producing any ESI is without merit; and (3) the challenged individual requests are not overbroad or vague, in light of Plaintiff's offer to limit ESI searches to specific search terms and custodians. Plaintiff contends Marathon is attempting to “curate document production to match [its] sham defenses against class certification” and that it “object[s] on relevancy and proportionality grounds for the types of documents - i.e., internal communications - that most clearly contain common answers for class certification.” ECF No. 50 at 7.

         IV. Analysis

         The Court holds: (1) discovery is not limited to class-certification issues; (2) Marathon must search and produce ESI, subject to agreed ESI protocols; and (3) certain requests are vague or overbroad and will be limited by the Court.

         A. Discovery Is Not Limited to Class Certification Issues

         As explained above, the district judge has not bifurcated discovery into stages, and there is one discovery deadline governing the litigation. Marathon has not moved for modification of the scheduling order or for bifurcation, and the Court will not revisit the issue of bifurcation under the guise of sustaining Marathon's discovery objections. Nor will the Court jeopardize the current scheduling order by postponing the production of ESI until after a ruling on class certification. Further, the Court finds the vast majority of requests are relevant to class certification, rather than merely merits issues, such that bifurcation would not significantly limit the discovery being compelled. Marathon's objections based on the requested discovery's lack of relevance to class-certification issues are overruled. Marathon's objections premised on the discovery's lack of proportionality to this “stage” of the proceedings are also overruled, as discovery is not staged or bifurcated.

         B. ESI Must Be Searched With Established ESI Protocols

         Across multiple requests for production, Plaintiff is requesting that Marathon search, review, and produce ESI. Specifically, Plaintiff is requesting searches of email accounts, shared folders, and desktop folders. Plaintiff stands willing (and has been willing) to negotiate search terms, custodians, and other ESI protocols for these requests. In support of its global argument that ESI searches are overly burdensome, Marathon relies on the affidavit of James Cashion, eDiscovery Support Analyst at Marathon. Cashion explained that, prior to March 26, 2018, emails not otherwise governed by a litigation hold order were retained for 45 days. Id. at ¶ 14. Cashion further represented that no backup data has been retained for emails prior to February 9, 2018. Id. at ¶ 15. ...