Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-01770/USCOURTS-azd-2_05-cv-01770-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

FTN Financial Capital Markets, a division

of First T ennessee Bank National

Association, and FTN Financial Securities

Corporation,

Plaintiffs, 

vs.

Miller Johnson Steichen & Kinnard, Inc.,

Defendant.

Carolyn Nance,

Intervenor,

vs.

Miller Johnson Steichen & Kinnard, Inc.,

Defendant. 

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No. CIV 05-1770-PHX-EHC

ORDER

Pending before the Court is Plaintiffs' Motion to Compel Discovery and Request for

Sanctions and Attorneys' Fees. [Dkt. 33]. The Motion is fully briefed.

Background

This case arises from Plaintiff FTN Financial Capital Markets hiring of Defendant's

former employee Intervenor Carolyn Nance, and nine others employed by Defendant, to

allegedly establish a business competing with Defendant. Defendant filed an arbitration

Case 2:05-cv-01770-EHC Document 58 Filed 05/02/06 Page 1 of 4
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1

 The parties agreed to stay the arbitration pending resolution of this case.

2

 The parties have filed Cross-Motions for Summary Judgment on the arbitrability

issue. [Dkts. 37, 46 & 47]. Those Motions are not fully briefed. 

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claim1

 against First Tennessee Nat ional Corporation n/k/a First Horizon National

Corporation (the parent company of Plaintiffs), Plaintiff FTN Financial Securities Corp. and

Intervenor. Plaintiffs and Intervenor seek a declaration from t he Court that Defendant's

claims are not arbitrable2 and a declaration that Defendant's claims are barred by the statute

of limitations.

Discovery Objections related to Determination of Arbitrability

Defendant has refused to respond to Plaintiffs' First Interrogatories one, t hree, five

through seven and ten through thirteen and Plaintiffs' First Requests for Production one

through three and seven through ten. "Parties may obtain discovery regarding any matter,

not privileged, t hat is relevant to the claim or defense of any party." Fed. R. Civ. P. 26(b)(1).

With exceptions discussed below, Plaintiffs' discovery requests are relevant to Count

Three of Plaintiff's Complaint, alleging that Defendant's claims are barred by t he st at ute of

limitations. The discovery requests, therefore, are directed towards relevant matters.

 Notwithstanding their relevance, Defendant argues it need not respond to the

discovery requests on the ground t hat those discovery requests are not relevant to

determining whether Plaintiffs' claims must be arbitrated. [See dkt. 33, ex. 1 & 2]. Fed. R. Civ.

P. 26(c) provides that "[u]pon mot ion by a party... and for good cause shown, the court...

may make any order which justice requires..., including... (4) t hat certain matters not be

inquired into, or that the scope of disclosure or discovery be limited to cert ain matters."

Defendant has not moved for a prot ect ive order narrowing the scope of discovery pending

the determination of arbitrability. In any event, Defendant has not shown good cause for

an order limiting discovery . Whether this Court or an arbitrator determines whether

Defendant's claims are barred by the statute of limitations, Defendant will be required t o

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provide Plaint iff with materials relevant to the statute of limitations issue. Narrowing

discovery would further delay resolution of this case.

Other Objections

Defendant objects to certain of Plaintiffs' discovery requests concerning when

Defendant learned of the conduct of the nine former employees of Defendant. The conduct

of those employees is not relevant to determining whether Defendant's claims against

Plaintiffs and Intervenor are arbitrable or barred by the statute of limitations, which are the

only issues before the Court. Defendant will not be required to respond to interrogatories

one and thirteen and document requests one and ten as they regard the nine former

employees.

Defendant objects that document request seven calls for irrelevant material. That

request calls for p roduction of documents "which relate to the proposals made by Carolyn

Nance." [Dkt. 41, p. 6]. Plaintiff argues those documents describe Intervenor's departure

from Defendant's employ, which is relevant to Defendant's claims in the arbitration. The

details of Intervenor's departure, however, are not relevant to whether Defendant's claims

are arbitrable or time barred, the issues before the Court. Defendant will not be required to

respond to document request seven.

Defendant objects that interrogatories one and thirteen and document requests one,

eight, nine and ten call for material protected by either the attorney-client privilege or the

work-product doctrine. Defendant must respond to t he discovery requests to the extent

that they request non-privileged information. Defendants are not required to disclose

privileged information. If Defendant withholds documents based on privilege, Defendant

must provide Plaintiffs a privilege log identifying the nature of the withheld document and

the basis for its withholding.

Sanctions

The Court finds substantial justification for Defendant's objections and will not

impose sanctions. See Fed. R. Civ. P. 37(a)(4)(A).

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Accordingly,

IT IS ORDERED that Plaintiffs' Motion to Compel Discovery and Request for

Sanctions and Attorneys' Fees [dkt. 33] is GRANTED IN PART and DENIED IN PART.

IT IS FURTHER ORDERED that Defendant shall answer Plaintiffs' First

Interrogatories three, five through seven and ten through twelve; Defendant shall answer

Plaintiffs' First Interrogatories one and thirteen as they regard Intervenor.

IT IS FURTHER ORDERED that Defendant shall produce the documents requested

in Plaint iffs' First Requests for Production two, three, eight and nine; Defendant shall

produce the documents request ed in Plaintiffs' First Requests for Production one and ten

as they regard Intervenor.

IT IS FURTHER ORDERED that Defendant is not required to disclose those

materials protected by either the attorney-client privilege or the work-product doct rine and

requested in Plaintiffs' First Interrogatories one and thirteen and Plaintiff's First Request

for Product ion one, eight, nine and ten. If Defendant withholds documents based on

privilege, Defendant must provide Plaintiffs a privilege log identifying t he nature of the

withheld document and the basis for its withholding.

DATED this 1st day of May, 2006.

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