Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_17-cv-04297/USCOURTS-azd-2_17-cv-04297-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1836(a) Injunction against Misappropriation of Trade Secrets

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Excel Fortress Limited, et al.,

Plaintiffs, 

v. 

Vaughn La Verl Wilhelm, et al., 

Defendants. 

No. CV-17-04297-PHX-DWL

ORDER 

 Pending before the Court are three interrelated requests for relief: (1) Plaintiff 

EFG America, LLC’s Motion to Transfer and Consolidate (Doc. 79), (2) the parties’ Joint 

Written Summary of Discovery Dispute (Doc. 83), and (3) Plaintiffs’ Amended Motion 

to Extend Deadline to Submit Report of Rubber Devulcanization Expert (Doc. 88). As 

explained below, the Court will deny the motion to transfer, deny in significant part 

Plaintiffs’ discovery-related requests, and deny the motion to extend the expert-disclosure 

deadline. 

BACKGROUND 

1. The Trade Secrets Case 

This lawsuit (“the Trade Secrets Case”) was initiated in April 2017. (Doc. 1.) The 

complaint was initially filed in the U.S. District Court for the Southern District of Texas 

but was later transferred to this Court. (Doc. 39.) 

Plaintiffs’ theory, in a nutshell, is that Defendants misappropriated their trade 

secrets related to the “devulcanization” of rubber, improperly hired their former chief 

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scientist in China, and tortiously interfered with their contractual and business 

relationships. (See generally Doc. 79 at 2-3.) The operative complaint identifies two 

Plaintiffs (Excel Fortress Limited and EFG America, LLC) and five Defendants (Vaughn 

La Verl Wilhelm, Ryan McHugh, Eversource Capital LP, Eversource Group, LP, and 

Eversource Global Technology LLC). (Doc. 62.) 

 On January 19, 2018, Plaintiffs served their first set of interrogatories and requests 

for production on defendants Wilhelm and McHugh. (Doc. 48.) 

 On January 29, 2018, the parties filed their Rule 26(f) report. (Doc. 53.) In it, 

Plaintiffs voiced an intention to pursue discovery on an “expedited” basis so they could 

“quickly” seek injunctive relief. (Doc. 53 at 10-11.) Plaintiffs also requested a much 

more aggressive discovery schedule than Defendants—for example, Plaintiffs requested 

an initial expert disclosure deadline of August 3, 2018, while Defendants requested that 

this deadline not be set until February 1, 2019. (Doc. 53 at 10.) 

 In its Rule 16 Scheduling Order, the Court reached a compromise between the 

parties’ scheduling requests. (Doc. 55.) Specifically, the Court designated November 2, 

2018, as the deadline for Plaintiffs to make their initial expert disclosures. (Doc. 55 at 2.) 

The Court further emphasized that “[f]ull and complete disclosures . . . are required on or 

before the dates set forth above; absent truly extraordinary circumstances, parties will not 

be permitted to supplement their expert reports after these dates.” (Id.) The Court also 

advised the parties, during the Rule 16 scheduling conference, that extension requests 

should not be made on, or even near, the deadline at issue. 

 On February 20, 2018, Defendants Wilhelm and McHugh each submitted a 

response to Plaintiffs’ first set of interrogatories and requests for production. (Doc. 88, 

Exhs. 1, 2.) Each response included objections to some of the questions. (Id.) 

On November 2, 2018—some 255 days later—Plaintiffs brought the discovery 

dispute to the Court’s attention via the submission of a two-page joint summary. (Doc. 

83.) 

On November 2, 2018, Plaintiffs also filed a motion to extend the expertCase 2:17-cv-04297-DWL Document 100 Filed 11/20/18 Page 2 of 12
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disclosure deadline. (Doc. 87, refiled as amended as Doc. 88.) In that motion—which 

was filed at 5:59 p.m. on the day of the deadline—Plaintiffs asserted that “unanticipated 

business circumstances [had] prevented them from aggressively pursuing discovery” over 

the last eight months but assured the Court they were now “better situated” to pursue 

their claims. (Doc. 88 at 3-4.) Plaintiffs also acknowledged that their “expert with regard 

to rubber devulcanization technology,” which is “the issue at the very heart of this case,” 

had not even started his analysis. (Doc. 88 at 1). 

On November 13, 2018, the Court held a lengthy telephonic hearing to obtain 

more information concerning the discovery dispute. (Doc. 90.) 

2. The Fraud Case 

 On August 15, 2018, a separate lawsuit (“the Fraud Case”) was filed in the U.S. 

District Court for the District of Arizona. It was given case number 18-cv-2583 and 

assigned to Judge Humetewa. 

 The complaint in the Fraud Case identifies one Plaintiff (Eversource Capital, LP) 

and at least 18 Defendants. Only one of the Defendants (EFG America LLC) is also a 

party in the Trade Secrets Case. The complaint alleges, in a nutshell, that Eversource 

Capital was fraudulently induced to make a $950,000 loan to EFG America, LLC and 

that the loan was thereafter squandered. (See generally Doc. 79 at 4 [“Essentially, 

Defendants . . . in this action allege they made certain loans to EFG and Fimrite . . . .”].) 

3. The Consolidation/Transfer Request 

On October 15, 2018, EFG America, LLC—which, as noted, is a plaintiff in the 

Trade Secrets Case and a defendant in the Fraud Case—filed a motion to transfer and 

consolidate the two cases for discovery purposes. (Doc. 79.) 

On October 26, 2018, the five defendants in the Trade Secrets Case filed an 

opposition. (Doc. 81.) Their position is that the two cases have very little factual and 

legal overlap and that the consolidation request amounts to “nothing but an attempt to 

secure an extension of discovery after Plaintiffs [in the Trade Secrets Case] . . . failed to 

pursue discovery for over seven months.” (Doc. 81 at 2.) 

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ANALYSIS 

1. Discovery Dispute 

 In their written submission to the Court, the parties stated they had unresolved 

disputes concerning McHugh’s response to interrogatories 11-16, Wilhelm’s response to 

interrogatories 12-17, and both Defendants’ responses to document requests 1, 2, 5, 6, 9, 

10, 16, 17, and 18. (Doc. 83 at 1.) However, during the November 13 hearing, the 

parties clarified that (a) the McHugh interrogatory responses and the Wilhelm 

interrogatory responses are basically identical and raise the same issues (they were 

simply numbered differently) and (b) there is no actual dispute as to two of the 

interrogatories that were identified in the joint statement (McHugh 14/15 and Wilhelm 

14/15). (Doc. 90.) Accordingly, the Court will address only McHugh Interrogatories 11-

13 and 16 and RFPs 1, 2, 5, 6, 9, 10, 16, 17, and 18 in this Order. 

 For purposes of resolving those disputes, the Court notes that “broad discretion is 

vested in the trial court to permit or deny discovery, and its decision to deny discovery 

will not be disturbed except upon the clearest showing that denial of discovery results in 

actual and substantial prejudice to the complaining litigant.” Hallett v. Morgan, 296 F.3d 

732, 751 (9th Cir. 2002) (citation omitted). In general, a party 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). However, it is not the 

province of the Court to rewrite discovery requests that seek irrelevant information, are 

overbroad, or are otherwise improper. See, e.g., Mailhoit v. Home Depot U.S.A., Inc., 

2012 WL 12884129, *2 (C.D. Cal. 2012) (“[T]he court is not obligated to impose 

limiting constructions on interrogatories that are overbroad, vague, or seek irrelevant 

information, but may simply deny the request to compel further responses.”); Frieri v. 

Sysco Corp., 2017 WL 3387713, *7 (S.D. Cal. 2017) (“The Court declines to rewrite this 

discovery request to narrow the scope. Plaintiff’s motion to compel any further 

production in response to this request is DENIED.”); Mycosafe Diagnotics GmbH v. Life 

Techs. Corp., 2013 WL 12097536, *2 (S.D. Cal. 2013) (“The RFPs . . . are overbroad. . . 

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. [I]t is not the province of the Court to rewrite discovery requests. . . . Accordingly, the 

joint motion to determine a discovery dispute, to the extent that it contains Defendants 

motion to compel further responses to RFPs 54-56 is DENIED.”); Jarosiewicz v. Conlisk, 

60 F.R.D. 121, 127 (N.D. Ill. 1973) (“This Court will not attempt to judicially rewrite 

[plaintiff’s] interrogatories. Instead all interrogatories will be stricken without prejudice 

to the plaintiff so that the plaintiff can properly draft interrogatories if he deems it 

necessary.”). 

▪ McHugh Interrogatory 11 (Wilhelm Interrogatory 16) 

 This interrogatory requests information about each real or potential investor in 

Eversource “related to technology developed or used for the devulcanization of rubber.” 

(See Doc. 88-1 at 5; Doc. 88-2 at 9-10.) The Court orally denied Plaintiffs’ motion to 

compel during the November 13, 2018 hearing (Doc. 90) and wishes to expand on that 

ruling here. On the one hand, it’s true that some of the information sought by this 

interrogatory may be relevant to Plaintiffs’ claims for breach of contract and tortious 

interference. After all, the complaint alleges that Defendants violated nondisclosure 

agreements by “contracting for financing, business opportunities and consulting 

compensation with prohibited parties” (see Doc. 62 ¶¶ 76-81, 84), and any efforts by 

Defendants to knowingly obtain investments from Plaintiffs’ investors might be relevant 

to those claims. On the other hand, the interrogatory is overbroad because it also seeks 

information about Defendants’ investors who are not business contacts of Plaintiffs. The 

relevance of such information is not apparent, and the Court is mindful of the potential 

for abuse that may arise when one business seeks to use the discovery process to obtain 

minimally-relevant, highly-sensitive information from a competitor. The Court therefore 

denies Plaintiffs’ request to compel further responses. 

▪ McHugh Interrogatory 12 (Wilhelm Interrogatory 12) 

 This interrogatory requests identification of “all trips you have taken in which you 

have engaged in any professional activities . . . on behalf of EFG, Excel Fortress and/or 

Eversource.” (Doc. 88-1 at 5-6; Doc. 88-2 at 5.) Defendants contend the interrogatory is 

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overbroad and the Court agrees. This interrogatory would require McHugh and Wilhelm 

to identify each and every work trip they took over a multi-year period, regardless of 

whether the trip was related to any allegations in the complaint. It would, for example, 

require McHugh and Wilhelm to identify each instance they traveled to meet with a new 

prospective investor on behalf of Eversource, even if the prospective investor was 

unknown to Plaintiffs. For the reasons stated above (regarding McHugh 11/Wilhelm 16), 

such information is minimally relevant (if at all) and poses a potential for abuse in the 

hands of a competitor. The Court therefore denies Plaintiffs’ request to compel further 

responses. 

▪ McHugh Interrogatory 13 (Wilhelm Interrogatory 13) 

This interrogatory requests information about “each occasion on which you have 

met with either Dr. Li Xing Ru, or [his daughter] Li Zhe Ying . . . .” (Doc. 88-1 at 6-7; 

Doc. 88-2 at 5-7.) In their written responses, McHugh identified four such meetings and 

Wilhelm identified five. (Id.) During the November 13, 2018 hearing, Defendants 

conceded these responses were incomplete because they also met regularly with Dr. Li’s 

daughter relating to her work in the laboratory. Because these meetings may be relevant 

to Plaintiffs’ claims, the Court orders Defendants to supplement their responses to reflect 

all meetings that occurred between each Defendant and Dr. Li or Dr. Li’s daughter. 

However, to the extent Defendants have met with Dr. Li or Dr. Li’s daughter on a 

frequent basis related to a specific topic (e.g., discussing progress on development of 

devulcanization technology), it is sufficient for each Defendant to summarize those 

meetings under a single heading, rather than undertaking the burdensome task of 

identifying each specific meeting. 

▪ McHugh Interrogatory 16 (Wilhelm Interrogatory 17) 

This interrogatory requests that Defendants “[i]dentify all prospective, current and 

former vendors or service providers of Eversource from September 2015 to the present 

relating to rubber devulcanization products or services.” (Doc. 88-1 at 9-10; Doc. 88-2 

at 9-10.) Defendants contend this request is overbroad and the Court agrees. Once again, 

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although some of the information sought by this interrogatory may be relevant to 

Plaintiffs’ trade-secret and tortious-interference claims, it sweeps far too broadly. To the 

extent Plaintiffs wish to discover whether Defendants are utilizing particular chemicals or 

procuring particular services, they should propound tailored questions that go directly to 

those issues. Asking a business competitor to identify all of its vendors, due to the 

possibility that some of those vendors may be off-limits, is not an appropriate discovery 

tactic. 

▪ Document Request 1 

This request seeks “[a]ll communication . . . between you and other defendants in 

this matter . . . from September 2014 to present.” (Doc. 88-1 at 10-11; Doc. 88-2 at 10-

11.) This request is extraordinarily broad. It does not contain any subject matter 

limitations, such as communications “related to the devulcanization of rubber.” Instead, 

as written, it would require Defendants to produce communications completely unrelated 

to the claims in this case, such as invitations to social gatherings. The Court therefore 

denies Plaintiffs’ request to compel further production. 

▪ Document Request 2 

This request seeks “any and all documents, including communications, relating in 

any way to the business relationship between you and Eversource.” (Doc. 88-1 at 11; 

Doc. 88-2 at 11.) The Court first notes that there are three Eversource defendants in this 

case: Eversource Capital LP; Eversource Group, LP; and Eversource Global Technology 

LLC. As represented by Defendants during the November 13, 2018 hearing, at least 

some of the Eversource entities conduct some business unrelated to rubber 

devulcanization. But document request 2 does not limit itself to the rubber 

devulcanization business, which is the crux of this case. Consequently, the Court finds 

the request is overbroad and therefore denies Plaintiffs’ request to compel further 

production. 

▪ Document Request 5 

This request seeks “any and all documents, including communications, relating 

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[to] Dr. Li Xing Ru from September 2014 to present.” (Doc. 88-1 at 12; Doc. 88-2 at 

12.) The request is overbroad because it does not contain any subject matter limitations. 

It would, for example, require Defendants to produce documents demonstrating Dr. Li’s 

efforts to develop new devulcanization technologies that are unrelated to Plaintiffs’ 

alleged trade secrets or any other claims. Thus, the Court denies Plaintiffs’ request to 

compel further production. 

▪ Document Request 6 

This request seeks the same production as request 5, except with regard to Dr. Li’s 

daughter. (See Doc. 88-1 at 12; Doc. 88-2 at 12.) It fails for the same reason—a lack of 

subject-matter limitation. The Court therefore denies Plaintiffs’ request to compel further 

production. 

▪ Document Request 9 

This request seeks “any and all documents relating to the business purposes and 

products of Eversource or your current employer in the rubber devulcanization business.” 

(Doc. 88-1 at 13; Doc. 88-2 at 13.) The Court denied Plaintiffs’ request to compel further 

production during the November 13, 2018 hearing (Doc. 90) and wishes to expand on its 

reasoning here. To comply with this request, Defendants would presumably need to 

produce every scrap of paper ever created by any of the Eversource entities (one of which 

apparently has little if anything to do with rubber devulcanization). This is improper. Cf.

Segan v. Dreyfus Corp., 513 F.2d 695, 696 (2d Cir. 1975) (interrogatories seeking 

“virtually the entire business history of defendants for a period of several years” 

constituted an impermissible “fishing expedition of large proportions”). Furthermore, it 

is not the Court’s job to create a limiting construction that might cure such obvious 

overbreadth. 

▪ Document Request 10 

This request seeks “any and all documents, including communications, related to 

the development of devulcanized rubber by Eversource or your current employer.” (Doc. 

88-1 at 13; Doc. 88-2 at 13.) This request is overbroad as written because it would 

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require Defendants to produce, for example, documentation regarding research they are 

currently conducting to develop new processes for devulcanizing rubber. Such 

information is unnecessary for Plaintiffs to prove Defendants stole their trade secrets and 

poses a potential for abuse in the hands of a competitor. The Court therefore denies 

Plaintiffs’ request to compel further production. 

▪ Document Request 16 

This request seeks telephone records for every cell phone used by Defendants, 

“whether for personal or professional purposes,” from September 2015 to the present. 

(See Doc. 88-1 at 4, 15; Doc. 88-2 at 4, 15.) Although some of Defendants’ cell phone 

records may be properly subject to discovery, Plaintiffs’ insistence on demanding the 

production of personal cell phone records with no connection to the claims asserted in the 

complaint renders this request—like so many of the others—overbroad. Accordingly, the 

Court denies Plaintiffs’ request to compel further production. 

▪ Document Request 17 

This request seeks “travel records and receipts related to your response to 

Interrogatory No. 12.” (Doc. 88-1 at 15; Doc. 88-2 at 15.) Because the Court has 

determined that interrogatory 12 is overbroad, the Court denies Plaintiffs’ request to 

compel further production pursuant to document request 17. 

▪ Document Request 18 

This request seeks “any and all financial or banking records” for accounts 

Defendants used related to rubber devulcanization efforts. (Doc. 88-1 at 15-16; Doc. 88-

2 at 15-16.) This request is again overbroad. Although it might enable Plaintiffs to 

discover information relevant to their claims, it is also likely to drag in a large amount of 

sensitive information that is irrelevant to Plaintiffs’ claims, such as payments to 

Defendants’ suppliers with whom Plaintiffs have never had a business relationship. 

Accordingly, the Court denies Plaintiffs’ request to compel further production. 

2. Motion to Extend 

 “Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party 

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seeking the amendment. . . . [C]arelessness is not compatible with a finding of diligence 

and offers no reason for a grant of relief. . . . [T]he focus of the inquiry is upon the 

moving party’s reasons for seeking modification. If that party was not diligent, the 

inquiry should end.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 

1992). 

 Here, Plaintiffs were not diligent in pursuing discovery. After Defendants 

responded to Plaintiffs’ discovery requests, Plaintiffs waited more than eight months to 

raise their grievances with the Court regarding the perceived inadequacy of those 

responses. Indeed, Plaintiffs filed their Motion for Extension of Time at 5:59 p.m. on the 

evening of the deadline. This is the antithesis of diligence. 

 It is also apparent that the parties made very little effort to meet and confer before 

bringing their discovery dispute to the Court’s attention. As discussed above, many of 

the overbreadth deficiencies in Plaintiffs’ interrogatories and requests for production may 

be curable. The parties should have spent the last eight months working together to 

resolve (or, at least, narrow the scope of) these issues. That didn’t happen. As a result, 

Plaintiffs were left to dump a series of overbroad discovery requests on the Court’s lap on 

the eve of the expert-disclosure cutoff. This, again, is the antithesis of diligence. 

 It is also notable that several of the disputed discovery requests (e.g., the requests 

about contacts with investors) seek information primarily related to Plaintiffs’ tortious 

inference claim, not their trade secrets claim. It is not clear why Plaintiffs’ 

devulcanization expert would need such information before starting his analysis. 

 Accordingly, the Court finds that Plaintiffs were not diligent in pursuing discovery 

and that “good cause” therefore does not exist to amend the scheduling order to extend 

the expert-disclosure deadline. 

3. Motion to Transfer and Consolidate 

 Federal Rule of Civil Procedure 42(a) provides that “[i]f actions before the court 

involve a common question of law or fact, the court may (1) join for hearing or trial any 

or all matters at issue in the actions; (2) consolidate the actions; or (3) issue any other 

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orders to avoid unnecessary cost or delay.” A district court has “broad discretion” under 

this rule and should “weigh[] the saving of time and effort consolidation would produce 

against any inconvenience, delay, or expense that it would cause.” Huene v. United 

States, 743 F.2d 703, 704 (9th Cir. 1984). Thus, even if a common question of law or 

fact exists, the “court ‘may,’ but is not required to, consolidate actions.” Garity v. APWU 

Nat’l Labor Org., 828 F.3d 848, 856 (9th Cir. 2016) (emphasis in original). “The party 

seeking consolidation bears the burden of demonstrating that convenience and judicial 

economy would result from consolidation.” Snyder v. Nationstar Mortg. LLC, 2016 WL 

3519181, *2 (N.D. Cal. 2016). 

The Court will decline to order consolidation here. First, the two cases have very 

little factual overlap. As noted, the Trade Secrets Case primarily concerns whether 

Defendants: (1) misappropriated Plaintiffs’ trade secrets related to the devulcanization of 

rubber; (2) made false and disparaging statements to third parties about Plaintiffs; (3) 

tortiously interfered with Plaintiffs’ business relationships; and (4) violated the terms of a 

nondisclosure agreement. On the other hand, the Fraud Case alleges that the 

approximately 18 defendants fraudulently induced Eversource Capital, LP (a defendant in 

the Trade Secrets Case) to loan $950,000 to them and that those defendants breached the 

terms of the loan. The cases currently share only two parties: Eversource Capital and 

EFG America LLC. Plaintiffs do not allege the two cases share any common questions 

of law, and it is questionable whether the cases’ modestly overlapping factual 

backgrounds qualify as a “common question of fact” under Rule 42(a). 

Second, and more important, consolidation would be inappropriate even if Rule 

42(a)’s threshold requirement of commonality were met. Because “[t]he factual 

determinations to be made in each case will be mostly unrelated,” there is little reason to 

believe consolidation will promote judicial economy. Silaev v. Swiss-America Trading 

Corp., 2015 WL 12938977, *2 (D. Ariz. 2015). Additionally, consolidation will result in 

hardship and unfairness to some of the parties. The Trade Secrets Case was filed more 

than a year and a half ago and the expert-disclosure deadline has already passed. The 

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Fraud Case, in contrast, was filed only a few months ago and its expert-disclosure 

deadline isn’t until late 2019. Consolidating the two cases “for discovery purposes,” as 

Plaintiffs request, would thus work to the detriment of Wilhelm, McHugh, and the other 

parties who are only defendants in the Trade Secrets Case—it would increase their 

litigation costs and significantly delay their case’s resolution. See, e.g., Firefighters, 

Local 1908 v. Cty. of Clark, 2012 WL 1986590, *3 (D. Nev. 2012) (denying 

consolidation request, despite presence of common questions of fact, because the two 

cases posed different legal issues and “perhaps most importantly, the two cases that 

Plaintiff seeks to consolidate are at different stages of the litigation process”). See also

Fed. R. Civ. P. 1 (the rules of civil procedure “should be construed, administered, and 

employed . . . to secure the just, speedy, and inexpensive determination of every action 

and proceeding”). Moreover, the effect of ordering consolidation would be to give 

Plaintiffs a second bite at the discovery apple after displaying a marked lack of diligence 

over the past eight months. 

 Because the Court is denying the motion for consolidation, it will not address 

whether transfer is appropriate. Silaev, 2015 WL 12938977 at *2 (“Because the Court 

has not granted consolidation, it does not independently reach the issue of whether 

transfer is appropriate.”). 

 Accordingly, 

IT IS ORDERED that Plaintiffs’ request to compel further discovery responses 

(Doc. 83) is GRANTED IN PART AND DENIED IN PART, as discussed above. 

IT IS FURTHER ORDERED that Plaintiffs’ Amended Motion to Extend 

Deadline to Submit Report of Rubber Devulcanization Expert (Doc. 88) is DENIED. 

IT IS FURTHER ORDERED that Plaintiff’s Motion to Transfer and 

Consolidate (Doc. 79) is DENIED. 

 Dated this 20th day of November, 2018. 

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