Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_18-cv-04819/USCOURTS-azd-2_18-cv-04819-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

GlobalTranz Enterprises, Inc.,

Plaintiff,

v. 

Sean Michael Murphy, et al.,

Defendants.

No. CV-18-04819-PHX-DWL

ORDER 

Pending before the Court is Defendant Michael Murphy’s motion to compel

Plaintiff GlobalTranz Enterprises, Inc. (“GlobalTranz”) to produce three categories of 

documents. (Doc. 91.) For the following reasons, the motion will be granted in part and 

denied in part. 

BACKGROUND

On November 15, 2018, GlobalTranz initiated this action by filing a complaint in 

Maricopa County Superior Court against Murphy, DirectPoint Logistics, LLC 

(“DirectPoint”), and Armstrong Transport Group, LLC (“Armstrong”). (Doc. 1-3 at 24-

46.) In broad strokes, the complaint alleges that GlobalTranz, a “logistics company 

specializing in freight management services,” hired Murphy in March 2014 to act as a sales 

representative, that Murphy signed various agreements (including a non-disclosure 

agreement and a non-solicitation agreement) as part of his employment, and that Murphy 

breached those agreements by disclosing GlobalTranz’s trade secrets to Armstrong (one of 

GlobalTranz’s competitors) and DirectPoint (a company that Murphy founded in January 

2018, a few weeks before resigning from GlobalTranz) and by diverting GlobalTranz’s 

customers to those entities. (Id. at 25-34.) Based on those allegations, the complaint asserts 

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claims against Murphy for breach of contract (Count One), breach of fiduciary duty (Count 

Two), misappropriation of trade secrets (Counts Four and Five), tortious interference 

(Count Six), conversion (Count Seven), breach of the covenant of good faith and fair 

dealing (Count Eight), unjust enrichment (Count Nine), and civil conspiracy (Count Ten).

On December 14, 2018, Murphy filed an answer and asserted two counterclaims, 

one for unpaid overtime in violation of the Fair Labor Standards Act and the other for 

unpaid wages and overtime in violation of Arizona law. (Doc. 1-3 at 5-20.) 

On December 19, 2018, Armstrong removed this action to federal court. (Doc. 1.)

On February 11, 2019, the Court issued the Rule 16 scheduling order. (Doc. 19.) It 

established a discovery deadline of October 25, 2019. (Id. ¶ 5.) 

On September 23, 2019, the parties filed a joint notice asking the Court to resolve a 

discovery dispute, which concerned whether GlobalTranz should be compelled to produce 

certain materials from a different lawsuit. (Doc. 40.) Following a telephonic hearing, the 

Court granted Murphy’s request in part and extended the discovery deadline to January 23, 

2020 in light of the new production obligations. (Doc. 44.) 

On December 13, 2019, the parties filed a joint motion to further extend the 

discovery deadline to February 21, 2020. (Doc. 70.) That request was granted. (Doc. 71.)

On January 13, 2020, the parties filed another joint notice asking the Court to resolve 

a discovery dispute, this one concerning whether GlobalTranz should be compelled to 

produce certain witnesses for depositions. (Doc. 75.) Following a telephonic hearing, the 

Court granted Murphy’s request in part, holding that Murphy could depose some (but not 

all) of the witnesses in question. (Doc. 47.) 

On February 13, 2020, the parties filed yet another joint notice of a discovery 

dispute. (Doc. 88.) This time, Murphy provided 10 pages of briefing, which violated the 

discovery-dispute procedure set forth in the Rule 16 scheduling order. (Doc. 19 ¶ 7(a).) 

Accordingly, the Court denied Murphy’s affirmative discovery-related requests without 

prejudice to his ability to file a written motion to compel. (Docs. 89, 90.) 

On February 28, 2020, Murphy filed the motion to compel. (Doc. 91.)

On March 11, 2020, GlobalTranz filed a response. (Doc. 96.)

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On March 18, 2020, Murphy filed a reply. (Doc. 101.)

ANALYSIS

A. Legal Standard

Murphy seeks relief under Rule 37(a)(3)(B) of the Federal Rules of Civil Procedure, 

which provides that “[a] party seeking discovery may move for an order compelling an 

answer, designation, production, or inspection.” 

Rule 26(b), in turn, defines the “Scope and Limits” of discovery. Under Rule 

26(b)(1), “[p]arties 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, 

considering the importance of the issues at stake in the action, the amount in controversy, 

the parties’ relative access to relevant information, the parties’ resources, the importance 

of the discovery in resolving the issues, and whether the burden or expense of the proposed 

discovery outweighs its likely benefit.”

1

 Notably, under Rule 26(b)(1), “[i]nformation . . . 

need not be admissible in evidence to be discoverable.” Finally, Rule 26(b)(2)(C) provides 

that “the court must limit the frequency or extent of discovery otherwise allowed by these 

rules if it determines,” inter alia, that “the discovery sought is unreasonably cumulative or 

duplicative, or can be obtained from some other source that is more convenient, less 

burdensome, or less expensive.”

B. Request One: GlobalTranz’s New Employment Agreement For Inside Sales Agents

First, Murphy seeks an order compelling GlobalTranz to produce the “new 

employment agreement [it] began using for newly hired employees during Murphy’s 

1 The current version of Rule 26(b)(1) was enacted in 2015. An earlier version 

provided that the requested material had to be “relevant to the subject matter involved in 

the pending action,” and the Ninth Circuit has recognized that the change in 2015 (under 

which “the ‘subject matter’ reference [was] eliminated from the rule, and the matter sought 

must be ‘relevant to any party’s claim or defense’”) “was intended to restrict, not broaden, 

the scope of discovery.” In re Williams-Sonoma, Inc., 947 F.3d 535, 539 (9th Cir. 2020). 

See also Fed. R. Civ. P. 26, advisory committee’s note to 2015 amendment (noting that 

Rule 26(b)(1) was amended in 1983 in part “to encourage judges to be more aggressive in 

identifying and discouraging discovery overuse,” that the “clear focus of the 1983 

provisions may have been softened, although inadvertently, by [subsequent] amendments,” 

and that the 2015 amendment was intended in part to “restore[] the proportionality factors 

to their original place in defining the scope of discovery”). 

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employment.” (Doc. 91 at 2.) He contends this agreement is discoverable under Rule 

26(b)(1) because he is being sued for violating the restrictive covenants in his employment 

agreement, Arizona law provides that the enforceability of a restrictive covenant turns on 

its reasonableness, and if GlobalTranz now requires its employees to submit to differently 

worded restrictive covenants, the change may bear upon the reasonableness of his 

covenants. (Id. at 2-5.) In support of this position, he cites Health Mgmt. Assocs., Inc. v. 

Salyer, 2015 WL 13776250 (S.D. Fla. 2015). 

GlobalTranz disagrees, arguing that “the reasonableness of the terms in Murphy’s 

2014 Agreement with [GlobalTranz] will be determined by examining the totality of the 

circumstances of the facts particular to Murphy’s case,” not by examining “form contracts 

Murphy was never asked to sign,” and that Salyer is distinguishable because the defendant 

in that case was challenging the enforceability of his restrictive covenant under a selectiveenforcement theory (which Murphy isn’t raising here). (Doc. 96 at 3-4.)

Murphy replies that the existence of the new agreement is relevant because (1) it 

establishes “an inconsistency and lapse in enforcement policies,” (2) it “undermines and 

diminishes the nature of the interest [GlobalTranz] claims it is seeking to protect through 

the employment agreement at issue,” and (3) if it is different from his agreement, “those 

differences would be relevant in assessing reasonableness of restrictive covenants at issue 

in this case, i.e., whether the restraints in the agreement at issue in this case were greater 

than necessary to protect [GlobalTranz’s] alleged interest.” (Doc. 101 at 104.)

The discoverability of GlobalTranz’s new contract presents a close call. On the one 

hand, it’s not clear that the new contract would be admissible at trial for purposes of 

challenging the enforceability of the restrictive covenants contained in Murphy’s contract. 

Salyer is distinguishable because it involved a selective enforcement claim2(which 

Murphy doesn’t appear to be raising here), it’s not clear that selective enforcement is even 

2 Salyer, 2015 WL 13776250 at *1 (“The Plaintiff is claiming that the Defendant is 

subject to non-compete agreements which the Defendant, by leaving his employment at the 

Sebastian hospital . . . for employment at the Vero Beach hospital . . . , breached. To defend 

against that claim, the Defendant is alleging the non-prior use, non-enforcement, and 

selective enforcement of non-compete agreements by the Plaintiff.”).

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a valid basis under Arizona law for challenging a restrictive covenant,3and Murphy has 

not cited any cases holding, or even suggesting, that an employee may demonstrate the 

unreasonableness of the restrictive covenants in his contract by introducing different 

contracts that other employees executed at other times. (Indeed, even if such contracts 

theoretically had some utility in assessing the reasonableness of a particular employee’s 

restrictive covenants, their introduction would potentially pose Rule 403 concerns.) Also, 

it’s not clear that the restrictive covenants appearing in the new contract differ from the 

ones in Murphy’s contract—instead, Murphy seems to be speculating they might be 

different and then arguing that, if they are different, this might support a challenge to the 

reasonableness of his covenants. 

On the other hand, Rule 26(b)(1) makes clear that the “[i]nformation . . . need not 

be admissible in evidence to be discoverable” and GlobalTranz has not cited any cases 

holding that other-contracts evidence is categorically inadmissible in a case involving a 

reasonableness challenge to a restrictive covenant. Additionally, GlobalTranz is not 

making a proportionality challenge or arguing that its new contract is privileged or 

otherwise sensitive—its sole objection is a lack of relevance. 

At bottom, Murphy has identified plausible reasons why the new contract could be 

relevant in this action. Given Rule 26(b)(1)’s broad, albeit not unlimited, conception of 

relevance, Murphy’s motion to compel as to the first category of discovery will be granted. 

C. Request Two: GlobalTranz’s Standard Agreement For Outside Sales Agents

Second, Murphy seeks an order compelling GlobalTranz to produce “[a]ll 

documents referring or relating to Globaltranz’[s] policies or practices that discuss or 

3 See, e.g., Larweth v. Magellan Health, Inc., 398 F. Supp. 3d 1281, 1292 (M.D. Fla. 

2019) (“Larweth has failed to provide authority under any law that not enforcing restrictive 

covenants against other employees in any way impacts the enforceability of Larweth’s 

restrictive covenants.”); Minnesota Mining & Mfg. Co. v. Kirkevold, 87 F.R.D. 324, 336

(D. Minn. 1980) (“All things considered, the failure of 3M to attempt to enforce similar 

[restrictive] covenants against other former employees . . . [does not] estop 3M from 

enforcing the covenant in question. For the Court to hold otherwise would effectively place 

employers in the precarious position of being compelled to enforce all such restrictive 

covenants with respect to all its former employees, which might encourage attempts to 

restrain trade, and which might undermine labor relations.”).

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address nature and scope of documents or information that Globaltranz authorizes or 

permits outside brokers or agents to access.” (Doc. 91 at 6.) He contends that, because it 

is “undisputed that [GlobalTranz’s] outside agents/brokers have access to [GlobalTranz’s]

databases, software, and the same or similar information regarding customers and 

prospective customers as [GlobalTranz’s] inside sales employees,” he needs the requested 

documents to determine whether GlobalTranz subjects its outside brokers to the same sorts 

of restrictive covenants to which he was subjected—a determination that will, in turn, shed 

light on the disputed issues of (1) whether his restrictive covenants are reasonable and (2) 

whether GlobalTranz took reasonable steps to protect its trade secrets. (Id. at 6-7.)

In response, GlobalTranz argues that Murphy’s request should be denied because 

(1) it already produced one outside broker contract to Murphy, (2) it previously informed 

Murphy that it does not have any “policies or practices that discuss outside agent’s access 

to [GlobalTranz’s] proprietary computer system,” (3) to the extent Murphy is seeking 

outside broker contracts from 2014-18, they are irrelevant because they predate the period 

during which Murphy served as an outside broker, and (4) Murphy’s “failure to protect 

trade secrets” theory wasn’t disclosed in his MIDP disclosures. (Doc. 96 at 2-4.)

In his reply, Murphy acknowledges that GlobalTranz has now produced its 

agreement with one outside broker but contends that GlobalTranz only did so in response 

to the motion to compel. (Doc. 101 at 3.) Murphy argues that the other outside broker 

contracts remain discoverable because “if [GlobalTranz’s] agreements with outside 

broker/agents do not provide any restriction or obligations that flow to employees or other 

individuals working through the outside broker/agent with the direct contractual 

relationship with [GlobalTranz], that would significantly undermine [GlobalTranz’s] 

alleged interest and the reasonableness of restrictive covenants at issue in this case.” (Id.

at 5.) 

The analysis concerning GlobalTranz’s outside broker contracts largely mirrors the 

analysis (in Part B above) concerning GlobalTranz’s new form contract for employees. 

Although it is questionable whether such contracts will ultimately be admissible in this 

case, admissibility isn’t a prerequisite to discoverability under Rule 26(b)(1), Murphy’s 

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arguments concerning the documents’ potential relevance have some plausibility, and 

GlobalTranz hasn’t raised any concerns about burdensomeness or proportionality. Thus, 

Murphy’s motion to compel as to the second category of discovery will be granted. 

D. Request Three: Personnel File

Third, Murphy seeks an order compelling GlobalTranz to produce “certain 

documents” from the personnel file of Joel Rosenblatt, GlobalTranz’s former vicepresident of operations. (Doc. 91 at 7-10.) Specifically, Murphy seeks “all agreements 

Mr. Rosenblatt entered into with [GlobalTranz]; (2) documents related to his job 

performance, performance evaluations, or discipline he received during his employment 

with [GlobalTranz]; and (3) correspondence between Mr. Rosenblatt and [GlobalTranz] 

regarding his employment agreements, his continuing obligations after his separation of 

employment from [GlobalTranz], and any alleged violations thereof.” (Id. at 10.) Murphy 

contends these documents are discoverable because Rosenblatt—who signed the complaint 

and some of the discovery responses in this case and who managed one of GlobalTranz’s 

key accounts following Murphy’s departure—was terminated by GlobalTranz in June 

2019. (Id.) Murphy thus contends that the requested documents may contain evidence that 

Rosenblatt mismanaged the account following Murphy’s departure (which would 

undermine GlobalTranz’s ability to prove causation on its damage claims) and may contain 

severance agreements that “are relevant to [Rosenblatt’s] potential bias or prejudice as a 

key trial witness in this case.” (Id. at 9.) Murphy also cites cases recognizing that a 

company’s personnel files “are not protected by any ‘generic privacy privilege’” and may 

be subject to production in appropriate cases. (Id. at 9-10, citations omitted).

In response, GlobalTranz argues that nothing in Rosenblatt’s personnel file could 

possibly be relevant to the claims or defenses in this action because (1) “Murphy did not 

report directly to Mr. Rosenblatt,” and indeed “there were at least three layers of 

management between Mr. Rosenblatt and Murphy,” and (2) “Rosenblatt left [GlobalTranz] 

eighteen . . . months after Murphy resigned,” so “the timing of Mr. Rosenblatt’s 

employment with [GlobalTranz] ending was far removed from Murphy’s resignation.” 

(Doc. 96 at 5.) GlobalTranz also argues that the cases cited in Murphy’s motion are 

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distinguishable because they “involved the personnel files of an employee directly involved 

with the incident giving rise to the action,” whereas “the only employee directly involved 

with Murphy’s choice to take a [GlobalTranz] customer is Murphy.” (Id. at 6.) Finally, 

GlobalTranz notes that Murphy already deposed Rosenblatt and asked questions related to 

the mitigation of damages during that deposition, so there is no reason to believe 

Rosenblatt’s personnel file would somehow contain more evidence relevant to that topic. 

(Id.) 

Murphy replies that Rosenblatt was involved in some of the conduct at issue in this 

case (because he assumed management of a key account after Murphy resigned); that if 

Rosenblatt’s severance agreement contains a restrictive covenant, it may be relevant in 

assessing the reasonableness of Murphy’s covenant; that any compensation owed to 

Rosenblatt under a severance agreement may be indicative of bias; and that if Rosenblatt 

was terminated for cause, this would undermine GlobalTranz’s causation arguments. (Doc. 

101 at 5-6.) 

Murphy’s motion to compel the production of sensitive documents from 

Rosenblatt’s personnel file will be denied. This request has all the hallmarks of a fishing 

expedition—Murphy simply speculates that the documents in Rosenblatt’s personnel file 

may support some of his defenses. Additionally, although Murphy is correct that personnel 

files may be subject to production in appropriate circumstances, it can’t be overlooked that 

“personnel files, even of a party’s agent, may contain information that is both private and 

irrelevant to the case, and that special care must be taken before personnel files are turned 

over to an adverse party.” Long v. Valley Forge Military Academy Foundation, 2009 WL 

10733869 (E.D. Pa. 2009) (quotation omitted). Thus, although the Court granted Murphy’s 

request to compel production of the first two categories of documents despite the somewhat 

speculative nature of his relevance theories, the third category triggers different concerns. 

See also Fritz v. Charter Tp. of Comstock, 2010 WL 1856481, *1 (W.D. Mich. 2010) 

(“When the subject of a discovery request is personnel files, it is appropriate for the Court 

to require a heightened showing of relevance and need.”). 

Finally, one of the reasons why Murphy wishes to obtain the personnel file is 

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because Rosenblatt was the GlobalTranz employee who signed the complaint in this case. 

(Doc. 91 at 8.) Elsewhere, Murphy has argued that he wishes to pursue a counterclaim 

against GlobalTranz for abuse of process, based on the theory that simply filing the 

complaint was tortious. (Doc. 64.) However, in a recent order, the Court concluded that 

Murphy could not amend his pleadings to assert such a counterclaim. (Doc. 108.) This 

further undermines Murphy’s need to obtain Rosenblatt’s personnel file—it is not relevant 

to the claims or defenses in this case.

E. Attorneys’ Fees

GlobalTranz included, in its response to the motion to compel, a request for 

attorneys’ fees under Rule 37(a)(5). (Doc. 96 at 1, 6.) 

This request will be denied. Rule 37(a)(5)(C) provides that when (as here) a motion 

to compel “is granted in part and denied in part, the court may . . . , after giving an 

opportunity to be heard, apportion the reasonable expenses for the motion.” Here, the 

Court will exercise its discretion to decline to award fees to either party. Both sides’ 

positions were substantially justified.

Accordingly, IT IS ORDERED that: 

(1) Murphy’s motion to compel (Doc. 91) is granted in part and denied in 

part. 

(2) GlobalTranz must, within 14 days of the issuance of this order, produce (1) 

the new employment agreement that GlobalTranz began using in 2016/2017 for all newly 

hired employees, and (2) form agreements GlobalTranz used with outside agents/brokers 

during Murphy’s employment.4

(3) The dispositive motion deadline is April 28, 2020 (Doc. 110), which is before 

the documents at issue will be produced. Accordingly, to the extent Murphy concludes, 

after receiving the documents, that they support his entitlement to summary judgment, the 

parties are ordered to confer about whether and how Murphy should be allowed to 

4 The verbiage in paragraph (2) is derived from Murphy’s proposed order (Doc. 91-

1), after eliminating category three and the portion of category two seeking the MN contract 

(which the parties agree has now been produced).

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supplement his summary judgment motion. Following the conferral process, the parties 

are ordered to file a joint notice summarizing their positions.

Dated this 27th day of April, 2020.

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