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In re Arbitration Between Shepherd

United States District Court, E.D. North Carolina, Western Division

March 18, 2019

IN THE MATTER OF THE ARBITRATION BETWEEN HOLTON B. SHEPHERD, et al., Plaintiffs,
v.
LPL FINANCIAL LLC, Defendant.

          ORDER

          KIMBERLY A. SWANK, UNITED STATES MAGISTRATE JUDGE

         This matter is before the court on Plaintiffs' motion to compel discovery pursuant to Fed.R.Civ.P. 37 [DE #55]. Defendant LPL Financial LLC (“LPL Financial”) has responded in opposition to the motion. Plaintiffs' motion has been referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(A) for disposition. For the reasons stated below, Plaintiffs' motion to compel is denied.

         BACKGROUND

         Plaintiffs initiated arbitration (the “underlying arbitration”) on July 9, 2015, seeking over $1.3 million in damages against Defendant LPL Financial, claiming that its failure to supervise its employee led to millions of dollars in losses for dozens of LPL Financial customers, including Plaintiffs. On December 6, 2016, a panel of three arbitrators awarded Plaintiffs over $100, 000. (Arbitration Award [DE #1-2 at 20].) On February 28, 2017, Plaintiffs filed a petition to vacate the arbitration award in North Carolina state court, which Defendant removed to this court on March 30, 2017. (Pet. Vacate [DE #1-2 at 12]; Notice Removal [DE #1].) As grounds for their petition, Plaintiffs assert, in part, that the arbitration award was procured by corruption, fraud, or undue means.

         Presently before the court is a discovery dispute regarding Defendant's resistance to Plaintiffs' Requests for Production of Documents (“RPD”).

         DISCUSSION

         Plaintiffs seek Defendant's response to RPDs 8 through 10. (Pl.'s Mem. Supp. Mot. Compel [DE #56] at 2.) Defendant opposes the requests, in general, on the ground the requests are an attempt to relitigate the underlying arbitration and are unwarranted in a petition to vacate. (Def.'s Opp. Pls.' Mot. Compel [DE #57] at 4-5.)

         Rule 37 permits a party to move to compel cooperation with discovery requests if “a party fails to answer an interrogatory submitted under Rule 33” or fails to produce or make available for inspection documents requested pursuant to Rule 34. Fed.R.Civ.P. 37(a)(3)(B)(iii), (iv). “[A]n evasive or incomplete disclosure, answer or response must be treated as a failure to disclose, answer, or respond.” Fed.R.Civ.P. 37(a)(4). “[T]he court has ‘substantial discretion' to grant or deny motions to compel discovery.” English v. Johns , No. 5:11-CT-3206-D, 2014 WL 555661, at *4 (E.D. N.C. Feb. 11, 2014) (quoting Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc. , 43 F.3d 922, 929 (4th Cir. 1995)).

         Rule 37(a)(1) of the Federal Rules of Civil Procedure also requires a party to certify that it has “in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.” Fed.R.Civ.P. 37(a)(1). The local rules of this district similarly require that counsel “certify that there has been a good faith effort to resolve discovery disputes prior to the filing of any discovery motions.” Local Civil Rule 7. 1. (c)(2); see generally Boykin Anchor Co. v. Wong, No. 5:10-CV-591-FL, 2011 WL 5599283, at *3 (E.D. N.C. Nov. 17, 2011) (describing discovery motion requirements under federal and local rules).

         Plaintiffs have made this certification of good faith efforts to resolve the parties' discovery disputes. (See Pls.' Mem. Supp. Mot. Compel at 1.) On February 7, 2018, Plaintiffs served a 94-page “First Discovery Requests” containing 22 requests for admission, 15 document production requests, and attaching 23 exhibits. On March 9, 2018, Defendant responded, objecting to all discovery requests, and offered to meet and confer. Defendant subsequently submitted an amended response admitting all of Plaintiffs' requests for admission but maintaining objections to Plaintiff s requests for documents. On April 19, 2018, both parties participated in a telephonic meet and confer but failed to reach an agreement. (Pls.' Mem. Supp. Mot. Compel. at 2.)

         Turning now to the motion presently before the court, Plaintiffs seek to compel responses to the following requests for production:

• All documents responsive to the Chairperson's Order dated April 28, 2016, in FINRA Arbitration No. 15-01640, attached hereto and incorporated herein as Exhibit U that were not produced to Claimants in FINRA Arbitration No. 15-01640. [RFP No. 8]
• All documents responsive to the Chairperson's Order dated July 5, 2016, in FINRA Arbitration No. 15-01640, attached hereto and incorporated herein as Exhibit V that were not produced to Claimants in FINRA Arbitration No. 15-01640. [RFP No. 9]
• All documents responsive to the Chairperson's Order dated August 30, 2016, in FINRA Arbitration No. 15-01640, attached hereto and incorporated herein as Exhibit W that were not produced to Claimants ...

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