United States District Court, W.D. North Carolina, Asheville Division
CARLETON METCALF, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Defendant's Motion to
Compel Discovery (the “Motion, ” Doc. 22).
Plaintiff has filed a response in opposition and Defendant
has filed a reply. Docs. 26 & 28.
January 13, 2020, the undersigned conducted a hearing on the
Motion. Attorneys Joseph McGuire and Murphy Fletcher appeared
for Defendant and attorneys Brian D. Gulden and Joseph
Sullivan appeared for Plaintiff.
Background Relevant to the Motion
2, 2019, Plaintiff filed a Complaint for Declaratory Judgment
(the “Complaint”) seeking a declaration of the
parties' rights pursuant to a Stock Appreciation Rights
Agreement (“SAR Agreement”). Under the SAR
Agreement, and upon a “payment event, ” Defendant
was to receive payment for Defendant's interest in
“Units, ” which were defined as stock
appreciation rights based on shares of common stock in Gaia
Herbs, Inc. (“Gaia”). Doc. 1-1.
rights, however, were subject to termination under the
(c) If the Original Employee ceases to be employed by the
Company at any time for any reason or no reason and such
Employee, within two years of such Employee's employment
with the Company, (i) becomes employed by, engaged by (in any
capacity, including as a consultant) or otherwise associated
with a Competitor (as defined below), (ii) owns, directly or
indirectly, any interest in a Competitor, or (iii) induces or
attempts to persuade any client, customer or supplier to
terminate or materially reduce its business with the Company
or induces or attempts to persuade any officer, employee or
consultant of the Company to resign or sever a relationship
with the Company, then all of such Employee's rights and
interests to all Units, whether vested or unvested, and in
this Agreement shall automatically expire and terminate.
"Competitor" shall mean any individual,
corporation, partnership, limited liability company, joint
venture or other entity conducting business in the United
States that is similar to, or in direct or indirect
competition with, the business of the Company.
SAR Agreement at ¶ 7(c).
Agreement stated that all determinations relative to this
Section “shall be made by [Plaintiff], whose decisions
will be final and binding.” Id. at ¶
contends that Defendant accepted employment with a competitor
of Gaia, that Defendant thereby forfeited his rights under
the SAR Agreement, and that Plaintiff had the sole the
discretion to determine that Defendant's rights had been
forfeited in this manner.
has counterclaimed, alleging that he resigned from Gaia due
to Plaintiff's harassment of him, that Section 7(c) of
the SAR Agreement is unenforceable, and that Plaintiff's
determination that Defendant forfeited his stock appreciation
rights was done maliciously and in bad faith. Doc. 4.
Motion to Compel
Rule 26 of the Federal Rules of Civil Procedure,
“[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.” This determination is to be made
“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 ...