Papineau v. Brake Supply Co.

JACK PAPINEAU and HOLLY PAPINEAU PLAINTIFFS v. BRAKE SUPPLY COMPANY, INC. et al. DEFENDANTSAndBRAKE SUPPLY COMPANY, INC. THIRD-PARTY PLAINTIFF v. FRAS-LE S.A., et al THIRD-PARTY DEFENDANTS

CIVIL ACTION NO. 4:18-CV-00168-BJB-HBB

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY OWENSBORO DIVISION

December 9, 2020

MEMORANDUM OPINION AND ORDER

Before the Court is a Motion for Protective Order filed by Third-Party Defendant Fras-le S.A. (DN 317). Fras-le S.A. is requesting entry of an Order protecting it from any obligation to respond to certain Topics identified in the Amended Notice of Defendant and Third-Party Plaintiff Brake Supply, Inc. to take the Remote Videoconference Deposition of Fras-le S.A. pursuant to Fed. R. Civ. P. 30(b)(6) (DN 306). Fully briefed, this matter is ripe for decision. For the following reasons, Fras-le S.A.'s Motion for Protective Order is GRANTED as to all of the Topics in the Amended Notice.

BACKGROUND

Plaintiff Jack Papineau alleges that he has malignant mesothelioma from exposure to asbestos-containing friction products while he was employed with Smith Coal from 1984 to 1992 (DN 1 ¶¶ 12-13). Papineau sued four defendants including Brake Supply (DN 1). Brake Supply is the only remaining defendant. During the relevant time period, Brake Supply allegedly purchased friction products from suppliers and resold the products by either using the products to reline brakes for certain customers or reselling parts to others (DN 89 ¶ 15).

In its Third-Party Complaint, Brake Supply alleged common law indemnity and apportionment under K.R.S. § 411.182 against Carlisle Industrial Brake and Friction, Inc. and Fras-le North America ("Fras-le N.A.") (DN 89). In its Amended Third-Party Complaint, Brake Supply alleged the same claims against Fras-le S.A. and Rudd Equipment Company¹ (DN 154). Fras-le N.A., a domestic corporation, is a subsidiary of Fras-le S.A, a Brazilian corporation (DN 154 ¶ 6).

Fras-le S.A. moved to dismiss the Amended Third-Party Complaint of Brake Supply for insufficient service of process and lack of personal jurisdiction (DN 234). Brake Supply filed a response (DN 246), and Fras-le S.A. file a reply (DN 269). In a Memorandum Opinion and Order, the District Judge denied Fras-le S.A.'s motion to dismiss without prejudice (DN 282 PageID # 4637).² The District Judge indicated that Fras-le S.A. may refile its motion after Brake Supply has had an opportunity to conduct limited discovery (Id.). Further, the District Judge directed "[n]o later than 120 days from filing of this Memorandum Opinion and Order, the parties shallcomplete limited discovery on the issue whether Fras-le North America is the agent and alter ego of Fras-le S.A. and on the issue of personal jurisdiction" (Id. PageID # 4638).

On July 28, 2020, Brake Supply issued a Notice to Take the Remote Videoconference Deposition of Fras-le S.A. pursuant to Fed. R. Civ. P. 30(b)(6) (DN 301). The Notice requests that Fras-le S.A. designate one or more Rule 30(b)(6) witnesses to testify on its behalf regarding 25 Topics (Id.).

On August 7, 2020, Fras-le S.A. filed a Notice indicating it accepted service of the Amended Third-Party Complaint filed by Brake Supply, while still maintaining it is not subject to personal jurisdiction in the Commonwealth of Kentucky (DN 303). Ten days later, Brake Supply issued an Amended Notice to Take the Remote Videoconference Deposition of Fras-le S.A. Pursuant to Fed. R. Civ. P. 30(b)(6) (DN 306). The Amended Notice, which identifies 29 Topics for examination, modified certain Topics and added four new Topics in Paragraphs 19, 20, 21, and 26 (Id.). Counsel for Fras-le S.A. conferred with counsel for Brake Supply regarding the scope of the discovery sought in the Amended Notice (DN 317-8).

Having failed to resolve the parties' disagreement as to the proper scope of discovery, Fras-le S.A. filed the Motion for Protective Order on August 27, 2020, (DN 317). Brake Supply filed its response (DN 321) and, with leave of Court (DN 327, 338), Fras-le S.A. filed a reply (DN 339).

ARGUMENTS OF THE PARTIES

1. Fras-le S.A.'s Motion for Protective Order

Fras-le S.A. seeks a protective order as to certain Topics identified in Brake Supply's Amended Notice (DN 317). Fras-le S.A. points out that various Topics in the amended notice exceed the scope of the May 12, 2020 Memorandum Opinion and Order allowing limited discovery related to its Motion to Dismiss (Id. PageID # 5247). Additionally, certain Topics are irrelevantor not calculated to lead to the discovery of relevant or admissible evidence and are not proportional to the needs of the case (Id. PageID # 5247-48). Fras-le S.A. accuses Brake Supply of seeking to conduct discovery about events from the past 30 years to support its novel belief that the Court may retroactively impose general personal jurisdiction over Fras-le S.A. via an alter ego theory founded upon events that occurred years or decades after the events upon which the Plaintiffs' claims and the Third-Party pleadings are based, as opposed to reviewing whether an alter ego relationship existed before or during the relevant period at issue 1984 to 1992 (the "Relevant Period") (DN 317 PageID # 5248).³ Because the parent/subsidiary relationship between Fras-le N.A. and Fras-le S.A. began after the Relevant Period, Fras-le S.A. believes that information about this relationship is wholly irrelevant to any jurisdictional inquiry in this case (DN 317 PageID # 5260-68).

As Brake Supply has not asserted general jurisdiction⁴ and because the discovery sought has no temporal relevance to specific jurisdiction⁵, Fras-le S.A. requests the Court forbid all discovery as to the alter ego matters contained in Topics 5 to 21 and 29 of the Amended Notice except to the extent that Brake Supply wishes to inquire about the relationship of Fras-le N.A. andFras-le S.A., i.e. the lack of a parent/subsidiary relationship, from 1990 until 1995 (DN 317 PageID # 5260-68). Additionally, Fras-le S.A. asserts that certain Topics, which seek information regarding whether Fras-le N.A. was Fras-le S.A.'s alter ego for service of process in 2019, have been rendered moot as a result of Fras-le S.A.'s recent acceptance of service of process (Id. PageID # 5248).

Fras-le S.A. contends because Brake Supply is asserting specific jurisdiction the scope of the jurisdictional discovery must be limited to Fras-le S.A.'s sales in Kentucky of asbestos-containing friction products for use in mining equipment during the time frame 1984 to 1992 (DN 317 PageID # 5268-69). Fras-le S.A. asserts that Topics 1-4 and 22-28 in the Amended Rule 30(b)(6) Deposition Notice are overbroad and irrelevant because they seek information relevant to general jurisdiction, Fras-le S.A.'s general sales across the United States from 1984 to 1993 (Id.).

Fras-le S.A. argues the Court should forbid discovery or inquiry into Topics 19-21 and 26 pursuant to Rule 26(c)(1)(A) or (D) because Brake Supply failed to include these topics in the original notice despite knowing that Fras-le S.A. had a connection to Meritor (DN 317 PageID # 5269-70). Fras-le S.A. suggests that Brake Supply served the Amended Rule 30(b)(6) Deposition Notice, which includes Topics 19-21 and 26, for the purpose of punishing Fras-le S.A. for its perceived "gamesmanship" in accepting service of process (Id.).

2. Brake Supply's Response

Brake Supply responds by pointing out the Court has ordered Fras-le S.A. to submit to discovery regarding "whether Fras-le North America is the agent and alter ego of Fras-le S.A. and on the issue of personal jurisdiction" (DN 321 PageID # 5336-37, quoting DN 282 PageID # 4638). Brake Supply asserts that Fras-le S.A. cannot establish "good cause" for imposition of a protective order because it's motion improperly attempts to limit discovery of information that is patentlyrelevant to Brake Supply's claim that Fras-le S.A. is subject to the jurisdiction of this Court (Id. PageID # 5337, 5341-55). Brake Supply indicates the Third-Party Complaint and Amended Third-Party Complaint both allege for a portion of the Relevant Period it purchased friction products from Fras-le S.A. and/or its subsidiary Fras-le N.A. (Id. citing DN 89 ¶ 7 and DN 154 ¶ 10). Further, Brake supply points out that in 1986 and 1987, Fras-le S.A. sold products in the United States to Brake Supply using a reseller, Prudential International (Id. PageID # 5337, 5341-55). To the extent Brake Supply supplied friction products to the worksite of the Plaintiff before 1986, which Brake Supply does not concede, some of those products would have been manufactured by Fras-le S.A., purchased from Prudential International, and contained asbestos as a component (Id. PageID # 5338, 5341-55).

Brake Supply asserts that Fras-le S.A.'s acceptance of service of process does nothing to alter the relevancy of the alter ego inquiries with regard to the issue of general personal jurisdiction (Id.).⁶ Topics 5-18 address factors relevant to the alter ego and merger theories of personal jurisdictional attribution (Id.). Brake Supply contends that the disputed discovery goes to the question of whether Fras-le N.A., which is subject to general personal jurisdiction of the Court, is merely an extension, an alter ego, or a conduit of Fras-le S.A. thereby making Fras-le S.A. subject to both specific and general personal jurisdiction in this forum for any and all causes of action (Id.).⁷ Brake Supply asserts it is entitled to discovery concerning the 40-year alter ego relationship between Fras-le N.A. and Fras-le S.A. as the evidence is sufficient to demonstrate continuouscontacts between both entities and the Commonwealth of Kentucky (Id.). Alternatively, Brake Supply argues it is at least entitled to relevant information from the time the cause of action arose (between 1984 and 1993), the time the suit is filed (2018 or 2019), and within a "reasonable period" immediately prior to the filing of the lawsuit (at least between 2011...