Interior Electric Incorporated Nevada v. T.W.C. Construction, Inc. ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Interior Electric Incorporated Nevada, 2:18-cv-01118-JAD-MDC 4 Plaintiff(s), 5 vs. Order 6 T.W.C. Construction, Inc., et al., 7 Defendant(s). 8 Due to unforeseen circumstances, the Court did not previously address defendant TWC 9 Construction, Inc.’s (“defendant”) Objection (ECF No. 234) to the Special Master’s Order (ECF No. 10 231).1 The Court has considered the Objection and the Special Master’s Order and for the reasons stated 11 below overrules the Objection and affirms the decision by the Special Master. 12 DISCUSSION 13 I. SUMMARY 14 This is a complex litigation involving numerous parties. Germaine to the Special Master’s Order 15 (ECF No. 231) are the counterclaims by defendant/counterclaimant TWC Construction, Inc. (“TWC”) 16 against plaintiff/counterdefendant Interior Electric Incorporated Nevada (“Interior Electric). Among 17 other things, TWC counterclaimed against TWC for damages allegedly incurred as a result of 18 disciplinary proceedings against TWC by the Nevada State Contractor’s Board (“NSCB”). TWC alleges 19 that Interior Electric pursued a “spurious complaint against TWC to the NSBC” and provided the NSCB 20 incorrect information in connection with those proceedings. See TWC’s Counterclaim, ECF No. 120 at 21 ¶¶74-75, pp. 70-71. 22 The issue before the Court involves a discovery dispute. Specifically at issue is TWC’s unlimited 23 request to produce all documents and communications submitted by Interior Electric to NSCB. Interior 24 25 1 The Court notes that although defendant’s objection is docketed as “Objection to 232 Notice (Other),” defendant is in fact objecting to ECF No. 231, the Special’s Master Order regarding TWC’s Motion to Compel. 1 Electric objected to TWC’s discovery and TWC moved to compel. Special Master Hale considered and 2 denied TWC’s motion. TWC objected (ECF No. 234) to the Special Master Hale’s Order (ECF No. 3 231). 4 The Court has reviewed the TWC’s Objection (ECF No. 234) and completed a de novo review of 5 the Special Master Hale’s Order (ECF No. 231). The Court overrules TWC’s objections and affirms the 6 Special Master Hale’s Order. 7 II. LEGAL STANDARD 8 The Federal Rules of Civil Procedure provides that the Court must review a Special Master's 9 conclusions of law and factual findings de novo. Fed. R. Civ. P. 53(f)(3)-(4). “The Special Master's 10 discovery rulings and recommendations are inextricably intertwined with conclusions of fact and law 11 and so are reviewed de novo.” Hernandez v. Lynch, 2019 U.S. Dist. LEXIS 221180, 2019 WL 6998774, 12 at 2 (C.D. Cal. Jun. 18, 2019) (collecting cases). Under the de novo standard, the Court decides “the 13 matter anew,” as if no prior decision had been rendered. United States v. Silverman, 861 F.2d 571, 576 14 (9th Cir. 1988). 15 The scope of discovery is governed by Rule 26(b) of the Federal Rules of Civil Procedure. The 16 Court, in consideration of the time the Special Master’s Order (ECF No. 231) and Objection (ECF No. 17 234) was filed, looks to the 2020 version of Rule 26(b), which provides that: 18 (1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any 19 nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance 20 of the issues at stake in the action, the amount in controversy, the 21 parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether 22 the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be 23 admissible in evidence to be discoverable. 24 Id. (emphasis added). 25 The court not only has the powers but also a duty to “limit the frequency or extent of 1 discovery otherwise allowed by [the] rules or by local rule if it determines that: 2 (i) the discovery sought is unreasonably cumulative or duplicative, or can 3 be obtained from some other source that is more convenient, less 4 burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the 5 information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 6 26(b)(1). 7 Fed. R. Civ. P. 26(b)(2)(C) 8 III. DISCUSSION 9 The Court has conducted an independent review and gives fresh consideration to the issue raised 10 by TWC’s Objection (ECF No. 234). 11 TWC initially served NSCB with a subpoena duce tecum for basically all documents received by 12 NSCB regarding TWC. See TWC Subpoena to NSCB (ECF No. 205-1 at Ex. 4). NSCB objected to the 13 scope of the documents requested and produced only the public portion of the records, which the NSCB 14 considered relative to its proceedings against TWC. See ECF No. 240-1; ECF No. 231; see also NRS 15 624.327(2) (“all documents and information considered by the Board when determining whether to 16 17 impose discipline are public records”). Importantly, the public records produced by NSCB to TWC 18 included all 122 exhibits considered by the NSCB during the disciplinary production. See ECF No. 231 19 at 3. 20 TWC then served Interior Electric with document request for all documents provided to NSCB: 21 TWC’s REQUEST NO. 138 sought: Produce all documents and/or communications relating to, concerning, 22 and/or evidencing your allegation(s) in paragraph 251 of the Complaint 23 that “This discovery led to a comprehensive investigation into Baquerizo and was a contributing to his termination.” 24 Similarly, the T.W.C. REQUEST NO. 224 stated: 25 Produce all communications between You and the Nevada State Contractor’s Board and/or its Agents related to and/or concerning of the 1 Defendants in this action and/or their respective officers and/or employees, which pertains and/or relates to any project identified in the 2 Complaint. In responding to this Request, including any communications between any officer and/or employee of Interior Electric and any agent 3 and/or employee of the Nevada State Contractor’s Board. 4 5 See ECF No. 231 at 3. 6 Interior Electric objected to TWC’s request arguing both privilege and confidentiality per NRS 7 624.327(1), among other things. TWC then moved to compel Interior Electric’s production of the 8 requested documents. Special Master Hale denied TWC’s motion to compel without reaching the issue 9 of confidence or privilege under NRS 624.327(1). First, Special Master Hale found that all documents 10 considered in the NSCB disciplinary proceeding had been produced: 11 A substantial number of documents and information was provided to 12 T.W.C. Construction as a result of the Contractor Board’s proceedings. Those documents included all 122 exhibits utilized during the disciplinary 13 hearing. 14 See ECF No. 231 at 3-4. 15 Next, Special Master Hale determined TWC’s request were not relevant or proportionate. 16 Special Master Hales complete findings were: 17 **** I FIND that T.W.C. Construction, Inc. has received all documents and 18 exhibits considered by the Nevada State Contractor’s Board during the disciplinary hearing involving T.W.C. Construction. 19 It is the content of those documents that T.W.C. Construction must utilize to pursue a claim that the Compliant was improperly or wrongfully 20 submitted since that was all that was considered by the Contractor’s Board. 21 IT IS ORDERED that the T.W.C. Construction, Inc. Motion to Compel 22 Plaintiff’s additional responses to Requests for Production of Documents 23 and Motion for related fees and costs are denied; 24 IT IS FURTHER ORDERED that the issues related to the T.W.C. Construction Motion to Compel the Plaintiff to Provide More Complete 25 Responses to Interrogatories will not be considered by the Special Master 1 as this time since counsel are attempting to resolve that issue. 2 See ECF No. 231 at 3-4. 3 In its Objection (ECF No. 234), TWC construes Special Master Hale’s Order (ECF No. 231) 4 differently. TWC argues that Special Master Hale somehow denied production based on NRS 5 624.327(1) and that the confidentiality provisions of NRS 624.327(1) do not create a privilege to 6 withhold discovery. Id. at 5-7. TWC also argues that NSCB did not produce all evidence it considered. 7 ECF No. 234 at 8. Special Master Hale’s Order, however, does not support TWC’s construction. As the 8 full statement of findings set forth above show, Special Master Hale’s determination did not concern 9 10 NRS 624.327(1) or privilege. In reviewing de novo, the Court finds that TWC’s second argument is 11 speculative and contrary to the record and applicable statute. 12 NRS 624.327(2) provides that all documents and information considered by the NSCB in 13 determining discipline are public records. Id. The NSCB’s response to TWC’s subpoena states that it 14 produced to TWC all records that it considered in the disciplinary proceedings against TWC pursuant to 15 NRS 624.327. See ECF No. 240-1. Thus, the Court finds ample evidence and support on the record that 16 NSCB produced all documents considered by NSCB in the disciplinary proceedings against TWC. 17 In reviewing de novo, the Court finds that TWC’s requests are neither relevant nor proportional 18 to TWC’s counterclaim. Fed. R. Civ. P. 26(b) provides that parties “may obtain discovery regarding 19 any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs 20 of the case.” Id. (emphasis added). TWC’s claim for damages is based the “significant attorney’s fees 21 and costs in connection with the NSCB investigation.” ECF No. 120 at 71:7-9. As Interior Electric 22 23 correctly points out: 24 This claim will require TWC to show that documents or information given to the Board by Interior Electric in some way caused the Board to decide to 25 impose discipline, thereby causing TWC to incur damages. Thus, any document which the Board did not consider in choosing to impose 1 discipline against TWC, is decidedly not relevant to TWC’s claims, as that document could not have possibly cause the alleged harm. 2 See ECF No. 240 at 15:1-5. 3 4 Therefore, the Court overrules TWC’s Objection (ECF No. 234) and upholds Special Master 5 Hale’s Order (ECF No. 231). See V5 Techs. V. Switch, Ltd., 334 F.R.D. 306, 314 (D. Nev. 2019) 6 (“courts have a duty to limit discovery that is outside the scope permitted by Rule 26(b)(1)”) (citing Fed. 7 R. Civ. P. 26(b)(2)(C)(iii)) (internal quotations omitted). 8 Although not raised in its Objection (ECF No. 234), the Court responds to TWC’s request for 9 fees, raised in its Reply (ECF No. 243). The Court denies such request as improper and unjust (per Rule 10 37). The request is improper because it was raised for the first time in the Reply (ECF No. 243) and 11 thus, depriving Internal Electric an opportunity to respond. The Court further notes that Special Master 12 Hale denied TWC’s Motion for Attorney’s fees and TWC failed to object to this portion of the Order 13 (ECF No. 231) in its Objection (ECF No. 234). The Ninth Circuit has long held that “issues raised for 14 the first time in a reply brief are waived.” Bazuaye v. I.N.S., 79 F.3d 118, 120 (9th Cir. 1996) (per 15 curiam). To do so otherwise deprives the opposing party of the opportunity to respond to them. Tovar v. 16 17 United States Postal Service, 3 F.3d 1271, 1273 n.3 (9th Cir. 1993) (discussing it is improper to raise 18 new arguments in a reply brief because the opposing party is deprived of the opportunity to respond). 19 Further, because the Court affirms Special Master Hale’s finding that TWC has “received all documents 20 and exhibits considered by the [NSCB] during the disciplinary hearing,” the Court finds that an award of 21 fees under Rule 37 would be unjust. Fed. R. Civ. P. 37(a)(5)(A)(iii) (“the court must not order this 22 payment if [] circumstances would make an award of expenses unjust). 23 // 24 // 25 ACCORDINGLY, 5 IT IS ORDERED that the defendant’s Objection (ECF No. 234) is overruled and the 3 || Special Master’s Order (ECF No. 231) is affirmed. 4 DATED this 10% day of May 2024. IT IS SO ORDERED. L TY 6 J? K Hon. Maximiliatio D.ouvillier III 8 United States Magistrate Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25