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Patriot Rail Corp v. Sierra Railroad Company

August 1, 2011

PATRIOT RAIL CORP.,
PLAINTIFF,
v.
SIERRA RAILROAD COMPANY, DEFENDANTS.
AND RELATED COUNTERCLAIM.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Defendant Sierra Railroad Company ("Sierra") has filed a Request for Review by the District Court of the Magistrate Judge's Ruling (ECF No. 157) granting Plaintiff Patriot Rail Corp.'s ("Patriot's") Motion for a Protective Order (ECF No. 146). The protective order prevents further efforts by Sierra to enforce an order and subpoena seeking financial records from a third party, UBS Investment Bank ("UBS").

Sierra requests review on grounds that the Magistrate Judge's order was "clearly erroneous or is contrary to law" pursuant to Federal Rule of Civil Procedure 72(a).*fn1 Alternatively, Sierra joints with its Request a Motion for Relief pursuant to Rule 60(b) or a modification of the Pretrial Scheduling Order ("PTSO") pursuant to Rule 16(b)(4). (Def.'s Req. for Review, 1:5-9, May 19, 2011, ECF No. 159).

For the reasons set forth below, Sierra's Request is denied.

BACKGROUND

This case stems from unsuccessful negotiations between the parties for Patriot's acquisition of Sierra. Patriot seeks monetary damages for breach of contract, breach of implied covenant of good faith and fair dealing, fraud, and unfair competition. Sierra, in turn, is countersuing for damages under the same theories, as well as intentional and negligent interference with prospective economic advantage, misappropriation of trade secrets, and coercion. (Joint Status Report, 2-3, Mar. 6, 2009, ECF No. 15).

The current Request (ECF No. 159) relates to a subpoena originally issued by Sierra to UBS on June 8, 2010, 10 days prior to the June 18, 2010 non-expert discovery cutoff. The cutoff, which had already been extended twice, was extended again to June 25, 2010, then once more to what the Magistrate Judge and Patriot presumed was a new cut-off date of September 10, 2010.

(See Orders Amending Pretrial Scheduling Order, ECF Nos. 100 & 104). Sierra, however, contends that the plain language of the second order indicates that September 10 was only the "[l]ast day for third parties to respond" to requests, not the deadline for them to enforce discovery requests. (Def.'s Req. 1:16-19, ECF No. 159).

On March 17, 2011, Sierra filed a Motion to Compel against UBS in the Southern District of New York (where UBS is headquartered). The motion was withdrawn when an agreement was apparently reached with UBS to produce the documents. (Id. at 6). On May 5, 2011, the Magistrate Judge granted Patriot's Motion for a Protective Order preventing further efforts by Sierra to obtain the documents from UBS on grounds that those efforts were untimely. Sierra's current Request asks this Court to reverse the Magistrate Judge's order pursuant to Rule 72(a) or alternatively to modify the PTSO pursuant to Rules 60(b) or 16(b)(4).

ANALYSIS

A. Rule 72(a) Review

In reviewing a magistrate judge's determination, the assigned judge shall apply the "clearly erroneous or contrary to law" standard of review set forth in Local Rule 72-303(f), as specifically authorized by Rule 72(a) and 28 U.S.C. § 636(b)(1)(A). Under this standard, the Court must accept a magistrate judge's decision unless it has a "definite and firm conviction that a mistake has been committed."

Concrete Pipe & Products of Cal., Inc. v. Constr. Laborers Pension Trust for So. Cal., 508 U.S. 602, 622 (1993). If the Court believes the conclusions reached by the magistrate judge were at least plausible, after considering the record in its entirety, the Court will not reverse even if convinced that it would have weighed the evidence differently. Phoenix Eng. & Supply Inc. v. Universal Elec. Co., Inc., 104 F.3d 1137, 1141 (9th Cir. 1997). After reviewing the evidence, this Court cannot say that the Magistrate Judge's order was "clearly erroneous or contrary to law" as the standard has been defined. While the language of the order extending the deadline to September 10, 2010 was arguably vague, the Magistrate Judge indicated that he based his holding both on the fact that applicable local rules do not allow indefinite extensions of time and a lack of due diligence exercised by Sierra. (Tr. Of Proceedings, 10-11, May 2, 2011, ECF No. 160).

Local Rule 144 states that "[n]o open extensions of time by stipulation of the parties will be recognized." L.R. 144(a). Consequently, the interpretation of September 10, 2010 as the non-expert discovery cut-off appears to be the most reasonable interpretation. Sierra contends otherwise, claiming that interpreting it as such would have given them no time to enforce the ...


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