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Excel Fortress Limited v. Wilhelm

United States District Court, D. Arizona

November 20, 2018

Excel Fortress Limited, et al., Plaintiffs,
Vaughn La Verl Wilhelm, et al., Defendants.



         Pending before the Court are three interrelated requests for relief: (1) Plaintiff EFG America, LLC's Motion to Transfer and Consolidate (Doc. 79), (2) the parties' Joint Written Summary of Discovery Dispute (Doc. 83), and (3) Plaintiffs' Amended Motion to Extend Deadline to Submit Report of Rubber Devulcanization Expert (Doc. 88). As explained below, the Court will deny the motion to transfer, deny in significant part Plaintiffs' discovery-related requests, and deny the motion to extend the expert-disclosure deadline.


         1. The Trade Secrets Case

         This lawsuit (“the Trade Secrets Case”) was initiated in April 2017. (Doc. 1.) The complaint was initially filed in the U.S. District Court for the Southern District of Texas but was later transferred to this Court. (Doc. 39.)

         Plaintiffs' theory, in a nutshell, is that Defendants misappropriated their trade secrets related to the “devulcanization” of rubber, improperly hired their former chief scientist in China, and tortiously interfered with their contractual and business relationships. (See generally Doc. 79 at 2-3.) The operative complaint identifies two Plaintiffs (Excel Fortress Limited and EFG America, LLC) and five Defendants (Vaughn La Verl Wilhelm, Ryan McHugh, Eversource Capital LP, Eversource Group, LP, and Eversource Global Technology LLC). (Doc. 62.)

         On January 19, 2018, Plaintiffs served their first set of interrogatories and requests for production on defendants Wilhelm and McHugh. (Doc. 48.)

         On January 29, 2018, the parties filed their Rule 26(f) report. (Doc. 53.) In it, Plaintiffs voiced an intention to pursue discovery on an “expedited” basis so they could “quickly” seek injunctive relief. (Doc. 53 at 10-11.) Plaintiffs also requested a much more aggressive discovery schedule than Defendants-for example, Plaintiffs requested an initial expert disclosure deadline of August 3, 2018, while Defendants requested that this deadline not be set until February 1, 2019. (Doc. 53 at 10.)

         In its Rule 16 Scheduling Order, the Court reached a compromise between the parties' scheduling requests. (Doc. 55.) Specifically, the Court designated November 2, 2018, as the deadline for Plaintiffs to make their initial expert disclosures. (Doc. 55 at 2.) The Court further emphasized that “[f]ull and complete disclosures . . . are required on or before the dates set forth above; absent truly extraordinary circumstances, parties will not be permitted to supplement their expert reports after these dates.” (Id.) The Court also advised the parties, during the Rule 16 scheduling conference, that extension requests should not be made on, or even near, the deadline at issue.

         On February 20, 2018, Defendants Wilhelm and McHugh each submitted a response to Plaintiffs' first set of interrogatories and requests for production. (Doc. 88, Exhs. 1, 2.) Each response included objections to some of the questions. (Id.)

         On November 2, 2018-some 255 days later-Plaintiffs brought the discovery dispute to the Court's attention via the submission of a two-page joint summary. (Doc. 83.)

         On November 2, 2018, Plaintiffs also filed a motion to extend the expert- disclosure deadline. (Doc. 87, refiled as amended as Doc. 88.) In that motion-which was filed at 5:59 p.m. on the day of the deadline-Plaintiffs asserted that “unanticipated business circumstances [had] prevented them from aggressively pursuing discovery” over the last eight months but assured the Court they were now “better situated” to pursue their claims. (Doc. 88 at 3-4.) Plaintiffs also acknowledged that their “expert with regard to rubber devulcanization technology, ” which is “the issue at the very heart of this case, ” had not even started his analysis. (Doc. 88 at 1).

         On November 13, 2018, the Court held a lengthy telephonic hearing to obtain more information concerning the discovery dispute. (Doc. 90.)

         2. The Fraud Case

         On August 15, 2018, a separate lawsuit (“the Fraud Case”) was filed in the U.S. District Court for the District of Arizona. It was given case number 18-cv-2583 and assigned to Judge Humetewa.

         The complaint in the Fraud Case identifies one Plaintiff (Eversource Capital, LP) and at least 18 Defendants. Only one of the Defendants (EFG America LLC) is also a party in the Trade Secrets Case. The complaint alleges, in a nutshell, that Eversource Capital was fraudulently induced to make a $950, 000 loan to EFG America, LLC and that the loan was thereafter squandered. (See generally Doc. 79 at 4 [“Essentially, Defendants . . . in this action allege they made certain loans to EFG and Fimrite . . . .”].)

         3. The Consolidation/Transfer Request

         On October 15, 2018, EFG America, LLC-which, as noted, is a plaintiff in the Trade Secrets Case and a defendant in the Fraud Case-filed a motion to transfer and ...

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