GRETHAKA SOLUTIONS OÜ, Plaintiff, v. CLICK LABS, INC., SAMAR SINGLA, NORA JAIN, AKANKSHA JAIN, and CLICK-LABS.COM, Defendants CASE NO. 8:22-cv-1341-WFJ-SPF United States District Court, M.D. Florida Filed February 14, 2023 Counsel Robert DeWitty, Pro Hac Vice, Washington, DC, Agnes Mombrun Geter, Mombrun Law, PLLC, St. Petersburg, FL, for Plaintiff. Patrick H. Willis, Christopher M. Harne, Willis & Oden, PL, Orlando, FL, for Defendants Click Labs, Inc., Nora Jain. Christopher M. Harne, Willis & Oden, PL, Orlando, FL, for Defendant Samar Singla. Flynn, Sean P., United States Magistrate Judge ORDER *1 Before the Court are Plaintiff's Motion to Compel the Production of Documents from Defendant Click Labs, Inc. (Doc. 62), Defendants Click Labs, Inc. and Nora Jain's Motion for Protective Order (Doc. 63) regarding Plaintiff's document production requests, and the parties’ responses to the motions (Docs. 64, 68). The Court directed the parties to confer regarding the scope of Plaintiff's financial discovery requests (Docs. 65, 67). The parties did so and filed separate status reports, the gist of which is their disagreement persists (Docs. 71, 72). Considering the procedural posture of this litigation, Plaintiff's operative claims, and the proportionality factors listed in Rule 26, the Court grants in part and denies in part Plaintiff's motion to compel (Doc. 62) and denies Defendants’ motion for protective order (Doc. 63) as untimely. A. Background Plaintiff filed this case on June 10, 2022, alleging Defendants breached a contract (the “Master Service Agreement”) between the parties regarding the creation and coding of a members-only dating app, which Plaintiff describes as “an online platform where users can view nearby users and connect with them via chat/video call[ ]” (Doc. 1 at ¶ 1). Plaintiff also alleged causes of action for fraud, unjust enrichment, intentional infliction of emotional distress, and violations of Section 5 of the Federal Trade Commission (“FTC”) Act, 15 U.S.C. § 45(a) (Id.). According to Plaintiff, under the Master Service Agreement, Defendants agreed to provide code for the app by a certain date. Plaintiff alleged it paid over $100,000 to Defendants, who failed to deliver a functional product (Id. at ¶ 25). In July 2022, the district judge granted Plaintiff's motion to serve a Rule 45 subpoena before the parties’ Rule 26 conference on then non-party Nora Jain (Defendant Click Labs’ director), so Plaintiff could obtain the correct name, email address, mailing address, and general business organization for Defendants, who are located overseas (Docs. 18, 19). Later in July 2022, Plaintiff filed a second motion for early discovery, asking the Court for leave to serve a Rule 45 subpoena on Defendants’ bank to obtain information relating to Defendants’ wire transfers, deposits, and withdrawals from January 1, 2021, through January 31, 2022 (Doc. 21). The Court denied that motion, finding Plaintiff's purported reason for subpoenaing Defendants’ bank records before the parties’ Rule 26 conference – to “follow the business operation and cash flow relating to Defendant's business” (Doc. 21-1 at 3) – was not supported by good cause so early in the litigation (Doc. 22). Next, on August 31, 2022, the Court denied Plaintiff's motion to compel Nora Jain to appear at deposition (Doc. 33).[1] Plaintiff filed its amended complaint two weeks later (Doc. 35). Besides including a fraud claim, Plaintiff dropped its unjust enrichment and FTC claims, added a substantive Racketeer Influenced and Corrupt Organization Act (“RICO”) count and a RICO civil conspiracy count, and added Nora and Akanksha Jain as Defendants (Doc. 35). Plaintiff alleges Defendants (collectively an “enterprise” for RICO purposes) have pursued a pattern of racketeering activity involving a wire fraud scheme to: (1) contract with clients to deliver customized software, (2) collect payment under the contracts, and then (3) deliver, piecemeal, bug-riddled aspects of the promised software, all the while obfuscating the clients’ attempts to communicate with them (Id. at ¶¶ 2-3, 49). Alleging two other predicate acts involving software customization contracts between Click Labs and non-parties Leigh Morum and Julio Monroy Ortega between 2020 and 2022, Plaintiff asserts Defendants failed to deliver complete and operational software or return payment (Id. at ¶ 56). *2 Defendants have moved to dismiss the amended complaint, arguing Plaintiff is attempting to shoehorn a garden-variety commercial dispute into a civil RICO action (Doc. 49 at 7; Doc. 73). According to Defendants, Plaintiff conflates “enterprise” with “Defendants,” does not allege with particularity Defendants’ underlying wire fraud activity, and does not allege a “pattern” of racketeering suggestive of continued criminal acts, all counter to RICO's requirements. Defendants also move to dismiss Plaintiff's breach of contract, fraud, and intentional infliction of emotional distress counts (Doc. 49 at 16-19; Doc. 73). The motions to dismiss are pending before the district judge. Meanwhile, in October 2022, after the parties conducted their Rule 26 conference and the Court entered its case management order (Doc. 50), discovery began. Plaintiff again attempted to subpoena Click Labs’ financial documents from Bank of America dating from February 18, 2018, to September 21, 2022 (see Doc. 51), but later withdrew the subpoena (see Doc. 67). Instead, Plaintiff propounded five document production requests on Click Labs, seeking communications between Click Labs and Nora Jain and documents regarding Defendants’ financial documents, bank records, and tax forms dating to January 1, 2018. Click Labs and Nora Jain objected to these requests as overbroad and outside the scope of discovery. The cross motions before the Court followed (see Docs. 62, 63). B. Legal Standard Discovery under the Federal Rules of Civil Procedure is governed by the principle of proportionality. Rule 26(b)(1) defines the scope of discovery: Parties 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, 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 the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed. R. Civ. P. 26(b)(1). Proportionality requires counsel and the court to consider if relevant information is discoverable in view of the needs of the case. The court must “consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery.” Fed. R. Civ. P. 26 Advisory Committee's Note to 2015 Amendment. Motions to compel discovery are committed to the sound discretion of the trial court. See Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir. 1984). The proponent of a motion to compel discovery bears the initial burden of proving that the information sought is relevant. Moore v. Lender Processing Servs. Inc., No. 3:12-CV-205-J, 2013 WL 2447948, at *2 (M.D. Fla. June 5, 2013). “A party resisting discovery must establish ‘lack of relevancy or undue burden in supplying the requested information.’ ” Craig v. Kropp, No. 2:17-cv-180-FtM-99CM, 2018 WL 1121924, at *3 (M.D. Fla. Mar. 1, 2018) (quoting Gober v. City of Leesburg, 197 F.R.D. 519, 521 (M.D. Fla. 2000)). The other side of the coin is Rule 26(c), which allows the court for “good cause,” to “issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ....” Fed. R. Civ. P. 26(c)(1); Farnsworth v. Proctor & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985). The party moving for a protective order has the burden to demonstrate good cause and must make “a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements” supporting its need for the order. Auto-Owners Ins. Co. v. Southeast Floating Docks, Inc., 231 F.R.D. 426, 429-30 (M.D. Fla. 2005) (citation omitted). In deciding whether a movant has established good cause, a court balances the respondent's interest in obtaining the discovery against the movant's stated harm that would result from allowing it. Celentano v. Nocco, No. 8:15-cv-1461-T-30AAS, 2016 WL 4943939, at *2 (M.D. Fla. Sept. 16, 2016). C. Discussion *3 Plaintiff asserts a substantive RICO count and a RICO conspiracy count against Defendants, whose motions for the Court to dismiss these counts are pending. Meanwhile, discovery has commenced. According to Defendants, Plaintiff's RICO claims are baseless, so Plaintiff should not be permitted the broad financial discovery it seeks. But Plaintiff's Amended Complaint – including the RICO counts – is the operative one. Defendants have not moved to stay discovery, and Click Labs concedes that some of its financial documents are discoverable. Unless the district judge dismisses Plaintiff's RICO claims, Plaintiff appropriately seeks discovery into these allegations at this stage of the litigation. 1. Defendants’ Motion for Protective Order (Doc. 63) Defendants argue good cause for a protective order exists because “Plaintiff is engaging in a pattern of discovery abuse under the guise of a purported RICO action for the apparent purpose of increasing the case's settlement value.” (Doc. 63 at 5). The Court does not address this, however, as Defendants’ motion for protective order is untimely. Plaintiff served the document production requests on October 7, 2022 (see Doc. 62, Exh. 1). Although Click Labs timely served Plaintiff with its objections to the discovery, Click Labs and Nora Jain did not move for a protective order until November 28, 2022, the day after Plaintiff moved to compel responses to the same discovery requests (see Docs. 62, 63). “A motion for protective order must be filed timely .... A motion for a protective order is generally untimely if it is made after the date the discovery material was to be produced.” Gray v. Fla. Beverage Corp., No. 6:18-cv-1779-Orl-31LRH, 2019 WL 13249032, at * 2 (M.D. Fla. Oct. 23, 2019) (citation and quotation omitted); see also Middle District Discovery (2021) § VII(B) (“Upon receipt of objectionable discovery, a party has a duty to seek relief immediately, i.e., without waiting until the discovery is due or almost due.”). “Communicating to opposing counsel a party's objections to production, without timely bringing the matter to the attention of the Court, is not adequate under Rule 26(c).” Cornell Pump Co. v. Thompson Pump & Mfg. Co., Inc., No. 6:17-cv-847-Orl-41TBS, 2018 WL 3827248, at *3 (M.D. Fla. Feb. 22, 2018) (citation and quotation omitted). Defendants do not acknowledge their belated motion or establish good cause for the Court to consider it. The motion for protective order (Doc. 63) is denied. 2. Plaintiff's Motion to Compel (Doc. 62) The Court considers Defendants’ objections to the document production requests in addressing Plaintiff's motion to compel. See Cornell Pump Co., 2018 WL 3827248, at * 3 (after denying motion for protective order, recognizing that the objections in response to the discovery requests were outstanding, and the denial of the motion for protective order did not waive those objections); Gray, 2019 WL 13249032, at * 3 (same). Plaintiff propounded five document requests on Click Labs, and it seeks an order compelling Click Labs to amend its responses to each one. The undersigned directed the parties to confer regarding the scope and timing of Plaintiff's financial discovery requests and update the Court. They did so (Docs. 71, 72). Plaintiff agreed to narrow the scope of its financial discovery requests to exclude documents relating to Click Labs and Nora Jain's stocks, mutual funds, and financial investments, but otherwise Plaintiff still seeks five years of Click Labs’ funds transfers, wire transfers, and bank withdrawals and deposits (Doc. 71). For its part, Click Labs agrees to produce documents between itself and Nora Jain “relating to Plaintiff's project and the contract at issue” and relating to “payments made by Plaintiff to Click Labs.” (Doc. 72 at 2). It also agreed to produce Click Labs’ documents “between its departments relating to Plaintiff's project and the contract at issue.” (Id. at 3). It objects to any other financial discovery. a. Request No. 1 *4 Request No. 1 asks for “all documents, communications, electronically stored information, and things relating to any and all communications between you and Director Nora Jain between January 1, 2018, and the current date.” (Doc. 62-1 at 7). Click Labs agreed to produce responsive documents between Click Labs and Nora Jain pertaining to Plaintiff's project and contract but otherwise objected. Plaintiff's request – reaching back five years and untailored as to client or customer – is not proportionate to the needs of the case. But Click Labs’ interpretation is too narrow. Considering the issues involved and the claims Plaintiff asserts in the Amended Complaint, Plaintiff may seek discovery of all non-privileged documents between Click Labs and Nora Jain from January 2020 to the present regarding Click Labs’ projects for and contracts with Plaintiff, Leigh Morum, and Julio Monroy Ortega (and the companies they represent). Plaintiff's motion to compel is granted in part as to Request No. 1. b. Request No. 2 As narrowed by Plaintiff, Request No. 2 asks for “all documents, including correspondence between you and Director Nora Jain, regarding any ... funds transfers, wire transfers, bank withdrawals, and bank deposits from January 1, 2018, to the current date.” (Doc. 62-1 at 7). Click Labs agreed to produce communications between it and Nora Jain “relating to payments made by Plaintiff to Click Labs[ ]” (Doc. 72 at 2). But this is simply a subset of those documents already discoverable under Request No. 1. Defendants have moved to dismiss Plaintiff's amended complaint, contending the alleged RICO enterprise is a rouse for Plaintiff to obtain vast financial discovery (Doc. 49). And in their motion for protective order, Click Labs and Nora Jain ask the Court to “enter an Order protecting Defendants from further abusive financial discovery. At a minimum, this Order should remain in place until adjudication of Defendants’ Motion to Dismiss and a ruling regarding the propriety of Plaintiff's purported RICO action.” (Doc. 63 at 9). But Defendants have not moved to stay discovery, the Court has not ruled on Defendants’ motion to dismiss, Click Labs has conceded that some of its financial documents are discoverable, and discovery is ongoing. At this juncture – considering the needs of the case, as Rule 26(b)(1) counsels – non-privileged documents regarding Click Labs’ transfers, withdrawals, and deposits in and out of its accounts related to Plaintiff's project and contract, and the projects and contracts alleged in the two other predicate acts, are discoverable. Plaintiff's motion to compel is granted in part as to Request No. 2. c. Request No. 3 In Request No. 3, Plaintiff seeks “all documents, communications, electronically stored information, and things relating to any and all communications between your departments between January 1, 2020, and the current date that relate to any Proposal.” (Doc. 62-1 at 7). Plaintiff defines “proposal” as “the understanding between Click Labs, Inc. and its clients, whether alleged or actual, oral or written, at the root of this action, pursuant to which Click Labs, Inc. promise[d] to set up a[ ] product for its clients.” (Id. at 3). Click Labs objects that the request is too broad and “agrees to treat this request as having a narrower scope and produce communications between its departments related to Plaintiff's project and the contract at issue.” (Doc. 72 at 3). Plaintiff requests Click Labs’ internal documents relating to all customer agreements dating back more than two years, an undue burden at this stage. In the parlance of Rule 26, Plaintiff has not demonstrated how this request is proportional to the needs of the case. But Plaintiff may seek discovery of non-privileged documents between Click Labs’ departments pertaining to Plaintiff's project and contract and the projects and contracts alleged in the two other predicate acts. Plaintiff's motion to compel is granted in part as to Request No. 3. d. Request No. 4 *5 Request No. 4 asks Click Labs for “all the Internal Revenue Service Tax Forms 1120 and 1126-A filed (or will be sent) by you from 2018 to the current date.” (Doc. 62-1 at 7). Plaintiff argues this tax information “will enable the discovery of further patterns of fraud in support of the RICO claim, as well as shed light on Defendant Nora Jain's duties and compensation as the stated director of Click Labs in the United States.” (Doc. 64 at 12). The Court agrees with Click Labs that Plaintiff's request for complete tax forms dating back five years is not proportional to the needs of the case. The Court is already permitting Plaintiff to pursue financial discovery regarding payments in and out of Click Labs’ accounts in Request No. 2. Plaintiff's motion to compel is denied as to Request No. 4. e. Request No. 5 Finally, in Request No. 5 Plaintiff seeks “all complaints you received since January 1, 2018.” (Doc. 62-1 at 7). Plaintiff defines “complaint” as “any message and communication from Click Labs, Inc.’s former or current clients, orally or in writing ... describing the gaps between what Click Labs, Inc. promised in terms of the product or services and what former clients got.” (Doc. 62-1 at 2). Plaintiff argues this information is discoverable because “[t]he requested complaints will show that Defendants knew or should have known about their regular failures in delivering a working, customized product.” (Doc. 62 at 11). But responding would require Click Labs to cull through five years of documents to make a subjective determination regarding what constitutes a “complaint.” Plaintiff's motion to compel is denied as to Request No. 5. D. Conclusion The Court ORDERS: (1) Plaintiff's motion to compel (Doc. 62) is granted in part as to Request Nos. 1, 2, and 3 and otherwise denied. Click Labs is directed to produce responsive documents consistent with this Order, including a privilege log if applicable, by February 24, 2023. (2) Defendants’ motion for protective order (Doc. 63) is denied as untimely. ORDERED in Tampa, Florida, February 14, 2023. Footnotes [1] Plaintiff's subpoena directed to Nora Jain did not comply with Rule 45 for a plethora of reasons, and Plaintiff sought information from her that was outside the scope of the service-related early discovery the district judge had authorized (Id.).