MUELLER BRASS CO., Plaintiff/Counter-Defendant, v. David CROMPTON, Defendant/Counter-Plaintiff No. 2:20-cv-02496-SHL-atc United States District Court, W.D. Tennessee, Western Division Signed July 13, 2022 Lipman, Sheryl H., United States District Judge ORDER DENYING MUELLER BRASS CO.’S OBJECTIONS TO MAGISTRATE JUDGE'S ORDER ON MOTIONS TO COMPEL *1 This matter comes before the Court on an appeal of the Magistrate Judge's Order granting three Motions to Compel: two filed by Plaintiff/Counter-Defendant Mueller Brass Co. (“MBC”), (ECF Nos. 68 & 98), and one filed by Defendant/Counter-Plaintiff David Crompton (“Crompton”). (ECF No. 96.) On May 19, 2022, Magistrate Judge Christoff granted all three Motions, and, in relevant part, ordered MBC to produce documents related to MBC's valuation of Quick Fitting, as well as its participation in the Quick Fitting sale process overseen by the Receiver (documents responsive to Crompton's Request Nos. 19, 23, 24, 28). (Order Granting Motions to Compel, ECF No. 129 at PageID 2037-38 (“May 19 Order”).) Now before the Court are MBC's Objections to the Magistrate Judge's Order on Motions to Compel, (ECF No. 130), and Crompton's Response in Opposition. (ECF No. 131.) MBC argues that the Magistrate Judge's Order compelling production must be modified or set aside because it relied on an interpretation of a contractual provision that was contrary to law. In response, Crompton contends that MBC's Objections should be denied on procedural and substantive grounds. Crompton asserts that the Objections are procedurally defective because MBC is actually objecting based on an alleged legal error rooted in this Court's earlier ruling, not on a ruling by the Magistrate Judge, rendering the Objections an improper vehicle to challenge this Court's ruling. Substantively, Crompton argues that MBC's arguments are premature, mischaracterize the record, and fail to meet its burden under the Federal and Local Rules for revision of this Court's Order. As explained below, the Court DENIES MBC's Objections. BACKGROUND The circumstances at issue are accurately described in Magistrate Judge Christoff's Order, (ECF No. 129), and the Court will briefly summarize them here. Crompton was the president, CEO, and majority shareholder of Quick Fitting, a company that designed and supplied metal fittings, including to MBC. (Id. at PageID 2032.) MBC purchased three loans taken out by Quick Fitting, one of which Crompton personally guaranteed (the Antipodes Loan), and Quick Fitting eventually defaulted on all three loans. (Id.) After defaulting, Quick Fitting engaged in a receivership proceeding in the Rhode Island Superior Court; the court approved the total amount of a Settlement Agreement reached through mediated negotiations, but did not determine how the settlement amount was allocated to Quick Fitting's creditors, including to MBC. (ECF No. 70-2.) The question of allocation and Crompton's obligations as guarantor on the Antipodes Loan were at issue in this litigation. On February 10, 2022, this Court concluded that Quick Fitting's settlement payment fully satisfied the Antipodes Loan guaranteed by Crompton. (ECF No. 104 (“February 10 Order”).) However, the Court also concluded that there were unresolved issues in this litigation as to competing claims for attorneys’ fees, expenses and costs. Specifically, the Court stated that the remaining issues include “(1) the amount of remaining damages due to MBC, if any, as a result of Crompton's alleged breach of guaranty, and (2) the amount of remaining damages due to Crompton under counts I and II, if any, both as an offset of any damages that Crompton owes under the Guaranty, and any independent damages that MBC owes Crompton for bringing this lawsuit.” (Id. at PageID 1943.) *2 Following this Court's decision, three unresolved Motions to Compel certain discovery requests remained in front of Magistrate Judge Christoff. The parties filed their respective supplemental memoranda in support of their motions to compel on April 21, 2022, (ECF Nos. 122, 123), and their responses in opposition one week later. (ECF Nos. 124, 125.) Magistrate Judge Christoff held a hearing on the Motions on May 10, 2022. (ECF No. 128.) MBC only contests Magistrate Judge Christoff's Order granting Crompton's Motion to Compel. Thus, the relevant requests at issue are Nos. 19, 23, 24, and 28: • Request No. 19: Please produce all documents and communications related to the Personal Guaranty at issue in this Action. • Request No. 23: All documents and communications related to the Intercreditor & Subordination Agreement described in paragraphs 49–52 of Crompton's Counterclaims. • Request No. 24: Please produce all documents and communications related to the [sic] MBC's efforts to participate in the Quick Fitting sale process in the Receivership, including MBC's request to credit bid its claims in connection with the sale of Quick Fitting's assets. • Request No. 28: Please produce all non-privileged documents and communications related to the Receivership Settlement. (ECF No. 129 at PageID 2037-38 (citing ECF No. 125).) In support of his Motion to Compel, Crompton argued that MBC “knowingly filed a baseless complaint and pursued a meritless case against him” despite knowing that the Antipodes Loan would be satisfied by Quick Fitting's assets in the Receivership proceeding, rendering this litigation unjustified and a coercive attempt to make Crompton pay MBC money it was not owed. (ECF No. 122 at PageID 1986-87.) Crompton asserted that the production requests “are unquestionably relevant to the remaining issues because they are properly tailored at MBC's awareness of the fully secured status of the Antipodes Loan at the time it filed this suit and at multiple points throughout the Receivership.” (Id.) MBC responded that it produced all responsive documents in its custody or control as to request No. 19, and, “even if there were [anything left to give], it does nothing to inform the question of Crompton's continued breach of his Personal Guaranty.” (ECF No. 125 at PageID 2020-21.) Likewise, it asserts that “there is nothing left to give” Crompton as to request No. 23 because the Court's February 10 order resolved the issue of the allocation of the funds received through the Settlement Agreement, mooting anything to do with the Intercreditor & Subordination Agreement and allocation. (Id. at PageID 2022.) Even if there were more to give, MBC asserts that it would not be relevant given the remaining, narrow focus of the litigation. (Id.) MBC's responses to Requests No. 24 and 28 also argue that the requested documents are no longer needed because the Court's February 10 Order resolved the underlying issues. As to Request 24, MBC contends that its role in Quick Fitting's sale does not impact Crompton's liability as guarantor, that MBC does not know the reference to a “credit bid,” and that the request seeks information protected under attorney-client privilege. (Id.) MBC also maintains its initial objection that the request “is overly broad, unduly burdensome, beyond the scope of discovery ... under Fed. R. Civ. P. 26, and seeks documents that are not relevant or material to this lawsuit ...” (ECF No. 125 at PageID 2023.) In response to Request No. 28, MBC contends that, even if Crompton argues that the request is relevant to support a claim for a breach of the Personal Guaranty by MBC, that remaining claim is legal – not factual – in nature, and its resolution does not require additional discovery. (Id. at PageID 2023-24.) *3 Magistrate Judge Christoff first concluded that Crompton's requested documents are relevant to the remaining claims at issue in the litigation. (ECF No. 129 at PageID 2038.) Her Order states that: [e]ach category of documents relates in some way to MBC's valuation of Quick Fitting, as well as its understanding as to whether it would be secured absent successful prosecution of its claims against Crompton in this litigation. Documents and communications that speak to that valuation and MBC's understanding are relevant because they have the potential to address MBC's alleged breach of the Antipodes Loan, as well as “MBC's efforts to enforce Crompton's Guaranty,” which, the Court explained ... “constitutes a valid, independent cause of action for breach of the Guaranty” (ECF No. 104, at 46–48), which may include “damages, including legal expenses incurred in defending MBC's meritless claim” (id. at 48). (ECF No. 129 at PageID 2038.) Notably, Magistrate Judge Christoff's Order never expressly states reliance on the interpretation of Paragraph 13 of the Personal Guaranty that was included in the Court's February 10 Order. MBC now argues one objection to the Order that is “purely legal in nature.” (ECF No. 130.) Explaining that it “does not take issue with the Magistrate Judge's reasoning per se,” it states that it instead objects to her reliance on an erroneous interpretation of Paragraph 13 of the Personal Guaranty that was a part of this Court's February 10 Order. (Id. at PageID 2040.) Specifically, it argues that this Court misinterpreted a sentence in Paragraph 13 of the Personal Guaranty, erroneously concluding that MBC had to “deem itself insecure” before it could enforce the Personal Guaranty against Crompton. (Id. at PageID 2040-41.) According to MBC, Crompton adopted that mistaken reasoning in front of Magistrate Judge Christoff to argue that documents relating to MBC's valuation of Quick Fitting and its participation in Quick Fitting's Receivership proceedings were relevant. (Id. at PageID 2041.) Because Magistrate Judge Christoff based her ruling that the documents were discoverable on this (according to MBC) legally erroneous theory, MBC argues that her decision must be set aside. (Id.) Crompton responds to MBC's objection on procedural and substantive grounds. First, he argues that the Court should not consider the objection because it is defective, asserting legal error rooted in an earlier ruling made by this Court, not the Magistrate Judge. (ECF No. 131 at PageID 2065.) Relying on the law of the case doctrine, Crompton argues that Magistrate Judge Christoff was compelled to follow the Court's February 10 Order. (Id. at PageID 2065-66) (citing, inter alia, Moore v. Mitchell, 848, F.3d 774, 776 (6th Cir. 2017).) Crompton contends that MBC's Objections are therefore procedurally improper to challenge that ruling, and instead should have been made as a motion for a revision of the Court's February 10 Order – an interlocutory order – under Local Rule 7.3 and Federal Rule 54(b). (Id. at PageID 2066.) Finally, Crompton argues that MBC's Objection is barred under the doctrine of waiver because MBC never previously argued that this Court erred in its earlier ruling during the hearing or memoranda filed in connection with the Motion to Compel, and that failure waives its argument here. (Id. at PageID 2067.) *4 Substantively, Crompton challenges MBC's objections by asserting that the Objections – based on contract interpretation – raise a premature challenge to the merits of the case. (Id. at PageID 2069 (“MBC cannot take a second bite at the apple on its motion to dismiss Crompton's counterclaim, or otherwise leap forward to the summary judgment or trial stage simply because it does not want to, and refuses to, participate in discovery.”).) Second, Crompton contends that MBC mischaracterizes his previously-asserted counterclaim for MBC's alleged breach of the Personal Guaranty as a “new theory,” when Crompton continually argued that MBC breached the Guaranty by “pursuing this lawsuit” and by improperly allocating the Receivership proceeds. (Id. (citing ECF No. 65 at ¶¶ 134-147; ECF No. 66-1 at 12).) Finally, Crompton argues that MBC's Objections fail to satisfy the substantive requirements under the Local and Federal Rules for seeking a revision of a court's interlocutory order. According to Crompton, “MBC cannot show any material difference or change in fact or law occurring after the Court's February 10 Order, or a manifest injustice or ... failure by this Court to consider any facts or legal arguments presented to it before such interlocutory order.” (ECF No. 131 at PageID 2071-72 (citing L.R. 7.3(b); Fed. R. Civ. P. 54(b); Thomas v. Schroer, No. 13-cv-02987-JPM-cgc, 2017 WL 6489144, at *2 (W.D. Tenn. Sept. 20, 2017), aff'd sub nom. Thomas v. Bright, 937 F.3d 721 (6th Cir. 2019)).) LEGAL STANDARD Federal Rule of Civil Procedure 72(a) requires district judges reviewing magistrate judges’ orders on non-dispositive, pre-trial matters to “consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a); 28 U.S.C. § 636(b)(1)(A); Local Rule 72.1(g)(“The presiding district judge may reconsider any order determining a pretrial matter where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.”). Because discovery matters are generally non-dispositive, the clearly erroneous or contrary to law standard applies. Chesher v. Allen, 122 F. App'x. 184, 186 (6th Cir. 2005). Here, MBC argues that Magistrate Judge Christoff's Order is contrary to law. (See ECF No. 130 at PageID 2047 (MBC's objection “is predicated upon interpretation of the Personal Guaranty as it pertains to the relevance of the discovery sought by Crompton; therefore, the issue before the Court is purely legal in nature.”).) “A magistrate's ruling is contrary to law if it fails to apply or misapplies relevant statutes, case law, or rules of procedure.” Goree v. United Parcel Serv., Inc., No. 14-cv-2505, 2015 WL 11120732, at *2 (W.D. Tenn. Oct. 5, 2015) (citing Thai Lao Lignite (Thailand) Co. v. Gov't of Lao People's Democratic Republic, 924 F.Supp. 2d 508, 512 (S.D.N.Y. 2013)); see also 23 Am. Jur. 2d Fed. Cts. § 140 (2018). A district court's deference to a magistrate judge when considering the magistrate judge's ruling on a non-dispositive motion signifies that “reversal or modification is warranted only if that discretion is abused.” United States v. Winsper, No. 3:08-cv-631-H, 2013 WL 5673617, at *1 (W.D. Ky. Oct. 17, 2013). ANALYSIS MBC's argument is straightforward: (1) The Court's February 10 Order partially quoted and misinterpreted Paragraph 13 of the Guaranty to conclude that MBC had to deem itself insecure before enforcing the Personal Guaranty; (2) however, Paragraph 13 is not a condition precedent to enforcement; and (3) by relying on the Court's erroneous interpretation of the contractual language, Magistrate Judge Christoff's Order is contrary to law and must be modified or set aside. While addressing the merits of this argument would require analysis of the language of Paragraph 13 in the Personal Guaranty, Crompton's arguments present threshold procedural issues that the Court must address first. Based on its procedural deficiencies, the Court DENIES MBC's Objections. *5 Crompton first argues that MBC's Objection is defective under Federal Rule 72(a) because it asserts legal error rooted in an earlier ruling made by this Court, not the Magistrate Judge. (ECF No. 131 at PageID 2065.) It points to the language of MBC's Objections, in which MBC specifically denied “tak[ing] issue with the Magistrate Judge's reasoning per se,” and instead states that the real error was found in this Court's February 10 Order: The Court's partial quotation of Paragraph 13 of the Personal Guaranty and conclusion about the effect of that language in its February 10, 2022 Order was contrary to the actual language and purpose of Paragraph 13, and thus was contrary to law. That legal error was compounded when Magistrate Judge Christoff relied on it to hold that information relating to whether Mueller Brass deemed itself insecure was relevant and discoverable. (ECF No. 130 at PageID 2041.) That assertion of legal error, Crompton argues, would be procedurally proper to raise in a motion for a revision of an interlocutory order under Local Rule 7.3 and Federal Rule 54(b), challenging the Court's February 10 Order, but is procedurally improper as an objection to the Magistrate Judge's discovery order. The Court agrees. MBC asserts that the Court's “partial quotation of Paragraph 13 of the Personal Guaranty and conclusion about the effect of that language in its February 10, 2022 Order was contrary to the actual language and purpose of Paragraph 13,” constituting an error that “will taint this entire case.” (ECF No. 130 at PageID 2041-42.) It is for this reason, and the Magistrate Judge's reliance on the Court's February 10 Order, that MBC objects to the discovery order. However, these objections are not the “proper vehicle” for MBC's argument. Federal Rule of Civil Procedure 72(a) requires district judges reviewing magistrate judges’ orders on non-dispositive, pre-trial matters to “consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). Here, MBC seeks a revision of the Court's own conclusions, which MBC asserts were compounded by Magistrate Judge Christoff's conclusion. Federal Rule 72 is not the proper vehicle for such a challenge to this Court's ruling. Instead, Local Rule 7.3, governing motions for the revision of interlocutory orders, provides that “any party may move, pursuant to Fed. R. Civ. P. 54(b), for the revision of any interlocutory order made by that Court on any ground set forth in subsection (b) of this rule.” L.R. 7.3(a). Subsection (b) sets forth that a party moving for revision: “must specifically show: (1) a material difference in fact or law from that which was presented to the Court before entry of the interlocutory order for which revision is sought, and that in the exercise of reasonable diligence the party applying for revision did not know such fact or law at the time of the interlocutory order; or (2) the occurrence of new material facts or a change of law occurring after the time of such order; or (3) a manifest failure by the Court to consider material facts or dispositive legal arguments that were presented to the Court before such interlocutory order.” L.R. 7.3(b). Here, MBC did not lodge its Objection as a Motion for Revision, nor does MBC show that these factors are met. Even if a Rule 72 Objection was the proper vehicle to lodge this Objection to the Magistrate Judge's Order, Crompton is correct that waiver bars the argument from being considered by the Court at this stage. Given the role of the Magistrate Judge in deciding non-dispositive issues, logic dictates that a district court cannot consider arguments that were not presented to the Magistrate Judge. See Murr v. United States, 200 F.3d 895, 902 n.1 (6th Cir. 2000) (“... the Magistrate Judge Act ... does not allow parties to raise at the district court stage new arguments or issues that were not presented to the magistrate.”) *6 Here, MBC states that Crompton made the argument that MBC must first deem itself insecure to enforce the Guaranty “in his papers and in his counsel's argument during the May 10, 2022 hearing before the Magistrate Judge.” (ECF No. 130 at PageID 2048-49.) But MBC does not state in its Objections that it opposed this argument at the hearing, and its written Response in opposition to Crompton's Supplemental Brief in support of his Motion to Compel also offers no support that it previously raised this objection. Indeed, in its Response, (ECF No. 125), MBC argues that it “was not required to sit around and hope it got paid at some point in the future” through the Receivership proceedings or by Crompton himself, but it does not argue that Crompton's argument relied on an erroneous interpretation of Paragraph 13 of the Personal Guaranty. (Id. at PageID 2019.) Without affording Magistrate Judge Christoff the opportunity to consider its argument, MBC waived its right to raise it here. CONCLUSION In sum, the Court finds that MBC's Objections improperly raise an argument under Federal Rule 72 that would be properly considered as a motion for revision of an interlocutory order, and, in any case, are procedurally barred from raising the objection under the doctrine of waiver. The Court therefore DENIES MBC's Objections as procedurally deficient under the requirements of Rule 72 and does not opine on the merits of MBC's objection to the contractual interpretation at this time. The Court ORDERS MBC to comply with Magistrate Judge Christoff's May 19 Order and to produce all documents and materials responsive to the relevant discovery requests, as well as privilege logs describing any documents being withheld, within seven (7) days of entry of this Order. The remaining issue of attorneys’ fees raised in Crompton's opposition to MBC's Objections is DENIED because the Court finds that MBC's timely objection to the underlying request was still substantially justified under the circumstances, despite its deficiencies, and an award of attorneys’ fees would be inappropriate under Rule 37(a)(5)(A)(ii). IT IS SO ORDERED, this 13th day of July, 2022.