ARC RESOURCE MANAGEMENT, INC., PLAINTIFF, v. CIVIL, LLC, DEFENDANT CIVIL ACTION NO. 7:20-CV-00027-DLB-EBA United States District Court, E.D. Kentucky Filed: July 30, 2024 Counsel C. Thomas Ezzell, Danielle Harlan, Evan McDonald Rice, Richard A. Getty, David Thomas Faughn, The Getty Law Group, PLLC, Lexington, KY, for Plaintiff. Calvin R. Tackett, Tackett Law Office, Whitesburg, KY, Karen J. Greenwell, Lexy Gross Holland, Lillian Stivers, Wyatt, Tarrant & Combs LLP, Lexington, KY, for Defendant. Atkins, Edward B., United States Magistrate Judge ORDER *1 This matter is before the Court on ARC Resource Management's Motion to Reconsider a Portion of the Order Denying the Motion to Compel Filed by Plaintiff [R. 100] and Civil, LLC's Motion to Amend Scheduling Order [R. 106]. ARC seeks to have the undersigned reconsider a portion of the Court's June 24, 2024, Order [R. 98] while Civil requests the Court to amend the current Scheduling Order to extend the fact and expert discovery deadlines in this matter. [R. 106]. The parties have since filed responsive pleadings to each of these motions. [R. 107; R. 110; R. 111; R. 115]. ARC then moved for a hearing to be held in this case, which the undersigned granted, and a hearing was to be held on July 31, 2024. [R. 119]. However, the hearing was then cancelled due to Plaintiff's counsel recovering from an illness. [R. 122]. A review of the pleadings, however, indicates that no hearing is required on these matters. Therefore, these matters are ripe for review. I. FACTUAL AND PROCEDURAL BACKGROUND As the parties acknowledge, this case originally centered around ARC's allegations that Civil had breached its Contract Mining Agreement relating to mining activities located in Buchanan County, Virginia by failing to mine 38,000 tons of coal. [See R. 1; R. 92 at pg. 1]. In response to ARC's Complaint, Civil has also filed its own counterclaims against ARC and additional parties. [R. 11]. The matter has since evolved to involve multiple corporate entities, complex claims and counterclaims, and possible damages of more than $15,000,000. The case was originally removed to the Eastern District of Kentucky on February 28, 2020, [R. 1], and since then extensive written and oral discovery has taken place. [See R. 28; R. 29; R. 30; R. 31; R. 32; R. 33; R. 38; R. 58; R. 78; R. 79; R. 87; R. 88; R. 89]. The Court originally issued its Scheduling Order on October 1, 2020, [R. 27], but since then the Court has extended the deadlines in this case multiple times. [See R. 43; R. 46; R. 48; R. 60; R. 62; R. 69; R. 71; R. 86; R. 98]. Recently, the parties moved to compel the production of certain discovery materials from each other and Civil moved to amend the Scheduling Order to extend the pending deadlines in this matter. [R. 91; R. 92]. The undersigned issued an order on these motions on June 24, 2024 (June 24th Order), which, among other things, denied portions of ARC's motion to compel, ordered Civil to produce its expert reports to ARC, and only granted Civil's motion to amend the Scheduling Order to the extent necessary to allow for the production of Civil's expert reports. [R. 98]. Now, ARC has moved to have the Court reconsider the portion of the June 24th Order denying ARC's request to compel the production of materials and information related to Civil's financial status and condition. [R. 100]. Civil has likewise filed another motion to amend the Scheduling Order in this case to extend the fact and expert discovery deadlines in this matter. [R. 106]. The parties have fully briefed these motions. [See R. 107; R. 110; R. 111; R. 115]. Therefore, the matters are ready for review. II. STANDARD OF REVIEW *2 While the Federal Rules of Civil Procedure do not explicitly allow for motions for reconsideration, the Sixth Circuit has found that “[d]istrict courts have authority both under common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final judgment.” Rodriguez v. Tennessee Laborers Health & Welfare Fund, 89 F. App'x 949, 959 (6th Cir. 2004) (quoting Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991)). Generally, the Court may reconsider an interlocutory order when justice requires, which will typically occur “when there is (1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear error or prevent manifest injustice.” Id. (citing Reich v. Hall Holding Co., 990 F.Supp. 955, 965 (N.D.Ohio 1998)). “When a motion for reconsideration is premised on clear error or manifest injustice, the moving party must show that the Court applied the incorrect law to the case or that ‘there exist[s] a fundamental flaw in the court's decision that without correction would lead to a result that is both inequitable and not in line with applicable policy.” ’ Evans v. Novolex Holdings, LLC, No. CV 20-98-DLB-CJS, 2023 WL 4843993, at *2 (E.D. Ky. June 21, 2023) (quoting Hazard Coal Corp. v. Am. Res. Corp., No. 6:20-CV-10-CHB, 2022 WL 18638743, at *3 (E.D. Ky. Sept. 9, 2022)). In other words, the moving party “must not only establish that errors were made, but that these errors were so egregious that an appellate court could not affirm the judgment.” Dorger v. Allstate Ins. Co., No. CIV.A. 2:08-56-DCR, 2009 WL 2136268, at *2 (E.D. Ky. July 16, 2009). Finally, “district courts retain ‘significant discretion in deciding motions for reconsideration,’ Woods v. RHA/Tenn. Grp. Homes, Inc., 803 F. Supp. 2d 789, 798 (M.D. Tenn. 2011), and although commonly filed, motions for reconsideration are ‘extraordinary in nature, and because they run contrary to finality and repose, should be discouraged.’ Younglove Constr., LLC v. PSD Dev., LLC, 767 F. Supp. 2d 820, 824 (N.D. Ohio 2011).” Evans, 2023 WL 4843993 at *2. Additionally, pursuant to FED. R. CIV. P. 26(b)(1), unless otherwise limited, “[p]arties 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... Information within this scope of discovery need not be admissible in evidence to be discoverable.” The courts have broadly construed this language “to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). While this scope is not without limits, the Sixth Circuit has consistently held that ‘ “[t]he scope of discovery is within the sound discretion of the trial court, and a ruling by the trial court limiting or denying discovery will not be cause for reversal unless an abuse of discretion is shown.” ’ France v. Lucas, 836 F.3d 612, 631 (6th Cir. 2016) (quoting S.S. v. E. Ky. Univ., 532 F.3d 445, 451 (6th Cir. 2008)). However, “[t]he ‘proponent of a motion to compel discovery bears the initial burden of proving that the information sought is relevant.” ’ O'Malley v. NaphCare Inc., 311 F.R.D. 461, 463 (S.D. Ohio 2015) (citation omitted). Finally, pursuant to FED. R. CIV. P. 16(b)(4), a scheduling order “may be modified only for good cause and with the judge's consent.” As the Sixth Circuit has held in the past, “[a] court asked to modify a scheduling order for good cause ‘may do so only if [a deadline] cannot reasonably be met despite the diligence of the party seeking the extension.” ’ Marcilis v. Twp. of Redford, 693 F.3d 589, 597 (6th Cir. 2012) (quoting Leary v. Daeschner, 349 F.3d 888, 906 (6th Cir. 2003)); see also Inge v. Rock Fin. Grp., 281 F.3d 613 (6th Cir. 2002). Further, “[a]nother important measure under Rule 16's good-cause standard is whether modification of the scheduling order would prejudice the nonmoving party.” In re Onglyza (Saxagliptin) & Kombiglyze XR (Saxagliptin & Metformin) Prod. Liab. Litig., No. 5:18-MD-2809-KKC, 2022 WL 3050665, at *5 (E.D. Ky. Aug. 2, 2022), aff'd sub nom. In re Onglyza (Saxagliptin) & Kombiglyze (Saxagliptin & Metformin) Prod. Liab. Litig., 93 F.4th 339 (6th Cir. 2024) (citation omitted). III. ANALYSIS A. MOTION FOR RECONSIDERATION. *3 ARC argues that the Court should reconsider its ruling denying its motion to compel the production of information and documentation related to Civil's financial state because evidence indicates that Civil's lack of financial resources caused it to breach the Contract Mining Agreement. [R. 100 at pgs. 7–8]. Additionally, ARC avers that these materials are needed to show that ARC's decision to terminate its contracts with Civil was reasonable under the circumstances, to help defend against Civil's counterclaims, to investigate what damages Civil may seek in this matter, and to prove “that Civil never would have received profits for the entire contract because it never could have performed that entire contract based on its financial situation.” [Id. at pgs. 9–10]. Civil maintains, however, that ARC's request for reconsideration should be denied because they have failed to demonstrate that the Court's Order was a clear error or that reconsideration is needed to prevent manifest injustice and that the request otherwise calls for irrelevant information and is not proportional to the needs of the case. [R. 111 at pgs. 4–9]. ARC continues to assert though that its motion does comply with the Civil Rules, that this discovery is relevant to the issues in this case, and that the request is proportional to the needs of the case, but that Plaintiff is amenable to limiting its request to obtaining financial records from 2018 and 2019 only. [R. 115]. As previously alluded to, ARC has not asserted that new evidence or a change in intervening law has occurred in this case [see R. 100], therefore ARC can only be granted relief if it demonstrates that reconsideration of the Court's previous order is needed to correct a clear error or to prevent manifest injustice. ARC's primary arguments to justify the production of these materials is that they are relevant to determine whether Civil's alleged lack of financial resources was the reason Defendant failed to properly fulfill its obligations under the Contract Mining Agreement and thus it is entitled to “discovery on this issue and to prove at trial that Civil's defenses, claims, and excuses are not the real reason it breached.” [Id.]. To support this argument, ARC included a detailed summary of the facts surrounding this case to describe the problems that arose with Civil's performance in mining the relevant property, its failure to acquire a second highwall miner or to make other adjustments to meet its monthly tonnage requirement, its failure to pay vendors, and its requests for monetary advances from ARC. [Id. at pgs. 2–6]. However, the requested evidence would appear to touch on Civil's state of mind or motive in breaching the Mining Contract Agreement and as the courts in the Sixth Circuit have recognized, “[a] party's state of mind or motive is not material when determining if a contract was breached or determining the amount of damages.” Veritiv Operating Co. v. Phoenix Paper Wickliffe, LLC, No. 5:21-CV-00170-BJB-HBB, 2023 WL 2975868, at *8 (W.D. Ky. Apr. 17, 2023) (citing Advanced Accessory Sys., LLC v. Gibbs, 71 Fed. App'x. 454, 466 (6th Cir. 2003)). The key issue is whether Civil did or did not breach its obligations under the Contract Mining Agreement—Civil's motivations behind the breach are not relevant to prove ARC's claims. ARC appears to be primarily concerned with Civil's defense that “acts of God” or circumstances beyond its control prevented it from fulfilling its contractual obligations and that information on Civil's financial resources is needed to rebut this defense. [R. 100 at pg. 7]. As ARC detailed in its summary of the facts, one of Civil's defenses in this case is acts of God “prevented it from meeting the tonnage requirement, that the roll had prevented it from meeting this requirement, that the wetlands had somehow impacted the rate at which coal was removed, and that the Movants had agreed to adjust the tonnage requirement.” [Id. at pg. 6]. ARC, however, does not indicate why Civil's financial resources or lack thereof would affect a jury's finding on whether these issues constituted “acts of God” that could excuse Civil's failure to meet its obligations. Indeed, ARC also goes on to state that “[n]either the wetlands, nor the alleged roll, rendered the tonnage requirement impossible or impracticable to meet (nor did Arc agree to modify the Contract Mining Agreement). These are not ‘acts of God’ that excuse performance. These are the sorts of things that are regularly encountered in mining and that are routinely addressed.” [Id. at pg. 8]. Simply put, ARC does not demonstrate why Civil's financial status would affect whether these conditions and issues were beyond its control and whether these factors should excuse Civil's non-performance of its contractual obligations. *4 ARC also argues that this evidence is needed to defend itself against Civil's counterclaim and to determine potential damages Civil may seek against ARC. [Id. at pgs. 9–10]. Specifically, ARC wishes to procure this evidence to demonstrate its decision to terminate its contracts with Civil was reasonable, that Civil's financial inability to fulfill its obligations is a defense against Civil's counterclaim, and that this information is relevant to determine the damages Civil may seek in its counterclaim. [Id.]. However, Civil's counterclaim is that it fulfilled its obligations under the Contract Mining Agreement and ARC therefore breached this agreement by failing to compensate Civil for its services. [See R. 11 at pgs. 22–23]. As Civil explains, the basis of this counterclaim is that ARC failed to pay it for services it rendered under the Mining Contract Agreement, therefore Civil's ability to perform would therefore appear to be irrelevant to this claim. [See R. 111 at pgs. 7–8]. Further, to the extent Civil may seek to recover profits it may have received from this contract, Civil itself acknowledges that it “cannot seek lost profits according to the plain terms of the Mining Agreement, which prohibits the recovery of consequential damages.” [Id. at pg. 8]. Finally, at the very least, ARC has failed to demonstrate how its request is proportional for this case given the fact it is seeking six years of records, which would include records for more than four years after the relevant contractual relationship was terminated. [See id. at pg. 9]. Therefore, ARC has failed to demonstrate that the Court's June 24th Order denying Plaintiff's request to compel the production of these financial documents was a clear error or will result in manifest injustice, thus ARC's motion must be denied. B. MOTION TO AMEND SCHEDULING ORDER. Civil has also moved to amend the Scheduling Order in this matter to allow it to take four additional depositions and to complete expert discovery if it is still necessary after the Court rules on the pending motion for summary judgment. [R. 106]. Defendant has argued that its requested adjustments will not affect the Court's overall timeline and that preventing Civil from taking these depositions and completing this discovery will prejudice it. [Id.]. ARC, however, has objected to this motion on the grounds that Civil had ample opportunity to conduct the fact discovery it needed, that it is attempting to circumvent the Court's previous orders, and has otherwise failed to demonstrate good cause for this amendment. [R. 107]. Civil maintains, however, this extension is needed to prevent prejudice it will otherwise suffer and the limited discovery Civil wishes to proceed with will not affect the case's timeline and will ensure the parties are fully prepared for trial. [R. 110]. As the undersigned explained in its June 24th Order, this case has been on the Court's docket for over four years and multiple extensions have been granted to give the parties sufficient time to complete discovery in this matter. [See R. 43; R. 46; R. 48; R. 60; R. 62; R. 69; R. 71; R. 86; R. 98]. Again, the undersigned understands the need to conduct thorough discovery, especially in cases with complex issues and facts like the one currently at bar. However, at a certain point, the needs of judicial efficiency require a case to be moved forward despite the wishes of counsel. The Court has been more than lenient with the parties' requests for extensions, but it cannot longer afford to grant such requests at this late stage in the case. Therefore, Civil's motion to amend the Scheduling Order will be denied. IV. CONCLUSION Accordingly, having reviewed the matter and being otherwise sufficiently advised, IT IS ORDERED that ARC Resource Management's Motion to Reconsider a Portion of the Order Denying the Motion to Compel Filed by Plaintiff [R. 100] is DENIED. IT IS FURTHER ORDERED that Civil, LLC's Motion to Amend Scheduling Order [R. 106] is DENIED.