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Commonwealthy v. Marathon Petroleum Co. LP

United States District Court, W.D. Kentucky, Louisville Division

June 26, 2018

COMMONWEALTH OF KENTUCKY, Plaintiff,
v.
MARATHON PETROLEUM COMPANY LP, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          COLIN H LINDSAY MAGISTRATE JUDGE.

Before the Court are a handful of motions: a motion for a protective order (DN 87) filed by plaintiff Commonwealth of Kentucky (“the Commonwealth”), a motion to stay discovery (DN 95) filed by defendants Marathon Petroleum Company LP, Marathon Petroleum Corp., and Speedway LLC (“Marathon”)[1], and numerous motions to seal filed by both parties. For the reasons stated below, the Court GRANTS the Commonwealth's motion for a protective order, DENIES Marathon's motion to stay discovery, and GRANTS the motions to seal.

         I. Statement of Facts and Procedural History

         The Commonwealth's second amended complaint alleges that Marathon has engaged in anticompetitive conduct in violation of the Sherman Act, Clayton Act, and Kentucky's Consumer Protection Act, through its business dealings in Louisville and northern Kentucky. (DN 88, #1087.) Essentially, the Commonwealth alleges that Marathon has entered into contracts with various gasoline retailers for the distribution of its reformulated gasoline (“RFG”) that restrict its competitors' ability to challenge Marathon's market dominance. (Id. at 1087-88.) The Commonwealth has alleged, inter alia, that these distribution agreements unlawfully restrict the gasoline retailers' ability to purchase RFG from Marathon's competitors; separate contracts allegedly include deed restrictions that prevent competitors from entering the market. (Id.)

         Previously, this Court granted the Commonwealth's motion to amend its complaint. (DN 87.) The Commonwealth subsequently filed its second amended complaint, which added Speedway LLC and Marathon Petroleum Corp. as co-defendants alongside Marathon Petroleum Co. LP. (DN 88.) Marathon Petroleum Corp. promptly filed a motion to dismiss for a want of personal jurisdiction (DN 92). The majority of the motions at issue here deal with Marathon Petroleum Corp.'s motion to dismiss.

         II. Analysis

         A. Motion for a Protective Order

         In its motion seeking a protective order, the Commonwealth argues that Marathon has improperly sought a Rule 30(b)(6) deposition from the Office of the Attorney General (“OAG”), because complying with the request would require it to either produce an attorney to testify or extensively prepare a non-attorney to testify, the latter option placing a significant burden on the Commonwealth. (DN 87-1, #883.) The Commonwealth does not argue that its attorneys are per se immune from being deposed or that it is exempt from certain types of discovery, but rather that Marathon has failed to demonstrate that it satisfies the so-called Shelton test, adopted by the Sixth Circuit in Nationwide Mut. Ins. Co. v. Home Ins. Co., 278 F.3d 621 (6th Cir. 2002), for determining when it is appropriate to depose opposing counsel. (Id. at 884.) It argues that even though Marathon's 30(b)(6) notice is not directed at the OAG specifically - and therefore theoretically could apply to a non-attorney employee - the notice is the “practical equivalent” of a notice to opposing counsel because the only people it could apply to are attorneys within the OAG. (Id. 891.)

         On the other hand, Marathon argues that a recent case from this district, Consumer Fin. Prot. Bureau v. Borders & Borders, PLC, 2016 WL 9460471 (W.D. Ky. June 29, 2016) (hereinafter “Borders & Borders”), explicitly rejected the “practical equivalent” argument that other districts have utilized. (DN 94, #1226.) It argues that because opposing counsel is not being targeted for a deposition, the Shelton test does not apply in this case. (Id. at 1231.)

         Thus, the Court must first determine whether Marathon's 30(b)(6) notice to the Commonwealth is the “practical equivalent” of sending a deposition notice to opposing counsel. If it is, then the Court then must determine if Marathon has met the Shelton standard for deposing opposing counsel.

         1. Summary of Law

         A party may, as the Commonwealth has done here, request that the Court grant it a protective order to protect the party from “annoyance, embarrassment, oppression, or undue burden” arising out of a discovery request. Fed.R.Civ.P. 26(c)(1). But before the Court can enter a protective order, the party seeking the order must demonstrate that “good cause” exists to grant the order; good cause can be met by a showing that absent the entry of a protective order, the party would suffer a clearly defined and serious injury. Borders & Borders, 2016 WL 9460471 at *2 (W.D. Ky. June 29, 2016) (citing Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3rd Cir. 1995)).

         In Nationwide Mut. Ins. Co. v. Home Ins. Co., the Sixth Circuit adopted the Eight Circuit's Shelton test for determining when opposing counsel can be deposed. 278 F.3d 621 (6th Cir. 2002) (citing Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986)). The party seeking to take the deposition must show that (1) no other means exists to obtain the information; (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case. Id.

         2. Analysis

         a. “Practical Equivalent” of Notice to Opposing Counsel

         Before the Court can look to the elements of the Shelton test, it must first determine whether Marathon is seeking the deposition of Commonwealth attorneys in the first place. The Commonwealth argues that this is the case, because although Marathon's notice is not directed at the OAG, the only individuals who possess the knowledge to appear at a deposition would be the attorneys and their investigators within the OAG. (DN 87-1, #891.) The Commonwealth points to a case from the Northern District of Illinois, SEC v. Buntrock, where the district court prohibited the defendants from taking a 30(b)(6) deposition of the SEC because it would be akin to deposing opposing counsel. 217 F.R.D. 441, 444 (N.D. Ill. 2003). Marathon's response to the “practical equivalent” argument is to point this Court's recent decision in Borders & Borders (which does not discuss Buntrock), in which the Court rejected the Consumer Financial Protection Bureau's request to avoid having one of its attorneys testify as a 30(b)(6) representative. (DN 94, #1226.) It also criticizes - at length - the Commonwealth's citation to out-of-circuit and out-of-district cases. (DN 94, #1230.) It does not appear that the Sixth Circuit has issued a ruling directly on the applicability of the “practical equivalent” test, so the Court must look to out-of-circuit opinions for guidance. U.S. v. Washington, 584 F.3d 693, 698 (6th Cir. 2009).

         In Buntrock, the Northern District of Illinois considered the issue of whether the defendants should be allowed to depose attorneys from the SEC. There, the SEC initiated a civil fraud enforcement action against the defendants, and during discovery, the defendants sought a 30(b)(6) deposition from someone in the SEC who could testify about “basically” the “results of the SEC's investigation.” SEC v. Buntrock, 217 F.R.D. 441, 443 (N.D. Ill. 2003). As the Commonwealth has done here, the SEC objected to the deposition because complying with the deposition notice would require it to either have one of its own attorneys testify or extensively prepare a non-attorney to testify. Id. The Court agreed with the SEC, holding that the defendants improperly sought to depose opposing counsel. Id. at 444. It rejected the defendants' argument that the SEC could simply designate a non-attorney employee to testify on its behalf; because the only people who investigated the case were either SEC attorneys or SEC investigators acting at the direction of SEC attorneys, ...


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