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New London Tobacco Market, Inc. v. Kentucky Fuel Corp.

United States District Court, E.D. Kentucky, Southern Division, London

July 27, 2018




         This matter is before the Court on the Defendants' Objection to the Magistrate's Order [R. 348] and Plaintiffs' Motion for Leave to Respond to Defendants' Objection [R. 351]. This Court will OVERRULE the Defendants' objections [R. 345] and DENY Plaintiffs' motion [R. 351].



         The factual background of this case has been detailed over and over again in the many Orders this Court has issued. [See, i.e., R. 285; R. 206; R. 321.] For the purposes of the current motion being considered, this Court will only update the extensive record.

         In March 2017, this Court entered an Order upholding Defendants' objections to the Magistrates entry of damages in connection with default judgment. [See R. 321.] In that Order, this Court held that Defendants should be afforded an evidentiary hearing with regard to the damages proved by Plaintiffs. [See R. 321.] As a result of this Court's ruling, the Defendants moved to extend deadlines for expert disclosures and discovery as to damages. [R. 331.] After the matter was fully briefed, Magistrate Judge Hanly A. Ingram denied the Defendants' motion because Defendants “never served any timely written discovery requests, and their deadline to do so expired four years ago.” [R. 345 at 1.] Defendants objected [R. 348], which this Court now considers.


         Magistrate judges have broad discretion over discovery and other non-dispositive matters. While the Court can reconsider the magistrate's orders, the Court's standard of review is deferential. 28 U.S.C. § 636(b)(1)(A) allows a district court to “designate a magistrate to hear and determine any pretrial matter pending before the court” (emphasis added). “When a magistrate judge determines a non-excepted, pending pretrial matter, the district court has the authority to “reconsider” the determination, but under a limited standard of review.” Massey v. City of Ferndale, 7 F.3d 506, 509 (6th Cir. 1993) (citing 28 U.S.C. § 636(b)(1)(A)).

         Pursuant to Federal Rule of Civil Procedure 72(a), the Court will set aside or modify a magistrate judge's order only if the Court finds that at least a portion of the order is “clearly erroneous or contrary to law.” Fed. R. Civ. Pro. 72(a). “A finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948). “The question is not whether the finding is the best or only conclusion that can be drawn from the evidence, or whether it is the one which the reviewing court would draw.” Heights Community Congress v. Hilltop Realty, Inc., 774 F.2d 135, 140 (6th Cir. 1985). Instead, the Court considers whether there is evidence in the record to support the initial court's finding and whether “its construction of that evidence is a reasonable one.” Id.


         Upon review of the record and careful consideration of the Defendants' objections, this Court will uphold the Magistrate's order [R. 345] and OVERRULE Defendants' Objections [R. 348]. Defendants have not identified any portion of the Magistrate's order which is “clearly erroneous or contrary to law, ” Fed. R. Civ. Pro. 72(a), and this Court agrees with the Magistrate Judge's analysis.

         Citing primarily dicta from this Court's previous opinion and misstating this Court's holdings, the Defendants argue they should have the opportunity to speak meaningfully towards damages, which, to them, means re-opening discovery to allow them to identify expert witnesses. [R. 338 at 2.] This Court did hold that Defendants should have an opportunity to speak meaningfully towards damages, but it did not hold that Defendants should be permitted to essentially start this litigation over and re-open discovery that should have been conducted years ago. Accordingly, the Magistrate's opinion is not in contradiction to the Court's previous order.

         The Magistrate Judge made several considerations when denying Defendants' Motion. First, he looked at past behavior, which has been “appalling.” [R. 345 at 2.] The Magistrate Judge emphasized, and this Court agrees, that the Defendants will be permitted to present any evidence regarding mitigation of damages or any other analysis they deem proper for the Court to consider, but they will be limited by the “strategic” decisions they made during discovery, namely, to not participate at all. [R. 345 at 3.] The Magistrate Judge held Plaintiffs to the same standard, that their “presentation will be constrained by the discovery they did, or did not, make in accordance with the Rules.” [R. 345 at 4.]

         The Magistrate Judge relied primarily on Nafziger v. McDermott Int'l, Inc., 467 F.3d 514, 522 (6th Cir. 2006), in his analysis to determine if Defendants had demonstrated excusable-neglect for not meeting earlier ...

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