Madgett Law, LLC v. Pravati Capital, LLC

U.S. District Court, District of Minnesota February 26, 2024

Trial Court Opinion

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
MADGETT LAW, LLC, Case No. 23-CV-1271 (NEB/JFD)

Plaintiff,
ORDER GRANTING IN PART
v. PLAINTIFF’S MOTION TO
COMPEL AND AMENDING THE
PRAVATI CAPITAL, LLC, PRAVATI SCHEDULING ORDER
INVESTMENT FUND IV, LP, and
BERKSHIRE HATHAWAY DIRECT
INSURANCE COMPANY, doing business
as BIBERK INSURANCE COMPANY,
Defendants.
This matter comes before the Court on the Motion to Compel filed by Plaintiff
Madgett Law, LLC (“Madgett Law”). (Mot. Compel, Dkt. No. 80.) Madgett Law is suing
Pravati Investment Fund IV, LP and Pravati Capital, LLC (collectively “Pravati Capital”)
for abuse of process, violations of the Minnesota Consumer Protection Act, fraud, and for
an injunction staying arbitration proceedings. (Am. Notice of Removal, Ex. A. 15–21,
Dkt. No. 7-1.) In a previous order, this Court has explained in detail the circumstances
that have led the undersigned to consider this Motion without oral argument and without
a response from Pravati Capital. (Order Canceling Deadline and Hearing 2, Dkt. 90.) In
short, Pravati Capital failed to timely respond to Madgett Law’s Motion to Compel. (Id.)
Moreover, this Court did not consider any of the unfiled motions Pravati Capital’s
counsel represented to have at the ready when he emailed the Court. (Id. at 4–5.)
Consistent with the rules in this District, this Court canceled the hearing and considers
this motion without oral argument or a response from Pravati Capital. (Id. at 5 (citing D.
Minn. LR 7.1(g)(1)).) For the reasons set forth below, the Court grants in part and denies
in part Madgett Law’s Motion to Compel.

I. BACKGROUND
Discovery in this matter was scheduled to close on December 20, 2023. (Pretrial
Scheduling Order 1, Dkt. 61.) Pravati Capital was served with a deposition notice
consistent with Rule 30(b)(6) on October 16, 2023, for a deposition scheduled November
14, 2023, at 1:00 PM, in Minneapolis, Minnesota. (Aff. of Counsel, Dkt. 83, ¶ 3; id., Ex.

A, Dkt. No. 83-1.) Mr. Clifford Haines, counsel for Pravati Capital, objected that he had
another court hearing on November 14, that the 30(b)(6) notice included topics that were
inappropriate for a deposition, and that the deposition could not be held in Minnesota.
(Aff. of Counsel, Ex. B, at 2, Dkt. No. 89-2.) Mr. Madgett agreed to hold the deposition
via Zoom, but it was never completed for reasons that are not clear from the record. (Id.

at 3.) Madgett Law filed a Motion asking the Court to order Pravati Capital to comply
with the Rule 30(b)(6) deposition notice on December 16, 2023, and perfected that
motion on December 20. (Pl.’s Mem. Supp. Mot. Compel 1, Dkt. No. 82.)
On December 21, 2023, Mr. Madgett updated the Court that he was able to meet
and confer with counsel for Pravati Capital and promised to keep the Court updated on

their negotiations. (Updated and Am. Meet and Confer Statement, Dkt. No. 87; Order
Canceling Deadline and Hearing 2, Dkt. 90.) On January 4, the Court ordered Mr.
Madgett to provide an update after not receiving any updates from either party. (Order
Canceling Deadline and Hearing 3.) Mr. Madgett filed an update with the Court
explaining that he emailed Mr. Haines on December 26, attempted to reach him by
telephone, and had not received a response. (Second Updated and Am. Meet and Confer
Statement, Dkt. No. 89.) After receiving this notice, the Court canceled the hearing on

Madgett Law’s Motion to Compel, denied Mr. Haines’ emailed request to attend that
hearing remotely as moot, and took the Motion under advisement. (Order Canceling
Deadline and Hearing 5–6.)
II. LEGAL STANDARDS
Parties in civil cases can discover nonprivileged information “relevant to any

party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). The requesting party has the burden
of showing the information’s relevance. Sherman v. Sheffield Fin., LLC,

338 F.R.D. 247

, 
252 (D. Minn. Apr. 26, 2021) (citing Hofer v. Mack Trucks, Inc.,

981 F.2d 377, 380

 (8th 
Cir. 1992)). Then, “the party resisting production bears the burden of establishing lack of 
relevancy or undue burden.” Inline Packaging, LLC v. Graphic Packaging Int’l, Inc., No. 

15-CV-3183 (ADM/LIB),

2016 WL 6997113

, at *7 (D. Minn. Sept. 6, 2016) (quoting 
Saint Paul Reinsurance Co. v. Com. Fin. Corp.,

198 F.R.D. 508, 511

 (N.D. Iowa Nov. 
22,  2000)).  This  is  a  broad  disclosure  standard  but  it  is  not  boundless;  parties  can 
discover only information which is “proportional to the needs of the case,” considering 
“the importance of the issues,” “the amount in controversy,” “the parties’ relative access 

to relevant information,” their resources, how important the discovery is 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).                                       
    Parties in civil cases may “depose any person, including a party.” Fed. R. Civ. P. 
30(a)(1). To do so, the requesting party must “give reasonable written notice” and “state 
the time and place of deposition.” Fed. R. Civ. P. 30(b)(1). If the notice is directed to an 

organization, it must “describe with reasonable particularity the matter for examination.” 
Fed.  R.  Civ.  P.  30(b)(6).  “The  named  organization  must  designate  . . . persons  who 
consent to testify on its behalf” and “may set out the matters on which each person 
designated will testify.” Fed. R. Civ. P. 30(b)(6). Additionally, “the serving party and the 
organization must confer in good faith about the matters for examination.” Fed. R. Civ. P. 

30(b)(6). “The persons designated must testify about information known or reasonably 
available to the organization.” Fed. R. Civ. P. 30(b)(6).                 
    A  requesting  party,  under  the  belief  its  discovery  requests  are  relevant  and 
proportional, may make a motion to compel the responding party’s production if the 
responding party fails to provide requested information. Fed. R. Civ. P. 37(a)(3)(B). If a 

party prevails in their motion to compel, the court must award them expenses unless the 
moving party failed to meet and confer, the opposing party’s conduct was “substantially 
justified,” or it would be otherwise unjust to order expenses. Fed. R. Civ. P. 37(a)(5). If 
the Court grants the motion to compel in part, the Court “may, after giving an opportunity 
to  be  heard,  apportion  the  reasonable  expenses  for  the  motion.”  Fed.  R.  Civ.  P. 

37(a)(5)(C).                                                              
    The Court may also order sanctions if “a person designated under Rule 30(b)(6)” 
fails to appear for their deposition “after being served with proper notice.” Fed. R. Civ. P. 
37(d)(1)(A)(i).  Failure is “not excused on the ground that the discovery  sought was 
objectionable, unless the party failing to act has a pending motion for a protective order 
under Rule 26(c).” Fed. R. Civ. P. 37(d)(2). Moreover, “the court must require the party 
failing to act, the attorney advising that party, or both to pay the reasonable expenses, 

including  attorney’s  fees,  caused  by  the  failure,  unless  the  failure  was  substantially 
justified or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 
37(d)(3).                                                                 
III.  ANALYSIS                                                            
    Rule 30(b)(6) “bears heavily upon the parties’ reciprocal obligations.” Prokosch v. 

Catalina Lighting, Inc.,

193 F.R.D. 633, 638

 (D. Minn. 2000). “[T]he requesting party 
must reasonably particularize the subjects of the intended inquiry.” (Id.) “In turn, the 
responding party. . . is obligated to produce a deponent who has been suitably prepared to 
respond to questioning within that scope of inquiry.” (Id.) Here, Pravati Capital took 
issue with the breadth of the deposition topics. (See Aff. of Counsel, Ex. B at 1–2.) It is 

true “that the requesting party must take care to designate, with painstaking specificity, 
the particular subject areas that are intended to be questioned, and that are relevant to the 
issues in dispute.” Prokosch,

193 F.R.D. at 638

. If Pravati Capital felt Madgett Law 
identified irrelevant topics for the noticed deposition, its recourse was to meet and confer 
with Madgett Law to narrow the scope of the issues or file a motion for a protective 
order.1 In fact, counsel for Pravati Capital agreed to meet with counsel for Madgett Law 


1 Pravati Capital’s communications suggest that it saw its options the same way: “If you 
are prepared to narrow your inquiry, again I will work with you but if not we will proceed 
with a Motion.” (Aff. of Counsel, Ex. B at 2.)                            
to identify their specific objections. (Updated and Am. Meet and Confer Statement, Dkt. 
No. 87.) It is unclear if this meeting ever happened. What is clear is that Pravati Capital 
did not file a motion for a protective order claiming that the deposition topics were 

unduly burdensome or oppressive. (See Fed. R. Civ. P. 26(c)(1).)          
    Madgett Law alleges that Pravati Capital wrongfully initiated binding arbitration 
proceedings when Madgett Law never agreed to it; that Pravati Capital is abusing the 
arbitration process to make Mr. Madgett pay for co-counsel’s alleged debts to Pravati 
Capital;  that  it  violated  the  Minnesota  Consumer  Protection  Act  when  it  withheld 

material information at the time of contract formation2; and that it committed fraud when 
it falsely told Mr. Madgett that he and his firm had signed legal documents with Pravati 
Capital in the hopes that Mr. Madgett would pay Pravati Capital to go away. (Am. Notice 
of Removal, Ex. A. at ¶¶ 22, 66, 76–78, 81, 86–87, 91–92.) To prove up these claims, 
Madgett Law seeks a 30(b)(6) deponent who is familiar with the following:  

    •  The filings and discovery materials in the case (topics 1–2)      
    •  The alleged contract between the parties (topic 4)                
    •  The loan file at issue (topic 9), “any loan investigation communications” (topic 
      16),  and  any  representations  made  to  auditors  or  investors  about  the  loan 

      (topics 17–19)                                                     
    •  Any contacts the parties had with one another (topics 3, 5, 13, and 28) 


2 Specifically, Madgett alleges that Pravati hid the fact that it will “prohibit attorneys 
from resolving cases by compromise unless such compromise directly benefits Pravati.” 
(Am. Notice of Removal, Ex. A. at ¶ 78.)                                  
    •  Any  contacts  Pravati  Capital  had  with  Mr.  Madgett’s  co-counsel  or  co-
      counsel’s  employees  (topics  14–15),  and  any  knowledge  it  has  about  co-

      counsel’s “financial mismanagement” or “truthfulness” (topics 21–22) 
    •  Madgett Law’s net worth (topic 29), its pretax profits in the last four years 
      (topic 30), and Pravati Capital’s records about or referencing Madgett Law 
      (topic 27)                                                         
    •  How the Pravati defendants are related (topic 31), how they make loans (topic 

      6–8), how they audit the loans (topic 24), how they recover loans (topic 25), 
      how they record and investigate claims (topics 23 and 26) how they decide to 
      sue (topic 11), and instances of suits in similar situations (topics 10 and 12)  
    •  The identities of Pravati’s investors (topic 20)                  
(Aff. of Counsel, Ex. A.)                                                 

    Each of these topics is relevant to the claims Madgett Law advances, with one 
exception. It is not clear how the identity of Pravati Capital’s investors has anything to do 
with the dispute about arbitration or the state law claims. Therefore, Pravati Capital need 
not present a 30(b)(6) witness familiar with the identities of its investors.  
    Pravati Capital was served through counsel and has provided no compelling legal 

justification for not naming a deponent and having that deponent sit for a deposition. 
Consequently, Madgett Law’s Motion to Compel is granted, as limited above. Pravati 
Capital’s burden “to prepare a knowledgeable Rule 30(b)(6) witness[] may be an onerous 
one,” but it is necessary to ensure “that the position of a corporation, that is involved in 
litigation, can be fully and fairly explored.” Prokosch,

193 F.R.D. at 639

. 
    Madgett Law requests reasonable expenses, including attorney’s fees, because of 
Plaintiffs’ failure to appear at the noticed Rule 30(b)(6) deposition, see Fed. R. Civ. P. 
37(d)(1)(a), as well as the costs and fees incurred in bringing this motion to compel, see 

Fed. R. Civ. P. 37(a)(5)(A). The award of fees is discretionary in this case because the 
Court granted in part and denied in part Madgett Law’s Motion to Compel. See Fed R. 
Civ. P. 37(a)(5)(C); see also Fed. R. Civ. P. 37(d)(1)(A) (“The court where the action is 
pending may, on motion, order sanctions if . . . . a person designated under Rule 30(b)(6)  
. . . fails, after being served with proper notice, to appear for that person’s deposition” 

(emphasis added)). The Court finds that sanctions are inappropriate here. The record 
reflects that Pravati Capital was unable to attend the noticed deposition because of a prior 
court appearance, which it explained to Madgett Law. Further, Pravati Capital has been 
severely sanctioned for its failure to meet and confer on the underlying motion to compel; 
this Court took the matter under advisement without Pravati Capital’s input. The present 

leniency notwithstanding, the Court will not hesitate to order monetary sanctions in the 
future if Pravati Capital fails to comply with this order.                
    Madgett  Law  requests  that  the  undersigned  enjoin  the  underlying  arbitration 
associated with this matter in another court. A motion to enjoin arbitration is dispositive 
and must be heard and decided by an Article III judge. See, e.g., Valspar Corp. v. Nat’l 

Union Fire Ins. Co. of Pittsburgh, Pa.,

81 F. Supp. 3d 729, 730

 (D. Minn. 2014) (denying 
motion  for  a  preliminary  injunction  enjoining  arbitration).  The  undersigned  cannot 
provide such relief.                                                      
IV.  CONCLUSION                                                           
    Pravati Capital must comply with Madgett Law’s discovery request (except as it 
relates to Pravati Capital’s investors) by the dates described below. Failure to comply 

with this Order will result in sanctions. Fed. R. Civ. P. 16(f) (allowing the courts to issue 
just orders and sanction a party that fails to obey a pretrial order);  Fed. R. Civ. P. 
37(b)(2)(A) (listing potential sanctions for failure to comply with a court order); Fed. R. 
Civ. P. 41(b) (allowing courts to dismiss cases when plaintiffs fail to prosecute their 
claims or comply with court orders).                                      

    Therefore, based on the files, records, and proceedings herein, IT IS HEREBY 
ORDERED that Madgett Law’s Motion to Compel is GRANTED IN PART AND        
DENIED IN PART.                                                           
1.  Pravati Capital must meet and confer on Madgett Law’s 30(b)(6) Notice of 
    Deposition no later than March 6, 2024. Pravati Capital will update the Court 

    on the substance of the meet and confer.                             
2.  Pravati Capital will name corporate representative(s) to appear at the deposition 
    no later than March 13, 2024. The representative(s) need not be prepared to 
    testify about the identity of Pravati Capital’s investors, except as is necessary to 
    answer questions about the remaining deposition topics fully and honestly.  

3.  The deposition of Pravati Capital’s corporate representative(s) will be completed 
    on or before March 20, 2024.                                         
4.  The expert discovery deadline is changed from March 13, 2024 to April 10, 
    2024.                                                                
Dated: February 26, 2024      s/  John F. Docherty                   
                             JOHN F. DOCHERTY                       
                             United States Magistrate Judge