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Inc. v. Stahlberg Taylor & Associates, P.C.

United States District Court, D. Montana, Missoula Division

April 22, 2019

LL'S MAGNETIC CLAY, INC. d/b/a Enviromedica, Petitioner/Plaintiff,
v.
STAHLBERG TAYLOR & ASSOCIATES, P.C., Respondent.

          ORDER

          JEREMIAH C. LYNCH UNITED STATES MAGISTRATE JUDGE

         Before the Court is a Fed.R.Civ.P. 24(a) motion to intervene as a matter of right filed by Safer Medical of Montana, Inc. (“Safer Medical”). For the reasons discussed, the Court deems it appropriate to grant the motion.

         I. Background

         Safer Medical is a business based in Great Falls, Montana. It asserts it owns and manufactures a brand of probiotic supplements known as Prescript Assist which it has sold since 2001.

         Petitioner LL's Magnetic Clay, Inc., dba Enviromedica (“Enviromedica”) served as a distributor for Safer Medical's products from 2008 to 2017. In 2017, Safer Medical believed Enviromedica had engaged in activities detrimental to Safer Medical's business interests in both its product and the market for the sales of its product. Consequently, Safer Medical terminated its distributorship relationship with Enviromedica.

         As a result of the terminated relationship between Safer Medical and Enviromedica, litigation between the two ensued. Enviromedica commenced an action in United States District Court in Texas against Safer Medical and its principal, George Ackerson. (Doc. 2-2 (Third Amended Complaint in LL's Magnetic Clay, Inc. d/b/a/ Enviromedica v. Safer Medical of Montana, Inc., George S. Ackerson, and DOES 1-5, No. 1:17-cv-00649-SS, filed in United States District Court, Western District of Texas, Austin Division (“Enviromedica I”)).) In general terms, Enviromedica advances fraud-related claims in Enviromedica I against Safer Medical and Ackerson based on various representations they made to Enviromedica relative to the Prescript Assist product and its ingredients, safety and efficacy - representations on which Enviromedica relied to invest in, and develop its distribution of the product, and to build the market for the product. Enviromedica also advances claims arising from Safer Medical and Ackerson's other alleged acts of misconduct which damaged Enviromedica's business interests. Safer Medical has pled counterclaims against Enviromedica.

         On August 13, 2018, Enviromedica caused a subpoena for the production of documents to be issued by the District Court in Enviromedica I which was directed to Stahlberg Taylor & Associates, PC (“Stahlberg”). (Doc. 2-3.) Stahlberg is Safer Montana and Ackerson's accounting firm and bookkeeper. The subpoena directs Stahlberg to produce documents in 24 identified categories providing information on matters such as, inter alia, Safer Medical and Ackerson's financial transactions, financial records, communications, and business relationships. (Doc. 2-3 at 6 to 7 of 8.) The subpoena demands production of the referenced documents relative to various business entities associated or affiliated with Ackerson and Safer Medical including: “George Ackerson, Safer Medical of Montana, Inc., MT Organo Tech, LLC, Big Sky Laboratories, LLC, Flight Crews, LLC, and any and all affiliates, including any parents, subsidiaries, or predecessors-in-interest, and any and all employees, agents, or anyone acting on their behalf.” (Doc. 2-3 at 5 of 8.) Enviromedica asserts the documents are relevant to its liability and damage claims advanced in Enviromedica I.

         In response to the subpoena, Stahlberg communicated its objections to the subpoena to Enviromedica. (Doc. 4-2 at ¶ 16.) Stahlberg has not produced documents in response to the subpoena.

         In view of Stahlberg's objections and its non-production of documents, Enviromedica filed its motion to compel in this action seeking to compel Stahlberg's compliance with the subpoena. Stahlberg has not filed a response to the motion to compel. Rather, it asserts it does not have the “resources to hire counsel and formally challenge” Enviromedica's motion. (Doc. 4-2 at ¶ 19.) Thus, in lieu of Stahlberg's active opposition to the motion to compel, Safer Medical filed its motion to intervene in an effort to protects its documents against disclosure.

         II. Discussion

         Safer Medical's motion to intervene is filed under authority of Fed.R.Civ.P. 24(a) which provides, in part, as follows:

(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:
[…]
(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless ...

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