Search by Case Name
Search by Case Number
Search by Keyword

#2231 signed 5-20-96 5-21-96 order in other cases on same questions attached

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

AMERICAN FREIGHT SYSTEM, INC.,

DEBTOR

CASE NO. 88-41050-11

CHAPTER 11

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

WILLIAMSON PRINTING CORP.,

DEFENDANT

ADV. NO. 90-7255

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

HASTINGS INDUSTRIES, INC.,

DEFENDANT

ADV. NO. 90-7613

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

SICO, INC.,

DEFENDANT

ADV. NO. 90-7642

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

AMERICAN GUIDANCE SERVICE, INC.,

DEFENDANT

ADV. NO. 90-7686

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

CRAIN CHEMICAL CO., INC.,

DEFENDANT

ADV. NO. 90-8204

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF,

v.

COLE SEWELL CORP.,

DEFENDANT

ADV. NO. 91-7187

PARTIAL RULING ON MOTION FOR PROTECTIVE ORDER

On May 1, 1996, the Court heard argument on the defendants' motions for protective orders. The defendants all appear by counsel Joseph M. Weiler of Alderson, Alderson, Montgomery & Newbery of Topeka, Kansas. Plaintiff-debtor American Freight System, Inc. (AFS), appears by counsel Kurt Stohlgren of Hillix, Brewer, Hoffhaus, Whittaker & Wright of Kansas City, Missouri. The Court has reviewed the relevant pleadings and is now ready to rule.

The Court finds the following facts are uncontroverted:

1. In these proceedings, AFS seeks to recover freight charges from the defendants for its transportation of goods.

2. Each of the defendants has filed a motion for summary judgment based on the small business defense created by the Negotiated Rates Act of 1993. See 49 U.S.C.A. §10701(f)(9); see generally P.L. No. 103-180, 1993 U.S.C.C.A.N. (107 Stat.) 2044 to 2053 (codified at 49 U.S.C.A. §10701(f), in a note to §10701, and at scattered sections of title 49) (the full Negotiated Rates Act). This defense is available to "small business concerns" as defined by regulations adopted by the Small Business Administration pursuant to the Small Business Act, see 13 C.F.R. §121.101 to 121.601 (1995). Each defendant has filed an affidavit declaring that it qualifies as a "small business concern" under the regulations.

3. In an effort to obtain information necessary to dispute the defendants' claimed status, AFS has sought discovery from each defendant in the form of interrogatories, requests for admission, and requests for production of documents. The discovery requests are all similar, if not identical.

4. The requests for admission ask the defendants to admit that statements made in recently filed affidavits are not correct. AFS concedes it presently has no information which contradicts those statements.

5. Each shipment of goods for which AFS seeks freight charges was delivered at a specific time, and each of these adversary proceedings was filed on a specific date.

6. AFS asks the defendants to provide an unknown number of documents and other information covering the years from 1985 through 1995.

The Court concludes that the discovery requests are onerous and overly broad. Unless and until AFS obtains contradictory information, there is no justification for serving requests for admission which ask the defendants to retract the assertions made in their recently-filed affidavits. The defendants need not respond at all to the requests for admission. AFS may serve new requests for admission only if it discovers a reasonable basis in fact for doing so.

The Court believes the interrogatories and requests for production of documents seek information and materials covering too long a period of time. For each defendant, they will be limited to the time periods beginning one year before the date of delivery of each shipment for which AFS is seeking freight charges from that defendant, and one year before the date when AFS filed its original complaint that commenced the adversary proceeding against that defendant.

At the hearing, the Court advised the parties that it would review the interrogatories, the requests for production, and the applicable SBA regulations, and determine which interrogatories and requests for production were appropriate. After reviewing the parties' memoranda and the regulations, the Court concludes that this determination would best be accomplished through a conference of the parties and the Court. Accordingly, a hearing for that purpose is hereby scheduled for June 28, 1996, at 1:40 p.m. in the Court's conference room. The Court has set aside forty minutes for this hearing.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of May, 1996.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

#2231 signed 5-21-96

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS



In Re: )

AMERICAN FREIGHT SYSTEM, ) NO. 88-41050-11

INC., ) CHAPTER 11

DEBTOR(S). )

)

AMERICAN FREIGHT SYSTEM, )

INC., )

PLAINTIFF(S), )

v. ) ADV. NO. 90-7769

) ADV. NO. 90-7096

SUN-TEK INDUSTRIES, INC., )

DEFENDANT(S), )

)

AMERICAN FREIGHT SYSTEM, )

INC., )

PLAINTIFF(S), )

v. ) ADV. NO. 91-7098

MISS EATON, INC., )

DEFENDANT(S), )



ORDER ON MOTION FOR PROTECTIVE ORDER

OR FOR AN EXTENSION OF TIME

These proceedings are before the Court on the defendants' motions for protective orders or for extensions of time to respond to discovery. Defendants Sun-Tek Industries, Inc., and Miss Eaton, Inc., appear by counsel Frank J. Rebori and Alex M. Lewandoski. American Freight System, Inc. (AFS), the plaintiff-debtor, has not yet responded to the motions in these cases, although it has responded to similar motions in other cases. The Court has reviewed the relevant pleadings and concludes this order is now appropriate.

In these proceedings, AFS seeks to recover freight charges from the defendants for its transportation of goods. Both defendants have filed motions for summary judgment based on the small business defense created by the Negotiated Rates Act of 1993. See 49 U.S.C.A. §10701(f)(9); see generally P.L. No. 103-180, 1993 U.S.C.C.A.N. (107 Stat.) 2044 to 2053 (codified at 49 U.S.C.A. §10701(f), in a note to §10701, and at scattered sections of title 49) (the full Negotiated Rates Act). This defense is available to "small business concerns" as defined by regulations adopted by the Small Business Administration pursuant to the Small Business Act, see 13 C.F.R. §121.101 to 121.601 (1995). AFS has submitted discovery requests to the defendants which led them to file the present motions.

The defendants note in their motions that the Court had a similar motion under advisement in another case, AFS v. Williamson Printing, Adv. No. 90-7255, but they understood no decision had been issued yet. In fact, the Court issued its ruling just yesterday (it covers five other cases as well). A copy of that decision will be attached to this order. The parties are hereby directed to review that order and determine whether it resolves some of their disputes in these cases. In addition, counsel for these defendants are invited to participate along with AFS's counsel in the hearing scheduled in that order for June 28, 1996, at 1:40 p.m., at which the Court intends to resolve the remaining questions raised in those discovery disputes. If the parties believe these cases raise different issues or participation in that hearing would not be productive, they should file pleadings explaining their reasons and desired alternative action.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of May, 1996.











__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

Search by Case Name
Search by Case Number
Search by Keyword