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Blue Rooster LLC v. Perficient, Inc.

United States District Court, E.D. Missouri, Eastern Division

June 20, 2018

BLUE ROOSTER LLC, Plaintiff,
v.
PERFICIENT, INC., Defendant.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff Blue Rooster LLC's motion (ECF No. 22) to compel Defendant Perficient, Inc. to respond to Plaintiff's requests for production. For the reasons set forth below, the motion will be granted in part and denied in part.[1]

         BACKGROUND

         This breach of contract action arises out of Defendant's purchase of Plaintiff's proprietary software and services known as Rise Foundation (“Rise”). The purchase agreement was signed and finalized on October 12, 2015, and the deal closed on December 31, 2015.

         Plaintiff alleges that Defendant has not paid all monies due and owing pursuing to the parties' purchase agreement. Specifically, Plaintiff alleges that Defendant agreed to pay Plaintiff a percentage of the revenue it earned from Rise after deduction of certain costs. Plaintiff alleges that Defendant has failed to provide payment owed and has falsely claimed that it has received little or no revenue from Rise. Plaintiff alleges that Defendant has failed to provide sufficient information about its Rise revenue and that it has mischaracterized or artificially depressed its Rise revenue to avoid paying Plaintiff.

         The current discovery dispute arises out of the following three requests for production, in which Plaintiff seeks financial documents reflecting revenue for Defendant's Microsoft Division, which is the division that sells, licenses, and provides services for Rise:

Request 7 - All documents reflecting, referring to, regarding or constituting monthly, quarterly and yearly Profit & Loss statements for [Defendant's] Microsoft Division for the last five (5) years;
Request 8 - All documents reflecting, referring to, or regarding monthly, quarterly, and yearly Revenue earned by [Defendant's] Microsoft Division for the last five (5) years; and
Request 25 - All documents reflecting, referring to, regarding, or constituting any and all financial audits of [Defendant's] Microsoft Division during the time period October 2015 to present.

         ECF No. 22 at 3. Plaintiff argues that the requests seek relevant information that will allow Plaintiff to conduct a more complete analysis of the process by which Plaintiff accounts for Rise-related revenue.

         In response, Defendant argues that the requests are overbroad, unduly burdensome, and not proportional to the needs of the case. Specifically, Defendant argues that the Microsoft Division encompasses many more products than Rise and that the financial documents from this division do not break down revenue earned from individual products. For example, Defendant contends that the revenue of its Rise team within the Microsoft Division only accounted for less than one percent of the revenue of the entire division from 2016 to 2018. Defendant maintains that production of financial documents from the entire division, as Plaintiff has requested, would amount to a “monumental task” that would yield largely irrelevant results.

         Defendant further argues that the purchase agreement only entitles Plaintiff to 30% of revenue from Rise licensing fees if those fees exceeded the value of certain expenses. Defendant states that it has “produced contracts, statements of work, and invoices which allow [Plaintiff] to confirm the exact amount, date, and terms of all Rise licensing fees, ” and thus, no further production is required. ECF No. 25 at 4.

         In reply, Plaintiff argues that the purchase agreement requires payment of a percentage of all Rise related revenue and is not limited to just license fees. Plaintiff further contends that Defendant's assertion of overbreadth is without merit because “Rise-related revenue is all that [Plaintiff wants to see].” ECF No. 28 at 3. Plaintiff contends that “produc[ing] the Microsoft Division financials for Rise-related revenue should be straightforward, ” and requests that Defendant “produce all financial documents and information showing or evidencing Rise-related revenue ...


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