MPSC Case No. U In the matter of the Complaint of MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP against CONSUMERS ENERGY COMPANY

Transcription

1 A CMS Energy Company May 16, 2016 Ms. Mary Jo Kunkle Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Post Office Box Lansing, MI General Offices: LEGAL DEPARTMENT One Energy Plaza Jackson, MI Tel: Fax: (517) (517) CATHERINE M REYNOLDS Senior Vice President and General Counsel *Washington Office: 1730 Rhode Island Ave. N.W. Tel: (202) MELISSA M GLEESPEN Suite 1007 Vice President, Corporate Washington, DC Fax: (202) Secretary and Chief Compliance Officer Writer s Direct Dial Number: (517) Writer s Address: adam.smith@cmsenergy.com SHAUN M JOHNSON Vice President and Deputy General Counsel H Richard Chambers Eric V Luoma Shelley J Ruckman Kimberly C Wilson Assistant General Counsel Ashley L Bancroft Robert W Beach Don A D Amato Gary A Gensch, Jr. Kelly M Hall Gary L Kelterborn Chantez P Knowles Mary Jo Lawrie Jason M Milstone Rhonda M Morris Deborah A Moss* Mirče Michael Nestor Jeffrey D Pintar James D W Roush Scott J Sinkwitts Adam C Smith Janae M Thayer Bret A Totoraitis Anne M Uitvlugt Attorney RE: MPSC Case No. U In the matter of the Complaint of MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP against CONSUMERS ENERGY COMPANY Dear Ms. Kunkle: Enclosed for electronic filing in the above-captioned case, please find Consumers Energy Company s Response in Opposition to Midland Cogeneration Venture Limited Partnership s Motion for Sanctions, Including Default. This is a paperless filing and is therefore being filed only in a PDF format. I have also enclosed a Proof of Service showing electronic service upon the parties. Sincerely, Adam C. Smith cc: Hon. Mark D. Eyster, Administrative Law Judge Attachment 1 to Proof of Service fl

2 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the Complaint of ) MIDLAND COGENERATION VENTURE ) PARTNERSHIP against CONSUMERS ) Case No. U ENERGY COMPANY ) ) CONSUMERS ENERGY COMPANY S RESPONSE IN OPPOSITION TO MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP S MOTION FOR SANCTIONS, INCLUDING DEFAULT Midland Cogeneration Venture Limited Partnership s ( MCV ) Motion for Sanctions, Including Default, filed May 6, 2016 ( Motion ) is an improper attempt to prevail in this matter by seeking what even MCV recognizes is the extraordinary relief of a default and default judgment against Consumers Energy Company, ( Consumers Energy or the Company ). (MCV s Motion at 1). Indeed, that acknowledgment in the first sentence of MCV s Motion confirms that MCV is seeking what Michigan courts have routinely stated is a drastic measure and a harsh sanction that should be exercised cautiously. See, e.g., Dean v Tucker, 182 Mich App 27, 32-33; 451 NW2d 571 (1990); Mink v Masters, 204 Mich App 242, 244; 514 NW 2d 235 (1994). Yet, MCV contends that such extreme relief is somehow justified in connection with a single discovery request (amongst the hundreds of others that MCV has served on Consumers Energy), and despite the fact that the Company has produced approximately 5,200 documents thus far in response to this request (plus nearly 35,000 additional documents that Consumers Energy has produced in response to MCV s other requests). Perhaps because of these incontrovertible facts, MCV has been left to attempt to build support for its Motion by grasping at a limited number of random, perceived discrepancies with Consumers Energy s extensive document productions in this case. Upon a full consideration of the record, it becomes apparent res

3 that no sanctions are warranted here. And certainly not the drastic and harsh result of a default judgment, or the alternative sanctions that would have the same result. Most importantly, MCV s contention that Consumers Energy has committed a blatant violation of this Tribunal s orders, is patently false. The only order that the Administrative Law Judge ( ALJ ) issued regarding discovery in this matter was a March 31, 2016 Order involving discovery request number MCV-CE-77 (MCV s Request for Production No. 26), among other issues not relevant to MCV s instant Motion. Regarding MCV-CE-77, the stipulated Order expressly provided that Consumers Energy has the right to conduct whatever pre-preproduction review it wishes to undertake at its own expense of potentially responsive documents. (Attachment A: March 31, 2016 Order at 2, 7). As will be discussed further below, Consumers Energy is expeditiously proceeding with that review at substantial expense, no less and has already produced thousands of responsive documents to MCV-CE-77. In short, the Company is proceeding with discovery as ordered by the ALJ, under the very same procedure that the ALJ expressly permitted to occur. There has been no violation of an order in any event, and certainly not the repeated violations that other courts have cited to justify the draconian sanction MCV seeks here. Pursuant to Rule 432 of the Michigan Public Service Commission s ( MPSC or the Commission ) Rules of Practice and Procedure, R , Consumers Energy files this Response in opposition to MCV s Motion, stating as follows: I. SUMMARY OF CONSUMERS ENERGY S POSITION ON MCV S MOTION While MCV has peppered its Motion with a smattering of alleged deficiencies in Consumers Energy s discovery responses in this case, the only discovery request that is at issue is MCV-CE-77 (MCV s Request for Production No. 26), which sought: res

4 each and every internal communication related in any way to the rupture of Line 100A that occurred on or about May 4, As Consumers Energy demonstrated in its filings related to the parties cross-motions for a protective order and to compel that the ALJ heard on March 5, 2016, Consumers Energy previously sought to reasonably identify the documents that could potentially be responsive to this broad request. Along those lines, the Company performed an electronic search that returned approximately 100,000 documents. Notably, MCV has not taken any substantive issue with Consumers Energy s list of current or former employees whose records were searched, nor the terms used in that search that resulted in this voluminous list of potentially responsive records. Following the ALJ s ruling on March 5 and the associated Order that entered on March 31 stating that Consumers Energy had to bear the cost of conducting whatever pre-preproduction review it wishes to undertake, the Company elected to proceed with a review of the potentially responsive documents to identify those that were truly responsive. As described further below, this effort involved engaging an outside review team of nine contract attorneys to expeditiously review the records in a much quicker fashion than Consumers Energy s in-house legal staff could have accomplished. This undertaking has already cost the Company over $60,000, which will increase since the review process is ongoing. (Attachment B: Affidavit of Victoria J. Watson ( Watson Aff. ) 10). 1 Contrary to MCV s claims in its Motion, Consumers Energy did not voluntarily agree[] to produce documents responsive to this request. (See MCV s Motion at 3). Rather, at a January 5, 2016 hearing, the ALJ overruled Consumers Energy s arguments for why it should not have to respond to this broad request. (2 TR at 40-44). res

5 Based on the review, Consumers Energy has already made three document productions to MCV in connection with MCV-CE-77 as follows: April 22, 2016: 277 documents totaling 985 pages; May 8, 2016: 2,358 documents totaling 7,255 pages; and May 12, 2016: 2,553 documents totaling 5,965 pages. These three productions totaling 5,188 documents and 14,205 pages in response to MCV-CE-77 are in addition to the nearly 35,000 documents produced in response to MCV s other discovery requests, which are approaching 300 including subparts. (Attachment B: Watson Aff. 11, 16). MCV s contention that Consumers Energy is somehow seeking to delay these proceedings is belied by the gigabytes of data and tens of thousands of records that the Company has produced in response to MCV s discovery. MCV may not like what the documents produced thus far show, but that is not justification for any form of sanctions. Consumers Energy will now describe the review process in further detail, outline the relevant requirements that must be met to impose the drastic sanctions MCV requests, and confirm why no sanctions are justified here. II. CONSUMERS ENERGY S REVIEW OF POTENTIALLY RESPONSIVE DOCUMENTS As allowed by the March 31, 2016 Order, Consumers Energy determined that it would conduct a review of the 100,000 potentially responsive documents to MCV-CE-77 rather than simply produce those materials. (Attachment B: Watson Aff. 5). Recognizing that the prohibitive amount of time it would take to perform this task using in-house resources, Consumers Energy engaged an outside vendor to assemble and manage a team of nine contract attorneys to conduct the review. (Attachment B: Watson Aff. 6). The review team was res

6 assembled in late March 2016 and began work reviewing documents on approximately April 6, (Attachment B: Watson Aff. 7). By May 6, 2016, the review team had conducted its first-pass review of approximately 80,000 documents and was proceeding with subsequent work on necessary quality-control activities (primarily to ensure that team members coding of documents was reasonably consistent) and final reviews before those documents were ready for production. (Attachment B: Watson Aff. 9). As batches of documents cleared the quality-control review process, they were prepared for production to MCV as noted above on April 22 and May 8 and 12, (Attachment B: Watson Aff. 11). The initial document review focused on electronic mail documents and attachments, and the Company is now proceeding with loading potentially responsive materials from servers and other sources (e.g., hard drives, flash drives, etc.) into the review software for the team to address. (Attachment B: Watson Aff. 12). The total number of further documents that will be reviewed is subject to further change as the final collection process concludes, but based on current information known at this time it is likely to be less than 10,000. (Attachment B: Watson Aff. 13). Consumers Energy s best estimate at this time is that review activities should be completed by the end of May 2016, unless there are any technical difficulties or other impediments that arise. (Attachment B: Watson Aff. 14). Once additional documents pass quality-control review, Consumers Energy will continue to make rolling productions to MCV on an ongoing basis until all responsive documents are produced. (Attachment B: Watson Aff. 15). Indeed, this is consistent with how Consumers Energy s attorneys repeatedly confirmed the review would take place since the beginning. (Attachment C: Chain, Smith Messages on April 5, 11, 14, 18, and 19, 2016; Attachment D: March 30, from Smith to res

7 Bolton). Likewise, the Company also alerted MCV that the first production was expected to be smaller than future ones, which is exactly what is occurring. (Attachment C: Chain, Smith Message on April 18, 2016). In short, Consumers Energy is simply proceeding with the very review that a previous Order in this matter confirmed it could conduct, and the Company has made rolling productions to MCV totaling approximately 5,200 documents and over 14,000 pages in response to MCV-CE-77 alone (not to mention the nearly 35,000 documents produced in response to MCV s other requests). This is not remotely close to the type of conduct that warrants sanctions of any type, much less the drastic measures MCV is improperly seeking here. III. SANCTIONS ARE UNAVAILABLE BECAUSE CONSUMERS ENERGY HAS NOT VIOLATED AN ORDER IN THIS CASE MCV s attempt at obtaining sanctions is based on MCR 2.313(B)(2)(a) through (c), which state as follows: (B) Failure to Comply With Order. * * * (2) Sanctions by Court in Which Action Is Pending. If a party... fails to obey an order to provide or permit discovery, including an order entered under subrule (A) of this rule or under MCR 2.311, the court in which the action is pending may order such sanctions as are just, including, but not limited to the following: (a) an order that the matters regarding which the order was entered or other designated facts may be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order; (b) an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting the party from introducing designated matters into evidence; res

8 (c) an order... dismissing the action or proceeding or a part of it, or rendering a judgment by default against the disobedient party; (See MCV s Motion at 2, 7). As a threshold matter, the title of MCR 2.313(B)(2) and the substantive text that follows confirm that this provision applies to situations where a party... fails to obey an order to provide or permit discovery. (Emphasis added.) Yet, MCV has failed to identify any order of the ALJ or the Commission that Consumers Energy has violated. Far from refusing to produce responsive documents to MCV-CE-77, Consumers Energy has produced approximately 5,200 documents totaling more than 14,000 pages in response to that request by itself. Nor can MCV complain about Consumers Energy engaging an outside team of review attorneys, because the ALJ s March 31, 2016 Order and the related comments on the record at the March 5, 2016 hearing confirmed that Consumers Energy had the right to conduct whatever pre-preproduction review it wishes to undertake at its own expense. Quite simply, without a violation of any order, sanctions that might be considered under MCR 2.313(B)(2) are irrelevant to this matter. IV. THE SANCTIONS REQUESTED ARE UNAVAILABLE ON THESE FACTS, IN ANY EVENT Even if MCV had identified a relevant discovery order that Consumers Energy violated, which it cannot, the facts of this matter confirm that the type of drastic and harsh sanctions that MCV is requesting are in no way justified here. In terms of the applicable standards, MCV s Motion has identified the eight factors that courts should consider in whether to impose discovery sanctions. See Dean, 182 Mich App at That said, MCV s filing conspicuously omits other relevant portions of the Dean opinion where the Michigan Court of Appeals confirmed that if a discovery sanction... result[s in dismissal], the sanction should be exercised cautiously, and that dismissal based on discovery issues is a harsh sanction. res

9 Id. at 32, 33. Notably, the appellate court in Dean reversed the circuit court s decision to exclude the plaintiff s expert witness after she missed a witness-list deadline, and remanded the case for trial because a dismissal was not warranted under those circumstances. Id. at 35. As noted further below, the result in Dean confirms that MCV is requesting the ALJ and the Commission to commit reversible error by ordering default judgment or other sanctions that would essentially have the same result. MCV also failed to so much as mention the relevant case of Mink, 204 Mich App at 244, where the Court of Appeals confirmed that default judgment is a drastic measure and should be used with caution. The court continued and made the following, prescient statement: The court should also evaluate other options before concluding that a drastic sanction is warranted. The sanction of default judgment should be employed only when there has been a flagrant and wanton refusal to facilitate discovery and not when failure to comply with a discovery request is accidental or involuntary. Id. at 244. (Emphasis added, internal citations omitted.) It is true that the Mink court concluded the trial court did not abuse its discretion in granting default judgment in that case. Yet, Mink involved two separate orders to produce documents that the defendants blatantly disobeyed. In addition, before granting the ultimate sanction, the court had specifically warned defendants in its second order that a failure to comply with the discovery request would result in the entry of a default judgment. Id. at 245. Accordingly, Mink s result is legally and factually inapposite to the circumstances of this case. Finally, MCV cited the case of Traxler v Ford Motor Co, 227 Mich App 276, 280; 576 NW2d 398 (1998) for the general proposition that a default judgment may be granted for certain discovery abuses. Again, however, MCV failed to mention Traxler s citations to Mink or the unique factual scenario present in that case. Regarding the law, Traxler cited Mink for the proposition that [d]efault is a drastic measure and should be used with caution. Traxler, res

10 227 Mich App at 286 (citing Mink, 204 Mich App at 244). The Traxler court also affirmatively quoted the passage from Mink confirming that [t]he sanction of default judgment should be employed only when there has been a flagrant and wanton refusal to facilitate discovery and not when failure to comply with a discovery request is accidental or involuntary. Id. Regarding the facts, in the underlying case before the Traxler court the trial court concluded that Ford lied and was guilty of an outrageous fraud in connection with responses to the plaintiffs discovery, and that was what justified a default judgment. Id. at 282. Certainly nothing of the sort can be said for Consumers Energy s conduct here, as discussed thoroughly in this Response. There is nothing on the record of the instant proceeding that comes close to justifying the drastic and harsh sanction of default judgment that MCV is requesting. Unlike in Mink, Consumers Energy has not violated any orders of the ALJ or the Commission much less two of them as the Mink defendants did and the possibility of default judgment has never been raised by the tribunal in this matter. Similarly, there is no hint of underlying lie[s] and outrageous fraud that permeated the dispute in Traxler and which supported a default judgment in that case. MCV may not be pleased that Consumers Energy exercised its right to conduct whatever pre-preproduction review it wishes to undertake at its own expense in connection with MCV-CE-77. (Attachment A: March 31, 2016 Order at 2, 7). But the Company s decision in that regard cannot support such extraordinary sanctions, especially when it was expressly permitted by the relevant Order issued by the ALJ in this case. Those facts alone distinguish Mink s and Traxler s results from the appropriate outcome here, which is for Consumers Energy to continue proceeding with its review and production of documents in response to MCV s broad request for each and every internal communication related in any way res

11 to the rupture of Line 100A. When reviewed in their entirety, the cases that MCV cites in its Motion fail to provide any support for the extreme sanction of a default judgment. MCV s requests for what appear to be alternative sanctions fare no better. In its conclusion, MCV proposes that the Commission enter an order: (a) deeming [that] the facts sought under the original order are established for the purpose of the proceeding in accordance with the claim [sic] of MCV; or (b) prohibiting Consumers [Energy] from admitting evidence opposing MCV s claims. Regarding the first alternative sanction, it is not clear what MCV is referring to by alluding to facts sought under the original order.... Notably, discovery request number MCV-CE-77 sought responsive documents and not facts, and the March 31, 2016 Order therefore focused on documents as well. Moreover, other than vague assertions of what MCV believes responsive documents may show, a request for each and every internal communication is not one that can be addressed by judicially determining that unspecified facts are established. Such a sanction is incongruent with the items at issue in MCV-CE-77. The second alternative sanction a prohibition against Consumers Energy entering evidence is technically not the same as an outright dismissal, but has the same ultimate effect in practice because the Company would not be able to defend against MCV s claims. For that reason, this alternative posited by MCV is not truly a form of alternative sanction. In fact, the Dean court specifically noted that refusing to allow the plaintiff s expert to testify because of a missed witness-list deadline essentially resulted in a dismissal, and viewed the case in that light. 182 Mich App at 32. Any order precluding Consumers Energy from admitting evidence opposing MCV s claims would have an identical effect and on this factual record would be subject to reversal by the Michigan Court of Appeals. Id. at res

12 V. TO THE EXTENT THAT THE DEAN FACTORS ARE APPLICABLE, THEY DO NOT SUPPORT SANCTIONS HERE, MUCH LESS THE EXTRAORDINARY RELIEF MCV SEEKS Although Consumers Energy contends that the fact it has not violated any discovery order is a threshold deficiency in MCV s reasoning and precludes any sanctions, if the Dean factors are considered, sanctions are not warranted on the facts present here. 2 First, there has been no violation, much less a willful one. As stated above, Consumers Energy has proceeded with the precise review that the ALJ s March 31, 2016 Order expressly confirmed was within the Company s right to conduct. Consumers Energy has already made three productions to MCV in response to MCV-CE-77 totaling approximately 5,200 documents and over 14,000 pages, with more rolling productions to come. Second, Consumers Energy has not improperly refused to comply with discovery requests. MCV apparently believes that Consumers Energy should have responded to any and all discovery requests that MCV felt like serving, without objecting to or challenging those requests that the Company determined were improper. It is true that there have been several discovery motions between the parties in this case. But a party exercising its right under the Michigan Court Rules to object to discovery requests that it determines are impermissibly vague, broad, unduly burdensome, oppressive or otherwise cannot form the basis for sanctions. Along these lines, the ALJ confirmed that Consumers Energy has done nothing wrong in defending against MCV s claims: I'm not saying that Consumers has done anything wrong. Both parties are litigating this case in the best way they know how and 2 The relevant factors are: (1) whether the violation was wilful or accidental, (2) the party's history of refusing to comply with discovery requests (or refusal to disclose witnesses), (3) the prejudice to the [opposing party], (4) actual notice to the [opposing party] of the [requested information] and the length of time prior to trial that the [opposing party] received such actual notice, (5) whether there exists a history of [the responding party] engaging in deliberate delay, (6) the degree of compliance by the [responding party] with other provisions of the court's order, (7) an attempt by the [responding party] to timely cure the defect, and (8) whether a lesser sanction would better serve the interests of justice. Dean, 182 Mich App at res

13 have represented their clients. The result, however, has been that there has been some delays that have occurred. I think that the delays primarily have been caused by Consumers' actions. Again I'm not saying they did anything wrong, just the way in which you have litigated this has resulted in it taking longer than it might otherwise have. (Attachment E: 4 TR ). Any suggestion to the contrary is untrue. Third, MCV has not suffered prejudice because the schedule has been extended. Both times that MCV has asked to extend the schedule in this case, the ALJ has agreed with MCV and done so. Therefore, MCV has not suffered any prejudice. In addition, these extensions occurred after the initial schedule that the ALJ set incorporated a lengthier process compared to what is typical for these types of Commission disputes. While Consumers Energy reserves the right to oppose any further extensions MCV may request, that is the applicable remedy for MCV to pursue not an improper motion for the ultimate sanction of a default judgment. Fourth, Consumers Energy has produced thousands of documents in response to MCV-CE-77 well ahead of relevant deadlines to file written testimony. MCV erroneously casts the fourth consideration in terms of when Consumers Energy produced documents, but this item truly considers actual notice to the [opposing party] of the [information requested] and the length of time prior to trial that the [opposing party] received such actual notice. Dean, 182 Mich App at 33. Even if MCV s view of this factor was correct, Consumers Energy has already made three productions, with more to follow and this has satisfied any ongoing obligation by the Company to produce documents. In terms of the proper view under this Dean factor (i.e., when the information is provided relative to dates established in the Scheduling Memo), this item does not support sanctions. The ALJ has already recognized that the issues surrounding the Line 100A rupture and Consumers Energy s related declaration of force majeure under its gas-exchange agreements with MCV relate to an affirmative defense that res

14 the Company will plead. Consumers Energy s deadline to file its direct testimony is August 26, 2016, and MCV s deadline to file any rebuttal testimony on this issue does not arrive until October 18, MCV will have plenty of time to review the documents responsive to MCV-CE-77 before its relevant rebuttal testimony is due in approximately five months. Fifth, Consumers Energy has not engaged in deliberate delay. Just as with the second Dean factor, this consideration favors Consumers Energy. Indeed, the ALJ has already confirmed that the Company has [not] done anything wrong and [b]oth parties are litigating this case in the best way they know how and have represented their clients. (Attachment E: 4 TR ). Zealous advocacy as part of the adversarial process cannot support sanctions. Sixth, Consumers Energy has complied with other parts of the Commission s orders. As noted above, other than discovery requests that MCV just recently served (and where the response date has not yet arrived), the only outstanding discovery request is MCV-CE-77. Consumers Energy has responded to all other open discovery requests from MCV, including those that the ALJ ordered it to. MCV has also conducted field and laboratory inspections of Consumers Energy property regarding Line 100A as covered in earlier proceedings in this matter, and the Company is producing requested witnesses for deposition. On this record, there is no basis to impose the draconian sanctions that MCV is seeking. Finally, MCV curiously contends that it is somehow improper for Consumers Energy to supplement earlier discovery responses and document productions. (MCV s Motion at 10-11). Indeed, MCV has reserved the right to supplement its responses to discovery in this proceeding, yet it criticizes Consumers Energy for actually doing the same thing. Consumers Energy is simply meeting its duty to supplement earlier discovery responses, consistent with MCR 2.302(E), so any attempt to use this as a basis for sanctions is an absurd contortion of the discovery rules in Michigan. res

15 Seventh, Consumers Energy is timely producing documents on a rolling basis as the permitted review process proceeds. Contrary to MCV s bald assertion, Consumers Energy has never taken the position that it can take as long as it pleases to produce the internal communications to MCV. (MCV s Motion at 11). If that were the case, the Company would not have spent substantial money (currently exceeding $60,000) to engage an outside team of contract attorneys to conduct the permitted review. It also would not have already made three productions in response to MCV-CE-77. Nothing about this factor supports sanctions. Finally, Consumers Energy s extensive work thus far responding to MCV-CE-77 precludes sanctions of any type, and certainly not the ultimate sanction of a default judgment. The principal case that MCV cites on this point is Traxler, but as confirmed above the factual setting before that court (involving lie[s] and outright fraud by the defendant) is far different from Consumers Energy s legitimate conduct in this case. Furthermore, the relevant legal standards from cases such as Dean and Mink that MCV conspicuously omitted from its Motion confirm that the drastic and harsh sanction of dismissal is not warranted on the facts of this case, particularly when there is no flagrant and wanton refusal to facilitate discovery by the Company. Indeed, Dean confirms that entry of a default judgment or equivalent sanctions like what MCV is requesting would constitute reversible error. 182 Mich App at 35. In sum, none of the eight factors support entry of default judgment, or the allegedly alternative sanctions of establishing certain facts or precluding Consumers Energy from defending against MCV s claims which would essentially have the same effect. res

16 VI. MCV S ADDITIONAL CLAIMED ISSUES WITH CONSUMERS ENERGY S DEFENSE OF THIS MATTER ARE MERITLESS Sprinkled throughout MCV s Motion are several, additional points that MCV raises in an apparent attempt to cloud the record and suggest impropriety by the Company. None are relevant, nor do any have merit. On page 4 of MCV s Motion it points to pages of the first production in response to MCV-CE-77, and contends that none of the documents are responsive to MCV s request for internal communications. The document that MCV is referring to was an internal Morning Media Update communication sent on May 6, 2015 the second morning after the Line 100A rupture. This correspondence mentioned articles regarding the rupture that appeared in the Ann Arbor News and the Chelsea Standard, and was therefore responsive to MCV s broad request for each and every internal communication related in any way to the rupture of Line 100A. The happened to mention other unrelated stories, but was clearly responsive to MCV s request. MCV s attempt to mischaracterize this responsive document and claim that Consumers Energy is improperly producing irrelevant information is baseless. In a similar argument, at page 8, MCV posits that Consumers [Energy s] production [on April 22, 2016 in response to MCV-CE-77] largely contained non-relevant and non-responsive documents which appears deliberate and calculated to waste MCV s resources. It is noteworthy that in opposition to Consumers Energy s Motion for Protective Order seeking to require MCV to bear the extraordinary cost of reviewing the potentially responsive documents to MCV-CE-77, MCV s counsel stated We don't agree that they need to review these. We will accept that burden and do the review ourselves.... particularly in a situation like this where they can indeed download these documents, put them on a flash drive, give them to us, and if there are irrelevant material in there after that search, that's our problem I res

17 suppose. We will review these, go through them all. And we are accustomed to doing that. (Attachment E: 4 TR ). Since MCV was previously willing to review all of the approximately 100,000 records despite the fact that many of them might be nonresponsive, MCV cannot now complain that it may have to go through a significantly reduced amount of documents (some of which it may consider nonresponsive). MCV s initial criticism of Consumers Energy for not simply providing non-responsive documents, and subsequent critique of the Company for its provision of materials which MCV deems non-responsive, is illogical. The significant resources that Consumers Energy is expending on its external review are benefitting MCV and no consideration should be given to MCV s changed argument to the contrary. At page 5 of the Motion, MCV makes the vague assertion that Consumers Energy is somehow mistreating attorney-client privileged documents based on a communication that the Company produced where two employees discuss considering documents as covered under the privilege. MCV s contention is curious, in that Consumers Energy produced the non-privileged that discussed this issue, and is not claiming that it is, in fact, privileged. This document that the Company provided cannot support any allegation of impropriety, despite MCV s attempted smear campaign. Similarly, MCV notes that no privilege log has been provided by Consumers Energy. The Company has confirmed that it will produce a relevant privileged log once it withholds documents on that basis. At this point, however, the focus is on producing those documents that are responsive so that MCV can review them as soon as possible, not which specific documents will be withheld as privileged. Finally, while MCV has claimed documents to be privileged in response to several discovery requests served upon it by Consumers Energy, it has also not provided a privilege log. res

18 Next, at pages 6-7 of the Motion, and in footnotes 5 and 6, MCV employs lengthy string cites to cases and Commission proceedings that allegedly confirm the Commission s ability to award discovery sanctions in this administrative matter. While Consumers Energy disagrees with MCV that the Commission can award the sanctions requested here, the fact remains that even if such sanctions fall within the Commission s authority, applicable case law cited above confirms that no sanctions are appropriate in this particular proceeding. Accordingly, MCV s purported citations in footnotes 5 and 6 can be disregarded. Finally, MCV makes an incorrect statement that a Commission letter regarding probable violations arising from inspections conducted in August 2014 and January 2015 supports sanctions here. (MCV s Motion at 9 and Exhibit F). First of all, this is a letter from the Commission to Consumers Energy, and therefore is not an internal communication that would be responsive to MCV-CE-77 that is the subject of MCV s Motion. On that basis alone it is wholly irrelevant chaff. In addition, and contrary to MCV s representation that the letter concerns critical corrosion assessments of Line 100A, there is no such relationship to Line 100A stated in the letter itself. This is yet another instance of MCV seeking to manufacture an apparent instance of impropriety where none exists. VII. CONCLUSION The MPSC s Rules of Practice and Procedure state [t]he parties shall not use discovery to harass or cause needless delay. R MCV s action of filing a meritless Motion seeking discovery sanctions is improper under the Commission s rules, the Michigan Court Rules, and applicable case law. MCV s Motion should be denied, and Consumers Energy should be permitted to continue the existing process of reviewing potentially responsive documents to MCV-CE-77, which the ALJ has approved and is well underway. res

19 WHEREFORE, Consumers Energy Company respectfully requests the Administrative Law Judge and the Michigan Public Service Commission deny Midland Cogeneration Venture Limited Partnership s Motion for Sanctions, Including Default. Respectfully submitted, CONSUMERS ENERGY COMPANY Dated: May 16, 2016 By: H Richard Chambers (P34139) Kelly M. Hall (P48083) Adam C. Smith (P69790) One Energy Plaza Jackson, Michigan Attorneys for Consumers Energy Company (517) res

20 ATTACHMENT A

21 ATTACHMENT A Page 1 of 5 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the Complaint of MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP against CONSUMERS ENERGY COMPANY ) ) ) ) ) Case No. U ORDER REGARDING CONSUMERS ENERGY COMPANY S MOTION FOR PROTECTIVE ORDER AND MIDLAND COGENERATION VENTURE LIMITED PARTNERSHIP S COUNTER-MOTION, INCLUDING (I) A SECOND MOTION TO COMPEL DISCOVERY, AND (II) A MOTION TO EXTEND SCHEDULING DATES Consumers Energy Company ( Consumers ) having filed a Motion for Protective Order; Midland Cogeneration Venture Limited Partnership ( MCV ) having filed a Response in Opposition and Counter-Motion, Including (i) a Second Motion to Compel Discovery, and (ii) a Motion to Extend Scheduling Dates; Consumers having filed a response; the parties having resolved a portion of the matters raised in the motions prior to the time of hearing; proceedings having been conducted on the record and further discussions having been held off the record during such proceedings; and for the reasons stated on the record; it is hereby ORDERED and DECREED by the Administrative Law Judge (hereinafter the ALJ ) that: 1. Both Motions are granted in part and denied in part, as discussed in detail below. 2. The depositions of the witnesses shall be conducted at their respective places of business. 3. For the following witnesses over which Consumers has represented that it is not exercising control, Consumers shall provide MCV complete last known contact information, so /

22 ATTACHMENT A Page 2 of 5 that MCV may pursue them without Consumers being responsible to produce them for deposition: Michelle Kirkland, Robert Odelvak, John Biek, John Santini. 4. For the witnesses previously noticed for deposition on March 7, 8, and 9, 2016, MCV has agreed to start with five (5) of its choosing, and to forgo (for the moment) deposing Louise Sheldon and Stephanie Heyden (who Consumers represents are administrative assistants), and William A. Serafin (who Consumers represents is not now and never has been employed by Consumers). MCV s agreement to forgo these depositions for now is subject to and without waiving MCV s ability to pursue one or more of these depositions at a later date. 5. For Tim Underwood, MCV has agreed to forgo (for the moment) deposing him, subject to and without waiving MCV s ability to pursue his depositions at a later date. 6. All other depositions noticed by MCV to-date shall proceed at dates and times to be agreed between the parties. 7. Consumers request to shift the expense of reviewing and/or producing internal correspondence responsive to MCV Request for Production No. 26 is denied, and MCV s request that the ALJ reaffirm its prior ruling that Consumers produce said documents is granted. Consumers is hereby ordered to produce all non-privileged documents responsive to said request, without limiting Consumers right to conduct whatever pre-preproduction review it wishes to undertake at its own expense. Pursuant to the Protective Order previously entered, the parties acknowledge their obligation to return any privileged documents inadvertently produced. 8. Consumers has agreed to identify with specificity the documents it has produced that are responsive to Interrogatories No. 10 and Based on Consumers representation that it is gathering for production the documents responsive to MCV s second set of discovery to Consumers, MCV agreed to withdraw /

23 ATTACHMENT A Page 3 of 5 its request for a further order compelling Consumers to produce the documents responsive to MCV Requests for Production Nos. 4-6 and 8-13, subject to and without waiving MCV s right to renew that request, should Consumers fail to produce all documents requested by MCV in its second set of discovery requests to Consumers. 10. All scheduling dates shall be adjourned 90 days from the dates last set and the ALJ shall issue a revised schedule accordingly. Mark D. Eyster 3/31/16 MARK D. EYSTER, ALJ Digitally signed by Mark D. Eyster DN: cn=mark D. Eyster, o, ou, =eysterm@michigan.gov, c=us Date: :14:23-04'00' Approved as to form, only, this 15 th day of March, 2016: /s/ Jordan S. Bolton CLARK HILL PLC Douglas R. Kelly(49856) Jordan S. Bolton (P66309) Attorneys for MCV DKelly@ClarkHill.com JBolton@ClarkHill.com /s/ Adam C. Smith Kelly M. Hall, Esq. Adam C. Smith, Esq. Attorneys for Consumers Energy Company kelly.hall@cmsenergy.com adam.smith@cmsenergy.com /s/ Bryan A. Brandenburg Amit T. Singh, Esq Bryan A. Brandenburg, Esq. Assistant Attorneys General Public Service Division singha9@michigan.gov brandenburgb@michigan.gov /186747

24 ATTACHMENT A Page 4 of 5 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * STATE OF MICHIGAN ) ) SS. Case No. U County of Ingham ) ) P R O O F O F S E R V I C E Danielle R. Rogers being duly sworn, deposes and says that on March 31, 2016, she served a copy of the attached Ruling via , to the persons as shown on the attached service list. Subscribed and sworn to before me This 31st day of March Danielle Rogers Digitally signed by Danielle Rogers DN: cn=danielle Rogers, o=michigan Public Service Commission, ou=michigan Administrative Hearing System, =rogersd8@michigan.gov, c=us Date: :14:09-04'00' Danielle R. Rogers Lisa Felice Notary Public, Eaton County My Commission Expires April 15, 2020

25 ATTACHMENT A Page 5 of 5 ATTACHMENT A Jordan S. Bolton jbolton@clarkhill.com Bryan A. Brandenburg BrandenburgB@michigan.gov H. Richard Chambers rick.chambers@cmsenergy.com Consumers Energy Company mpscfilings@cmsenergy.com Charles E. Dunn cedunn@midcogen.com Kelly M. Hall Kelly.hall@cmsenergy.com Douglas R. Kelly dkelly@clarkhill.com Leland R. Rosier lrrosier@clarkhill.com Amit T. Singh SinghA9@michigan.gov Adam C. Smith adam.smith@cmsenergy.com Linda M. Watson lwatson@clarkhill.com

26 ATTACHMENT B

27 ATTACHMENT B Page 1 of 4 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the Complaint of ) MIDLAND COGENERATION VENTURE) PARTNERSHIP against CONSUMERS ) ENERGY COMPANY ) ~~~~~~~~~-) Case No. U STATE OF MICHIGAN ) )ss. COUNTY OF JACKSON ) AFFIDAVIT OF VICTORIA J. WATSON Victoria J. Watson, having been duly sworn, states as follows: 1. I am currently employed by Consumers Energy Company ("Consumers Energy" or "Company"), and my present title is Paralegal IV. I have been employed by Consumers Energy since February 1, 2000 and have held my current position since July 1, In my current role for Consumers Energy, and among other responsibilities, I am involved with electronic-discovery matters. This includes working with Consumers Energy's computer systems and employees in the Company's information technology department to gather potentially responsive documents following discovery requests that the Company receives in pending legal proceedings. 3. With regards to this case, I was asked to assist with compiling records that could be responsive under Consumers Energy's discovery response MCV-CE-77. This response relates to Midland Cogeneration Venture Limited Partnership's ("MCV") Request for Production No. 26, which sought "each and every internal communication related in any way to the rupture of Line looa that occurred on or about May 4, 2015." 1

28 ATTACHMENT B Page 2 of 4 4. My involvement has also involved facilitating an external review of the documents that were identified as potentially responsive to MCV-CE Consumers Energy determined that it would conduct a review of the approximately 100,000 potentially responsive documents to MCV-CE-77 rather than simply produce those materials. 6. It would take a prohibitive amount of time to perform this task using in-house resources, so Consumers Energy engaged an outside vendor to assemble and manage a team of contract attorneys to conduct the review. 7. The review team was assembled in late March 2016 and began work reviewing documents on approximately April 6, While the review team originally consisted of nine members, as the initial review of approximately 80,000 electronic communications was coming close to completion, two members of the team left for other professional opportunities, and one subsequently had to focus on family concerns with an elderly parent. Accordingly, the team is currently made of up of six outside attorneys. 9. By May 6, 2016, the review team had conducted its first-pass review of approximately 80,000 documents and was proceeding with subsequent work on necessary quality-control activities (primarily to ensure that team members' coding of documents was reasonably consistent) and final reviews before those documents were ready for production. 10. This undertaking has already cost Consumers Energy over $60,000, which cost will increase as the review process remains ongoing. 2

29 ATTACHMENT B Page 3 of As batches of documents cleared the quality-control review process, they were prepared for production to MCV on April 22 and May 8 and 12, The total number of documents and pages produced in each of these productions was as follows: April 22, 2016: 277 documents totaling 985 pages; May 8, 2016: 2,358 documents totaling 7,255 pages; May 12, 2016: 2,553 documents totaling 5,965 pages; For a combined total of 5,188 documents and 14,205 pages. 12. The initial document review focused on electronic mail documents and attachments, and the Company is now proceeding with loading potentially responsive materials from servers and other sources (e.g., hard drives, flash drives, etc.) into the review software for the review team to address. 13. The total number of these additional documents that will need to be reviewed is unknown and subject to change as the final collection process concludes, but based on current information that is known at this time it is likely to be less than 10, Consumers Energy's best estimate at this time is that review activities should be completed by the end of May 2016, unless there are any technical difficulties or other impediments that arise. 15. Once additional documents pass quality-control review, Consumers Energy will continue to make rolling productions to MCV on a continuing basis until all responsive documents are produced. 16. The documents listed above are in addition to nearly 35,000 documents produced by Consumers Energy in response to MCV's 283 other discovery requests to the Company in this matter, including subparts. 3

30 ATTACHMENT B Page 4 of I am of legal age and could testify competently to the facts stated in this affidavit based on my own personal knowledge if called to do so. 4

31 ATTACHMENT C

32 ATTACHMENT C Page 1 of 7 Adam C. Smith From: Adam C. Smith Sent: Tuesday, April 19, :34 PM To: 'Kelly, Douglas R.'; Bolton, Jordan S. Cc: Kelly M. Hall; Watson, Linda M. Subject: RE: MCV vs. Consumers - Depositions Doug Your assumptions about the review that is currently underway are inaccurate in all respects. It is precisely because of the length of time that it would have taken to perform a review internally that Consumers Energy elected to engage outside resources at substantial expense to perform this task. While Judge Eyster s March 10 ruling could be read to support a bare bones review along the lines of what you speculate is occurring, the company instead chose to pursue a path that is moving much more quickly. Accordingly, your contention that Consumers Energy is somehow intentionally delaying this process is also incorrect. So that you do not have to surmise how the process is moving forward, I can confirm we have contracted for a team of nine review attorneys who have been actively reviewing documents on a full time basis. The team has completed an initial review of approximately half of the potentially responsive documents, and those that have been identified as responsive will be produced as soon as reasonably possible once final quality control review is done. I reiterate that the first set should be out by the end of this week, with rolling productions to follow thereafter. Consumers Energy categorically denies your unsupported allegations that the Company has acted improperly in this matter. Your allegations of improper conduct are simply not supported by the facts. acs From: Kelly, Douglas R. [mailto:dkelly@clarkhill.com] Sent: Tuesday, April 19, :47 PM To: Adam C. Smith; Bolton, Jordan S. Cc: Kelly M. Hall; Watson, Linda M. Subject: RE: MCV vs. Consumers - Depositions Adam, sent from outside of CMS/CE. Use caution before clicking links/attachments. With all due respect, MCV has been waiting over 5 months for these documents. Consumers collected these documents a long time ago and failed to disclose this fact. It was only after we demanded production of these documents that Consumers revealed it collected the documents but secretly chose not to do anything with them. Consumers forced MCV to file a Motion to Compel, which was decided over a month ago. Yet, MCV still does not have a single document. We surmise from Consumers flippant response below that it likely has intentionally decided to have one person reviewing these documents on a part time basis. This type of discovery abuse is the subject of sanctions, including default judgment. Indeed, MCV does not think that Judge Eyster will find sympathy for Consumers due to its lack of good faith and lack of reasonable diligence in producing these documents. Consumers actions have slowed down this case substantially causing prejudice and harm to MCV and is effectively preventing MCV from moving forward in a timely manner. We continue to demand full production by the end of the week. Otherwise, we will file a motion for default. 1

33 ATTACHMENT C Page 2 of 7 Best regards, Doug From: Adam C. Smith [mailto:adam.smith@cmsenergy.com] Sent: Monday, April 18, :05 PM To: Kelly, Douglas R.; Bolton, Jordan S. Cc: Kelly M. Hall; Watson, Linda M. Subject: RE: MCV vs. Consumers - Depositions Doug With respect to your recently stated threat to file a motion seeking judgment in this matter, we see no basis for Judge Eyster to grant MCV that relief. And certainly not based on a single discovery request that Consumers Energy has been actively addressing since before and after the judge s latest ruling on March 10. Indeed, the company s work to date includes gathering approximately 100,000 records that may be responsive to MCV s broad request for each and every internal communication related in any way to the rupture of Line 100A.... As you know, Judge Eyster expressly approved of Consumers Energy undertaking whatever review of those documents Consumers feels it needs to do, and that such a review is up to the Company to decide. See page 108 of the transcript from the March 10, 2016 hearing. Consumers Energy is simply moving ahead with that process, as the judge previously indicated it could, at considerable expense. As I stated earlier, we expect the first set of responsive documents will be produced later this week, with rolling productions to follow as additional responsive documents are available. I also note that Consumers Energy has produced tens of thousands of documents in response to MCV s other discovery requests in this matter. This is a volume of records that dwarfs the scant amount MCV has produced in response to the discovery requests that Consumers Energy has served on it. That is an issue we will be forced to address through a motion to compel if MCV continues to refuse to supplement its existing, deficient responses. acs From: Kelly, Douglas R. [mailto:dkelly@clarkhill.com] Sent: Friday, April 15, :41 PM To: Adam C. Smith; Bolton, Jordan S. Cc: Kelly M. Hall; Watson, Linda M. Subject: RE: MCV vs. Consumers - Depositions Dear Adam: sent from outside of CMS/CE. Use caution before clicking links/attachments. Regarding producing documents responsive to MCV s Request to Produce No. 26 regarding internal communications, it has now been 5 months since the request and we have yet to see a single responsive document. At this point, we must insist that all responsive documents (except privileged) be produced by next Friday, April 22, Otherwise, MCV will be filing a motion of entry of judgment. Douglas R. Kelly CLARK HILL PLC 151 S Old Woodward Suite 200 Birmingham, Michigan (direct) (fax) dkelly@clarkhill.com 2