analysis-cascade-subpoena-response.docx

1012-00005 · Stonefield Logistics Group · Discovery/Analysis

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT THIS MEMORANDUM IS PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK PRODUCT DOCTRINE. IT IS INTENDED SOLELY FOR USE BY ATTORNEYS AND PERSONNEL OF CALDERWOOD & HARKNESS LLP IN CONNECTION WITH THE REPRESENTATION OF STONEFIELD LOGISTICS GROUP INC. DO NOT COPY OR DISTRIBUTE WITHOUT PRIOR AUTHORIZATION.

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166

INTERNAL MEMORANDUM

August 1, 2023

TO: Patrick Gallagher, Lead Associate, Litigation (General)

FROM: Simone Laroche, Associate, Litigation (General)

RE: Analysis of Documents Produced by Cascade Freight Systems Inc. in Response to Defendant's Subpoena Duces Tecum

MATTER: Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)

MATTER NO.: 1012-00005

CLIENT: Stonefield Logistics Group Inc.

I. PURPOSE AND SUMMARY

The purpose of this memorandum is to analyze the documents produced by Cascade Freight Systems Inc. ("Cascade"), an Ohio corporation with its principal place of business at 4700 Lakehurst Court, Columbus, Ohio 43016, in response to the third-party subpoena duces tecum served by Calderwood & Harkness LLP on behalf of Stonefield Logistics Group Inc. ("Stonefield" or "SLG") on June 28, 2023. Cascade's production was received by this firm on or about July 21, 2023, and the undersigned has completed a comprehensive review and analysis of the entire production, the results of which are set forth below.

The subpoena sought documents relating to contracts and communications between Cascade and Stonefield for freight Lanes 8 through 14 as designated under the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) between Stonefield (in its capacity as "Shipper-Broker") and Vantor Transport Services LLC ("VTS") (in its capacity as "Carrier-Provider"). As discussed further herein, the TSA and its schedules are central to the claims and defenses at issue in this litigation.

Summary Conclusion. The Cascade production confirms, through objective third-party evidence, that Stonefield's use of Cascade as a carrier was limited exclusively to Lanes 8 through 14, all of which are classified as "Secondary Lanes" under Schedule C, Section 2(b) of the TSA. These Secondary Lanes are expressly outside the scope of the exclusivity restrictions that apply only to the fourteen designated "Primary Lanes" enumerated in Schedule C, Section 2(a). None of the 614 load confirmations produced by Cascade involves any Primary Lane origin-destination pair. This evidence directly and powerfully supports Stonefield's defense that it did not violate any exclusivity provision of the TSA, thereby rebutting Count III of Vantor Holdings Corp.'s ("Vantor") Amended Complaint (filed December 2, 2022, ECF No. 34).

Additionally, the email communications produced by Cascade corroborate Stonefield's stated rationale for engaging alternative carriers: namely, that VTS was declining tenders and failing to provide adequate capacity on Secondary Lanes during the period of Q3 2021 through March 2022, leaving Stonefield with no practical alternative but to seek carrier services from Cascade and others to fulfill its freight obligations.

This memorandum should be read in conjunction with the companion memorandum analyzing the subpoena response of Briarwood Trucking Co. ("Briarwood"), which is expected to be completed by August 3, 2023, as well as the earlier Schedule C Exclusivity Analysis memorandum dated September 30, 2022, prepared by the undersigned, which mapped the relevant carrier usage to Lanes 8 through 14 and provided an initial assessment of the TSA's lane classification framework. Together, these analyses form a comprehensive evidentiary foundation for the exclusivity defense in anticipation of the summary judgment briefing currently contemplated for the fall of 2023.

II. BACKGROUND

A. The TSA Exclusivity Framework

The Transportation Services Agreement was executed on March 15, 2019, by and between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. The TSA was drafted by Ashford Meridian LLP, then outside counsel to Stonefield, and establishes a comprehensive framework governing the provision of truckload freight transportation services by VTS on behalf of Stonefield across a defined network of shipping lanes. The TSA has a five-year term commencing April 1, 2019 and running through March 31, 2024, subject to earlier termination in accordance with the provisions of Article XII.

Central to the present dispute is Schedule C to the TSA, which defines two distinct categories of freight lanes and imposes correspondingly different obligations on the parties with respect to each category.

Primary Lanes. Schedule C, Section 2(a) designates fourteen specific origin-destination pairs as "Primary Lanes." These Primary Lanes are concentrated in the Northeast, Mid-Atlantic, and Southeast freight corridors and represent the lanes on which VTS committed to provide dedicated equipment and service capacity. Under the exclusivity obligation set forth in Section 2(a), Stonefield was required to tender all freight originating on Primary Lanes exclusively to VTS, subject to certain defined exceptions. Those exceptions include, inter alia: (i) VTS tender rejection (i.e., VTS declining to accept a tendered load); (ii) force majeure events as defined in Article XIV of the TSA; and (iii) capacity shortfalls not cured by VTS within forty-eight (48) hours of written notice from Stonefield. The exclusivity obligation is a bilateral commitment — in exchange for Stonefield's agreement to tender exclusively on Primary Lanes, VTS committed to maintaining certain equipment levels and meeting specified service level objectives ("SLOs") on those lanes.

Secondary Lanes. Schedule C, Section 2(b) addresses "Secondary Lanes," which are defined as all freight lanes outside the fourteen designated Primary Lane origin-destination pairs. On Secondary Lanes, Stonefield retained full and unrestricted discretion to use any carrier of its choosing, including but not limited to VTS, without any exclusivity obligation whatsoever. Section 2(b) provides, in pertinent part: "With respect to any freight lane not designated as a Primary Lane in Section 2(a) above (each, a 'Secondary Lane'), Shipper-Broker shall have no obligation to tender freight exclusively to Carrier-Provider and may, in its sole discretion, engage any carrier or carriers to provide transportation services on such Secondary Lanes." This language is unambiguous and grants Stonefield complete freedom of carrier selection on all Secondary Lanes.

Lanes 8 through 14, which are the lanes at issue in this analysis, are designated as Secondary Lanes under Schedule C, Section 2(b). This classification was confirmed in the undersigned's September 30, 2022 Exclusivity Analysis memorandum, which mapped the Cascade and Briarwood Trucking Co. usage data available at that time to the Schedule C lane designations and concluded that all identifiable alternative carrier usage fell within the Secondary Lane category. The Cascade production now provides independent, third-party confirmation of that conclusion.

B. Vantor's Allegations Regarding Lane Exclusivity Violations

Vantor Holdings Corp., the parent company and sole member of VTS, filed its original Complaint in this action on October 14, 2022, and subsequently filed an Amended Complaint on December 2, 2022 (ECF No. 34). The Amended Complaint asserts five counts against Stonefield, of which Count III is directly relevant to this memorandum.

At Count III, Vantor alleges that Stonefield breached the TSA's exclusivity provisions by diverting freight to competing carriers in violation of Schedule C. Specifically, the Amended Complaint identifies two carriers by name — Cascade Freight Systems Inc. and Briarwood Trucking Co. (a Virginia corporation with offices at 1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) — and alleges that Stonefield's use of these carriers constituted a material breach of the TSA that caused economic harm to VTS and contributed to VTS's declining operational and financial performance during the period in question.

Vantor's position, as articulated through its litigation counsel, Caldwell Royce & Shapiro LLP ("CRS"), is that Stonefield's engagement of alternative carriers was not limited to Secondary Lanes but extended to Primary Lanes as well, and that even to the extent alternative carrier usage occurred on Secondary Lanes, the pattern and scale of diversion evidenced a broader scheme to undermine the VTS relationship and create a pretext for termination. CRS has further argued that Stonefield's use of Cascade and Briarwood contributed to VTS's declining performance metrics by reducing the volume of freight available to VTS, thereby impairing VTS's ability to efficiently utilize its fleet and maintain profitable operations on the Stonefield account.

Stonefield's Defense. Stonefield's defense on Count III is straightforward and grounded in the plain language of the TSA. Stonefield contends that its use of Cascade and Briarwood was limited exclusively to Secondary Lanes (Lanes 8 through 14), which are expressly non-exclusive under Schedule C, Section 2(b). Stonefield further contends that the diversion of freight to alternative carriers on these Secondary Lanes was operationally necessary because VTS was consistently rejecting tenders and failing to provide adequate capacity on those lanes. Supporting this defense, Stonefield's internal records reflect that VTS's tender acceptance rate declined precipitously during the relevant period, falling to 71.4% in Q4 2021 — well below the 90% threshold established in the Service Level Objectives set forth in Schedule D to the TSA. This deterioration in VTS's performance left Stonefield with no viable option other than to engage alternative carriers to service its Secondary Lane freight requirements.

C. The Subpoena to Cascade

To obtain independent, third-party evidence supporting Stonefield's defense on Count III, Calderwood & Harkness prepared and served a subpoena duces tecum on Cascade Freight Systems Inc. pursuant to Federal Rule of Civil Procedure 45. The subpoena was drafted by the undersigned and served on Cascade's registered agent on June 28, 2023.

The subpoena requested the following categories of documents:

(1) All contracts, rate agreements, and load confirmations between Cascade and Stonefield for any freight lanes, without limitation as to lane designation;

(2) All communications, including but not limited to email correspondence, written correspondence, and electronic messages (including text messages and instant messages), between Cascade and Stonefield personnel regarding freight transportation services; and

(3) All shipment records, invoices, and bills of lading for loads tendered by Stonefield to Cascade during the period from April 1, 2019 through March 4, 2022.

The temporal scope of the subpoena was designed to encompass the entire period from the commencement of the TSA through the date of Stonefield's termination of the TSA on March 4, 2022, thereby capturing any and all carrier engagement between Stonefield and Cascade that could potentially bear on Vantor's exclusivity allegations.

Cascade produced documents without objection approximately three weeks after service. The production was transmitted to Calderwood & Harkness via secure encrypted file transfer and was received by this firm on or about July 21, 2023. No privilege log was submitted, and Cascade did not withhold any documents on any grounds. The undersigned has reviewed the entire production in its totality, and the results of that review are set forth in the sections that follow.

III. SUMMARY OF CASCADE'S DOCUMENT PRODUCTION

A. Volume and Format

Cascade's production consists of a total of 847 documents, comprising approximately 3,200 pages of material. All documents were produced in PDF format via secure file transfer, organized by document category. The production was bates-stamped by Cascade's counsel as CASCADE-000001 through CASCADE-003200.

The documents produced fall into the following five principal categories:

(1) One (1) Master Carrier Agreement between Stonefield and Cascade, dated June 12, 2020;

(2) Six hundred fourteen (614) individual load confirmations and corresponding bills of lading;

(3) One hundred eighty-seven (187) invoices submitted by Cascade to Stonefield for freight transportation services rendered;

(4) Thirty-eight (38) email communications between Cascade and Stonefield personnel; and

(5) Eight (8) rate confirmation sheets reflecting negotiated per-mile rates for specific lanes.

Each of these categories is discussed in detail below.

B. The Master Carrier Agreement (Stonefield–Cascade)

The cornerstone document in the Cascade production is the Master Carrier Agreement between Stonefield Logistics Group Inc. and Cascade Freight Systems Inc., executed on June 12, 2020 (CASCADE-000001 through CASCADE-000024). This agreement is a standard-form freight brokerage carrier agreement of the type commonly used in the truckload transportation industry and establishes the general terms and conditions under which Cascade would provide transportation services for freight tendered by Stonefield.

Several features of this agreement are noteworthy for purposes of the present analysis:

Non-Exclusive Arrangement. The Master Carrier Agreement is expressly non-exclusive. Section 2.1 of the agreement provides that Cascade's engagement is on a non-exclusive basis and that Stonefield retains the right to engage other carriers for any freight at any time. Similarly, Cascade is not obligated to accept any particular load tender and retains discretion to accept or reject tenders based on equipment availability and operational considerations. There is no minimum volume commitment by either party.

Scope of Services. Section 3.1 authorizes Cascade to provide truckload ("TL") transportation services on lanes as specified in individual load confirmations issued by Stonefield from time to time. The agreement does not pre-designate any particular lanes or corridors; rather, the specific origin-destination pair, commodity, rate, and service requirements are set forth in each individual load confirmation, which operates as a separate contract for each shipment under the umbrella of the Master Carrier Agreement.

No Reference to the TSA or VTS Exclusivity. Critically, the Master Carrier Agreement contains no reference whatsoever to the TSA between Stonefield and VTS, no reference to the concepts of "Primary Lanes" or "Secondary Lanes," and no indication that Cascade was aware of or involved in any exclusivity arrangement between Stonefield and VTS. This absence confirms that the Cascade engagement was an arm's-length, independent carrier arrangement entirely separate from the Stonefield-VTS relationship, and that Cascade had no knowledge of or role in the VTS exclusivity framework.

Standard Terms. The remainder of the Master Carrier Agreement contains industry-standard provisions addressing insurance requirements (including cargo liability coverage of not less than $100,000 per occurrence), Federal Motor Carrier Safety Administration ("FMCSA") compliance, billing and payment terms (net 30 days from invoice date), indemnification obligations, and limitation of liability. These terms are unremarkable and consistent with a standard commercial carrier relationship.

C. Load Confirmations and Shipment Records

The production includes 614 individual load confirmations spanning the period from June 2020 through March 2022 (CASCADE-000025 through CASCADE-002114). Each load confirmation is a one- to two-page document that identifies the essential details of an individual shipment, including: origin city and state, destination city and state, commodity description, approximate weight, agreed-upon rate (typically expressed as a per-mile rate or flat rate), scheduled pickup date, and scheduled delivery date. Corresponding bills of lading are attached to or produced alongside each load confirmation.

The undersigned has conducted a comprehensive lane-by-lane analysis of all 614 load confirmations, mapping each origin-destination pair to the lane designations set forth in Schedule C to the TSA. The results of this analysis are conclusive and unambiguous.

Every single one of the 614 shipments falls within Lanes 8 through 14 as defined in Schedule C to the TSA. Specifically, the load confirmations reflect the following lane distribution:

• Lane 8 (Columbus, OH to Charlotte, NC — Secondary Mid-Atlantic corridor): Shipments servicing this corridor, representing one of the higher-volume Secondary Lanes in the Cascade production.

• Lane 9 (Indianapolis, IN to Nashville, TN — Secondary Midwest-Southeast corridor): Shipments covering this interior freight corridor, which was among the earliest lanes on which Cascade was engaged.

• Lane 10 (Pittsburgh, PA to Raleigh, NC — Secondary Mid-Atlantic south corridor): Shipments on this lane reflect freight movements that VTS had historically serviced on a non-exclusive, as-available basis.

• Lane 11 (Cleveland, OH to Atlanta, GA — Secondary Midwest-Southeast extended corridor): Shipments on this longer-haul lane, which saw increased Cascade utilization beginning in late 2021.

• Lane 12 (Cincinnati, OH to Knoxville, TN — Secondary Ohio Valley corridor): A lower-volume lane with intermittent Cascade usage during the relevant period.

• Lane 13 (Louisville, KY to Greenville, SC — Secondary Interior Southeast corridor): Shipments reflecting spot-market engagement on this corridor during periods of VTS tender rejection.

• Lane 14 (Detroit, MI to Jacksonville, FL — Secondary Great Lakes to Southeast corridor): The longest-haul Secondary Lane in the Cascade production, with shipments concentrated in Q4 2021 and Q1 2022.

Zero load confirmations involve any of the fourteen designated Primary Lanes in Schedule C, Section 2(a). The undersigned has cross-referenced every origin-destination pair in the Cascade production against the complete list of Primary Lane designations and confirms that there is no overlap whatsoever. A full cross-reference table is provided in Appendix B to this memorandum.

The following table summarizes the volume breakdown by lane:

Temporal Distribution. The temporal distribution of Cascade shipments is also significant and supports Stonefield's defense narrative. While the earliest load confirmations date to June 2020 (shortly after execution of the Master Carrier Agreement), shipment volume was modest during the initial period. The substantial concentration of Cascade usage occurred during Q3 2021 through Q1 2022 (the quarter ending with Stonefield's March 4, 2022 termination of the TSA). Specifically, approximately 78% of all Cascade shipments occurred between July 2021 and March 2022. This temporal concentration corresponds precisely with the period during which VTS's tender acceptance rates and operational performance metrics declined sharply, as documented in Stonefield's internal performance tracking records and as reflected in VTS's own quarterly performance reports submitted pursuant to Section 7.2 of the TSA. A detailed quarterly breakdown is provided in Appendix A.

D. Rate Confirmation Sheets

The production includes eight (8) rate confirmation sheets (CASCADE-002690 through CASCADE-002724) reflecting negotiated per-mile rates between Stonefield and Cascade for specific Secondary Lanes. These rate confirmations cover the period from approximately August 2020 through January 2022 and reflect the rates at which Cascade agreed to provide transportation services on individual lanes or lane groupings.

The rates set forth in these confirmation sheets are market-competitive spot rates and short-term contract rates. The undersigned has compared the Cascade rates against publicly available freight market indices for the relevant time periods (including the Brightmoor Software and Penrose Services Inc. rate data) and finds that the Cascade rates are consistent with prevailing market conditions. Of particular note, the rates negotiated during Q4 2021 and Q1 2022 reflect the elevated spot market conditions that characterized the broader truckload freight market during that period, when tight capacity and strong demand drove rates to historically high levels across many corridors.

Importantly, there is no evidence in the rate confirmation sheets of preferential pricing, volume discounts, or minimum volume commitments that would suggest Stonefield was building a long-term alternative carrier relationship designed to supplant VTS. The rates are consistent with ad hoc, as-needed carrier engagement in the spot market — precisely the type of engagement one would expect from a shipper-broker that was turning to alternative carriers only when its primary carrier was unable or unwilling to fulfill tenders.

E. Email Communications

The final category of documents in the Cascade production consists of 38 email communications between Stonefield operations personnel and Cascade's account management team (CASCADE-002725 through CASCADE-003142). The undersigned has reviewed each email in its entirety and summarizes the key observations below.

Nature of Communications. The emails are overwhelmingly operational and transactional in nature. They relate to the day-to-day mechanics of freight transportation — load tenders, equipment scheduling, pickup and delivery coordination, rate negotiations for individual loads, and delivery status confirmations. There is no strategic, planning, or high-level management correspondence in the production. The Stonefield personnel reflected in the emails are primarily members of Janet Kirkwood's Carrier Relations group, including operations coordinators and logistics analysts. The Cascade personnel are account managers and dispatchers.

Absence of References to VTS, the TSA, or Primary Lanes. The undersigned has specifically searched for any reference — direct or indirect — to the VTS relationship, the TSA, the concepts of Primary Lanes or Secondary Lanes, or any strategy to divert volume away from VTS. No such references exist in any of the 38 emails. The communications treat the Stonefield-Cascade relationship as an entirely self-contained, independent carrier engagement, which is precisely what it was.

Absence of References to Rate Adjustment Mechanism. Similarly, none of the emails reference the anticipated rate adjustment under Section 5.3 of the TSA (the Rate Adjustment Mechanism) or the April 2022 rate increase that Vantor has suggested was a motivating factor in Stonefield's decision to terminate the TSA. The absence of any cost-related motive in the Cascade communications undermines Vantor's "pretextual termination" theory.

References to VTS Tender Rejections. Several of the emails from Stonefield operations personnel contain contemporaneous references to specific tenders that had been submitted to VTS and were either declined or went unfulfilled, prompting Stonefield to redirect those loads to Cascade. These emails are particularly significant because they provide real-time, contemporaneous evidence — corroborated by a third-party production — that the decision to use Cascade was reactive and operationally driven rather than strategic or pretextual. Key examples include:

• Email dated October 18, 2021 (CASCADE-002781): An email from David Marchetti, Stonefield Operations Coordinator, to Cascade dispatch, stating: "VTS declined our tender on the Columbus-Charlotte lane again — moving this to Cascade. Need pickup by Thursday 10/21 at the latest. Can you confirm equipment availability?"

• Email dated November 8, 2021 (CASCADE-002803): An email from Lisa Fontaine, Stonefield Logistics Analyst, to Cascade account management, referencing VTS's inability to provide equipment for a time-sensitive shipment on the Cleveland-Atlanta lane (Lane 11, a Secondary Lane), and requesting that Cascade accept the load on an expedited basis. Fontaine writes: "We've been trying to get VTS to cover this for two days but they can't source a truck. This is the third time this month."

• Email dated December 3, 2021 (CASCADE-002847): An email from David Marchetti to Cascade account management requesting coverage on the Indianapolis-Nashville lane (Lane 9), noting: "VTS passed on this one — no surprise at this point. Standard rate applies."

• Email dated January 19, 2022 (CASCADE-002891): An email from Lisa Fontaine confirming a tender redirect from VTS to Cascade on the Detroit-Jacksonville lane (Lane 14), noting that VTS had failed to confirm acceptance within the 24-hour window.

Consistency with Kirkwood Email and Deposition Testimony. These operational emails are consistent with the internal Stonefield communications already in the record, including Janet Kirkwood's September 22, 2021 email to Carlos Medina (Senior Vice President, Operations, Stonefield), in which Kirkwood stated that volume was being moved to Cascade and Briarwood on "Lanes 8–14." They are also consistent with Kirkwood's deposition testimony on July 14, 2023, in which she testified under oath that the diversion of freight to Cascade and Briarwood was limited to Secondary Lanes and was undertaken in direct response to VTS's tender rejections and capacity failures. The Cascade production provides independent third-party corroboration of both Kirkwood's email and her deposition testimony.

IV. ANALYSIS: IMPACT ON EXCLUSIVITY DEFENSE

A. Confirmation That Cascade Usage Was Limited to Secondary Lanes

The single most important conclusion to be drawn from the Cascade production is that it provides objective, third-party documentary evidence confirming that every single shipment Stonefield tendered to Cascade fell within Lanes 8 through 14 — all of which are designated as Secondary Lanes under Schedule C, Section 2(b) of the TSA. Out of 614 load confirmations produced, not one involves a Primary Lane origin-destination pair. This is not a close question or a matter of interpretation; the evidence is unequivocal.

This evidence is particularly valuable because it is independent of Stonefield's own records and internal testimony. While Stonefield's internal shipping records, Kirkwood's deposition testimony, and the September 30, 2022 Exclusivity Analysis memorandum all support the same conclusion, the Cascade production provides an entirely separate evidentiary source — documents generated and maintained by a third party with no interest in the outcome of this litigation — that independently confirms the factual predicate of Stonefield's exclusivity defense. In the context of a motion for summary judgment, this third-party corroboration carries significant weight and substantially reduces the likelihood that a genuine dispute of material fact could be found on the question of whether Stonefield tendered Primary Lane freight to Cascade.

The legal analysis flowing from this factual conclusion is straightforward. Schedule C, Section 2(b) expressly permits Stonefield to use any carrier on Secondary Lanes without restriction. The plain language of the provision — "Shipper-Broker shall have no obligation to tender freight exclusively to Carrier-Provider" on Secondary Lanes — leaves no room for ambiguity. Because all Cascade shipments were on Secondary Lanes, no exclusivity obligation was triggered, and no exclusivity violation occurred. This conclusion is dispositive of Count III insofar as it relates to Cascade.

This evidence directly supports the defense position articulated in the September 30, 2022 Exclusivity Analysis memorandum and is fully consistent with Kirkwood's deposition testimony of July 14, 2023.

B. Corroboration of Stonefield's Stated Rationale

Beyond confirming the lane-level facts, the Cascade production also corroborates the operational rationale that Stonefield has advanced for its use of alternative carriers. Stonefield has consistently maintained that it turned to Cascade and Briarwood not as part of a strategic effort to undermine VTS or create a pretext for termination, but because VTS's deteriorating performance left Stonefield with no practical alternative for servicing its Secondary Lane freight requirements.

The operational emails in the Cascade production — particularly the emails from David Marchetti and Lisa Fontaine referencing specific VTS tender rejections — provide contemporaneous, real-time evidence that the decision to use Cascade was reactive and necessity-driven. These emails were written in the ordinary course of business by operations-level personnel who were simply trying to get freight moved after VTS had declined or failed to cover tenders. They are not the product of strategic planning or executive decision-making; they reflect the day-to-day operational reality of a shipper-broker dealing with an unreliable carrier.

The timing of the increased Cascade usage further supports this rationale. As noted above, approximately 78% of all Cascade shipments occurred between Q3 2021 and Q1 2022. This period corresponds precisely with the documented decline in VTS's operational performance, including:

• VTS's tender acceptance rate falling to 71.4% in Q4 2021, compared to the 90% SLO threshold established in Schedule D to the TSA;

• VTS's equipment availability dropping to approximately 62% of the committed fleet capacity, with roughly 248 tractors available versus the 400 tractors required under the dedicated fleet provisions of the TSA; and

• VTS's service level metrics falling below the established thresholds across all five SLO categories (tender acceptance, on-time pickup, on-time delivery, claims ratio, and equipment condition).

The causal connection between VTS's performance failures and Stonefield's use of Cascade is further illuminated by the November 12, 2021 email from Sandra Milescu (Chief Operating Officer of Vantor/VTS) to Nikolai Vantorovich (Chief Executive Officer of Vantor), which has been previously identified as a key document in this litigation. In that email, Milescu acknowledged that VTS had "pulled 85 tractors off the SLG dedicated lanes" to cover other commitments, reducing available equipment on the Stonefield account by more than 20%. This unilateral reduction in capacity by VTS necessarily forced Stonefield to seek alternative carriers for its Secondary Lane freight — precisely the pattern reflected in the Cascade production.

In sum, the Cascade production establishes not only that Stonefield's use of Cascade was contractually permissible, but also that it was operationally justified by VTS's own performance failures. This dual showing is important because it addresses both the legal defense (no exclusivity breach) and the factual narrative (no bad faith or pretext).

C. Absence of Adverse Evidence

In addition to the affirmatively favorable evidence discussed above, the Cascade production is notable for what it does not contain. The undersigned has conducted a thorough review of all 847 documents and 3,200 pages, and the production contains no documents suggesting any of the following:

(i) That Stonefield tendered any Primary Lane freight to Cascade at any time during the relevant period or otherwise;

(ii) That Cascade was engaged as part of a deliberate plan or strategy to terminate or phase out the VTS relationship;

(iii) That Stonefield offered Cascade volume commitments, preferred pricing arrangements, exclusive lane assignments, or other terms inconsistent with arm's-length spot market engagement;

(iv) That any Stonefield personnel communicated to Cascade any intention to transition freight away from VTS or to build Cascade into a replacement carrier for VTS;

(v) That any communications between Stonefield and Cascade referenced the upcoming April 2022 rate adjustment under Section 5.3 of the TSA, or any cost-related motive for using Cascade rather than VTS; or

(vi) That Cascade had any awareness of or involvement in the Stonefield-VTS contractual relationship, the TSA exclusivity framework, or the disputes that ultimately gave rise to this litigation.

The absence of such evidence is significant because it directly undermines the central pillars of Vantor's "pretextual termination" narrative. CRS has argued that Stonefield's engagement of alternative carriers was part of a calculated scheme to divert freight away from VTS, drive down VTS's performance metrics, and create a manufactured justification for terminating the TSA. If that theory were true, one would expect to find at least some evidence in the Cascade production — a discussion of volume transition, a reference to the TSA or VTS, a negotiation of terms that suggest a long-term or strategic relationship. The complete absence of any such evidence is powerful circumstantial proof that the Cascade engagement was exactly what Stonefield has always said it was: an ordinary, arm's-length carrier relationship entered into on a transactional, as-needed basis to cover Secondary Lane freight that VTS was unable or unwilling to service.

D. Relationship to the Kirkwood Email (September 22, 2021)

Vantor has placed particular emphasis on the September 22, 2021 internal email from Janet Kirkwood (Director of Carrier Relations, Stonefield) to Carlos Medina (Senior Vice President, Operations, Stonefield), in which Kirkwood wrote:

"VTS is a mess. We're already moving volume to Cascade and Briarwood on Lanes 8–14. If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract."

Vantor contends that this email is a "smoking gun" demonstrating that Stonefield had a premeditated plan to terminate the TSA and that the diversion of freight to Cascade and Briarwood was an improper component of that plan. CRS has characterized the email as evidence that the carrier diversion was strategic rather than reactive, and that Stonefield was already contemplating termination months before VTS's performance deterioration could have justified it.

The Cascade production substantially undermines Vantor's interpretation of this email and reinforces Stonefield's reading.

First, and most fundamentally, the Kirkwood email itself identifies the lanes to which freight was being diverted as "Lanes 8–14." The Cascade production independently confirms that this is precisely what happened — all 614 Cascade shipments are on Lanes 8 through 14, all of which are Secondary Lanes. The Cascade production therefore corroborates Kirkwood's contemporaneous description of the diversion and refutes any inference that freight was being diverted from Primary Lanes.

Second, the language of the Kirkwood email, read in context and in light of the Cascade production, reflects a factual assessment of VTS's deteriorating performance rather than a scheme to breach the exclusivity provisions. Kirkwood's statement that "VTS is a mess" is entirely consistent with the performance data showing VTS's tender acceptance rate at 71.4% and its equipment availability at 62% of committed levels. Her reference to moving volume to Cascade and Briarwood on Lanes 8–14 is consistent with — and now independently confirmed by — the Cascade production showing reactive, operational use of alternative carriers on Secondary Lanes. And her statement about "pull[ing] the plug" on the TSA reflects a legitimate business assessment that the relationship with VTS was becoming untenable, not a premeditated plan to manufacture a breach.

Third, Kirkwood's deposition testimony of July 14, 2023 is fully consistent with both the email and the Cascade production. At her deposition, Kirkwood testified that the diversion of volume to Cascade and Briarwood was limited to Secondary Lanes, was undertaken in response to VTS's tender rejections and capacity failures, and was not part of any plan to breach the exclusivity provisions or manufacture a pretext for termination. The Cascade production provides independent third-party corroboration of every material aspect of that testimony.

This memorandum and the underlying Cascade documents should be referenced in any future summary judgment briefing addressing the Kirkwood email and the exclusivity defense. The Cascade production transforms the analysis of the Kirkwood email from a swearing contest between the parties into a factual question that can be resolved on the documentary record — a record that conclusively establishes that the carrier diversion was limited to non-exclusive Secondary Lanes.

V. IMPLICATIONS FOR SUMMARY JUDGMENT

The Cascade production, standing alone, provides a strong evidentiary basis for seeking partial summary judgment on Vantor's exclusivity violation claim (Count III of the Amended Complaint) as it relates to the use of Cascade. When combined with the anticipated Briarwood Trucking Co. subpoena response analysis — which is expected to confirm that Briarwood was likewise used exclusively on Secondary Lanes — the case for partial summary judgment on the entirety of Count III becomes compelling.

The undisputed evidence, viewed in the light most favorable to Vantor, establishes the following:

(1) All shipments tendered by Stonefield to Cascade fell within Lanes 8 through 14, as confirmed by 614 individual load confirmations produced by Cascade from its own business records;

(2) Lanes 8 through 14 are designated as Secondary Lanes under Schedule C, Section 2(b) of the TSA;

(3) Schedule C, Section 2(b) expressly provides that Stonefield has no obligation to tender freight exclusively to VTS on Secondary Lanes and may use any carrier in its sole discretion; and

(4) Therefore, Stonefield's use of Cascade on Lanes 8 through 14 did not and could not constitute a violation of any exclusivity provision of the TSA.

This syllogism is grounded entirely in the documentary record and the plain language of the contract. There is no genuine dispute of material fact as to the lane classification of the Cascade shipments, and the legal conclusion follows inexorably from the undisputed facts.

This analysis supports the Summary Judgment Roadmap Memorandum currently in preparation (anticipated for completion in September 2023), which organizes Stonefield's summary judgment arguments into four principal pillars. The exclusivity defense constitutes one of those four pillars, and the Cascade production provides the critical evidentiary foundation for that argument.

Recommendation. I recommend that the Cascade production documents be incorporated into the summary judgment exhibit list at the earliest practicable date and that they be cited prominently in the statement of undisputed material facts and supporting brief in connection with the argument that Stonefield's carrier diversification was contractually permitted under the TSA. Specifically, representative load confirmations for each of Lanes 8 through 14 should be included as exhibits, together with the Master Carrier Agreement and key operational emails demonstrating VTS tender rejections. The goal should be to present the Court with a concise but comprehensive factual record that resolves the exclusivity question as a matter of law.

VI. RECOMMENDATIONS

Based on the foregoing analysis, the undersigned recommends the following action items:

1. Cross-Reference with Briarwood Analysis. Upon completion of the Briarwood Trucking Co. subpoena response analysis (expected August 3, 2023), the undersigned will prepare a combined memorandum confirming that both alternative carriers — Cascade and Briarwood — were used exclusively on Secondary Lanes (Lanes 8 through 14) and that no Primary Lane freight was diverted to either carrier. This combined analysis will serve as the definitive factual foundation for the exclusivity defense and should be distributed to the full trial team upon completion.

2. Exhibit Preparation. The following categories of Cascade production documents should be flagged for inclusion in dispositive motion exhibits:

(a) The Master Carrier Agreement dated June 12, 2020 (CASCADE-000001 through CASCADE-000024), demonstrating the non-exclusive, arm's-length nature of the Stonefield-Cascade relationship;

(b) Representative load confirmations covering each of Lanes 8 through 14, selected to demonstrate the complete absence of Primary Lane shipments and the geographic scope of Cascade's engagement (representative documents from each lane to be selected in coordination with the trial team);

(c) Key operational emails showing VTS tender rejections prompting Cascade usage, including the October 18, 2021 email from David Marchetti (CASCADE-002781), the November 8, 2021 email from Lisa Fontaine (CASCADE-002803), the December 3, 2021 email from David Marchetti (CASCADE-002847), and the January 19, 2022 email from Lisa Fontaine (CASCADE-002891).

3. Deposition Testimony Alignment. The Cascade operational emails should be cross-referenced with the deposition testimony of Janet Kirkwood (taken July 14, 2023) and the anticipated deposition testimony of Sandra Milescu (scheduled for August 4, 2023) regarding VTS fleet redeployment and tender rejections. The objective is to create a unified factual narrative supported by multiple independent evidentiary sources — Stonefield's internal records, Kirkwood's testimony, the Milescu deposition, and the third-party Cascade production — that demonstrates the operational necessity of Stonefield's use of alternative carriers on Secondary Lanes. This cross-reference work should be completed following the Milescu deposition.

4. Preserve for Expert Use. Relevant Cascade shipment data, including load confirmation details, rates, and temporal distribution data, should be provided to Dr. Evelyn Rosser at Kensington Analytics Group LLC, 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, for potential use in the rebuttal expert report (due to be served on August 25, 2023) or for supplemental analysis if needed. Dr. Rosser may use the Cascade data to demonstrate that Stonefield's use of alternative carriers on Secondary Lanes was consistent with market-standard shipper-broker practices and was not indicative of bad faith, strategic diversion, or an intent to undermine VTS. The shipment volume and rate data from the Cascade production can be compared against industry benchmarks and freight market indices to support this conclusion.

5. Update Key Document Index. All relevant Cascade production documents identified in this memorandum and in the Appendix hereto should be added to the Key Document Index maintained by Kara Nystrom and Helen Tsao. Each document should be indexed with its bates number, date, author(s), recipient(s), document type, and a brief description of its relevance to the case. The undersigned will coordinate with Nystrom and Tsao to ensure that the index is updated promptly.

VII. APPENDICES

Appendix A: Cascade Load Confirmations by Lane and Quarter

The following table summarizes the number of shipments and aggregate dollar value for each lane (Lanes 8 through 14) broken out by quarter from Q3 2020 (the first full quarter of Cascade engagement) through Q1 2022 (ending with Stonefield's March 4, 2022 termination of the TSA).

As the data above demonstrate, Cascade usage was modest during the initial period of engagement (Q3 2020 through Q2 2021), averaging approximately 27 shipments per quarter. Beginning in Q3 2021, shipment volume increased dramatically, with 110 shipments in Q3 2021 and 214 shipments in Q4 2021 — an approximately eight-fold increase from the prior quarterly average. This concentration of Cascade usage in Q3 2021 through Q1 2022 correlates directly with the documented decline in VTS's tender acceptance rates and fleet availability during the same period.

Appendix B: Cross-Reference — TSA Schedule C Lane Designations

B-1: Primary Lanes (Schedule C, Section 2(a))

The following table lists all fourteen designated Primary Lanes under Schedule C, Section 2(a), and confirms that none corresponds to any origin-destination pair reflected in any Cascade load confirmation.

Note: The Primary Lane numbering (1 through 14) in Schedule C, Section 2(a) is a separate numbering system from the Secondary Lane numbering (Lanes 8 through 14) in Schedule C, Section 2(b). The "Lane 8" referenced in connection with Cascade shipments (Columbus, OH to Charlotte, NC) is Secondary Lane 8 under Section 2(b) and is entirely distinct from Primary Lane 8 (Boston, MA to Newark, NJ) under Section 2(a). This distinction has been noted in prior memoranda and should be clearly articulated in any summary judgment briefing to avoid confusion.

B-2: Secondary Lanes (Schedule C, Section 2(b)) — Cascade Mapping

All 614 load confirmations in the Cascade production map to one of the seven Secondary Lanes listed above. No load confirmation involves any Primary Lane origin-destination pair.

Appendix C: Index of Key Cascade Production Documents Referenced

The following is an index of the specific documents from the Cascade production that are cited in or are particularly relevant to this memorandum:

This memorandum is intended solely for use in connection with the legal representation of Stonefield Logistics Group Inc. and is protected by the attorney-client privilege and the work product doctrine. This memorandum reflects the analysis and conclusions of the author as of the date hereof and is subject to revision as additional evidence becomes available, including but not limited to the Briarwood Trucking Co. subpoena response and the Milescu deposition.

Prepared by:

________________________________________

Simone Laroche Associate, Litigation (General) Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, NY 10166 slaroche@calderwoodharkness.com (212) 555-4837

Date: August 1, 2023

cc: Case File (Matter No. 1012-00005)

Lane	Corridor	Total Shipments	Percentage of Total
Lane 8	Columbus, OH – Charlotte, NC	142	23.1%
Lane 9	Indianapolis, IN – Nashville, TN	118	19.2%
Lane 10	Pittsburgh, PA – Raleigh, NC	97	15.8%
Lane 11	Cleveland, OH – Atlanta, GA	89	14.5%
Lane 12	Cincinnati, OH – Knoxville, TN	64	10.4%
Lane 13	Louisville, KY – Greenville, SC	58	9.4%
Lane 14	Detroit, MI – Jacksonville, FL	46	7.5%
Total	614	100.0%
Lane	Q3 2020	Q4 2020	Q1 2021	Q2 2021	Q3 2021	Q4 2021	Q1 2022	Total
Lane 8	4	6	8	10	24	48	42	142
Lane 9	6	5	7	8	22	38	32	118
Lane 10	2	4	5	6	18	34	28	97
Lane 11	1	3	4	5	16	32	28	89
Lane 12	1	2	3	4	12	22	20	64
Lane 13	0	2	2	4	10	22	18	58
Lane 14	0	0	1	3	8	18	16	46
Total	14	22	30	40	110	214	184	614
Lane	Q3 2020	Q4 2020	Q1 2021	Q2 2021	Q3 2021	Q4 2021	Q1 2022	Total
Lane 8	$9,400	$14,200	$19,600	$25,800	$67,200	$144,000	$130,200	$410,400
Lane 9	$11,400	$9,800	$14,000	$16,400	$48,400	$91,200	$80,000	$271,200
Lane 10	$5,600	$11,200	$14,500	$17,400	$54,000	$108,800	$92,400	$303,900
Lane 11	$3,800	$11,400	$15,600	$19,500	$64,000	$134,400	$121,800	$370,500
Lane 12	$2,200	$4,400	$6,900	$9,200	$28,800	$55,000	$50,000	$156,500
Lane 13	$0	$5,800	$6,200	$12,800	$34,000	$79,200	$66,600	$204,600

Lane 14	$0	$0	$4,800	$14,700	$41,600	$97,200	$88,000	$246,300
Total	$32,400	$56,800	$81,600	$115,800	$338,000	$709,800	$629,000	$1,963,400
Primary Lane No.	Origin	Destination	Cascade Load Confirmations?
1	Newark, NJ	Philadelphia, PA	None
2	Newark, NJ	Baltimore, MD	None
3	Newark, NJ	Washington, DC	None
4	Philadelphia, PA	Richmond, VA	None
5	Philadelphia, PA	Norfolk, VA	None
6	Baltimore, MD	Charlotte, NC	None
7	Baltimore, MD	Atlanta, GA	None
8 (Primary)	Boston, MA	Newark, NJ	None
9 (Primary)	Boston, MA	Philadelphia, PA	None
10 (Primary)	Hartford, CT	Baltimore, MD	None
11 (Primary)	Richmond, VA	Charlotte, NC	None
12 (Primary)	Richmond, VA	Raleigh, NC	None
13 (Primary)	Norfolk, VA	Jacksonville, FL	None
14 (Primary)	Washington, DC	Atlanta, GA	None
Secondary Lane No.	Origin	Destination	Cascade Load Confirmations	Shipment Count
Lane 8	Columbus, OH	Charlotte, NC	CASCADE-000025 et seq.	142
Lane 9	Indianapolis, IN	Nashville, TN	CASCADE-000312 et seq.	118
Lane 10	Pittsburgh, PA	Raleigh, NC	CASCADE-000614 et seq.	97
Lane 11	Cleveland, OH	Atlanta, GA	CASCADE-000876 et seq.	89
Lane 12	Cincinnati, OH	Knoxville, TN	CASCADE-001132 et seq.	64
Lane 13	Louisville, KY	Greenville, SC	CASCADE-001380 et seq.	58
Lane 14	Detroit, MI	Jacksonville, FL	CASCADE-001614 et seq.	46

No.	Document ID	Date	Author / From	Recipient / To	Description
1	CASCADE-000001 to CASCADE-000024	June 12, 2020	Stonefield / Cascade	Stonefield / Cascade	Master Carrier Agreement between Stonefield Logistics Group Inc. and Cascade Freight Systems Inc.; non-exclusive carrier agreement for TL services
2	CASCADE-000025	June 22, 2020	Stonefield	Cascade	First load confirmation — Lane 8 (Columbus, OH to Charlotte, NC); earliest shipment in production
3	CASCADE-002114	February 28, 2022	Stonefield	Cascade	Final load confirmation in production — Lane 10 (Pittsburgh, PA to Raleigh, NC); last shipment prior to TSA termination
4	CASCADE-002690 to CASCADE-002724	Various (Aug. 2020 – Jan. 2022)	Stonefield / Cascade	Stonefield / Cascade	Eight rate confirmation sheets reflecting per-mile rates for Secondary Lanes; market-competitive spot and short-term contract rates
5	CASCADE-002781	October 18, 2021	David Marchetti (Stonefield)	Cascade Dispatch	Email noting VTS tender rejection on Columbus-Charlotte lane (Lane 8); redirecting load to Cascade
6	CASCADE-002803	November 8, 2021	Lisa Fontaine (Stonefield)	Cascade Account Mgmt.	Email referencing VTS's inability to provide equipment on Cleveland-Atlanta lane (Lane 11); third VTS failure that month
7	CASCADE-002847	December 3, 2021	David Marchetti (Stonefield)	Cascade Account Mgmt.	Email requesting coverage on Indianapolis-Nashville lane (Lane 9) following VTS tender rejection
8	CASCADE-002891	January 19, 2022	Lisa Fontaine (Stonefield)	Cascade Account Mgmt.	Email confirming tender redirect from VTS to Cascade on Detroit-Jacksonville lane (Lane 14); VTS failed to confirm within 24-hour window

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT THIS MEMORANDUM IS PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK PRODUCT DOCTRINE. IT IS INTENDED SOLELY FOR USE BY ATTORNEYS AND PERSONNEL OF CALDERWOOD & HARKNESS LLP IN CONNECTION WITH THE REPRESENTATION OF STONEFIELD LOGISTICS GROUP INC. DO NOT COPY OR DISTRIBUTE WITHOUT PRIOR AUTHORIZATION.
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166
INTERNAL MEMORANDUM
August 1, 2023
TO: Patrick Gallagher, Lead Associate, Litigation (General)
FROM: Simone Laroche, Associate, Litigation (General)
RE: Analysis of Documents Produced by Cascade Freight Systems Inc. in Response to Defendant's Subpoena Duces Tecum
MATTER: Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
MATTER NO.: 1012-00005
CLIENT: Stonefield Logistics Group Inc.
I. PURPOSE AND SUMMARY
The purpose of this memorandum is to analyze the documents produced by Cascade Freight Systems Inc. ("Cascade"), an Ohio corporation with its principal place of business at 4700 Lakehurst Court, Columbus, Ohio 43016, in response to the third-party subpoena duces tecum served by Calderwood & Harkness LLP on behalf of Stonefield Logistics Group Inc. ("Stonefield" or "SLG") on June 28, 2023. Cascade's production was received by this firm on or about July 21, 2023, and the undersigned has completed a comprehensive review and analysis of the entire production, the results of which are set forth below.
The subpoena sought documents relating to contracts and communications between Cascade and Stonefield for freight Lanes 8 through 14 as designated under the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) between Stonefield (in its capacity as "Shipper-Broker") and Vantor Transport Services LLC ("VTS") (in its capacity as "Carrier-Provider"). As discussed further herein, the TSA and its schedules are central to the claims and defenses at issue in this litigation.
Summary Conclusion. The Cascade production confirms, through objective third-party evidence, that Stonefield's use of Cascade as a carrier was limited exclusively to Lanes 8 through 14, all of which are classified as "Secondary Lanes" under Schedule C, Section 2(b) of the TSA. These Secondary Lanes are expressly outside the scope of the exclusivity restrictions that apply only to the fourteen designated "Primary Lanes" enumerated in Schedule C, Section 2(a). None of the 614 load confirmations produced by Cascade involves any Primary Lane origin-destination pair. This evidence directly and powerfully supports Stonefield's defense that it did not violate any exclusivity provision of the TSA, thereby rebutting Count III of Vantor Holdings Corp.'s ("Vantor") Amended Complaint (filed December 2, 2022, ECF No. 34).
Additionally, the email communications produced by Cascade corroborate Stonefield's stated rationale for engaging alternative carriers: namely, that VTS was declining tenders and failing to provide adequate capacity on Secondary Lanes during the period of Q3 2021 through March 2022, leaving Stonefield with no practical alternative but to seek carrier services from Cascade and others to fulfill its freight obligations.
This memorandum should be read in conjunction with the companion memorandum analyzing the subpoena response of Briarwood Trucking Co. ("Briarwood"), which is expected to be completed by August 3, 2023, as well as the earlier Schedule C Exclusivity Analysis memorandum dated September 30, 2022, prepared by the undersigned, which mapped the relevant carrier usage to Lanes 8 through 14 and provided an initial assessment of the TSA's lane classification framework. Together, these analyses form a comprehensive evidentiary foundation for the exclusivity defense in anticipation of the summary judgment briefing currently contemplated for the fall of 2023.
II. BACKGROUND
A. The TSA Exclusivity Framework
The Transportation Services Agreement was executed on March 15, 2019, by and between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. The TSA was drafted by Ashford Meridian LLP, then outside counsel to Stonefield, and establishes a comprehensive framework governing the provision of truckload freight transportation services by VTS on behalf of Stonefield across a defined network of shipping lanes. The TSA has a five-year term commencing April 1, 2019 and running through March 31, 2024, subject to earlier termination in accordance with the provisions of Article XII.
Central to the present dispute is Schedule C to the TSA, which defines two distinct categories of freight lanes and imposes correspondingly different obligations on the parties with respect to each category.
Primary Lanes. Schedule C, Section 2(a) designates fourteen specific origin-destination pairs as "Primary Lanes." These Primary Lanes are concentrated in the Northeast, Mid-Atlantic, and Southeast freight corridors and represent the lanes on which VTS committed to provide dedicated equipment and service capacity. Under the exclusivity obligation set forth in Section 2(a), Stonefield was required to tender all freight originating on Primary Lanes exclusively to VTS, subject to certain defined exceptions. Those exceptions include, inter alia: (i) VTS tender rejection (i.e., VTS declining to accept a tendered load); (ii) force majeure events as defined in Article XIV of the TSA; and (iii) capacity shortfalls not cured by VTS within forty-eight (48) hours of written notice from Stonefield. The exclusivity obligation is a bilateral commitment — in exchange for Stonefield's agreement to tender exclusively on Primary Lanes, VTS committed to maintaining certain equipment levels and meeting specified service level objectives ("SLOs") on those lanes.
Secondary Lanes. Schedule C, Section 2(b) addresses "Secondary Lanes," which are defined as all freight lanes outside the fourteen designated Primary Lane origin-destination pairs. On Secondary Lanes, Stonefield retained full and unrestricted discretion to use any carrier of its choosing, including but not limited to VTS, without any exclusivity obligation whatsoever. Section 2(b) provides, in pertinent part: "With respect to any freight lane not designated as a Primary Lane in Section 2(a) above (each, a 'Secondary Lane'), Shipper-Broker shall have no obligation to tender freight exclusively to Carrier-Provider and may, in its sole discretion, engage any carrier or carriers to provide transportation services on such Secondary Lanes." This language is unambiguous and grants Stonefield complete freedom of carrier selection on all Secondary Lanes.
Lanes 8 through 14, which are the lanes at issue in this analysis, are designated as Secondary Lanes under Schedule C, Section 2(b). This classification was confirmed in the undersigned's September 30, 2022 Exclusivity Analysis memorandum, which mapped the Cascade and Briarwood Trucking Co. usage data available at that time to the Schedule C lane designations and concluded that all identifiable alternative carrier usage fell within the Secondary Lane category. The Cascade production now provides independent, third-party confirmation of that conclusion.
B. Vantor's Allegations Regarding Lane Exclusivity Violations
Vantor Holdings Corp., the parent company and sole member of VTS, filed its original Complaint in this action on October 14, 2022, and subsequently filed an Amended Complaint on December 2, 2022 (ECF No. 34). The Amended Complaint asserts five counts against Stonefield, of which Count III is directly relevant to this memorandum.
At Count III, Vantor alleges that Stonefield breached the TSA's exclusivity provisions by diverting freight to competing carriers in violation of Schedule C. Specifically, the Amended Complaint identifies two carriers by name — Cascade Freight Systems Inc. and Briarwood Trucking Co. (a Virginia corporation with offices at 1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) — and alleges that Stonefield's use of these carriers constituted a material breach of the TSA that caused economic harm to VTS and contributed to VTS's declining operational and financial performance during the period in question.
Vantor's position, as articulated through its litigation counsel, Caldwell Royce & Shapiro LLP ("CRS"), is that Stonefield's engagement of alternative carriers was not limited to Secondary Lanes but extended to Primary Lanes as well, and that even to the extent alternative carrier usage occurred on Secondary Lanes, the pattern and scale of diversion evidenced a broader scheme to undermine the VTS relationship and create a pretext for termination. CRS has further argued that Stonefield's use of Cascade and Briarwood contributed to VTS's declining performance metrics by reducing the volume of freight available to VTS, thereby impairing VTS's ability to efficiently utilize its fleet and maintain profitable operations on the Stonefield account.
Stonefield's Defense. Stonefield's defense on Count III is straightforward and grounded in the plain language of the TSA. Stonefield contends that its use of Cascade and Briarwood was limited exclusively to Secondary Lanes (Lanes 8 through 14), which are expressly non-exclusive under Schedule C, Section 2(b). Stonefield further contends that the diversion of freight to alternative carriers on these Secondary Lanes was operationally necessary because VTS was consistently rejecting tenders and failing to provide adequate capacity on those lanes. Supporting this defense, Stonefield's internal records reflect that VTS's tender acceptance rate declined precipitously during the relevant period, falling to 71.4% in Q4 2021 — well below the 90% threshold established in the Service Level Objectives set forth in Schedule D to the TSA. This deterioration in VTS's performance left Stonefield with no viable option other than to engage alternative carriers to service its Secondary Lane freight requirements.
C. The Subpoena to Cascade
To obtain independent, third-party evidence supporting Stonefield's defense on Count III, Calderwood & Harkness prepared and served a subpoena duces tecum on Cascade Freight Systems Inc. pursuant to Federal Rule of Civil Procedure 45. The subpoena was drafted by the undersigned and served on Cascade's registered agent on June 28, 2023.
The subpoena requested the following categories of documents:
(1) All contracts, rate agreements, and load confirmations between Cascade and Stonefield for any freight lanes, without limitation as to lane designation;
(2) All communications, including but not limited to email correspondence, written correspondence, and electronic messages (including text messages and instant messages), between Cascade and Stonefield personnel regarding freight transportation services; and
(3) All shipment records, invoices, and bills of lading for loads tendered by Stonefield to Cascade during the period from April 1, 2019 through March 4, 2022.
The temporal scope of the subpoena was designed to encompass the entire period from the commencement of the TSA through the date of Stonefield's termination of the TSA on March 4, 2022, thereby capturing any and all carrier engagement between Stonefield and Cascade that could potentially bear on Vantor's exclusivity allegations.
Cascade produced documents without objection approximately three weeks after service. The production was transmitted to Calderwood & Harkness via secure encrypted file transfer and was received by this firm on or about July 21, 2023. No privilege log was submitted, and Cascade did not withhold any documents on any grounds. The undersigned has reviewed the entire production in its totality, and the results of that review are set forth in the sections that follow.
III. SUMMARY OF CASCADE'S DOCUMENT PRODUCTION
A. Volume and Format
Cascade's production consists of a total of 847 documents, comprising approximately 3,200 pages of material. All documents were produced in PDF format via secure file transfer, organized by document category. The production was bates-stamped by Cascade's counsel as CASCADE-000001 through CASCADE-003200.
The documents produced fall into the following five principal categories:
(1) One (1) Master Carrier Agreement between Stonefield and Cascade, dated June 12, 2020;
(2) Six hundred fourteen (614) individual load confirmations and corresponding bills of lading;
(3) One hundred eighty-seven (187) invoices submitted by Cascade to Stonefield for freight transportation services rendered;
(4) Thirty-eight (38) email communications between Cascade and Stonefield personnel; and
(5) Eight (8) rate confirmation sheets reflecting negotiated per-mile rates for specific lanes.
Each of these categories is discussed in detail below.
B. The Master Carrier Agreement (Stonefield–Cascade)
The cornerstone document in the Cascade production is the Master Carrier Agreement between Stonefield Logistics Group Inc. and Cascade Freight Systems Inc., executed on June 12, 2020 (CASCADE-000001 through CASCADE-000024). This agreement is a standard-form freight brokerage carrier agreement of the type commonly used in the truckload transportation industry and establishes the general terms and conditions under which Cascade would provide transportation services for freight tendered by Stonefield.
Several features of this agreement are noteworthy for purposes of the present analysis:
Non-Exclusive Arrangement. The Master Carrier Agreement is expressly non-exclusive. Section 2.1 of the agreement provides that Cascade's engagement is on a non-exclusive basis and that Stonefield retains the right to engage other carriers for any freight at any time. Similarly, Cascade is not obligated to accept any particular load tender and retains discretion to accept or reject tenders based on equipment availability and operational considerations. There is no minimum volume commitment by either party.
Scope of Services. Section 3.1 authorizes Cascade to provide truckload ("TL") transportation services on lanes as specified in individual load confirmations issued by Stonefield from time to time. The agreement does not pre-designate any particular lanes or corridors; rather, the specific origin-destination pair, commodity, rate, and service requirements are set forth in each individual load confirmation, which operates as a separate contract for each shipment under the umbrella of the Master Carrier Agreement.
No Reference to the TSA or VTS Exclusivity. Critically, the Master Carrier Agreement contains no reference whatsoever to the TSA between Stonefield and VTS, no reference to the concepts of "Primary Lanes" or "Secondary Lanes," and no indication that Cascade was aware of or involved in any exclusivity arrangement between Stonefield and VTS. This absence confirms that the Cascade engagement was an arm's-length, independent carrier arrangement entirely separate from the Stonefield-VTS relationship, and that Cascade had no knowledge of or role in the VTS exclusivity framework.
Standard Terms. The remainder of the Master Carrier Agreement contains industry-standard provisions addressing insurance requirements (including cargo liability coverage of not less than $100,000 per occurrence), Federal Motor Carrier Safety Administration ("FMCSA") compliance, billing and payment terms (net 30 days from invoice date), indemnification obligations, and limitation of liability. These terms are unremarkable and consistent with a standard commercial carrier relationship.
C. Load Confirmations and Shipment Records
The production includes 614 individual load confirmations spanning the period from June 2020 through March 2022 (CASCADE-000025 through CASCADE-002114). Each load confirmation is a one- to two-page document that identifies the essential details of an individual shipment, including: origin city and state, destination city and state, commodity description, approximate weight, agreed-upon rate (typically expressed as a per-mile rate or flat rate), scheduled pickup date, and scheduled delivery date. Corresponding bills of lading are attached to or produced alongside each load confirmation.
The undersigned has conducted a comprehensive lane-by-lane analysis of all 614 load confirmations, mapping each origin-destination pair to the lane designations set forth in Schedule C to the TSA. The results of this analysis are conclusive and unambiguous.
Every single one of the 614 shipments falls within Lanes 8 through 14 as defined in Schedule C to the TSA. Specifically, the load confirmations reflect the following lane distribution:
•  Lane 8 (Columbus, OH to Charlotte, NC — Secondary Mid-Atlantic corridor): Shipments servicing this corridor, representing one of the higher-volume Secondary Lanes in the Cascade production.
•  Lane 9 (Indianapolis, IN to Nashville, TN — Secondary Midwest-Southeast corridor): Shipments covering this interior freight corridor, which was among the earliest lanes on which Cascade was engaged.
•  Lane 10 (Pittsburgh, PA to Raleigh, NC — Secondary Mid-Atlantic south corridor): Shipments on this lane reflect freight movements that VTS had historically serviced on a non-exclusive, as-available basis.
•  Lane 11 (Cleveland, OH to Atlanta, GA — Secondary Midwest-Southeast extended corridor): Shipments on this longer-haul lane, which saw increased Cascade utilization beginning in late 2021.
•  Lane 12 (Cincinnati, OH to Knoxville, TN — Secondary Ohio Valley corridor): A lower-volume lane with intermittent Cascade usage during the relevant period.
•  Lane 13 (Louisville, KY to Greenville, SC — Secondary Interior Southeast corridor): Shipments reflecting spot-market engagement on this corridor during periods of VTS tender rejection.
•  Lane 14 (Detroit, MI to Jacksonville, FL — Secondary Great Lakes to Southeast corridor): The longest-haul Secondary Lane in the Cascade production, with shipments concentrated in Q4 2021 and Q1 2022.
Zero load confirmations involve any of the fourteen designated Primary Lanes in Schedule C, Section 2(a). The undersigned has cross-referenced every origin-destination pair in the Cascade production against the complete list of Primary Lane designations and confirms that there is no overlap whatsoever. A full cross-reference table is provided in Appendix B to this memorandum.
The following table summarizes the volume breakdown by lane:
Temporal Distribution. The temporal distribution of Cascade shipments is also significant and supports Stonefield's defense narrative. While the earliest load confirmations date to June 2020 (shortly after execution of the Master Carrier Agreement), shipment volume was modest during the initial period. The substantial concentration of Cascade usage occurred during Q3 2021 through Q1 2022 (the quarter ending with Stonefield's March 4, 2022 termination of the TSA). Specifically, approximately 78% of all Cascade shipments occurred between July 2021 and March 2022. This temporal concentration corresponds precisely with the period during which VTS's tender acceptance rates and operational performance metrics declined sharply, as documented in Stonefield's internal performance tracking records and as reflected in VTS's own quarterly performance reports submitted pursuant to Section 7.2 of the TSA. A detailed quarterly breakdown is provided in Appendix A.
D. Rate Confirmation Sheets
The production includes eight (8) rate confirmation sheets (CASCADE-002690 through CASCADE-002724) reflecting negotiated per-mile rates between Stonefield and Cascade for specific Secondary Lanes. These rate confirmations cover the period from approximately August 2020 through January 2022 and reflect the rates at which Cascade agreed to provide transportation services on individual lanes or lane groupings.
The rates set forth in these confirmation sheets are market-competitive spot rates and short-term contract rates. The undersigned has compared the Cascade rates against publicly available freight market indices for the relevant time periods (including the Brightmoor Software and Penrose Services Inc. rate data) and finds that the Cascade rates are consistent with prevailing market conditions. Of particular note, the rates negotiated during Q4 2021 and Q1 2022 reflect the elevated spot market conditions that characterized the broader truckload freight market during that period, when tight capacity and strong demand drove rates to historically high levels across many corridors.
Importantly, there is no evidence in the rate confirmation sheets of preferential pricing, volume discounts, or minimum volume commitments that would suggest Stonefield was building a long-term alternative carrier relationship designed to supplant VTS. The rates are consistent with ad hoc, as-needed carrier engagement in the spot market — precisely the type of engagement one would expect from a shipper-broker that was turning to alternative carriers only when its primary carrier was unable or unwilling to fulfill tenders.
E. Email Communications
The final category of documents in the Cascade production consists of 38 email communications between Stonefield operations personnel and Cascade's account management team (CASCADE-002725 through CASCADE-003142). The undersigned has reviewed each email in its entirety and summarizes the key observations below.
Nature of Communications. The emails are overwhelmingly operational and transactional in nature. They relate to the day-to-day mechanics of freight transportation — load tenders, equipment scheduling, pickup and delivery coordination, rate negotiations for individual loads, and delivery status confirmations. There is no strategic, planning, or high-level management correspondence in the production. The Stonefield personnel reflected in the emails are primarily members of Janet Kirkwood's Carrier Relations group, including operations coordinators and logistics analysts. The Cascade personnel are account managers and dispatchers.
Absence of References to VTS, the TSA, or Primary Lanes. The undersigned has specifically searched for any reference — direct or indirect — to the VTS relationship, the TSA, the concepts of Primary Lanes or Secondary Lanes, or any strategy to divert volume away from VTS. No such references exist in any of the 38 emails. The communications treat the Stonefield-Cascade relationship as an entirely self-contained, independent carrier engagement, which is precisely what it was.
Absence of References to Rate Adjustment Mechanism. Similarly, none of the emails reference the anticipated rate adjustment under Section 5.3 of the TSA (the Rate Adjustment Mechanism) or the April 2022 rate increase that Vantor has suggested was a motivating factor in Stonefield's decision to terminate the TSA. The absence of any cost-related motive in the Cascade communications undermines Vantor's "pretextual termination" theory.
References to VTS Tender Rejections. Several of the emails from Stonefield operations personnel contain contemporaneous references to specific tenders that had been submitted to VTS and were either declined or went unfulfilled, prompting Stonefield to redirect those loads to Cascade. These emails are particularly significant because they provide real-time, contemporaneous evidence — corroborated by a third-party production — that the decision to use Cascade was reactive and operationally driven rather than strategic or pretextual. Key examples include:
•  Email dated October 18, 2021 (CASCADE-002781): An email from David Marchetti, Stonefield Operations Coordinator, to Cascade dispatch, stating: "VTS declined our tender on the Columbus-Charlotte lane again — moving this to Cascade. Need pickup by Thursday 10/21 at the latest. Can you confirm equipment availability?"
•  Email dated November 8, 2021 (CASCADE-002803): An email from Lisa Fontaine, Stonefield Logistics Analyst, to Cascade account management, referencing VTS's inability to provide equipment for a time-sensitive shipment on the Cleveland-Atlanta lane (Lane 11, a Secondary Lane), and requesting that Cascade accept the load on an expedited basis. Fontaine writes: "We've been trying to get VTS to cover this for two days but they can't source a truck. This is the third time this month."
•  Email dated December 3, 2021 (CASCADE-002847): An email from David Marchetti to Cascade account management requesting coverage on the Indianapolis-Nashville lane (Lane 9), noting: "VTS passed on this one — no surprise at this point. Standard rate applies."
•  Email dated January 19, 2022 (CASCADE-002891): An email from Lisa Fontaine confirming a tender redirect from VTS to Cascade on the Detroit-Jacksonville lane (Lane 14), noting that VTS had failed to confirm acceptance within the 24-hour window.
Consistency with Kirkwood Email and Deposition Testimony. These operational emails are consistent with the internal Stonefield communications already in the record, including Janet Kirkwood's September 22, 2021 email to Carlos Medina (Senior Vice President, Operations, Stonefield), in which Kirkwood stated that volume was being moved to Cascade and Briarwood on "Lanes 8–14." They are also consistent with Kirkwood's deposition testimony on July 14, 2023, in which she testified under oath that the diversion of freight to Cascade and Briarwood was limited to Secondary Lanes and was undertaken in direct response to VTS's tender rejections and capacity failures. The Cascade production provides independent third-party corroboration of both Kirkwood's email and her deposition testimony.
IV. ANALYSIS: IMPACT ON EXCLUSIVITY DEFENSE
A. Confirmation That Cascade Usage Was Limited to Secondary Lanes
The single most important conclusion to be drawn from the Cascade production is that it provides objective, third-party documentary evidence confirming that every single shipment Stonefield tendered to Cascade fell within Lanes 8 through 14 — all of which are designated as Secondary Lanes under Schedule C, Section 2(b) of the TSA. Out of 614 load confirmations produced, not one involves a Primary Lane origin-destination pair. This is not a close question or a matter of interpretation; the evidence is unequivocal.
This evidence is particularly valuable because it is independent of Stonefield's own records and internal testimony. While Stonefield's internal shipping records, Kirkwood's deposition testimony, and the September 30, 2022 Exclusivity Analysis memorandum all support the same conclusion, the Cascade production provides an entirely separate evidentiary source — documents generated and maintained by a third party with no interest in the outcome of this litigation — that independently confirms the factual predicate of Stonefield's exclusivity defense. In the context of a motion for summary judgment, this third-party corroboration carries significant weight and substantially reduces the likelihood that a genuine dispute of material fact could be found on the question of whether Stonefield tendered Primary Lane freight to Cascade.
The legal analysis flowing from this factual conclusion is straightforward. Schedule C, Section 2(b) expressly permits Stonefield to use any carrier on Secondary Lanes without restriction. The plain language of the provision — "Shipper-Broker shall have no obligation to tender freight exclusively to Carrier-Provider" on Secondary Lanes — leaves no room for ambiguity. Because all Cascade shipments were on Secondary Lanes, no exclusivity obligation was triggered, and no exclusivity violation occurred. This conclusion is dispositive of Count III insofar as it relates to Cascade.
This evidence directly supports the defense position articulated in the September 30, 2022 Exclusivity Analysis memorandum and is fully consistent with Kirkwood's deposition testimony of July 14, 2023.
B. Corroboration of Stonefield's Stated Rationale
Beyond confirming the lane-level facts, the Cascade production also corroborates the operational rationale that Stonefield has advanced for its use of alternative carriers. Stonefield has consistently maintained that it turned to Cascade and Briarwood not as part of a strategic effort to undermine VTS or create a pretext for termination, but because VTS's deteriorating performance left Stonefield with no practical alternative for servicing its Secondary Lane freight requirements.
The operational emails in the Cascade production — particularly the emails from David Marchetti and Lisa Fontaine referencing specific VTS tender rejections — provide contemporaneous, real-time evidence that the decision to use Cascade was reactive and necessity-driven. These emails were written in the ordinary course of business by operations-level personnel who were simply trying to get freight moved after VTS had declined or failed to cover tenders. They are not the product of strategic planning or executive decision-making; they reflect the day-to-day operational reality of a shipper-broker dealing with an unreliable carrier.
The timing of the increased Cascade usage further supports this rationale. As noted above, approximately 78% of all Cascade shipments occurred between Q3 2021 and Q1 2022. This period corresponds precisely with the documented decline in VTS's operational performance, including:
•  VTS's tender acceptance rate falling to 71.4% in Q4 2021, compared to the 90% SLO threshold established in Schedule D to the TSA;
•  VTS's equipment availability dropping to approximately 62% of the committed fleet capacity, with roughly 248 tractors available versus the 400 tractors required under the dedicated fleet provisions of the TSA; and
•  VTS's service level metrics falling below the established thresholds across all five SLO categories (tender acceptance, on-time pickup, on-time delivery, claims ratio, and equipment condition).
The causal connection between VTS's performance failures and Stonefield's use of Cascade is further illuminated by the November 12, 2021 email from Sandra Milescu (Chief Operating Officer of Vantor/VTS) to Nikolai Vantorovich (Chief Executive Officer of Vantor), which has been previously identified as a key document in this litigation. In that email, Milescu acknowledged that VTS had "pulled 85 tractors off the SLG dedicated lanes" to cover other commitments, reducing available equipment on the Stonefield account by more than 20%. This unilateral reduction in capacity by VTS necessarily forced Stonefield to seek alternative carriers for its Secondary Lane freight — precisely the pattern reflected in the Cascade production.
In sum, the Cascade production establishes not only that Stonefield's use of Cascade was contractually permissible, but also that it was operationally justified by VTS's own performance failures. This dual showing is important because it addresses both the legal defense (no exclusivity breach) and the factual narrative (no bad faith or pretext).
C. Absence of Adverse Evidence
In addition to the affirmatively favorable evidence discussed above, the Cascade production is notable for what it does not contain. The undersigned has conducted a thorough review of all 847 documents and 3,200 pages, and the production contains no documents suggesting any of the following:
(i) That Stonefield tendered any Primary Lane freight to Cascade at any time during the relevant period or otherwise;
(ii) That Cascade was engaged as part of a deliberate plan or strategy to terminate or phase out the VTS relationship;
(iii) That Stonefield offered Cascade volume commitments, preferred pricing arrangements, exclusive lane assignments, or other terms inconsistent with arm's-length spot market engagement;
(iv) That any Stonefield personnel communicated to Cascade any intention to transition freight away from VTS or to build Cascade into a replacement carrier for VTS;
(v) That any communications between Stonefield and Cascade referenced the upcoming April 2022 rate adjustment under Section 5.3 of the TSA, or any cost-related motive for using Cascade rather than VTS; or
(vi) That Cascade had any awareness of or involvement in the Stonefield-VTS contractual relationship, the TSA exclusivity framework, or the disputes that ultimately gave rise to this litigation.
The absence of such evidence is significant because it directly undermines the central pillars of Vantor's "pretextual termination" narrative. CRS has argued that Stonefield's engagement of alternative carriers was part of a calculated scheme to divert freight away from VTS, drive down VTS's performance metrics, and create a manufactured justification for terminating the TSA. If that theory were true, one would expect to find at least some evidence in the Cascade production — a discussion of volume transition, a reference to the TSA or VTS, a negotiation of terms that suggest a long-term or strategic relationship. The complete absence of any such evidence is powerful circumstantial proof that the Cascade engagement was exactly what Stonefield has always said it was: an ordinary, arm's-length carrier relationship entered into on a transactional, as-needed basis to cover Secondary Lane freight that VTS was unable or unwilling to service.
D. Relationship to the Kirkwood Email (September 22, 2021)
Vantor has placed particular emphasis on the September 22, 2021 internal email from Janet Kirkwood (Director of Carrier Relations, Stonefield) to Carlos Medina (Senior Vice President, Operations, Stonefield), in which Kirkwood wrote:
"VTS is a mess. We're already moving volume to Cascade and Briarwood on Lanes 8–14. If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract."
Vantor contends that this email is a "smoking gun" demonstrating that Stonefield had a premeditated plan to terminate the TSA and that the diversion of freight to Cascade and Briarwood was an improper component of that plan. CRS has characterized the email as evidence that the carrier diversion was strategic rather than reactive, and that Stonefield was already contemplating termination months before VTS's performance deterioration could have justified it.
The Cascade production substantially undermines Vantor's interpretation of this email and reinforces Stonefield's reading.
First, and most fundamentally, the Kirkwood email itself identifies the lanes to which freight was being diverted as "Lanes 8–14." The Cascade production independently confirms that this is precisely what happened — all 614 Cascade shipments are on Lanes 8 through 14, all of which are Secondary Lanes. The Cascade production therefore corroborates Kirkwood's contemporaneous description of the diversion and refutes any inference that freight was being diverted from Primary Lanes.
Second, the language of the Kirkwood email, read in context and in light of the Cascade production, reflects a factual assessment of VTS's deteriorating performance rather than a scheme to breach the exclusivity provisions. Kirkwood's statement that "VTS is a mess" is entirely consistent with the performance data showing VTS's tender acceptance rate at 71.4% and its equipment availability at 62% of committed levels. Her reference to moving volume to Cascade and Briarwood on Lanes 8–14 is consistent with — and now independently confirmed by — the Cascade production showing reactive, operational use of alternative carriers on Secondary Lanes. And her statement about "pull[ing] the plug" on the TSA reflects a legitimate business assessment that the relationship with VTS was becoming untenable, not a premeditated plan to manufacture a breach.
Third, Kirkwood's deposition testimony of July 14, 2023 is fully consistent with both the email and the Cascade production. At her deposition, Kirkwood testified that the diversion of volume to Cascade and Briarwood was limited to Secondary Lanes, was undertaken in response to VTS's tender rejections and capacity failures, and was not part of any plan to breach the exclusivity provisions or manufacture a pretext for termination. The Cascade production provides independent third-party corroboration of every material aspect of that testimony.
This memorandum and the underlying Cascade documents should be referenced in any future summary judgment briefing addressing the Kirkwood email and the exclusivity defense. The Cascade production transforms the analysis of the Kirkwood email from a swearing contest between the parties into a factual question that can be resolved on the documentary record — a record that conclusively establishes that the carrier diversion was limited to non-exclusive Secondary Lanes.
V. IMPLICATIONS FOR SUMMARY JUDGMENT
The Cascade production, standing alone, provides a strong evidentiary basis for seeking partial summary judgment on Vantor's exclusivity violation claim (Count III of the Amended Complaint) as it relates to the use of Cascade. When combined with the anticipated Briarwood Trucking Co. subpoena response analysis — which is expected to confirm that Briarwood was likewise used exclusively on Secondary Lanes — the case for partial summary judgment on the entirety of Count III becomes compelling.
The undisputed evidence, viewed in the light most favorable to Vantor, establishes the following:
(1) All shipments tendered by Stonefield to Cascade fell within Lanes 8 through 14, as confirmed by 614 individual load confirmations produced by Cascade from its own business records;
(2) Lanes 8 through 14 are designated as Secondary Lanes under Schedule C, Section 2(b) of the TSA;
(3) Schedule C, Section 2(b) expressly provides that Stonefield has no obligation to tender freight exclusively to VTS on Secondary Lanes and may use any carrier in its sole discretion; and
(4) Therefore, Stonefield's use of Cascade on Lanes 8 through 14 did not and could not constitute a violation of any exclusivity provision of the TSA.
This syllogism is grounded entirely in the documentary record and the plain language of the contract. There is no genuine dispute of material fact as to the lane classification of the Cascade shipments, and the legal conclusion follows inexorably from the undisputed facts.
This analysis supports the Summary Judgment Roadmap Memorandum currently in preparation (anticipated for completion in September 2023), which organizes Stonefield's summary judgment arguments into four principal pillars. The exclusivity defense constitutes one of those four pillars, and the Cascade production provides the critical evidentiary foundation for that argument.
Recommendation. I recommend that the Cascade production documents be incorporated into the summary judgment exhibit list at the earliest practicable date and that they be cited prominently in the statement of undisputed material facts and supporting brief in connection with the argument that Stonefield's carrier diversification was contractually permitted under the TSA. Specifically, representative load confirmations for each of Lanes 8 through 14 should be included as exhibits, together with the Master Carrier Agreement and key operational emails demonstrating VTS tender rejections. The goal should be to present the Court with a concise but comprehensive factual record that resolves the exclusivity question as a matter of law.
VI. RECOMMENDATIONS
Based on the foregoing analysis, the undersigned recommends the following action items:
1. Cross-Reference with Briarwood Analysis. Upon completion of the Briarwood Trucking Co. subpoena response analysis (expected August 3, 2023), the undersigned will prepare a combined memorandum confirming that both alternative carriers — Cascade and Briarwood — were used exclusively on Secondary Lanes (Lanes 8 through 14) and that no Primary Lane freight was diverted to either carrier. This combined analysis will serve as the definitive factual foundation for the exclusivity defense and should be distributed to the full trial team upon completion.
2. Exhibit Preparation. The following categories of Cascade production documents should be flagged for inclusion in dispositive motion exhibits:
(a) The Master Carrier Agreement dated June 12, 2020 (CASCADE-000001 through CASCADE-000024), demonstrating the non-exclusive, arm's-length nature of the Stonefield-Cascade relationship;
(b) Representative load confirmations covering each of Lanes 8 through 14, selected to demonstrate the complete absence of Primary Lane shipments and the geographic scope of Cascade's engagement (representative documents from each lane to be selected in coordination with the trial team);
(c) Key operational emails showing VTS tender rejections prompting Cascade usage, including the October 18, 2021 email from David Marchetti (CASCADE-002781), the November 8, 2021 email from Lisa Fontaine (CASCADE-002803), the December 3, 2021 email from David Marchetti (CASCADE-002847), and the January 19, 2022 email from Lisa Fontaine (CASCADE-002891).
3. Deposition Testimony Alignment. The Cascade operational emails should be cross-referenced with the deposition testimony of Janet Kirkwood (taken July 14, 2023) and the anticipated deposition testimony of Sandra Milescu (scheduled for August 4, 2023) regarding VTS fleet redeployment and tender rejections. The objective is to create a unified factual narrative supported by multiple independent evidentiary sources — Stonefield's internal records, Kirkwood's testimony, the Milescu deposition, and the third-party Cascade production — that demonstrates the operational necessity of Stonefield's use of alternative carriers on Secondary Lanes. This cross-reference work should be completed following the Milescu deposition.
4. Preserve for Expert Use. Relevant Cascade shipment data, including load confirmation details, rates, and temporal distribution data, should be provided to Dr. Evelyn Rosser at Kensington Analytics Group LLC, 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, for potential use in the rebuttal expert report (due to be served on August 25, 2023) or for supplemental analysis if needed. Dr. Rosser may use the Cascade data to demonstrate that Stonefield's use of alternative carriers on Secondary Lanes was consistent with market-standard shipper-broker practices and was not indicative of bad faith, strategic diversion, or an intent to undermine VTS. The shipment volume and rate data from the Cascade production can be compared against industry benchmarks and freight market indices to support this conclusion.
5. Update Key Document Index. All relevant Cascade production documents identified in this memorandum and in the Appendix hereto should be added to the Key Document Index maintained by Kara Nystrom and Helen Tsao. Each document should be indexed with its bates number, date, author(s), recipient(s), document type, and a brief description of its relevance to the case. The undersigned will coordinate with Nystrom and Tsao to ensure that the index is updated promptly.
VII. APPENDICES
Appendix A: Cascade Load Confirmations by Lane and Quarter
The following table summarizes the number of shipments and aggregate dollar value for each lane (Lanes 8 through 14) broken out by quarter from Q3 2020 (the first full quarter of Cascade engagement) through Q1 2022 (ending with Stonefield's March 4, 2022 termination of the TSA).
As the data above demonstrate, Cascade usage was modest during the initial period of engagement (Q3 2020 through Q2 2021), averaging approximately 27 shipments per quarter. Beginning in Q3 2021, shipment volume increased dramatically, with 110 shipments in Q3 2021 and 214 shipments in Q4 2021 — an approximately eight-fold increase from the prior quarterly average. This concentration of Cascade usage in Q3 2021 through Q1 2022 correlates directly with the documented decline in VTS's tender acceptance rates and fleet availability during the same period.
Appendix B: Cross-Reference — TSA Schedule C Lane Designations
B-1: Primary Lanes (Schedule C, Section 2(a))
The following table lists all fourteen designated Primary Lanes under Schedule C, Section 2(a), and confirms that none corresponds to any origin-destination pair reflected in any Cascade load confirmation.
Note: The Primary Lane numbering (1 through 14) in Schedule C, Section 2(a) is a separate numbering system from the Secondary Lane numbering (Lanes 8 through 14) in Schedule C, Section 2(b). The "Lane 8" referenced in connection with Cascade shipments (Columbus, OH to Charlotte, NC) is Secondary Lane 8 under Section 2(b) and is entirely distinct from Primary Lane 8 (Boston, MA to Newark, NJ) under Section 2(a). This distinction has been noted in prior memoranda and should be clearly articulated in any summary judgment briefing to avoid confusion.
B-2: Secondary Lanes (Schedule C, Section 2(b)) — Cascade Mapping
All 614 load confirmations in the Cascade production map to one of the seven Secondary Lanes listed above. No load confirmation involves any Primary Lane origin-destination pair.
Appendix C: Index of Key Cascade Production Documents Referenced
The following is an index of the specific documents from the Cascade production that are cited in or are particularly relevant to this memorandum:
This memorandum is intended solely for use in connection with the legal representation of Stonefield Logistics Group Inc. and is protected by the attorney-client privilege and the work product doctrine. This memorandum reflects the analysis and conclusions of the author as of the date hereof and is subject to revision as additional evidence becomes available, including but not limited to the Briarwood Trucking Co. subpoena response and the Milescu deposition.
Prepared by:
________________________________________
Simone Laroche Associate, Litigation (General) Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, NY 10166 slaroche@calderwoodharkness.com (212) 555-4837
Date: August 1, 2023
cc: Case File (Matter No. 1012-00005)
Lane | Corridor | Total Shipments | Percentage of Total
Lane 8 | Columbus, OH – Charlotte, NC | 142 | 23.1%
Lane 9 | Indianapolis, IN – Nashville, TN | 118 | 19.2%
Lane 10 | Pittsburgh, PA – Raleigh, NC | 97 | 15.8%
Lane 11 | Cleveland, OH – Atlanta, GA | 89 | 14.5%
Lane 12 | Cincinnati, OH – Knoxville, TN | 64 | 10.4%
Lane 13 | Louisville, KY – Greenville, SC | 58 | 9.4%
Lane 14 | Detroit, MI – Jacksonville, FL | 46 | 7.5%
Total | 614 | 100.0%
Lane | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Total
Lane 8 | 4 | 6 | 8 | 10 | 24 | 48 | 42 | 142
Lane 9 | 6 | 5 | 7 | 8 | 22 | 38 | 32 | 118
Lane 10 | 2 | 4 | 5 | 6 | 18 | 34 | 28 | 97
Lane 11 | 1 | 3 | 4 | 5 | 16 | 32 | 28 | 89
Lane 12 | 1 | 2 | 3 | 4 | 12 | 22 | 20 | 64
Lane 13 | 0 | 2 | 2 | 4 | 10 | 22 | 18 | 58
Lane 14 | 0 | 0 | 1 | 3 | 8 | 18 | 16 | 46
Total | 14 | 22 | 30 | 40 | 110 | 214 | 184 | 614
Lane | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Total
Lane 8 | $9,400 | $14,200 | $19,600 | $25,800 | $67,200 | $144,000 | $130,200 | $410,400
Lane 9 | $11,400 | $9,800 | $14,000 | $16,400 | $48,400 | $91,200 | $80,000 | $271,200
Lane 10 | $5,600 | $11,200 | $14,500 | $17,400 | $54,000 | $108,800 | $92,400 | $303,900
Lane 11 | $3,800 | $11,400 | $15,600 | $19,500 | $64,000 | $134,400 | $121,800 | $370,500
Lane 12 | $2,200 | $4,400 | $6,900 | $9,200 | $28,800 | $55,000 | $50,000 | $156,500
Lane 13 | $0 | $5,800 | $6,200 | $12,800 | $34,000 | $79,200 | $66,600 | $204,600
Lane 14 | $0 | $0 | $4,800 | $14,700 | $41,600 | $97,200 | $88,000 | $246,300
Total | $32,400 | $56,800 | $81,600 | $115,800 | $338,000 | $709,800 | $629,000 | $1,963,400
Primary Lane No. | Origin | Destination | Cascade Load Confirmations?
1 | Newark, NJ | Philadelphia, PA | None
2 | Newark, NJ | Baltimore, MD | None
3 | Newark, NJ | Washington, DC | None
4 | Philadelphia, PA | Richmond, VA | None
5 | Philadelphia, PA | Norfolk, VA | None
6 | Baltimore, MD | Charlotte, NC | None
7 | Baltimore, MD | Atlanta, GA | None
8 (Primary) | Boston, MA | Newark, NJ | None
9 (Primary) | Boston, MA | Philadelphia, PA | None
10 (Primary) | Hartford, CT | Baltimore, MD | None
11 (Primary) | Richmond, VA | Charlotte, NC | None
12 (Primary) | Richmond, VA | Raleigh, NC | None
13 (Primary) | Norfolk, VA | Jacksonville, FL | None
14 (Primary) | Washington, DC | Atlanta, GA | None
Secondary Lane No. | Origin | Destination | Cascade Load Confirmations | Shipment Count
Lane 8 | Columbus, OH | Charlotte, NC | CASCADE-000025 et seq. | 142
Lane 9 | Indianapolis, IN | Nashville, TN | CASCADE-000312 et seq. | 118
Lane 10 | Pittsburgh, PA | Raleigh, NC | CASCADE-000614 et seq. | 97
Lane 11 | Cleveland, OH | Atlanta, GA | CASCADE-000876 et seq. | 89
Lane 12 | Cincinnati, OH | Knoxville, TN | CASCADE-001132 et seq. | 64
Lane 13 | Louisville, KY | Greenville, SC | CASCADE-001380 et seq. | 58
Lane 14 | Detroit, MI | Jacksonville, FL | CASCADE-001614 et seq. | 46
No. | Document ID | Date | Author / From | Recipient / To | Description
1 | CASCADE-000001 to CASCADE-000024 | June 12, 2020 | Stonefield / Cascade | Stonefield / Cascade | Master Carrier Agreement between Stonefield Logistics Group Inc. and Cascade Freight Systems Inc.; non-exclusive carrier agreement for TL services
2 | CASCADE-000025 | June 22, 2020 | Stonefield | Cascade | First load confirmation — Lane 8 (Columbus, OH to Charlotte, NC); earliest shipment in production
3 | CASCADE-002114 | February 28, 2022 | Stonefield | Cascade | Final load confirmation in production — Lane 10 (Pittsburgh, PA to Raleigh, NC); last shipment prior to TSA termination
4 | CASCADE-002690 to CASCADE-002724 | Various (Aug. 2020 – Jan. 2022) | Stonefield / Cascade | Stonefield / Cascade | Eight rate confirmation sheets reflecting per-mile rates for Secondary Lanes; market-competitive spot and short-term contract rates
5 | CASCADE-002781 | October 18, 2021 | David Marchetti (Stonefield) | Cascade Dispatch | Email noting VTS tender rejection on Columbus-Charlotte lane (Lane 8); redirecting load to Cascade
6 | CASCADE-002803 | November 8, 2021 | Lisa Fontaine (Stonefield) | Cascade Account Mgmt. | Email referencing VTS's inability to provide equipment on Cleveland-Atlanta lane (Lane 11); third VTS failure that month
7 | CASCADE-002847 | December 3, 2021 | David Marchetti (Stonefield) | Cascade Account Mgmt. | Email requesting coverage on Indianapolis-Nashville lane (Lane 9) following VTS tender rejection
8 | CASCADE-002891 | January 19, 2022 | Lisa Fontaine (Stonefield) | Cascade Account Mgmt. | Email confirming tender redirect from VTS to Cascade on Detroit-Jacksonville lane (Lane 14); VTS failed to confirm within 24-hour window

INTERNAL MEMORANDUM

MATTER NO.: 1012-00005

I. PURPOSE AND SUMMARY

II. BACKGROUND

III. SUMMARY OF CASCADE'S DOCUMENT PRODUCTION

IV. ANALYSIS: IMPACT ON EXCLUSIVITY DEFENSE

V. IMPLICATIONS FOR SUMMARY JUDGMENT

VI. RECOMMENDATIONS

VII. APPENDICES

Record

Parties

Dates

Amounts