CM Systems, LLC v. TransAct Technologies, Inc.

District Court, D. Connecticut·Decided August 30, 2023·No. 3:22-cv-00624·Unknown

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

CM SYSTEMS, LLC, : : plaintiff, : : v. : CASE NO. 3:22cv624(JCH) : TRANSACT TECHNOLOGIES INC., : : defendant. :

RULING ON PLAINTIFF’S MOTIONS TO COMPEL Pending before the Court are multiple motions by the plaintiff to compel certain depositions. First, plaintiff seeks, once again, to depose the relatively new CEO of TransAct John Dillon. (Dkt. #181.) Second, plaintiff seeks another deposition of defendant’s Chief Technology Officer Brent Richtsmeier. (Dkt. #183). Finally, plaintiff seeks another Rule 30(b)(6) deposition regarding defendant’s marketing efforts related to the products that are at issue in this case. (Dkt. #185.) The Court held oral argument on July 17, 2023. Upon consideration of the briefs and the arguments made during the oral argument, plaintiff’s motion to depose John Dillon (dkt. #181) is DENIED. Plaintiff’s motion to re-depose CTO Brent Richtsmeier (dkt. #183) is GRANTED in part and DENIED in part. Plaintiff’s final motion, seeking to depose another Rule 30(b)(6) witness regarding defendant’s marketing materials (dkt. #185), is DENIED. A. Motion to depose CEO John Dillon (Dkt. #181) As noted in connection with a motion that was resolved earlier in this case, a court applying Rule 26(c), “may prohibit a party from deposing senior corporate executives where ‘the

party has not established that the executive has some unique knowledge pertinent to the issues in the case’ or where the party can obtain the desired information through less intrusive means.” Weber v. FujiFilm Med. Sys. U.S.A., Inc., No. 3:10-CV- 401-JBA, 2011 WL 677278, at *2 (D. Conn. Jan. 24, 2011)(quoting Rodriguez v. SLM Corp., No. CIV3:07CV1866WWE, 2010 WL 1286989, at *2 (D. Conn. March 26, 2010)). Likelihood of harassment and business disruption are factors to be considered in deciding whether to allow discovery of corporate executives. Unless it can be demonstrated that a corporate official has some unique knowledge of the issues in the case, it may be appropriate to preclude a[ ] deposition of a highly- placed executive while allowing other witnesses with the same knowledge to be questioned.

Burns v. Bank of Am., No. 03 CIV.1685 RMB JCF, 2007 WL 1589437, at *3 (S.D.N.Y. June 4, 2007)(internal quotation and citation omitted). In this case the plaintiff has made multiple attempts to depose Mr. Dillon, who became the CEO of TransAct in April of 2023. When plaintiff first tried to depose Mr. Dillon, defendant filed a motion for a protective order. Plaintiff objected and argued that it was necessary to depose Mr. Dillon because Mr. Dillon allegedly had unique knowledge of the organization and management of defendant, TransAct Technologies, Inc. (Dkt. #147 at 3.) Specifically, plaintiff believed that a public comment Mr. Dillon made concerning a future product

launch coupled with Mr. Dillon’s long tenure on the Board of Directors of TransAct supported the contention that Mr. Dillon had unique knowledge. However, this Court held that plaintiff had failed to demonstrate that Mr. Dillon possessed any such unique knowledge that could not be readily obtained by deposing other lower-level executives and employees. The Court granted TransAct’s motion for a protective order and noted that plaintiff could seek to depose Mr. Dillon later. (Dkt. #153.) In so ruling, the Court noted that Mr. Dillon was named CEO of TransAct recently, in April of 2023, and that plaintiff had not identified with

specificity any information or knowledge that Mr. Dillon had gleaned in his short tenure as CEO that would provide Mr. Dillon with some unique knowledge of the current litigation or the organization and structure of defendant. Indeed, during the oral argument, TransAct’s counsel specifically represented that multiple executives who were about to be deposed by plaintiff could testify about the very same subjects that plaintiff claimed were uniquely known by Mr. Dillon. Immediately following the ruling, plaintiff filed an objection with the Honorable Janet C. Hall. (Dkt. #178.) Plaintiff argued that the undersigned’s ruling was erroneous because of the clear evidence of CEO Dillon’s unique knowledge.

At least in part the objection was based on a May 2, 2023 press release in which Mr. Dillon discussed the “next-generation BOHA! Terminal.” (Dkt. 178 at 4.) In the objection to Judge Hall, plaintiff added a new topic that allegedly fell within the scope of Mr. Dillon’s unique knowledge. Plaintiff argued that Mr. Dillon has unique knowledge of his “personal outlook of the current state of Trans[A]ct and his vision and philosophy for increasing the BOHA! systems’ market presence.” (Id.) In denying plaintiff’s objection, Judge Hall noted that the undersigned’s discovery ruling had given plaintiff an opportunity to renew its attempt

to depose Mr. Dillon at a later time if the other executives could not provide testimony on the relevant topics. (Dkt. #191.) Plaintiff had not yet attempted to do so. Plaintiff is now attempting, once again, to justify a deposition of Mr. Dillon. (Dkt. #181.) This time, consistent with the argument that plaintiff raised for the first time in the objection to Judge Hall, plaintiff contends that Mr. Dillon has unique knowledge of his vision and strategy for TransAct and, therefore a deposition is justified. To that end, during depositions, plaintiff asked each lower-level deponent what they knew of Mr. Dillon’s vision and strategy for TransAct. Notably, plaintiff did not ask what TransAct’s current vision is or if TransAct has adopted a vision, instead, the questions focused on

CEO Dillon’s vision, which has apparently not been shared with the rest of the company yet.1 Plaintiff notes that “not a single of these designated witnesses could speak to Mr. Dillon’s vision and strategy for Transact.” (Dkt. 181 at 7.) Plaintiff notes that the deponents either had to speculate, state that they did not know, or refer the questions to Mr. Dillon. In further support of its motion, plaintiff again mentions the topics of TransAct’s organization and management, and then states that TransAct’s strategy going forward as it relates to the allegedly infringing product is relevant to willfulness, enhanced damages, and potentially a permanent injunction. (Dkt. #181-1 at 9.)

Defendant responds by arguing that the vision and strategy for future sales is not relevant to the underlying claims which relate to whether the defendant infringed the patents-in-suit

1 One of the witnesses testified that he thinks Mr. Dillon is still formulating a plan and has not determined the “go forward strategy” yet. (Dk. #193 at 3.) and whether the plaintiff is entitled to damages.2 (Dkt. # 193 at 4.) Based on the parties’ briefs and the oral argument, the undersigned has determined that the plaintiff has failed to meet its burden of establishing that the information sought is relevant or that Mr. Dillon has unique knowledge such that a

deposition would be appropriate. As referenced, plaintiff has shifted its description of Mr. Dillon’s “unique knowledge” from organization and management to vision and strategy. The Court notes that in making this shift, plaintiff elicited information from deponents that the deponents were unlikely to know, and it appears that plaintiff is attempting to use that lack of knowledge to justify the need for Mr. Dillon’s deposition. Changing the description to a broader and vaguer subject like Mr. Dillon’s “vision and strategy” is not a sufficient reason to take his deposition and it is not lost on the undersigned that the plaintiff failed to mention the newest description of Mr.

Dillon’s so-called unique knowledge in its original brief or

2 The Court notes that defendant also asserts that no meet and confer was held.

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