Knight Capital Partners Corp. v. Henkel AG & Co.

290 F. Supp. 3d 681
CourtDistrict Court, E.D. Michigan
DecidedNovember 30, 2017
DocketCase Number 16–12022
StatusPublished
Cited by8 cases

This text of 290 F. Supp. 3d 681 (Knight Capital Partners Corp. v. Henkel AG & Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knight Capital Partners Corp. v. Henkel AG & Co., 290 F. Supp. 3d 681 (E.D. Mich. 2017).

Opinion

DAVID M. LAWSON, United States District Judge

Discovery disputes bring this case back before the Court. Plaintiff Knight Capital Partners sued defendant Henkel KGaA ("Henkel Global") for tortious interference with a business expectancy and breach of a non-disclosure agreement after Henkel Global allegedly scuttled a three-way deal KCP was brokering among itself, Henkel Corporation (the defendant's American subsidiary), and AI Sealing, LLC (AIS), a technology company that held patents on products useful in the oil production business. KCP served interrogatories and document requests on the defendant and subpoenaed documents from its American Subsidiary (Henkel US). The defendant and Henkel US refused to respond to the requests unless KCP agreed to a protective order that contained terms KCP deemed onerous and unjustified. KCP has moved to compel production. Henkel US moved to quash the subpoena, and both Henkel companies seek a protective order. Central to their arguments is the German Federal Data Protection Act, a foreign discovery blocking statute, which the defendant and Henkel US insist prevents them from turning over much of the information the plaintiff seeks.

*684After reviewing the materials submitted-including the affidavit from Joachim Bornkamm, a former German jurist and the defendant's foreign law expert-the Court is not convinced that the reach of the German Federal Data Protection Act is as vast as the defendant and Henkel US claim, or that it prohibits the discovery the plaintiff seeks. With one exception, the terms of the protective order sought by the defendant and Henkel US are overly restrictive and the Court will not impose them. The plaintiff's motions to compel responses to first written discovery requests to defendant and to compel compliance with subpoena to Henkel US will be granted. The defendant's amended motion for entry of protective order and non-party Henkel US's motion to quash the subpoena or for protective order will be granted in part and denied in part. The Court will adjust the case management deadlines to allow for the discovery.

I.

The facts of the case are discussed at length in the Court's opinion and order denying the defendant's motion to dismiss. See dkt. # 40 at 2-8. The basic facts alleged are that KCP became aware of technology patented by AIS in Texas that could be used to clean dirty equipment at refineries and oil rigs. AIS granted KCP a license for a limited period to develop and sell that technology. KCP approached AIS to broker a partnership that would include Henkel US, which would have marketed the patented products under the Henkel brand. As part of the negotiations, Henkel US executed a nondisclosure agreement that governed the way the parties would handle confidential information. KCP alleges that defendant Henkel Global induced Henklel US to subvert the negotiations so that KCP's license from AIS would expire, and the defendant could come to terms directly with AIS and cut KCP out of the venture. KCP also alleges that the nondisclosure agreement was violated along the way.

As part of its formal discovery, KCP served written requests on Henkel Global and served a subpoena on Henkel US for a variety of documents and internal communications focusing on the scuttled negotiations and contemporaneous and later communications between those entities and AIS. Those requests included (1) Henkel internal communications discussing the three-way technology licensing deal that KCP sought to enter into with Henkel and AIS; (2) communications between Henkel Global and representatives of AIS; (3) contracts executed between Henkel US or Henkel Global and AIS; (4) presentations to executives of Henkel Global about the KCP / AIS deal and any ensuing arrangement between Henkel and AIS; (5) meeting minutes concerning the KCP / AIS deal and Henkel's plans to enter relevant markets addressed by the AIS product; (6) business plans and project documents relating to the KCP deal and any separate deal with AIS; (7) communications between Henkel and Magnablend (a contemplated provider of product blending services under the three-way deal); and (8) meeting agendas, notes, and call logs evidencing any communications between Henkel and AIS.

According to the plaintiff, Henkel responded with objections to the discovery requests, in which it (1) claimed in response to almost all of the requests that disclosure of the materials was restricted under European Union data privacy laws; (2) insisted that KCP execute a protective order containing certain "standard contractual clauses" that KCP viewed as overly restrictive; and (3) purported to reserve to Henkel Global the unilateral right to redact any information that it deemed appropriate from the documents before production.

*685KCP objects to these demands. Another feature of Kenkel's proposed protective order to which KCP objects is a two-tiered "attorney eyes only" and "confidential" designation scheme. KCP contends that Henkel has not pointed to any information so extremely sensitive that it cannot be disclosed to the principal representatives of the parties to this lawsuit. Finally, Henkel has insisted on a provision requiring automatic filing of all "confidential" information under seal; KCP argues that the requirement is not warranted because Henkel has not advanced any basis in law or fact to justify a broad preemptive closure of the parties' filings.

II.

" 'The scope of discovery under the Federal Rules of Civil Procedure is traditionally quite broad.' " Loyd v. Saint Joseph Mercy Oakland , 766 F.3d 580, 593 (6th Cir. 2014) (quoting Lewis v. ACB Bus. Servs., Inc. , 135 F.3d 389, 402 (6th Cir. 1998) ). Under Rule 26, parties may obtain "discovery of any relevant, non-privileged information," In re Ohio Execution Protocol Litigation , 845 F.3d 231, 236 (6th Cir. 2016) (citing Fed. R. Civ. P. 26(b)(1) ), that is "proportional to the needs of the case." Fed. R. Civ. P. 26(b)(1). Courts may limit discovery requests for information that is outside the scope allowed by Rule 26, or is cumulative or easily obtained elsewhere. Fed. R. Civ. P. 26(b)(2)(C). In addition, "a district court may grant a protective order preventing the production of discovery to protect a party or entity from 'annoyance, embarrassment, oppression, or undue burden or expense.' " In re Ohio Execution Protocol Litigation , 845 F.3d at 236 (quoting Fed. R. Civ. P.

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Bluebook (online)
290 F. Supp. 3d 681, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knight-capital-partners-corp-v-henkel-ag-co-mied-2017.