Navigant Consulting, Inc. v. Wilkinson

220 F.R.D. 467, 2004 U.S. Dist. LEXIS 5439, 2004 WL 690881
CourtDistrict Court, N.D. Texas
DecidedMarch 29, 2004
DocketNo. 3-02-CV-2186-D
StatusPublished
Cited by46 cases

This text of 220 F.R.D. 467 (Navigant Consulting, Inc. v. Wilkinson) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 2004 U.S. Dist. LEXIS 5439, 2004 WL 690881 (N.D. Tex. 2004).

Opinion

MEMORANDUM OPINION AND ORDER

KAPLAN, United States Magistrate Judge.

Defendants John Wilkinson, Sharon Taul-man, and Robert Canales have filed a motion to compel the production of 112 documents withheld from discovery by Plaintiff Navi-gant Consulting, Inc. (“NCI”) on the grounds of attorney-client privilege and attorney work product. For the reasons stated herein, the motion is granted in part and denied in part.

I.

NCI provides class action settlement processing services to clients in the United States and Canada. (Plf. Sec. Am. Compl. at 2,1110). Among these services are compiling information and data from thousands of po[471]*471tential claimants, operating a call center, and calculating and distributing payments based on specific criteria established by courts or parties to settlement agreements. (Id,.). According to NCI, a key element to maintaining a competitive advantage in the class action settlement processing business is the ability to perform services accurately and at a low cost. (Id. at 3, 1111). The ability to safeguard confidential financial and personal data submitted by claimants is also an important consideration to courts and parties who select settlement administrators. (Id.). To accomplish the complicated administrative tasks associated with class action settlement processing, NCI designed and built a customized computer software program known as the “Class Action Administration System.” (Id. at 3, H12). This program, which was developed over many years at a cost of more than $500,000, performs a variety of functions, including: (1) gathering data and information relevant to particular aspects of the lawsuit; (2) modifying the input screens related to the data necessary for the settlement procedures; (3) adjusting the calculation of settlement amounts or awards; (4) interpreting, sorting, and utilizing client information as required by the settlement; and (5) generating reports. Because every settlement is unique, the software must be customized for each case at an additional cost. (Id.).

John Wilkinson and Sharon Taulman were managing directors of NCI’s class action settlement processing business Dallas, Texas. (Id. at 2, 1IU 7, 8). Another NCI employee, Roberto Canales, was a key advisor to Wilkinson on information technology issues. (Id. at 2, II9). When Wilkinson and Taulman were hired,1 both signed confidentiality agreements. The agreements provide, in pertinent part:

In consideration of my employment with [NCI], I hereby agree that I will not publish, use or disclose to any other person or entity, either directly or indirectly, any Confidential Information I receive in the course of my work with [NCI]. “Confidential Information” means any information, whether written or not, that is not generally known in the industry, or that has been treated by the Firm as confidential, or that is of competitive advantage to the firm, or that relates to the business operations, customers or clients of the Firm. My obligation to not disclose any Confidential Information shall continue during and after my working relationship with [NCI].

(Id. at 5, 1117 & 7, II23). Canales entered into a similar confidentiality agreement as a condition of his employment. (Id. at 15, H 53). In addition, as managing directors, Wilkinson and Taulman were prohibited from competing with NCI or soliciting any of its clients if they left the company. (Id. at 9-10, 111133, 34(d)).

Sometime around the summer of 2001, Wilkinson and Taulman decided to leave NCI and allegedly “formulated a secret plan to market and ‘sell’ to NCI’s competitors a business that they did not own — NCI’s Dallas class action settlement administration business.” (Id. at 15, 1154). In furtherance of this illicit plan, NCI contends that Wilkinson instructed Canales to download information from company servers, including proprietary software and client databases, to a non-NCI server that was removed to an unknown location. (Id. at 20-21, 1184). This activity continued for three consecutive months until Jordan Allen, another Dallas-based employee, reported Canales and Wilkinson to the IT Department in Chicago, Illinois. (Id. at 21, H 84; Plf.App. at 79-80,1114). On August 23, 2002, Philip P. Steptoe, General Counsel for NCI, traveled to Dallas to confront Wilkinson, Taulman, and Canales about these “surreptitious backups.” (Plf. Sec. Am. Compl. at 21, 1185; Plf.App. at 80, 1116). At this interview, Wilkinson admitted that he had instructed Canales to backup the NCI servers, but claimed it was done as part of a local disaster recovery system for the Dallas office. (Plf. Sec. Am. Compl. at 21, 111186-87). Steptoe ordered Wilkinson to stop making unauthorized backups. (Plf.App. at 81, H18). Wilkinson agreed and promised to purge the non-NCI server of any data. (Id.; Plf. Sec. Am. Compl. at 22, U 90). However, two days later, an IT technician in the Dallas [472]*472office observed Canales attempting to copy NCI software and client data files onto CD ROMs. (Id. at 23, 1197; Plf.App. at 82, 1119).

Before leaving for Dallas on August 23, 2002, Steptoe hired Doug Haloftis and Celeste Yeager Winford, attorneys with the law firm of Gardere Wynne Sewell, LLP, to act as local counsel in the event legal proceedings were necessary. (Plf.App. at 80, II15). After learning of this latest incident, Steptoe asked the Gardere lawyers to help with the investigation by interviewing Wilkinson, Taulman, and Canales. (Id. at 82-83, 1121). On September 26, 2002, while the investigation was still ongoing, Wilkinson and Taul-man resigned from NCI. (Plf. Sec. Am. Compl. at 23, 1199; Plf.App. at 83, H 22). Canales resigned on October 1, 2002. (Plf. Second Am. Compl. at 25, 11114). Within days, all three defendants and two other NCI employees went to work for LECG, LLP, a competitor in the class action settlement processing business. (See id. at 23-26, H1Í100-116).

On October 8, 2002, NCI sued defendants in Dallas federal court for misappropriation of trade secrets, conversion, breach of contract, breach of fiduciary duty, tortious interference with contracts, and violations of the Illinois Trade Secret Act.2 Defendants have counterclaimed for defamation and breach of contract. As part of their pretrial discovery, defendants served a request for production on NCI. This document request seeks, inter alia:

24. All documents that evidence, refer or relate to the investigation into the non-NCI server or the alleged “surreptitious backups” conducted at the Dallas office.
25. All documents that evidence, refer or relate to contemporaneous notes, correspondence or memoranda regarding employee interviews conducted in connection with the investigation into the alleged “surreptitious backups” conducted in the Dallas office.
26. All documents that evidence, refer or relate to statements or comments made by Defendants or any other employees interviewed in connection with the investigation into the alleged “surreptitious backups” conducted in the Dallas office.

(DefApp. at 14, HH 24-26). NCI objected to each request to the extent it sought information protected by the attorney-client privilege or the work-product doctrine. A privilege log identifying the documents withheld from production also was furnished to opposing counsel.

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220 F.R.D. 467, 2004 U.S. Dist. LEXIS 5439, 2004 WL 690881, Counsel Stack Legal Research, https://law.counselstack.com/opinion/navigant-consulting-inc-v-wilkinson-txnd-2004.