ORP Surgical, LLC v. Howmedica Osteonics Corp.

District Court, D. Colorado·Decided November 12, 2021·No. 1:20-cv-01450·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge R. Brooke Jackson

Civil Action No. 1:20-cv-01450-RBJ

ORP SURGICAL, LLP, a Colorado limited liability company, and LEE PETRIDES,

Plaintiffs,

v.

HOWMEDICA OSTEONICS CORP, a New Jersey corporation,

Defendant.

ORDER on REMAINING MOTIONS

The Court here addresses the remaining motions in this case. The Court has reviewed responses and replies on file, and if responses or replies are not yet due, the Court exercises its authority pursuant to D.C.COLO.LCivR 7(d) (“Nothing in this rule precludes a judicial officer from ruling on a motion at any time after it is filed.”). If a party has not yet filed a response or a reply to a particular motion and seriously believes that a response or reply would make a difference, the party can bring it up at the Trial Preparation Conference. BACKGROUND Plaintiffs (collectively “ORP”) claim that defendant (“Stryker”) wrongfully solicited and hired 14 ORP sales representatives between October 2019 and July 2020. ORP asserts six claims: (1) corporate raiding; (2) breach of contract; (3) unjust enrichment; (4) intentional interference with existing contractual relationships; (5) intentional interference with prospective business relations; (6) violation of the Colorado Wholesale Sale Representatives Act. ECF No. 159 (Third Amended Complaint). Stryker asserts four counterclaims: (1) breach of the Joint Reconstruction SRA Contract – ORP; (2) breach of the Trauma SRA Contract – ORP & Petrides; (3) unfair trade practices – ORP & Petrides; and (4) tortious interference – ORP & Petrides. ECF No. 171. MOTIONS A. Defendant’s Motion to Quash, ECF No. 165. ORP subpoenaed (1) cell phone records possessed by AT&T concerning Adam Jacobs, a Stryker Vice President, for January 1, 2019 through July 1, 2020, and (2) Mr. Jacobs’ calendars, day planners, diaries, date books, schedules, and journals from January 2019 to the present.

Stryker moved to quash the subpoenas. AT&T produced the information, but Stryker nevertheless objected to plaintiff’s reviewing the information, claiming that it invaded Mr. Jacobs’ privacy. Mr. Jacobs did not produce the subpoenaed calendar-type information, nor did he move to quash the subpoena. The Special Master found that the motion to quash was moot as to AT&T’s production of the phone record and recommended that the Court deny Stryker’s alternative motion for a protective order as to that information. ECF No. 188. He found that Stryker lacked standing to object to the subpoena of Mr. Jacobs’ calendar information and, relatedly, noted an inconsistency between Stryker’s position and it’s position elsewhere in this case and in a related state court

case that calendar information is not in its possession or control but is in the possession, custody, and control of third parties, e.g., such as Mr. Jacobs. Id. He recommended that the motion be denied. Id. Stryker filed a timely objection to the Special Master’s recommendation, which I have reviewed. However, I agree entirely with the Special Master’s recommendation and the reasons for it provided at ECF No. 188. Therefore, Stryker’s motion to quash is denied. Because Mr. Jacobs did not object, the Court orders that the information be immediately produced. I expect, of course, that Stryker will also be provided with copies of the AT&T and Jacobs documents. B. Plaintiff’s Motion to Strike Defendant’s “Attorneys Eyes Only” Designation on Text Message, ECF Nos. 184/187. ORP objected to Stryker’s designation of all text messages produced as “attorney’s eyes only.” Stryker responded that conferral would have avoided the motion, and that it had now removed the designation on most of the messages. ORP replies that Stryker just changed the

designation from “attorney’s eyes only” to “confidential,” which also was not appropriate on most of the messages. Noting that the Amended Protective order, ECF No.40, provides the procedure for attaching a legend labeling a document as “confidential -- attorney’s eyes only” or “confidential,” the Special Master ordered that within 21 days Stryker must either notify ORP that, after review, it is satisfied that its legends were appropriately placed or provide ORP with an amended disclosure of the text messages with proper legends. ECF No. 219 at 3. Then ORP may review the texts again, an estimated 30,000 or so, and follow up as it deems appropriate. Noting the practical problems presented, the Special Master encouraged the parties to explore more expeditious and cost-effective procedures. Id. at 4. There was no recommendation

as such. No objection has been filed. The Court finds that the motion is now moot. The Court adds that counsel’s labeling of every text message as “attorney’s eyes only” or “confidential” when most of them are likely innocuous and undeserving of such labels was inappropriate and has wasted both parties’ money and the time of the Special Master and the Court. C. Plaintiff’s Amended Motion for Sanctions for Spoliation of Evidence, ECF Nos. 194/196. ORP complains that until May 2020 Stryker employees Adam Jacobs and Michael Bonessi deleted or allowed an automatic delete after 30 days function to delete their text messages with ORP’s 14 former sales representatives despite litigation hold letters and other reasons why they knew or should have known better. ORP asks the Court to sanction Stryker by presuming that the deleted messages were unfavorable; precluding contrary testimony; permitting ORP to examine Stryker’s witnesses about this at trial (while precluding contrary

testimony?); and awarding attorney’s fees. Stryker responds that it did preserve information after its receipt of ORP’s litigation document preservation letter on May 21, 2020, the same date that ORP filed this case; that it had no obligation to preserve information before that date; that the 14 ORP sales representatives could have preserved the same text message; that the loss of texts from Mr. Jacobs’ or Mr. Bonessi’s personal cell phone cannot be imputed to Stryker (but note Stryker’s position in its motion to quash, ECF No. 165 above); and there was no intent or bad faith. The Special Master found that the relevant time period is December 1, 2019 through April 22, 2020, the date that the 30-day delete function stopped deleting the Jacobs and Bonessi

text messages. There were text messages between the 14 sales representative and Jacobs or Bonessi or both during the relevant period. The duty to preserve evidence is triggered when a defendant reasonably anticipates litigation involving the evidence. ECF No. 238 at 2-3. The Special Master found that Stryker, a large and sophisticated company with experienced lawyers on staff, should have been alerted to the need to preserve evidence at least by preservation demands in letters from ORP’s litigation counsel to Stryker’s employment counsel dated December 12, 2019 and a letter from ORP’s counsel to Stryker’s in-house counsel dated January 16, 2020. If appropriate steps had been taken within a few days after January 16, 2020, the auto delete function would have been turned off and text messages on or after December 20, 2019 would have been preserved. Stryker had an obligation to preserve Jacobs’ and Bonessi’s text messages made in their capacity as employees and representatives of Stryker. ORP did not have an obligation to preserve text messages on the phones of its employees who were allegedly being solicited by Stryker in violation of the Sales Representative Agreements,

contrary to the interest of ORP. The Special Master added that during a good deal of the relevant period of time Stryker and its representatives Jacob and Bonessi were aware of the communications and were actively trying to prevent discovery by ORP. Id. at 3-7.

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ORP Surgical, LLC v. Howmedica Osteonics Corp., (D. Colo. 2021).

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