St. Jude Medical, Inc. v. Intermedics, Inc.

107 F.R.D. 398, 40 Fed. R. Serv. 2d 1455
Procedural entryThis page is a short order in St. Jude Medical, Inc. v. Intermedics, Inc.. Read the opinion of the Court — 611 F. Supp. 96
District Court, D. Minnesota·Decided February 20, 1985·No. Civ. Nos. 4-84-267, 4-84-529 and 4-84-643·Published

Opinion

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

These cases have generated many discovery disputes and a number of protective orders. Before the court is an appeal of CarboMedics, Inc. (CarboMedics), Intermedies, Inc. (Intermedies), and GA Technologies, Inc. (GA), from discovery orders issued by United States Magistrate Floyd E. Boline on January 30,. 1985, February 1, 1985, and February 8, 1985. Appellants are concerned about issues related to production of documents designated “Restricted Access”.1 Appellants concede that their appeal focuses largely upon the February 8, 1985 order.2.

CarboMedics, Intermedies, and GA also sought a stay of the February 8, 1985 order, and a hearing was held before this court on February 11, 1985. A stay was entered until the parties could be heard more fully at a previously scheduled hearing on February 13, 1985. After considering the parties’ oral and written arguments on possible extension of the stay and on the appeal, and finding that success on the merits was unlikely, the court denied an extension of the stay that afternoon. On the next day appellants applied to the Eighth Circuit Court of Appeals for a stay; that court indicated that the stay “will be denied” but ruled that the Magistrate’s order be modified in certain respects.

Discussion

Appellants claim that the court must conduct a de novo review of the February 8, 1985 order. They argue that the order is dispositive of CarboMedics’ claims and rights to the trade secrets required to be produced, assets which form a basis of CarboMedics’ lawsuit.

28 U.S.C. § 636 governs the powers of a magistrate and the standard of review to be applied by the district court upon appeal of a magistrate's actions. Section 636(b)(1)(A) and Local Rule 14(B)(a) allow a magistrate to determine any pretrial motion or matter, with the exception of certain dispositive motions. District court re[400] view is to consider whether “the magistrate’s order is clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A).

The Magistrate’s order of February 8, 1985, was issued to enforce two previous orders which ruled on various motions pertaining to discovery. Before issuing these orders, the Magistrate heard two and one-half hours of arguments on January 24, 1985 pertaining to 1) St. Jude’s motion to compel document production and testimony of Robert Akins; 2) CarboMedics’ motions for a protective order for documents requested by St. Jude from Hemex Scientific, Inc. (Hemex); 3) CarboMedics’ motion for a protective order concerning document production and discovery; and 4) CarboMedics’ motion for a discovery conference. These discovery motions fall within the category of pretrial motions which may properly be heard and determined by the Magistrate under 28 U.S.C. § 636(b)(1)(A). The court concludes that the proper standard of review is whether the Magistrate’s orders are clearly erroneous or contrary to law.

Appellants claim that the Magistrate did not properly evaluate the need or propriety of disclosure. They charge that he has not acknowledged that St. Jude has spent three years and millions of dollars trying to duplicate the process CarboMedics uses to coat and manufacture pyrolitic carbon heart valve components. Appellants contend that trade secrets concerning this process are not relevant to any of the underlying claims or defenses in these lawsuits and that the Magistrate erred in failing to analyze the relevance of the documents ordered to be produced.

Further, appellants argue that despite their compliance with the previous orders, the February 8, 1985 order in effect transfers CarboMedics’ valuable trade secrets to St. Jude by failing to provide adequate protection of the information disclosed. They maintain that they would not have produced the documents for the depository if they had known that the February 8, 1985 order would so severely undercut security measures. Appellants assert that the Magistrate’s failure to analyze the need for disclosure and to provide sufficient security measures for the information disclosed amounts to an unconstitutional taking of CarboMedics’ property in violation of the fifth amendment.

St. Jude, by contrast, argues that the documents it seeks are crucial to the effective presentation of its case and should therefore be discoverable. It contends that CarboMedics’ trade secrets are more than adequately guarded by the six protective orders which have been entered to date in this litigation.

After carefully considering the parties’ arguments, the court finds that appellants have not shown that the Magistrate’s orders are clearly erroneous or contrary to law. The record indicates that the information sought by St. Jude is relevant and necessary to the prosecution or defense of several claims. Counsel for St. Jude must be granted meaningful access to material pertaining to CarboMedics’ trade secrets to enable them to pursue effectively the allegations set forth in Counts VI, VII, and VIII of St. Jude’s amended complaint. CarboMedics has also accused St. Jude of misappropriating its trade secrets. These allegations, as well as the parties’ allegations concerning patent infringement and antitrust violations, make the documents related to CarboMedics’ trade secrets relevant to St. Jude’s preparation for trial. St. Jude’s requests for this information are calculated to lead to admissible evidence, satisfying the requirements of Fed.R.Civ.P. 26. When trade secrets are relevant to the litigation, they may be discoverable. See Centurion Industries Inc. v. Warren Steurer & Associates, 665 F.2d 323, 325-26 (10th Cir.1981); Struthers Scientific and International Corp. v. General Foods Corp., 45 F.R.D. 375, 378 (S.D.Texas 1968).

Nor have appellants shown that the orders are an unconstitutional taking of property. The February 8, 1985 order leaves intact the substantial protections provided by the Third Protective Order of January 30, 1985 for documents marked “Restricted Access.” The order also pro[401] vides that all documents produced by CarboMedics, Intermedies, and GA, and all copies thereof, must remain in the depository. Outside counsel for St. Jude are fully aware of the duties imposed upon them by the terms of the Magistrate’s orders and of their ethical obligations. In fact, counsel for appellants conceded at the hearing that he was not impuning the integrity of St. Jude’s attorneys; appellants do not fear that St. Jude’s lawyers will intentionally hand over trade secrets to their client. Rather, they argue that their unilaterally-imposed conditions are essential to guard against inadvertent disclosures, or intentional disclosures by persons other than attorneys.

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St. Jude Medical, Inc. v. Intermedics, Inc., 107 F.R.D. 398, 40 Fed. R. Serv. 2d 1455 (mnd 1985).

107 F.R.D. 398 (St. Jude Medical, Inc. v. Intermedics, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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