Wilbur-Ellis Company LLC v. Gompert

District Court, D. Nebraska·Decided December 16, 2022·No. 8:21-cv-00340·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

WILBUR-ELLIS COMPANY LLC,

Plaintiff, 8:21CV340

vs. MEMORANDUM AND ORDER JOSH GOMPERT, AARON PETERSEN, JAMES KUNZMAN, and CHAD MUELLER,

Defendants.

The Plaintiff has sued several of its former employees for, among other claims, misappropriation of trade secrets and tortious interference with business relationships. Plaintiff now seeks to serve a third-party subpoena on Defendants’ current employer and Plaintiff’s direct competitor, J.R. Simplot Company (“Simplot”). Before the subpoena was issued, Defendants served Plaintiff with several objections, arguing that the subpoena is improper because it seeks information that is not relevant, is a fishing expedition for competitive information, and is a “harassing, intimidating, and retaliatory action” directed at Defendants’ current employer. (Filing No. 56-2 at CM/ECF pp. 15-18).

Before the Court is Plaintiff’s Motion to Overrule Defendants’ Objections and its corresponding Motion for Hearing. (Filing No. 54 and 62). Defendants have also filed a motion seeking to lift the restricted access filing designation on Plaintiff’s “Identification of Trade Secrets.” (Filing No. 71). For the reasons that follow, the Plaintiff’s motions will be denied, and Defendants’ motion to lift restrictions will be granted. BACKGROUND

This case was filed on September 1, 2021, and case progression was set on May 5, 2022, after the amended complaint was filed and the motions to dismiss were resolved. (Filing No. 44). On May 27, 2022, a telephonic conference was held with the undersigned to address Defendants’ objections to Plaintiff’s proposed document production subpoena of Defendants’ new employer, Simplot. (Filing No. 47, audio file). The parties were heard, and the undersigned directed Plaintiff to identify what Defendants allegedly took and shared with Simplot, and to conduct party discovery related to that information before serving third party discovery on Simplot. Id.

On September 16, 2022, Plaintiff filed a motion to overrule Defendants’ objections to the proposed third-party subpoena. (Filing No. 54). In support of the motion, Plaintiff argues the subpoena requests information and documents that are “entirely relevant,” and Defendants have failed to provide any substantive information in discovery. (See generally, Filing No. 55). Plaintiff argues that if Defendants “believed they could produce the requested information and documents sought by the Subpoena through less intrusive means, they should have done so pursuant to their discovery obligations.” (Filing No. 55 at CM/ECF p. 12). Plaintiff states it is left with no choice but to proceed with discovery through the third-party subpoena to Simplot.

In response, Defendants argue that Plaintiff is litigating this case in bad faith and has not, to date, “provided a single fact or detail identifying the information and trade secrets on which Plaintiff’s claims are supposedly based.” (Filing No. 59 at CM/ECF p. 1). As such, Defendant contends the subpoenaed information is irrelevant, and that Plaintiff’s actions in this case amount to harassment of Defendants and their current employer. (Filing No. 59 at CM/ECF p. 1). On October 27, 2022, after reading the parties’ briefs, the court ordered Plaintiff to “disclose, with specificity, the trade secrets it alleges were misappropriated and file the list of record.” (Filing No. 66 (emphasis in original)). In response, Plaintiff filed its “Identification of Trade Secrets” on November 4, 2022. The court granted Plaintiff’s request to file that document as a restricted access document. (Filing No. 69).

Plaintiff’s proposed subpoena was filed as part of the present motion. (Filing No. 56-2 at CM/ECF p. 4). The subpoena requests ten categories of documents including, but not limited to, documents relating to Defendants’ employment with Simplot, various communications between the Defendants and Simplot, various communications between Defendants and Plaintiff’s contacts, and, rather broadly, any documents relating to Plaintiff in any way.

ANALYSIS

Under Nebraska Civil Rule 45.1, a party may move for the issuance of a contested third-party subpoena. NECivR. 45.1. The court will issue the subpoena if the topics are within the permissible scope of discovery as outlined in Rule 26 of the Federal Rules of Civil Procedure. The scope of permissible discovery is broad, and parties may obtain:

discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. Fed. R. Civ. P. 26(b)(1). Although relevance is broadly construed for discovery purposes, the proponent of the discovery must make “[s]ome threshold showing of relevance ... before parties are required to open wide the doors of discovery and to produce a variety of information which does not reasonably bear upon the issues in the case.” Prism Techs., LLC v. Adobe Sys., Inc., 284 F.R.D. 448, 449 (D. Neb. 2012) (quoting Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992)). Mere speculation that information might be useful will not suffice; litigants seeking to compel discovery must describe with a reasonable degree of specificity the information they hope to obtain and its importance to their case. See Cervantes v. Time, Inc., 464 F.2d 986, 994 (8th Cir. 1972).

When the discovery sought appears relevant on its face, the party resisting discovery has the burden to establish that the discovery is not relevant, or is “of such marginal relevance that the potential harm occasioned by the discovery would outweigh the ordinary presumption in favor of broad disclosure.” Streck, Inc. v. Research & Diagnostic Sys., Inc., No. 8:06-cv-458, 2009 WL 1562851, at *3 (D. Neb. June 1, 2009) (quoting Moses v. Halstead, 236 F.R.D. at 671.) However, when the relevancy of the discovery request is not readily apparent, the court need not consider proportionality unless the moving party first shows how the requested information is relevant. Id.

The scope of discovery under a Rule 45 subpoena is the same as the scope of discovery under Rules 26(b) and 34 and is subject to the rules that apply to other methods of discovery. (McGehee v. Nebraska Dept. of Corr. Servs. No. 4:18-cv- 3092, 2019 WL 266423 (D. Neb., Jan. 17, 2019). However, the standard for nonparty discovery may require a stronger showing of relevance than for party discovery. Cor Clearing, LLC v. Calissio Res. Grp. Inc., No. 8:15-cv-317, 2016 WL 2997643 (D. Neb. May 23, 2016). 1. Standing

As a preliminary matter, Plaintiff argues that Defendants lack standing to object to subpoenas to be served on third parties. To the extent Defendants object to the subpoena as being unduly burdensome or inconvenient, the court agrees with Plaintiff, and overrules Defendants’ objections on this basis. See Streck, Inc., 2009 WL 1562851 at *3.

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