Wilcox Industries Corp. v. Hansen

279 F.R.D. 64, 2012 U.S. Dist. LEXIS 4880, 2012 WL 124843
CourtDistrict Court, D. New Hampshire
DecidedJanuary 17, 2012
DocketCivil No. 11-cv-551-PB
StatusPublished
Cited by1 cases

This text of 279 F.R.D. 64 (Wilcox Industries Corp. v. Hansen) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wilcox Industries Corp. v. Hansen, 279 F.R.D. 64, 2012 U.S. Dist. LEXIS 4880, 2012 WL 124843 (D.N.H. 2012).

Opinion

ORDER

LANDYA McCAFFERTY, United States Magistrate Judge.

Wilcox Industries Corp. (“Wilcox”) has sued defendants in eight counts, seeking injunctive relief and damages for, among other things, their alleged misappropriation of Wilcox’s confidential and trade-secret information. Before the court is Wilcox’s motion for limited expedited discovery. Defendants object. For the reasons that follow, Wilcox’s motion is denied.

Background

The following factual background is drawn from Wilcox’s complaint. Wilcox manufactures military equipment. Its products include a self-contained breathing apparatus, initially called the SCOUT, now called the PATRIOT.

From 2003 until March of 2005, Mark Hansen served as a consultant to Wilcox. From March of 2005 through June of 2007, he was employed by Wilcox as a vice president. Shortly after he left that position, Hansen and his new company, Advanced Life Support Technologies, Inc. (“ALST”), performed consulting work for Wilcox. Hansen stopped consulting for Wilcox in February of 2009.

During his time as both a consultant and an employee, Hansen had access to a wide range of Wilcox’s trade secrets and confidential/proprietary information pertaining to product design, manufacture, marketing, and sales. He also played a significant role in the development of Wilcox’s SCOUT/PATRIOT products. Hansen’s legal relationship with Wilcox includes a royalty agreement, a nondisclosure and noncompetition agreement, and an assignment of his intellectual property rights in the SCOUT/PATRIOT to Wilcox.

Hansen’s new company, ALST, is a direct competitor to Wilcox. ALST manufactures and markets a self-contained breathing apparatus, the SHIELD. According to Wilcox, the SHIELD incorporates some of its proprietary technology as well as technology for which it continues to pay Hansen a monthly royalty. Wilcox also alleges that Hansen and ALST are currently using its proprietary customer information to market the SHIELD and that they have offered to service SCOUT/PATRIOT products, which, in turn would require Hansen to impermissibly use Wilcox’s proprietary and confidential information.

[67]*67Based on the foregoing, Wilcox sued Hansen and ALST, seeking injunctive relief and asserting claims for: (1) breach of contract, breach of the implied covenant of good faith and fair dealing, common-law unfair competition, violation of the New Hampshire Consumer Protection Act, violation of New Hampshire’s version of the Uniform Trade Secrets Act, breach of fiduciary duty, unjust enrichment, and intentional interference with contractual relations. The planning conference required by Rule 26(f) of the Federal Rules of Civil Procedure has yet to take place. ALST has filed a motion to dismiss under Rule 12(b)(2), and both defendants have filed a motion to dismiss under Rule 12(b)(6). Neither motion is yet ripe for decision.

Discussion

On the same day it filed its complaint, Wilcox moved for limited expedited discovery, arguing that it needs certain information in order to develop the factual record in preparation for moving for preliminary injunctive relief. Specifically, it seeks the following:

.a. A reasonable inspection of a physical sample of Defendants’ Self-Contained Hybrid Integrated Evolution Life Support Device (SHIELD);
b. A reasonable inspection of any prototype SHIELD products or component parts and accessories of the SHIELD;
c. Production of any schematics, user or operating manuals showing the physical configuration and operation of the SHIELD product;
d. Production of any documents, including purchase orders and supply contracts, listing the names and contact information of any customers of Hansen or ALST;
e. Production of a list of the names and contact information of any customers Hansen acquired while engaged as an employee of or consultant to Wilcox; and
f. Production of any documents or information relating to Hansen and ALST’s current and prospective purchase orders for the SHIELD, or any maintenance/service contracts that Defendants have procured relating to Wilcox’s products.1

Pl.’s Mot. for Disc. (doc. no. 3), at 2. Defendants object, characterizing Wilcox’s motion as a fishing expedition and arguing that the motion: (1) lacks adequate factual support; (2) does not establish good cause; (3) does not adequately identify the proprietary technology and proprietary customer information they are alleged to have misappropriated; and (4) does not adequately explain Wilcox’s need for the wide range of information it seeks.

A. Relevant Law

It is undisputed that at this early stage in the litigation, Wilcox is not entitled to discovery without a court order. See Fed. R.Civ.P. 26(d)(1). Before the court may issue such an order, Wilcox must show good cause. See Momenta Pharms., Inc. v. Teva Pharms. Indus. Ltd., 765 F.Supp.2d 87, 88 (D.Mass.2011); McMann v. Doe, 460 F.Supp.2d 259, 265 (D.Mass.2006) (citing Best W. Int'l Inc. v. Doe, No. CV-06-1537-PHX-DGC, 2006 WL 2091695, at *3 (D.Ariz. July 25, 2006)). Courts have adopted two different standards for determining whether to allow expedited discovery. See Momenta, 765 F.Supp.2d at 88; see also 6 James Wm. Moore, Moore’s Federal Practice § 26.121[2], at 26-573 (3d ed. 2010). Here, the parties agree that the court should apply the so-called reasonableness standard that was articulated and used in Momenta and McMann, under which courts “analyze[ ] the ‘reasonableness of the request in light of all of the surrounding circumstances.’” Momenta, 765 F.Supp.2d at 89 (quoting Entm’t Tech. Corp. v. Walt Disney Imagineering, No. Civ.A. 03-3546, 2003 WL 22519440, at *3 (E.D.Pa. Oct. 2, 2003); citing Merrill Lynch, Pierce, Fenner & Smith, Inc. v. O’Connor, 194 F.R.D. 618, 624 (N.D.Ill.2000)). When applying that standard, courts have considered various factors, such as

[68]*68the purpose for the discovery, the ability of the discovery to preclude demonstrated irreparable harm, the plaintiffs likelihood of success on the merits, the burden of discovery on the defendant, and the degree of prematurity.

Momenta, 765 F.Supp.2d at 89 (quoting McMann, 460 F.Supp.2d at 265).

In Momenta, a patent-infringement case, the plaintiffs sought expedited discovery of “three discrete sets of documents that [would] assist them in determining whether to move for a preliminary injunction.” 765 F.Supp.2d at 88. Judge Gorton denied the plaintiffs’ request on grounds that: (1) notwithstanding their fear of imminent infringement, the plaintiffs could not demonstrate irreparable harm because, on the facts of that ease, any infringement by the defendant was readily compensable by money damages, see id.; and (2) the plaintiffs had not yet filed a motion for preliminary injunctive relief, see id.

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