L-3 Communications Corporation et al v. Jaxon Engineering & Maintenance, Inc. et al
ORDER re: Motion Hearing 118 held on October 3, 2011. It is ordered that Plaintiffs shall file a List of Trade Secrets, under seal, no later than October 24, 2011. All AEO documents, including AEO technical, will be produced by both parties. All discovery addressed by the court and pertaining to the motions in question at the October 3, 2011 hearing must be answered by both parties on or before November 7, 2011. Any outstanding discovery resolved by orders given during that hearing or any d iscovery that requires redrafting must be propounded by both sides on or before October 31, 2011. Any outstanding or re-drafted discovery must be answered on or before November 14, 2011. The parties shall file as supplements to Motion to Compel [89 ] on behalf of plaintiffs and Motion to Compel 94 on behalf of defendants any matters still outstanding that must be resolved by the court on or before November 18, 2011. The parties will also address in the supplements the parameters of a site in spection of defendant's place of business. The deposition of Joni White shall not be conducted before November 14, 2011. The parties shall agree on a date between November 18, 2011 and December 2, 2011. For further information, please see attached minutes. By Magistrate Judge Kathleen M. Tafoya on 10/12/2011. (kmtcd)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Kathleen M. Tafoya
Civil Action No. 10–cv–02868–MSK–KMT
L-3 COMMUNICATIONS CORPORATION, and
L-3 SERVICES, INC.,
JAXON ENGINEERING & MAINTENANCE, INC.,
JONI ANN WHITE,
RANDALL K. WHITE,
JOHN MCCLURE, and
JOHN DOES 1-25, said names being fictitious as such names are unknown at this time,
This matter is before the court on the Motions Hearing held on October 3, 2011
(hereinafter “Motions Hearing”). (See Doc. No. 118, filed Oct. 3, 2011.) At the Motions
Hearing, the court found that Plaintiffs had sufficiently disclosed the trade secrets that they
allege Defendants misappropriated to require that Defendants respond to Plaintiffs’ trade secretrelated discovery requests. However, the court also noted that it would inform the parties if it
was persuaded otherwise by the cases submitted by the parties regarding this issue. The court
has now considered those cases in light of the record before it and reverses its conclusion that
Plaintiffs have sufficiently disclosed their trade secrets at issue in this case.
The parties do not dispute the relevant standard governing this issue. In a trade secret
case, “[t]here is no privilege excepting trade secrets from discovery, but ‘courts must exercise
discretion to avoid unnecessary disclosures of such information.’” Dura Global Techs., Inc. v.
Magna Donnelly, Corp. (“Dura Global Techs. I”), No. 07-cv-10945, 2007 WL 4303294, at *2
(E.D. Mich. Dec. 6, 2007) (quoting Automeds Techs., Inc. v. Eller, 160 F. Supp. 2d 915, 925
(N.D. Ill. 1974)). As such, a “[p]laintiff will normally be required first to identify with
reasonable particularity the matter which it claims constitutes a trade secret, before it will be
allowed . . . to compel discovery of its adversary’s trade secrets.” Id. (quoting Automeds, 160 F.
Supp at 926); see also Gentex Corp. v. Sutter, No. 3:07-cv-1269, 2008 WL 5068825, at *1 (M.D.
Pa. Nov. 25, 2008).
This threshold disclosure requirement for discovery in trade secret cases serves several
purposes. First, describing a trade secret with specificity puts the defendant on notice of what it
has allegedly misappropriated. See Sit-Up, Ltd. v. IAC/Interactive Corp., No. 05-cv-9292, 2008
WL 463884, at *11 (S.D.N.Y. Feb. 20, 2008); see also Leucadia, Inc. v. Applied Extrusion
Technologies, Inc., 755 F. Supp. 635, 637 (D. Del. 1991) (“disclosure of Plaintiff’s trade secrets
prior to discovery of defendant may be necessary to enable the defendant and ultimately the
Court to ascertain the relevance of plaintiff’s discovery.”) Second, this requirement prevents
disclosure of trade secrets that were not misappropriated by the defendant, thereby giving the
plaintiff access to trade secret information that it would otherwise be illegal for the plaintiff to
misappropriate. Gentex Corp., 2008 WL 5068825, at *1. Finally, “requiring the plaintiff to state
its claimed trade secrets prior to engaging in discovery ensures that it will not mold its cause of
action around the discovery it receives.” DeRubeis v. Witten Techs., Inc., 244 F. R.D. 676, 681
(N.D. Ga. 2007). In this case, the court notes that the fact that the individual defendants were
former employees of the plaintiffs does not ameliorate the concerns underlying the last two
purposes; in fact, that they were former employees actually increases these dangers.
To ensure that plaintiffs adequately disclose their trade secrets, courts commonly order a
list of trade secrets at the outset of the litigation. Dura Global Techs I, 2007 WL 4303294, at *2.
Ultimately, whether a plaintiff has sufficiently disclosed its trade secrets is “a fact-specific
question to be decided on a case-by-case basis.” Gentex Corp., 2008 WL 5068825, at *1
(quoting DeRubeis, 244 F.R.D. at 681).
Unfortunately, beyond the more general standard of “reasonable particularity,” the case
law does not provide clear guidance as how detailed a plaintiff’s trade secret disclosures must be.
This is because trade secrets are necessarily confidential. As a consequence, courts are very
reluctant to discuss a plaintiff’s trade secret disclosures in a court order or opinion. See, e.g., d.
at *4 (declining to discuss the defendant’s interrogatories or the plaintiff’s answers to those
interrogatories because they were designated confidential and filed under seal).
Nevertheless, what is clear is that general allegations and generic references to products
or information are insufficient to satisfy the reasonable particularity standard. Hill v. Best Med.
Int’l, No. 09-1184, 2010 WL 2546023, at *4 (W.D. Pa. June 24, 2010); see also Dura Global
Techs I, at *4 (interrogatory response providing a list of general categories and types of
information alleged to comprise their trade secret insufficient); Automed Techs., 160 F. Supp. at
925 (general allegations of “software, designs, and research” and generic references to three
research projects by name insufficient to identify trade secrets in question).
Here, after reviewing the entire record, including the audio recording of the Motions
Hearing, the court now finds that Plaintiffs have not identified their trade secrets with sufficient
particularity. First, Plaintiffs’ disclosures of their trade secrets in their Amended Complaint
(Doc. No. 33, filed Feb. 11, 2011 [Am. Compl.]) are mere general, categorical references to the
equipment, methods, and software Plaintiffs use to conduct shielding effectiveness, pulse current
injection, and continuous wave immersion testing. (Am. Compl. ¶¶ 40–55.) Thereafter,
Plaintiffs only generally allege that Defendants misappropriated their trade secret customer lists;
pricing templates and labor rates; vendor lists; drawings, designs, and processes of constructing
its electromagnetic enclosures; and “other information.”1 (Id. ¶ 58a.–e.) At no point in their
Amended Complaint do Plaintiffs describe the actual equipment, methods, software or other
information they claim as trade secrets. See Dura Global Techs I, at *4 (a list of general
categories and types of information deemed insufficient). Indeed, it appears that Plaintiffs
acknowledge that their Amended Complaint does not sufficiently disclose their trade secrets.
(Doc. No. 48 [Scheduling Conf. Tr.] at 38:6-9, filed ) (“[T]his is very complicated information.
This other information includes “L-3 s proprietary pricing spreadsheet templates, labor
categories, profit margins, bidding templates, pricing spreadsheets, MILSTAR government site
contacts, data on pulser safety, an export list of test equipment, HEMP hardness testing data,
HEMP test data acquired by L-3 in the United Kingdom, marketing and marketing plans, and
graphical illustrations of components of L-3 products.” (Id. ¶ 58e.)
It doesn’t belong in a complaint . . . . We would have given up our trade secrets, which is why
parties enter into a protective order.”)
At the Motions Hearing, Plaintiff’s counsel, Ms. Parker, engaged in a lengthy discussion
of the technology at issue and Plaintiffs’ claimed trade secrets.2 However, Plaintiffs’ counsel’s
description of its trade secrets as Plaintiffs’ selection of parts, and of vendors; their methods of
using the test equipment; and software that helps generate and assimilate raw data also amounts
to a general, categorical description. Thus, Ms. Parker’s discussion of Plaintiffs’ trade secrets in
open court is similarly insufficient. Automed Techs., 160 F. Supp. at 925 (general allegations of
“software, designs, and research” insufficient). Again, at no point in the Motions Hearing did
Plaintiffs describe their actual selection of parts and vendors, the actual methods by which they
use their equipment, or the actual software they use to process the generated raw data.
Finally, the court notes that Plaintiffs have not filed or served any disclosures of their
trade secrets under seal, nor have they moved to seal either their Amended Complaint or the
Motions Hearing. Although there is certainly no hard and fast rule that trade secrets described
with the requisite reasonable particularity be filed under seal, they typically are, “[i]n order to
preserve the secrecy required for such material.” See, e. g., Dura Global Techs., Inc. v. Magna
Donnelly Corp. (“Dura Global Techs. II”), No. 07-cv-10945-DT, 2008 WL 2064516, at *2 (E.D.
At that time, the court took into consideration that the individual defendants actually
knew the plaintiffs’ trade secrets since they were former employees, and therefore could respond
based on what they already knew of plaintiffs’ operations. However, as noted infra, their mere
knowledge is insufficient to satisfy the legal obligation of the plaintiffs to list trade secrets in a
suit claiming misappropriation.
Mich. May 14, 2008) (where the court limited its discussion of the plaintiffs’ List of Trade
Secrets because it was filed under seal, but nevertheless found that the plaintiffs failed to
describe their trade secrets with reasonable particularity.) Although not essential to the court’s
finding, the fact that all of Plaintiffs’ discussions of its trade secrets have occurred in the public
portions of the record further suggests that Plaintiffs have failed to disclose their trade secrets
with reasonable particularity.
Altogether, the court finds that Plaintiff have failed to describe their trade secrets with
reasonable particularity as required for Plaintiffs to discover Defendants’ trade secrets.
Accordingly, the court will order Plaintiffs to file a List of Trade Secrets which they claim have
been misappropriated. Because this will affect certain discovery-related deadlines imposed by
the court at the Motions Hearing (See Doc. No. 118, filed Oct. 3, 2011), those dates will also be
adjusted accordingly as outlined below.
Wherefore, it is
ORDERED that Plaintiffs shall file a List of Trade Secrets, under seal, no later than
October 24, 2011.
It is further ORDERED that
All AEO documents, including AEO technical, will be produced by both parties.
All discovery addressed by the court and pertaining to the motions in question at the October 3,
2011 hearing must be answered by both parties on or before November 7, 2011. Any
outstanding discovery resolved by orders given during that hearing or any discovery that requires
must be propounded by both sides on or before October 31, 2011. Any outstanding or re-drafted
discovery must be answered on or before November 14, 2011.
The parties shall file as supplements to Motion to Compel  on behalf of the
plaintiffs and Motion to Compel  on behalf of defendants any matters still outstanding that
must be resolved by the court on or before November 18, 2011. The parties will also address in
the supplements the parameters of a site inspection of defendant’s place of business.
The deposition of Joni White shall not be conducted before November 14, 2011.
The parties shall agree on a date between November 18, 2011 and December 2, 2011.
All other deadlines set in this case shall remain in full force and effect.
Dated this 12th day of October, 2011.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?