HECKLER & KOCH, INC. v. GERMAN SPORT GUNS GMBH et al
Filing
272
ORDER ON PLAINTIFFS' OBJECTIONS - The Court overrules HK's objection to the Magistrate Judge's order to produce communications or documents listed in the privilege logs specified above that include Umarex. Accordingly, in that respect the Magistrate Judge's Orders are affirmed and those materials are ordered to be produced to Defendants no later than March 20, 2014. The additional objections remain under advisement. Signed by Judge Sarah Evans Barker on 3/6/2014. (JD)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
HECKLER & KOCH, INC., and
HECKLER & KOCH, GMBH,
Plaintiffs/Counterclaim Defendants,
vs.
GERMAN SPORT GUNS GMBH, and
AMERICAN TACTICAL IMPORTS, INC.,
Defendants/Counterclaimants.
AND
GERMAN SPORT GUNS GMBH, and
AMERICAN TACTICAL IMPORTS, INC.,
Counterclaimants/Third-Party Plaintiffs,
vs.
G. WAYNE WEBER and NIELS IHLOFF,
Third-Party Defendants.
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No. 1:11-cv-01108-SEB-TAB
ORDER ON PLAINTIFFS’ OBJECTIONS
This cause is before the Court on objections filed by Plaintiffs Heckler & Koch, Inc., and
Heckler & Koch, Gmbh, (collectively, “HK”) to the Magistrate Judge’s Order on Defendants’
Motion to Compel [Dkt. No. 136], which held, inter alia: (1) that HK failed to establish that
communications or documents listed in certain privilege logs that include Umarex are privileged
by virtue of the common interest doctrine; (2) that the crime-fraud exception applied to
communications and documents concerning ownership and assignment of the MP5 intellectual
property rights; and (3) that any claims of privilege for documents concerning ownership and
assignment of the MP5 intellectual property rights that were not listed on privilege logs before
the Court were waived. HK filed a motion to reconsider these rulings, which the Magistrate
Judge denied. [Dkt. No. 179]. The instant objections to these rulings followed, filed pursuant to
Rule 72(a) of the Federal Rules of Civil Procedure.
For the reasons detailed herein, HK’s objection to the Magistrate Judge’s ruling that HK
failed to prove that a common interest existed between itself and Umarex is OVERRULED. As
explicated below, we reserve rulings on the remainder of HK’s objections at this time.
I.
Factual and Procedural Background
The factual underpinnings of this case have been recounted various times by the Court
but are largely irrelevant for purposes of our consideration of HK’s objections.1 To provide
context, however, we note that this lawsuit relates to the alleged intellectual property
infringement of HK’s MP5 firearm. Previous litigation between the parties resulted in a
settlement agreement executed in October 2009. This subsequent lawsuit alleges that
Defendants German Sports Guns GmbH and American Tactical Imports, Inc. breached that
agreement. Defendants have brought counterclaims against HK alleging that it fraudulently
represented in the agreement that they owned the intellectual property that was the subject of the
previous lawsuit despite its having assigned away those rights in March 2009.
In September 2013, after HK’s objections to the Magistrate Judge’s rulings were fully
briefed, we dismissed Defendants’ claims for both fraud and constructive fraud. [Dkt. No. 215].
Specifically, the Court found that Defendants had failed to plead plausibly that they suffered
damages as a result of the allegedly fraudulent representations or omissions. That ruling has
been challenged in a Motion for Reconsideration filed by Defendants which currently pends
before the Court.
1
For a more detailed recitation of the allegations underlying this case, see Docket Nos. 214-15.
II.
Standard of Review
Pursuant to Federal Rule of Civil Procedure 72(a), the Court must consider and modify or
set aside a non-dispositive pretrial ruling, or any part thereof, issued by a magistrate judge that is
found to be clearly erroneous or contrary to law. Using the clear error standard, the Court will
sustain an objection “only if [it] is left with the definite and firm conviction that a mistake has
been made.” Weeks v. Samsung Heavy Indus., Ltd., 126 F.3d 926, 943 (7th Cir. 1997).
III.
Discussion
As noted above, HK objects to three specific rulings made by the Magistrate Judge. We
address each of these objections below.
A.
The Magistrate Judge Did Not Err in Holding That Plaintiffs Failed
to Establish The Application of The Common Interest Doctrine to
Communications and Documents Involving Umarex.
In their motion to compel, Defendants contended that the communications and documents
listed in HK’s privilege logs involving Umarex are not protected by the attorney-client privilege.
HK rejoined that these communications are privileged under the common legal interest doctrine,
which extends the attorney-client privilege to communications between parties that “undertake a
joint effort with respect to a common legal interest, and [] is limited strictly to those
communications made to further an ongoing enterprise.” United States v. BDO Seidman, LLP,
492 F.3d 806, 815-16 (7th Cir. 2007).
In its briefing of the motion, HK conceded that the interest between itself and Umarex
was merely “nearly identical,” and failed to respond in their sur-reply to Defendants’ arguments
on this point. Thus, the Magistrate Judge found that the legal interest shared between HK and
Umarex was not identical making the communications between those parties discoverable. Dkt.
No. 136 at 12 (citing Pampered Chef v. Alexanian, 737 F. Supp. 2d 958, 964 (N.D. Ill. 2010);
Parvati Corp. v. City of Oak Forest, No. 08-C-702, 2010 WL 4792649, at *2 (N.D. Ill. Nov. 18,
2010); Square D Co. v. E.I. Electronics, Inc., 264 F.R.D. 385, 391 (N.D. Ill. 2009); Zepter v.
Dragistic, 237 F.R.D. 185, 189 (N.D. Ill. 2006)).
HK asserts that the Magistrate Judge erred in ruling that HK had not met its burden of
establishing that the common interest doctrine applies to the communications and documents in
the three privilege logs that include Umarex.2 However, in advancing this objection HK fails
entirely to address one of the Magistrate Judge’s primary bases for his conclusion – that HK
failed to respond to Defendants’ argument that the interest between Umarex and HK was not
sufficiently common. In his initial ruling, the Magistrate Judge expressly stated that HK had
failed to respond to Defendants’ challenge to the commonality of interest. Thereafter, in denying
HK’s motion for reconsideration, the Magistrate Judge again referenced HK’s failure to address
this point, explaining that while HK may be correct about the standard by which the interest must
be comparable, it failed to make any response to Defendants’ challenge. This default left the
Court without “an adequate factual basis to support application of the common interest doctrine.”
Accordingly, HK is unable to establish that the Magistrate Judge’s ruling was clearly erroneous
or contrary to law, and its objection to this portion of the Magistrate Judge’s order must be
overruled.
B.
HK’s Remaining Objections
As noted above, HK also objects to the Magistrate Judge’s rulings concerning the
application of the crime-fraud exception to communications and documents related to ownership
and assignment of the MP5 intellectual property rights. Relatedly, HK objects to the Magistrate
Judge’s ruling that any claims of privilege for documents not listed in the privilege logs related
2
The Magistrate Judge specified that his ruling applied only to the three referenced privilege logs, Docket Nos. 751, 75-2, and 98-2.
to the ownership or assignment of the MP5 rights were waived and that those materials must be
produced. Since the time when these objections were briefed, however, as we have previously
noted, the Court dismissed Defendants’ fraud claims, calling into question the continued
relevancy of the materials sought.3 Defendants’ Motion to Reconsider the dismissal of those
claims will allow the Court an opportunity to pass on the relevance and soundness of the
remaining objections interposed by HK. We withhold a ruling until that time.
IV.
Conclusion
For the foregoing reasons, the Court overrules HK’s objection to the Magistrate Judge’s
order to produce communications or documents listed in the privilege logs specified above that
include Umarex. Accordingly, in that respect the Magistrate Judge’s Orders are affirmed and
those materials are ordered to be produced to Defendants no later than March 20, 2014. The
additional objections remain under advisement.4
IT IS SO ORDERED.
03/06/2014
Date: _____________
_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana
3
HK posits in its opening brief that the communications and documents would no longer be relevant if the Court
were to later grant HK’s motion to dismiss. Dkt. No. 181 at 10-11. Defendants did not dispute HK’s challenge to
the relevancy to the documents in the event that the Court granted HK’s motion, instead maintaining that the
production of irrelevant documents posed no threat of irreparable harm to HK.
4
Contemporaneous with their filing of objections to the rulings of the Magistrate Judge, HK file a Motion to Stay
Production until 14 days after the Court rules on these objections. [Dkt. No. 182]. HK’s Motion is GRANTED.
Distribution:
Darlene R. Seymour
dseymour@ce-ip.com
Jason M. Sneed
SNEED PLLC
jsneed@sneedlegal.com
Charles .M. Landrum, III
SNEED PLLC
clandrum@sneedlegal.com
Bruce Benjamin Paul
STITES & HARBISON, LLP
bpaul@stites.com
Douglas B. Bates
STITES & HARBISON, LLP
dbates@stites.com
Neal F. Bailen
STITES & HARBISON, LLP
nbailen@stites.com
Anne L. Cowgur
TAFT STETTINIUS & HOLLISTER LLP
acowgur@taftlaw.com
Jonathan G. Polak
TAFT STETTINIUS & HOLLISTER LLP
jpolak@taftlaw.com
Michael Zachary Gordon
TAFT STETTINIUS & HOLLISTER LLP
zgordon@taftlaw.com
Peter Jon Prettyman
TAFT STETTINIUS & HOLLISTER LLP
pprettyman@taftlaw.com
Tracy Nicole Betz
TAFT STETTINIUS & HOLLISTER LLP
tbetz@taftlaw.com
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