Babcock Power Inc. et al v. Kapsalis
Filing
378
MEMORANDUM OPINION AND ORDER signed by Magistrate Judge Colin H. Lindsay on 11/14/2016, DENYING 232 Motion for Protective Order. Deposition of Plaintiffs' corporate representative(s) shall take place after 11/11/2016. cc: Counsel(RLK)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:13-CV-717-CRS-CHL
BABCOCK POWER, INC., et al.,
Plaintiffs,
v.
STEPHEN T. KAPSALIS, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court is a Motion for Protective Order (DN 232) and accompanying
memorandum (DN 232-1) filed by plaintiffs Babcock Power, Inc. (“Babcock”) and Vogt Power
International, Inc. (“Vogt”) (collectively, “plaintiffs”).
Defendants Stephen T. Kapsalis
(“Kapsalis”) and Express Group Holdings, LLC (“Express) (collectively, “defendants”) filed a
response (DN 234), and plaintiffs filed a reply (DN 243). Therefore, this matter is ripe for
review. For the reasons contained herein, the Motion for Protective Order is denied.
I.
BACKGROUND
On February 8, 2016, plaintiffs moved for entry of a protective order precluding
defendants from conducting a second Rule 30(b)(6) deposition of Vogt, among other things.
(See DN 188.) On March 2, 2016, the Court entered an order (DN 208) denying in part and
granting in part that motion for a protective order. With respect to the Rule 30(b)(6) deposition,
the Court permitted the deposition to go forward, but stated that it “shall be limited to issues that
have been raised since the first 30(b)(6) deposition, specifically the identification of trade secrets
by plaintiffs, and shall not address areas covered by the first 30(b)(6) deposition.” (DN 208, p.
2.)
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On March 4, 2016, defendants served a second Rule 30(b)(6) deposition notice (DN 2322) for a corporate representative of plaintiffs to take place on March 30, 2016 in Louisville,
Kentucky. On March 23, 2016, counsel for plaintiffs e-mailed counsel for defendants a letter
(DN 232-4) detailing objections to the second Rule 30(b)(6) deposition notice. According to
plaintiffs, although they believed that the second Rule 30(b)(6) deposition notice exceeded the
scope of the Court’s March 2, 2016 order, they nonetheless agreed to produce appropriate
30(b)(6) deponents on March 30, 2016.
(See DN 232-1, pp. 3-4.)
In the memorandum
supporting the Motion for Protective Order, plaintiffs state that, to ensure that defendants
received “full and accurate information,” a revised list of trade secrets was provided to
defendants on March 29, 2016, the day before the depositions were to take place; plaintiffs state
that, out of the approximately 2,500 documents initially identified as trade secrets on the list, 500
were removed and none were added. (Id. at 4.) Plaintiffs further state, “It should be noted, here,
that there was no obligation on the part of Plaintiffs to provide this list to Defendants before the
deposition.” (Id.) In response, defendants state that, due to plaintiffs’ revised disclosure of trade
secrets the day before the second Rule 30(b)(6) depositions were to begin, counsel for defendants
requested a two-day postponement of the depositions, but counsel for plaintiffs would not agree
to same. (DN 234, pp. 1-2.) On March 29, 2016, after exchanging e-mails with counsel for
plaintiffs, counsel for Kapsalis ultimately cancelled the Rule 30(b)(6) depositions set for March
30, 2016. On March 30, 2016, plaintiffs filed the Motion for Protective Order at issue.
II.
DISCUSSION
Plaintiffs argue that the second Rule 30(b)(6) deposition notice (DN 232-2) requested
much of the same or substantially similar information that was requested in the first Rule
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30(b)(6) deposition notice (DN 232-3). Plaintiffs assert that the “only legitimate area for inquiry
in the second 30(b)(6) deposition notice [i]s the identification of trade secrets” and that all other
topics were either already addressed, could have been addressed, or are the subject of expert
testimony. (DN 232-1, p. 3.) Defendants argue that the second Rule 30(b)(6) deposition notice
is limited to issues related to plaintiffs’ trade secrets and other issues that have been raised since
the first 30(b)(6) deposition. (Id. at 4.)
Rule 26(c)(1) of the Federal Rules of Civil Procedure states that the “court may, for good
cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or
undue burden or expense, including . . . forbidding inquiry into certain matters, or limiting the
scope of disclosure or discovery to certain matters . . . .” Fed. R. Civ. P. 26(c)(1)(D). The Court
does not have good cause to issue such an order in this instance, and thus the Motion for
Protective Order will be denied. For one, an accurate and up-to-date identification of trade
secrets at issue by plaintiffs is crucial to efficient and effective discovery. While it is true, as
plaintiffs assert, that there appears to be no rule stating that they were required provide
defendants an updated list in advance of the Rule 30(b)(6) depositions, a failure to supplement
when supplementation was warranted would have been suggestive of gamesmanship and
possibly a violation of Rule 37. And, while the Court is not placing blame on anyone, it is
undisputed that there have been several iterations of the list of trade secrets at issue. (See DN
361, pp. 2-3 [memorandum opinion discussing identification of trade secrets].) Consequently,
the Court finds that it is reasonable for defendants to have an accurate and up-to-date list of
alleged trade secrets reasonably in advance of the second Rule 30(b)(6) deposition. Second, the
volume of the documents containing trade secrets identified by plaintiffs makes it even more
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crucial that counsel for defendants have an accurate and up-to-date list to allow them to properly
prepare for the deposition, which is generally limited to one day of seven hours. See Fed. R. Civ.
P. 30. Third, the Court has stated in the past that “hyper-technicalities” are discouraged. After
reviewing the second 30(b)(6) deposition notice (DN 232-2), the Court finds that the topics are
limited to and stem from the identification of trade secrets by plaintiffs and are therefore proper.
Finally, neither party discusses with specificity plaintiffs’ objections to the second Rule 30(b)(6)
notice in their briefs. Plaintiffs, however, aver that they objected to some of the topics in the
second Rule 30(b)(6) deposition notice because they call for expert or opinion testimony. (See,
e.g., DN 232-1, p. 3; DN 243, pp. 5-6.)
The Court agrees that plaintiffs’ Rule 30(b)(6)
deponent(s) is not required to give expert testimony; rather, the deponent must have knowledge
of the factual basis for plaintiffs’ claims. See Smith v. Gen. Mills, Inc., No. C2 04-705, 2006 WL
7276959, at *3 (S.D. Ohio Apr. 13, 2006) (“[N]umerous courts have ruled that a Rule 30(b)(6)
notice of deposition that seeks the factual bases for another party's claims or defenses is proper.”)
(citing cases).
In a separate memorandum opinion and order (DN 361), the Court ordered that plaintiffs
further clarify their identification of trade secrets by November 4, 2016. This deadline was later
extended to November 11, 2016. (See DN 373.) Consequently, the second Rule 30(b)(6)
deposition shall take place after November 11, 2016 at a date, time, and place mutually agreeable
to all parties with each bearing his/her/its own costs or as otherwise agreed.
III.
CONCLUSION
Accordingly,
IT IS ORDERED that the Motion for Protective Order (DN 232) is DENIED.
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IT IS FURTHER ORDERED that the second Rule 30(b)(6) deposition of plaintiffs’
corporate representative(s) shall take place after November 11, 2016 at a date, time, and place
mutually agreeable to all parties.
Colin Lindsay, MagistrateJudge
United States District Court
cc: Counsel of record
November 14, 2016
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