Choon's Design LLC v. Tristar Products, Inc.

Filing 91

ORDER denying 86 Motion to Seal; granting 87 Motion to Compel. Signed by District Judge Victoria A. Roberts. (CPin)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTICT OF MICHIGAN
SOUTHERN DIVISION
CHOON’S DESIGN INC.,
Plaintiff,

Case No. 14-10848
Honorable Victoria A. Roberts

v.
TRISTAR PRODUCTS, INC.,
Defendant.
______________________________/
ORDER GRANTING DEFENDANT’S MOTION TO COMPEL
PRODUCTION [Doc. 87] AND DENYING ITS MOTION TO SEAL [Doc. 86]
This matter is before the Court on Defendant Tristar Products, Inc.’s motion to
compel production [Doc. 87] and motion to file the same under seal [Doc. 86].
Tristar’s motion to seal does not “state the authority for sealing,” as required by
E.D. Mich. LR 5.3(b)(2)(A). The motion to seal is DENIED. On the other hand, Tristar’s
motion to compel is GRANTED.
Tristar’s motion to compel concerns a settlement agreement that Plaintiff
Choon’s Design Inc. (f/k/a Choon’s Design LLC) entered into with non-parties Toys “R”
Us – Delaware, Inc. (“TRU”) and LaRose Industries, LLC (the “Settlement Agreement”).
Choon’s does not dispute that the Settlement Agreement falls within the scope of
Tristar’s discovery requests. However, it says the Court should deny Tristar’s motion
because: (1) the Settlement Agreement is not relevant, or is, at most, minimally
relevant; (2) it produced several other settlement agreements entered into with other
parties in connection with the same patents, such that the production of the Settlement
Agreement would be cumulative; (3) the proportionality of Tristar’s need for the

agreement does not warrant compelling its production; (4) Choon’s and LaRose/TRU
designated the Settlement Agreement “Confidential”; and (5) it formally objected to
producing the agreement more than 18 months ago, such that Tristar’s motion is
untimely.
The fact that Choon’s and LaRose/TRU designated the Settlement Agreement
confidential is of no consequence. “The terms of a settlement agreement, even when
marked confidential, are not protected from discovery by privilege.” State Farm Mut.
Auto. Ins. Co. v. Universal Health Grp., Inc., No. 14-10266, 2016 WL 6822014, at *2
(E.D. Mich. Nov. 18, 2016) (citations omitted). See also In re MSTG, Inc., 675 F.3d
1337, 1348 (Fed. Cir. 2012) (“settlement negotiations related to reasonable royalties
and damage calculations are not protected by a settlement negotiation privilege”). “The
only constraint is whether . . . the material ‘is relevant to any party’s claim or defense
and proportional to the needs of the case.’” State Farm Mut., 2016 WL 6822014, at *2
(quoting Fed. R. Civ. P. 26(b)(1) (“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. . . .”)).
Although Choon’s now argues that the Settlement Agreement is not relevant, it
never specifically objected to producing the Settlement Agreement because it was
irrelevant. Rather, as it concedes, it produced all other settlement agreements it
entered into regarding the underlying patents, but withheld the agreement with LaRose
and TRU because it was designated confidential. In patent cases, “settlement
agreements can be pertinent to the issue of reasonable royalties.” See In re MSTG,
Inc., 675 F.3d 1337, 1348 (Fed. Cir. 2012) (citing ResQNet.com, Inc. v. Lansa, Inc., 594

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F.3d 860, 869-73 (Fed. Cir. 2010)). Because the Settlement Agreement concerns the
same patents of Choon’s that are at issue in this suit, it is “relevant” to the issue of
reasonable royalties and discoverable. See id.; State Farm Mut., 2016 WL 6822014, at
*2 (“Evidence is ‘relevant’ to a party's claim or defense if it has ‘any tendency to make
the existence of any fact that is of consequence to the determination of the action more
probable or less probable than it would be without the evidence.’”) (citations omitted).
Moreover, while Choon’s produced other settlement agreements, there is no way
to determine whether the Settlement Agreement with LaRose and TRU is cumulative of
that evidence because it has not been produced. On the other hand, the burden on
Choon’s to produce one document – that may be cumulative – is minor. Therefore, the
Court finds that Tristar’s request for the Settlement Agreement is proportional to the
needs of the case.
Finally, although Tristar may not have acted as diligently as it should have, the
Court finds any lack of diligence excusable. Choon’s never provided a specific
objection to Tristar’s discovery requests stating that it was withholding the Settlement
Agreement on a particular basis. Moreover, the parties engaged in extended settlement
discussions over several months; there may have been no need to pursue this
discovery during that period of time.
Tristar’s motion to compel production [Doc. 87] is GRANTED. Choon’s must
produce the Settlement Agreement to Tristar by March 3, 2017 at 5:00 p.m.
IT IS ORDERED.
S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: February 28, 2017
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