LinTech Global, Inc. v. CAN Softtech, Inc. et al

Filing 84

OPINION and ORDER Denying Defendants' Objections to Magistrate Judge's August 28, 2020 Order. Signed by District Judge Linda V. Parker. (RLou)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LINTECH GLOBAL, INC.,
Plaintiff,
Case No. 2:19-cv-11600
Honorable Linda V. Parker

v.
CAN SOFTTECH, INC., and
SWAPNA REDDYGARI,
Defendants,
And
CAN SOFTTECH, INC.,
Counter-Plaintiff,
v.
LINTECH GLOBAL, INC.,
Counter-Defendant.
_______________________________/

OPINION AND ORDER DENYING DEFENDANTS’ OBJECTIONS TO
MAGISTRATE JUDGE’S AUGUST 28, 2020 ORDER
Plaintiff LinTech Global, Inc. initiated this lawsuit against Defendants CAN
Softtech, Inc. (“CAN”)—a former LinTech subcontractor—and Swapna Reddygari
(“Reddygari”)—a former LinTech employee—after the Federal Aviation
Administration (“FAA”) terminated its contract with Plaintiff and engaged

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Defendants to do “substantially the same project.” (Am. Compl., ECF No. 1 at Pg.
ID 592-93, 597.) In its Amended Complaint, Plaintiff alleges (i) breach of duty of
loyalty against Reddygari; (ii) breach of contract against CAN; (iii) trade secret
misappropriation against both Defendants; (iv) unjust enrichment against
Reddygari; and (v) tortious interference with a business relationship or expectancy
against both Defendants. (Id. at Pg. ID 600-05.)
On July 2, 2020, Plaintiff filed a Motion to Compel Discovery regarding
certain communications between Defendants and the FAA. (ECF No. 47.) This
Court referred Plaintiff’s motion to Magistrate Judge David R. Grand for a hearing
and determination pursuant to 28 U.S.C. § 636(b)(1)(A). (ECF No. 48.) On
August 27, Magistrate Judge Grand held a hearing regarding the motion. During
the hearing, Magistrate Judge Grand explained that, in spite of Defendants’
assertion that the information contained in the relevant documents belongs to the
FAA “pursuant to the agreements between [CAN] and the FAA,” Defendants had
not produced copies of or excerpts from such an agreement to support their
assertion. (8/27/20 Hr’g Tr., ECF No. 64 at Pg. ID 1309-10, 22:1-23:3.)
Magistrate Judge Grand further explained that he could not rule in favor of
Defendants “without . . . [a] very specific recitation of . . . what the contract says, .
. . what the document is, . . . . [and] what the FAA is saying about why it should
not be produced.” (Id. at Pg. ID 1310, 23:12-19.) For the reasons stated on the
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record, Magistrate Judge Grand issued an Order compelling Defendants to produce
documents in response to the following requests:
15. Produce all email and other correspondence between
CAN and FAA between May 14, 2019 to the present date
regarding, relating or referring to:
a.
b.

LinTech;
The CAN FAA Contract award and scope of
work;
c.
Justification for Sole-Source Award;
d.
Communications to U.S. Congress to justify
sole-source award; and
e.
Hiring or potential hiring of any LinTech
personnel.
23. Produce copies of all documents or communications
between any agent, employee, or representative of CAN
and any FAA Project representative pertaining to the FAA
Project and/or CAN’s interest, proposal and subsequent
award to obtain the FAA Project.1
30. Produce copies of all communications between CAN
and all FAA personnel relating to LinTech.
(See ECF No. 65.)
On September 10, Defendants filed an Objection to Magistrate Judge
Grand’s Order. (ECF No. 68.) In their brief, Defendants “narrowly object to . . .
the Magistrate Judge’s Order to the extent it requires the production of documents
prior to CAN obtaining permission from the FAA regarding disclosure.” (Id. at

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Magistrate Judge Grand limited the scope of Request for Production No. 23 to
documents “pertaining to the decision to award the FAA project” to CAN. (See
8/27/20 Hr’g Tr., ECF No. 64 at Pg. ID 1313, 26:6-18.)
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Pg. ID 1363.) Defendants argue that they “cannot comply with this portion of the
Order without breaching its contractual obligation.” (Id. at Pg. ID 1369.) To
support this contention, Defendants excerpted several portions of the contract
between CAN and the FAA (“FAA/CAN Contract”), including the following:
In performance of this contract, the contractor and any
of its subcontractors, may need access to and use various
data and information in the possession of the
Government. This data and information may have been
obtained under conditions which restrict the
Government’s right to use and disclose this data and
information or which may be adverse to the interests of the
Government or other parties if it is disseminated or used
in a capacity other than in performance of this contract.
Therefore, the contractor and its subcontractors agree to
abide by any restrictive use conditions on such data and
not to: (1) knowingly disclose such data and information
to others without written authorization from the
Contracting Officer, unless it is already [publicly]
available. . . .
The Contractor is responsible for protecting all
information used, gathered, or developed as a result of
work under this Contract. The Contractor must protect
all Government data, equipment, etc. by treating the
information as sensitive. . . . The Contractor must not
release data without the Government’s written consent.
The Contractor must submit all requests for release to the
COR/CO in writing.
(Id. at Pg. ID 1365-67 (citing Ex. B, ECF No. 68-3 at 3.13-15(a), H.3) (emphasis
added).)
Federal Rule of Civil Procedure 72(a) and 28 U.S.C. § 636(b)(1)(A) provide
the standard of review this Court must apply when objections are filed with respect
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to a magistrate judge’s ruling on nondispositive matters. The rule provides in
relevant part: “The district judge in the case must consider timely objections and
modify or set aside any part of the order that is clearly erroneous or is contrary to
law.” Fed. R. Civ. P. 72(a); see also 28 U.S.C. § 636(b)(1)(A).
Applying this standard here, the Court rejects Defendants’ Objection to
Magistrate Judge Grand’s Order. The contractual provisions to which Defendants
point concern (i) “data and information in the possession of the Government”
“accessed” or “used” “[i]n performance of [the FAA/CAN] [C]ontract” and (ii)
“information used, gathered, or developed as a result of work under this Contract.”
(Ex. B, ECF No. 68-3 at 3.13-15(a), H.3 (emphasis added).) Defendants have not
suggested that the relevant documents and communications contain information
once in the possession of the Government and subsequently accessed or used by
Defendants “[i]n perform[ing]” the FAA/CAN Contract. Nor have Defendants
suggested that the relevant documents and communications contain information
used, gathered, or developed “as a result of work” under the FAA/CAN Contract.
Additionally, it appears that much of the relevant communication occurred
prior to the execution of the FAA/CAN Contract. Defendants fail to explain why
such communications are subject to the contract’s confidentiality provisions.
The Court also notes that defense counsel does not represent the FAA.
Accordingly, defense counsel’s uncorroborated assertions that “the FAA considers
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all such communications,”—specifically, the requested documents—“to be
property of the FAA and not subject to disclosure” and that “[t]he FAA has taken
the position that the information contained in those documents is the FAA’s
information and the FAA’s documents pursuant to the agreements between [CAN]
and the FAA” do not move Defendants closer to showing that Magistrate Judge
Grand’s Order is clearly erroneous or contrary to law. (See ECF No. 68 at Pg. ID
1362 (citing ECF No. 52 at Pg. ID 924; 8/27/20 Hr’g Tr., ECF No. 64 at Pg. ID
1309, 22:2-8).)
CONCLUSION
Defendants have not demonstrated that any part of Magistrate Judge Grand’s
Order is clearly erroneous or is contrary to law. The Court therefore rejects
Defendants’ Objection.
Accordingly,
IT IS ORDERED that Magistrate Judge Grand’s Order Granting in Part and
Denying in Part Plaintiff’s Motion to Compel Discovery (ECF No. 68) is
AFFIRMED.
IT IS FURTHER ORDERED that Defendants shall produce the
supplemental responses and documents ordered by the Court within seven (7) days

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of this Opinion and Order.
IT IS SO ORDERED.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: November 18, 2020

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