Outdoor Leisure Products, Inc v. Dansons, Inc. et al

Filing 99

ORDER regarding discovery dispute and identification of trade secrets. Signed on 8/7/2018 by District Judge Roseann Ketchmark. (Perry, Madison)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHWESTERN DIVISION
OUTDOOR LEISURE PRODUCTS, INC,
et al.,
Plaintiffs,
v.
DANSONS, INC., et al.,
Defendants.

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Case No. 3:17-05029-CV-RK

ORDER REGARDING DISCOVERY DISPUTE AND
IDENTIFICATION OF TRADE SECRETS
Now before the Court is a discovery dispute related to an Access database maintained by
Defendants. After holding a discovery dispute telephone conference on the matter, the Court
directed the parties to provide further briefing. (Doc. 83.) That briefing is now complete.
(Docs. 87, 89, 92.) Plaintiffs ask the Court to compel Defendants to produce an Access database
within their possession. Defendants ask the Court to require Plaintiffs to describe their alleged
trade secrets with more particularity before proceeding with further discovery of the Access
database. After careful review, the Court will require Plaintiffs to more particularly describe their
alleged trade secrets before seeking further discovery of the Access database.
The Court first looks to Federal Rule of Civil Procedure 26 to determine the relevant scope
of discovery. Generally, parties are entitled to discovery regarding any non-privileged matter that
is relevant to any claim or defense. Fed. R. Civ. P. 26(b)(1). While this liberal rule is not bound
by admissibility standards, it “should not be misapplied so as to allow fishing expeditions in
discovery.” Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992). Additionally, the
“court may, for good cause, issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense[.]” Fed. R. Civ. P. 26(c), and the Court
has broad discretion to modify the sequence of discovery “for the parties’ and witnesses’
convenience and in the interests of justice[.]” Fed. R. Civ. P. 26(d).
“Trade secret cases present unique and difficult problems with respect to the timing and
scope of discovery.” DeRubeis v. Witten Techs., Inc., 244 F.R.D. 676, 679 (N.D. Ga. 2007). There
are competing policy considerations for whether or not to allow discovery before trade secrets are

particularly identified. Policy considerations for allowing Plaintiffs to proceed with discovery
before particularly identifying trade secrets include:
[1] plaintiff’s broad right to discovery under the Federal Rules of Civil Procedure[;]
. . . [2] the trade secret plaintiff, particularly if it is a company that has hundreds or
thousands of trade secrets, may have no way of knowing what trade secrets have
been misappropriated until it receives discovery on how the defendant is
operating[;] . . . [and 3 the trade secret plaintiff] is placed in somewhat of a “Catch22”: Satisfying the requirement of detailed disclosure of the trade secrets without
knowledge [of] what the defendant is doing can be very difficult. If the list is too
general, it will encompass material that the defendant will be able to show cannot
be trade secret. If instead it is too specific, it may miss what the defendant is doing.
DeRubeis, 244 F.R.D. at 680 (citations omitted). In contrast, there are also a number of policy
reasons that support an early disclosure requirement:
(1) it promotes well-investigated claims and dissuades the filing of meritless trade
secret complaints, (2) it prevents plaintiffs from conducting “fishing expeditions”
and using discovery as a means to obtain the defendant’s trade secrets, (3) it assists
the court in framing the appropriate scope of discovery, and (4) it enables
defendants to form complete and well-reasoned defenses and ensures that
defendants need not wait until the eve of trial to defend against trade secret claims
effectively.
1-2 Trade Secrets: Law and Practice § 2.06 (2017) (citations omitted); see also Porous Media
Corp. v. Midland Brake Inc., 187 F.R.D. 598, 600 (D. Minn. 1999) (“Ordering the listing of trade
secrets at the outset of the litigation is a common requirement. Failure to identify the trade secrets
with sufficient specificity renders the Court powerless to enforce any trade secret claim. . . . The
orderly disposition of cases involving claims of misappropriation of trade secrets cannot permit a
situation where the details concerning the claimed trade secrets are not disclosed at an early date
in the litigation. Adequate discovery cannot be conducted in the absence of the specific disclosure
which is required by this Order.”); Roeslein & Assocs. v. Elgin, 2018 U.S. Dist. LEXIS 34000, at
*29-30 (E.D. Mo. Mar. 2, 2018) (“any particularity in pleading Defendants seek regarding
Plaintiffs’ trade secret claims may be addressed through the discovery process in this litigation[.]”).
In balancing the policy considerations in light of the facts of this case, the Court finds that
it is appropriate to first require Plaintiffs to identify their alleged trade secrets with reasonable
particularity before seeking discovery of Defendants’ Access database. First, Plaintiffs should be
aware of the specific products and trade secret information Defendants Simon and Giebel were
working on and had access to during the time they were employed by Plaintiff Outdoor Leisure
Products. Moreover, this will prevent Plaintiffs from conducting a fishing expedition or using
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discovery as a means to obtain the Defendant’s trade secrets and will assist the Court in framing
the appropriate scope of discovery.
In their briefing, Plaintiffs argue that even if they are required to identify their trade secrets
with reasonable particularity, they have already done so. The Court disagrees. The proposed
verdict director submitted by Plaintiffs at the Court’s request is too generalized and fails to provide
enough particularity. In addition, Plaintiffs caveat the verdict director with a note that “the verdict
director is preliminary in nature . . . that it may change pending receipt of additional discovery
requested in order to determine if Defendants have utilized additional trade secrets.” This is the
type of fishing expedition that would be permitted if Plaintiffs are not required to identify their
trade secrets with reasonable particularity.
Accordingly, Plaintiffs’ request that the Court compel Defendants to produce their Access
database is DENIED without prejudice. Further, the Court GRANTS Defendants’ request to
require Plaintiffs to describe their alleged trade secrets with more particularity before proceeding
with further discovery of the Access database.
IT IS SO ORDERED.
s/ Roseann A. Ketchmark
ROSEANN A. KETCHMARK, JUDGE
UNITED STATES DISTRICT COURT
DATED: August 7, 2018

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