West Plains, L.L.C. v. Retzlaff Grain Company Incorporated, et al

Filing 60

MEMORANDUM AND ORDER - Plaintiff's Motion to Compel Compliance (Filing No. #51 ) is denied, without prejudice to reassertion. Ordered by Chief Judge Laurie Smith Camp. (AOA)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
WEST PLAINS, L.L.C.,
Plaintiff,

CASE NO. 8:13CV47

vs.
RETZLAFF GRAIN COMPANY
INCORPORATED, BRYCE WELLS,
JEFFREY BRADLEY, THOMAS DANNER,
REBECCA DANNER, JODY MAY, CHAD
NEEDHAM, TODD PAYZANT,
SAMANTHA RHONE, CRYSTAL
KONECKY, CINDY SCHOLTING, DREW
WAGGONER,

MEMORANDUM
AND ORDER

Defendants.

This matter is before the Court on the Plaintiff’s Motion to Compel Compliance
with Court Order (Filing No. 51).

Having considered the parties’ briefs and the

accompanying indexes of evidence, the Motion will be denied, without prejudice to
reassertion.
BACKGROUND
On February 8, 2013, Plaintiff filed a Complaint initiating this action and alleging
claims of misappropriation of trade secrets, breach of the duty of loyalty, tortious
interference with business and employment relationships, conspiracy, and violations of
the Computer Fraud and Abuse Act (Filing No. 1 ). On February 26, 2013, the Court
granted, in part, Plaintiff's Motion for Preliminary Injunction (referred to herein as the
“Preliminary Injunction Order”) (Filing No. 45). The Preliminary Injunction Order stated,
inter alia, that "Defendants and all persons or entities acting in concert with them shall
immediately return to Plaintiff West Plains, L.L.C. d/b/a CT Freight Company all original

records or documents and any copies in whatever form or type, that contain Confidential
Information belonging to Plaintiff West Plains, L.L.C. d/b/a CT Freight Company." (Filing
No. 45 at 21.)

The order defined Confidential Information as defined Confidential

Information as:
…including without limitation, information about customer needs (e.g.
quantity of resources and location of resources needed by customers; and
customer contact personnel and their corresponding facsimile numbers,
telephone numbers, or email contact information); pricing processes and
rates; driver databases and/or spreadsheets and information contained
therein or derived therefrom; proposals made or planned by Plaintiff West
Plains, L.L.C. d/b/a CT Freight Company for such customers; and
technical analyses or other data provided by Plaintiff West Plains, L.L.C.
d/b/a CT Freight Company for use by Individual Defendants in servicing
customers and contract carriers.
(Id. at 20.)
To this point, Defendants have returned the following to the Plaintiff:

Drew

Waggoner's address book; Todd Payzant's address book; Chad Needham's address
book; Jeffrey Bradley's Rolodex; Rebecca Danner's Rolodex; Todd Payzant's notes
(beginning 1/29/2013); Thomas Danner's Rolodex; Chad Needham's notes (beginning
10/12/12); and data maintained by West Plains Co. following sale to West Plains, LLC.
Defendants also returned paper copies of certain e-mail correspondence, including
emails containing West Plains' standard forms and contracts.

Plaintiff claims that

Defendants have not yet produced any electronic records or any information regarding
electronic accounts that contain Confidential Information belonging to West Plains.
Defendants counter that they have returned any and all records or documents that may
be considered confidential information under the Preliminary Injunction Order. (Filing
No. 56-1 at 8.)

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Plaintiff requests an order compelling all Defendants to (1) produce their personal
cell phone and computer or laptop devices and to pay for fifty percent (50%) of the cost
of imaging those devices and making working copies of those images; (2) identify all
personal electronic mail addresses and instant messaging addresses for each
Defendant and the third party hosting company for each such address; (3) allow Plaintiff
to run searches of Defendants' personal cell phone and computer or laptop devices,
electronic mail addresses, and instant messaging addresses to retrieve West Plains'
Confidential Information; and (4) extend the April 5, 2013 deadline of the current
Preliminary Injunction for a reasonable period of time until such time as Plaintiff is able
to image the personal computer devices, to search the Defendants' personal electronic
mail and instant messaging accounts to retrieve all Confidential Information belonging to
West Plains, and to confirm that no West Plains' Confidential Information remains in
Defendants' possession. Defendants claim that they have turned over all records or
documents in their possession that may be covered by the Preliminary Injunction Order,
and further allowed, or will allow, Plaintiff to image their business and personal
computers and electronic devices to ensure compliance.
STANDARD
Plaintiff styles its Motion as one to compel; however, it cites standards for civil
contempt and sanctions. (See Filing No. 51 at 9.) Plaintiff also alludes to Fed. R. Civ.
Pr. 37(b)(2), and compares this Motion to motions to compel in the discovery context.
Plaintiff’s Motion does not arise under a discovery order, and the Court will therefore
treat Plaintiff’s Motion as one for civil contempt, with a request for sanctions.

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In a civil contempt proceeding, the moving party must prove, by clear and
convincing evidence, that the person allegedly in contempt violated the court's order.
Chicago Truck Drivers v. Bhd. Labor Leasing, 207 F.3d 500, 505 (8th Cir.2000).
However, the moving party does not need to show that the violation of the court's order
was willful. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949). Once the
moving party has met its burden, the burden shifts to the nonmoving party to show
inability to comply. Chicago Truck Drivers, 207 F.3d at 505. To demonstrate inability to
comply, nonmoving parties must establish “(1) that they were unable to comply,
explaining why categorically and in detail, (2) that their inability to comply was not selfinduced, and (3) that they made, in good faith all reasonable efforts to comply.” United
States v. Santee Sioux Tribe of Neb., 254 F.3d 728, 736 (8th Cir.2001) (citation
omitted).
DISCUSSION
Plaintiff’s Motion relates to the mandate in the Preliminary Injunction Order that
the Defendants return all confidential information belonging to Plaintiff.

Thus, the

question before the Court is whether Plaintiff has demonstrated by clear and convincing
evidence that Defendants have failed to return “all original records or documents and
any copies in whatever form or type, that contain Confidential Information belonging to
Plaintiff.” (Filing No. 45 at 21.) The Court concludes that the Plaintiff has not met this
burden.

Plaintiff relies on the affidavit of Paul Shotkoski along with copies of

correspondence between the parties.

Mr. Shotkoski states in his affidavit that

Defendants have not produced any electronic records containing Confidential
Information belonging to West Plains, nor have Defendants given Plaintiff access to
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those accounts to confirm compliance with the Court's prior orders. (Filing No. 52-1 at
5.) Based on Defendants’ alleged previous attempts to erase company e-mails, Plaintiff
expresses concern that if Plaintiff is not permitted to image the Defendants’ personal email and instant message accounts, key information will be lost forever. (Filing No. 51
at 6.) Further, a primary contention of Plaintiff is that while Defendants have returned
some confidential information, Defendants have failed to assure the Plaintiff or the Court
that all information has been returned, nor have they disclosed the methods employed
to comply with the Preliminary Injunction Order.
Defendants deny Plaintiff’s claims, and affirmatively assert that they have
confirmed that all documents containing covered by the Preliminary Injunction Order
have been returned. Defendants have stated, through their counsel of record, that they
have returned Rolodexes, notebooks, emails, and forms that were responsive to the
Preliminary Injunction Order.

(See Filing Nos. 56-1 at 4; 56-2 at CM/ECF p. 2.)

Defendants specifically assert they have turned over all records or documents in their
possession that may be covered by the Court’s Preliminary Injunction Order and further
allowed, or will allow, Plaintiff to image their business and personal computers and
electronic devices. (Filing No. 56-1 at 7-8; 56-4 through 56-6.)
The Court cannot conclude based on the attorneys’ competing affidavits that
Plaintiff has produced clear and convincing evidence of Defendants’ noncompliance
with the Preliminary Injunction Order. Plaintiff argues that Defendants must provide
“reasonable assurance to the Plaintiff and the Court that all confidential and proprietary
information has been searched for, located and returned to Plaintiff.” (Filing No. 59 at
6.) This argument attempts to shift the Plaintiff’s burden of proof before Plaintiff has
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proven that Defendants failed to comply with the Preliminary Injunction Order. This is
inconsistent with the standard for civil contempt.
According to the representations of Defendants’ counsel, Defendants have
agreed to produce much of the information Plaintiff requests. Further, most of the
information requested is discoverable, and avenues exist whereby Plaintiff may obtain
such information through discovery without undue delay. The Preliminary Injunction
Order did not require the type of confirmation or action sought by Plaintiff in this Motion
and, absent clear and convincing evidence of noncompliance, it would be inappropriate
to order production of this information as a sanction for contempt.

Should further

evidence come to light demonstrating noncompliance with the Preliminary Injunction
Order, Plaintiff may reassert its claims at that time. Plaintiff has not met its burden of
showing through clear and convincing evidence that Defendants have violated the
Preliminary Injunction Order. Accordingly,
IT IS ORDERED: Plaintiff’s Motion to Compel Compliance (Filing No. 51) is
denied, without prejudice to reassertion.
Dated this 19th day of April, 2013.
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge

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