ACI Worldwide Corp. v. MasterCard Technologies, LLC et al

Filing 335

ORDER - Plaintiff's Motion to Compel Subpoena to BHMI (Filing No. 292 ) is granted. Ordered by Magistrate Judge F.A. Gossett. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ACI WORLDWIDE CORP.,
Plaintiff,
v.
MASTERCARD TECHNOLOGIES,
LLC and MASTERCARD
INTERNATIONAL
INCORPORATED,
Defendants.

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8:14CV31
ORDER

This matter is before the court on Plaintiff’s motion (Filing No. 292) to compel the
issuance of a subpoena to produce documents on BHMI, a nonparty. For the reasons
explained below, the court will grant the motion.
BACKGROUND
Plaintiff alleges that Defendants, in violation of a licensing agreement and other legal
obligations between the parties, disclosed confidential information regarding Plaintiff’s
NET24-XPNET middleware to Baldwin Hackett & Meeks, Incorporated (“BHMI”). Plaintiff
claims that the disclosure of this proprietary intellectual property, including Plaintiff’s
software, manuals, and/or derivative works, allowed Defendants and BHMI to replicate
Plaintiff’s NET24-XPNET middleware and create a replacement middleware product known
as TMS. (Filing No. 48).
On December 30, 2015, Plaintiff provided notice to Defendants of Plaintiff’s intent to
serve a subpoena to produce documents on BHMI.

(Filing No. 294-2).

Defendants

objected to the subpoena on January 6, 2016. (Filing No. 294-3). The parties unsuccessfully
conferred by telephone on January 13, 2016. (Filing No. 292 at p.2).
Plaintiff’s subpoena requests BHMI to produce (1) all communications and documents
exchanged, stored-in or transmitted between Defendants and BHMI “related to XPNET,
TMS, BASE24, MDS, Middleware, a Gateway, a Wrapper, the Federal Litigation, or the
State Litigation;” (2) all libraries, source code, development records, and communications

and documents regarding the development of TMS; (3) all communications and documents
regarding a Wrapper or Gateway for MDS and/or TMS; (4) all Manuals for TMS, XPNET,
the MDS, or a Wrapper or Gateway used in connection with the MDS; and (5) all documents
created by Plaintiff, containing Plaintiff's confidential information, or bearing Plaintiff’s
copyright or logo. (Filing No. 294-2 at p.6). Plaintiff asserts the subpoena’s requests are
aimed at determining the extent of Defendants’ disclosures to BHMI, the extent to which
BHMI relied on and incorporated such information to create TMS, and whether BHMI
disclosed such information to third parties. (Filing No. 314 at p.2). Defendants assert the
subpoena seeks irrelevant information, is overbroad and unduly burdensome, and is
inappropriate because Plaintiff previously violated a protective order. (Filing No. 310 at
pp.3-9).
DISCUSSION
Plaintiff argues, with merit, that Defendants do not have standing to raise certain
objections to subpoenas on behalf of BHMI. “[An] adverse party has standing to object to a
third-party subpoena on grounds of relevance or to protect a personal right or privilege in the
information requested.” Jenkins v. Pech, No. 8:14CV41, 2015 WL 728305, at *3 (D. Neb.
Feb. 19, 2015) (quoting Streck, Inc. v. Research & Diagnostic Sys., Inc., No. 8:06CV458,
2009 WL 1562851, at *3 (D. Neb. June 1, 2009)). As such, the court finds Defendants do not
have standing to lodge objections to the issuance of the third-party subpoena to protect BHMI
from undue burden, inconvenience, and the like. Defendants do not represent BHMI’s
interests in this litigation. BHMI itself is in the best position to negotiate with the requesting
party and, where necessary, raise its own objections pursuant to Fed. R. Civ. P. 26(c) or Fed.
R. Civ. P. 45(d).

Defendants have not shown that they themselves would be unduly

burdened by the discovery requests, nor have they shown they have any personal right or
privilege in the information sought by Plaintiff.

Therefore, Defendants are limited to

objecting on relevance.
A party does have standing to move for a protective order if a third-party subpoena
seeks irrelevant information. See Auto-Owners Ins. Co. v. Southeast Floating Docks, Inc.,
231 F.R.D. 426, 429 (M.D. Fla. 2005). Under the federal rules, parties to a lawsuit may
obtain discovery regarding any matter, not privileged, that is relevant to a claim or defense of

any party. Fed. R. Civ. P. 26(b)(1). The scope of permissible discovery is extremely broad.
“Discovery requests should be considered relevant if there is any possibility the information
sought is relevant to any issue in the case and should ordinarily be allowed, unless it is clear
the information sought can have no possible bearing on the subject matter of the action.”
Met-Pro Corp. v. Industrial Air Technology, Corp., No. 8:07CV262, 2009 WL 553017, * 3
(D. Neb. March 4, 2009). “[R]elevant information need not be admissible at the trial if the
discovery appears reasonably calculated to lead to the discovery of admissible evidence.”
WWP, Inc. v. Wounded Warriors Family Support, Inc., 628 F.3d 1032, 1039 (8th Cir. 2011)
(quoting Fed. R. Civ. P. 26(b)(1)). When the discovery sought appears relevant on its face,
the party resisting discovery has the burden to establish that the discovery is not relevant, or is
“of such marginal relevance that the potential harm occasioned by the discovery would
outweigh the ordinary presumption in favor of broad disclosure.” Moses v. Halstead, 236
F.R.D. 667, 671 (D. Kan. 2006). If the relevancy of the discovery request is not readily
apparent, the party seeking the discovery has the burden to show the relevancy of the request.
Id.
Though the court finds Defendants have standing to object to the subpoena based on
relevance pursuant to Fed. R. Civ. P. 26(c), their objections are without merit. Considering
the nature of the parties’ claims and defenses, the court finds Plaintiff’s requests for
documents are relevant to the issues in the instant case. Plaintiff seeks documents and
communications related to the alleged disclosure of Plaintiff’s confidential information from
Defendants to BHMI and the extent to which such confidential information was used.
Plaintiff also seeks information relevant to Defendants’ defenses, including its assertion that
BHMI independently developed TMS. (Filing No. 122 at p.6). Defendants’ objections
based on relevance are therefore overruled.
Finally, Defendants again argue that Plaintiff should be sanctioned under Rule
37(b)(2)(A) for allegedly violating the protective order by using discovery from this
proceeding in proceedings in state court. (Filing No. 310 at pp.9-10; Filing No. 267 at pp.
20-23; Filing No. 275 at pp. 3-4). At this time, the court finds Plaintiff’s conduct was in
compliance with its previous protective orders and therefore finds sanctions unwarranted.
(Filing No. 290 at p.2 “This Court merely finds that the state court judge should be given the
opportunity to review the materials should he so choose.”). Accordingly,

IT IS ORDERED:
Plaintiff’s Motion to Compel Subpoena to BHMI (Filing No. 292) is granted.

DATED: March 24, 2016.
BY THE COURT:
s/ F.A. Gossett, III
United States Magistrate Judge