Schmidt v. Navistar, Inc.
Filing
117
MEMORANDUM OPINION AND ORDER by Magistrate Judge John F. Robbenhaar Regarding Defendant's Objection and Request to Stay. (kc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
D. MARIA SCHMIDT,
Plaintiff,
vs.
Civ. No. 18-321 KG/JFR
NAVISTAR, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
REGARDING DEFENDANT’S OBJECTION AND REQUEST TO STAY
Before the Court is Defendant Navistar’s Objection and Request to Stay, Doc. 93, upon
remand from District Judge Kenneth Gonzales to consider new evidence from the parties that
was not previously presented to the Court. Doc. 110. Specifically, the Court must determine
(1) whether Defendant must produce the CAD files and FEA models as previously ordered, and
(2) whether an additional protective order, as proposed by Defendant, is necessary if Defendant
must produce the CAD files and FEA models. Id.
On August 24, 2020, the parties submitted additional briefing on the questions presented,
which the Court received and reviewed. Docs. 114, 115. On August 28, 2020, the Court held a
hearing to consider the parties’ arguments. Having considered the parties’ submissions, oral
argument, and the relevant law, the Court finds Defendant’s objection regarding the production
of CAD files and FEA models is well taken and SUSTAINED.
PROCEDURAL BACKGROUND
This is a wrongful death case arising out of an accident that occurred in March 2015
when Ruben Guerra Guinones was driving a heavy commercial truck, lost control, and the
vehicle rolled over. Mr. Guinones died in the accident. Plaintiff D. Maria Schmidt, as personal
representative of the wrongful death estate, brought suit against Defendant Navistar, Inc., the
manufacturer of the truck, for strict products liability, negligence, and breach of implied
warranty of merchantability. Doc. 4. Plaintiff alleges that fatal design flaws rendered the
Subject Vehicle, a 2009 International 9200i commercial vehicle designed and manufactured by
Defendant, not crashworthy.
A.
Agreed Protective Order
On November 12, 2019, the parties entered into an Agreed Protective Order, in which the
parties aim to protect “proprietary and business information and/or trade secrets . . . .” Doc. 60.
Generally, the parties stipulated that “Protected Documents” should not be disclosed or
otherwise disseminated except under very specific procedures and only to specifically authorized
individuals. Indeed, anyone who receives Protected Documents must sign an acknowledgement
(“Exhibit A”) agreeing that all Protected Documents and all information contained therein must
be used solely for the prosecution of this litigation. Id. at 4. The parties also stipulated that the
provisions of the Agreed Protective Order would remain binding on them even after the case is
closed, and the parties agreed to return all Protected Documents to the disclosing party, or
otherwise certify that such material had been destroyed. Id. at 6.
B.
Discovery Dispute and Court Order
The parties reached an impasse in their exchange of discovery as to several of Plaintiff’s
requests and, unable to resolve the dispute, on February 14, 2020, Plaintiff filed a motion to
compel. Doc. 75. The dispute centered on Plaintiff’s Requests for Production Nos. 3, 6, 8, 9, 11,
and 13. Plaintiff generally argued that she needed the computer assisted design (“CAD”) and
finite element analysis (“FEA”) models created by Defendant for the Subject Vehicle and other
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vehicle models (regarding cab and cab roof structures) designed and sold by Defendant in order
to assess crashworthiness principles and to determine whether the Subject Vehicle sold by
Defendant and involved in the underlying crash failed to meet safety benchmarks and thereby
played a role in the death of Mr. Guinones.
On March 23, 2020, the discovery dispute came before the Court for a hearing. Doc. 86.
Plaintiff clarified that she was seeking safer alternative designs that Defendant may have
evaluated on other models of vehicles regarding cab roof strength and preventing crush and
intrusion.1 Plaintiff indicated that in RFP No. 3, she was specifically seeking the testing records
that address impact intrusion and crush. Id. at 1. Defendant resisted and contended that it was
not clear from Plaintiff’s request that Plaintiff was seeking information beyond the vehicle and
cab at issue. Id. Defendant further contended that whether Plaintiff’s claim is viewed from the
perspective of notice or safer alternative design, that Plaintiff had failed to meet her burden
demonstrating that other models are substantially similar to the design model at issue here to
support her requested production, as she was required to do. Id. at 2. Defendant explained that it
had provided the Court with affidavits and real evidence that demonstrated that looking at the
geometry and the materials making up other cab models are entirely different from the one at
issue here and therefore not relevant. Id. Nevertheless, Defendant indicated that it had produced
testing information regarding the entire 9000i series as it relates to the 72” high rise cab, the cab
restraint system and cab structure. Id. Regarding RFP No. 8, Plaintiff stated that she was
seeking Navistar’s CAD and FEA files for the “vehicle model at issue, similar model vehicle, or
any vehicle that incorporates a similar structure or restraint system as the vehicle model in
1
During the hearing, Plaintiff indicated that the parties had resolved their dispute regarding RFP Nos. 6, 9, 11, and
13. Doc. 86.
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question.” See Doc. 75-1, at 6. Plaintiff argued that these files are necessary to evaluate
structural integrity and design features of the Subject Vehicle’s cab and cab roof. Doc. 86 at 2.
Defendant opposed this request and asserted that the CAD and FEA files are Defendant’s most
highly valued trade secrets, and that very few Navistar employees even have access to these
materials. Id. Defendant further asserted that the Agreed Protective Order was insufficient to
adequately protect the information being sought. Id. Lastly, Defendant asserted that Plaintiff
had not demonstrated that her need for this material outweighed the proprietary nature of the
information and Defendant’s strong interest in its confidentiality. Id. Defendant stated that it
had produced “drawings for the driver seat, seatbelt tethers, cab, roof, and glazing of the vehicle
at issue, and the corporate engineering specifications identified in the drawings.” Doc. 75-1 at 6.
In response, Plaintiff stated that she was prepared to submit an affidavit from her expert
demonstrating why Navistar’s CAD and FEA files are relevant and necessary to address her
stated needs.
The Court ruled that Defendant must disclose materials in response to RFP Nos. 3 and 8.
The Court acknowledged case law where courts have ruled that trade secrets did not have to be
produced regardless of a protective order in place, but the Court found that Navistar’s CAD and
FEA files were relevant to Plaintiff’s claims and that the Agreed Protective Order was sufficient
to protect the information contained in the materials to be produced. Doc. 86 at 2. With respect
to RFP No. 3 and based upon Defendant’s statement that it already produced much responsive
materials,2 the Court ordered Defendant to produce “all materials, including any and all testing,
2
Defendant responded to Plaintiff’s RFP No. 3 stating “Upon entry of an agreed upon protective order, Navistar
will produce test results relating to SAE J2422 and FMVSS 205, 206, 207, 209, and 210 which relate to the vehicle
at issue.” Doc. 75-1 at 4. At the hearing, Defendant informed the Court that it had produced information,
including testing information, regarding the entire 9000i series as it relates to the 72” high rise cab, so beyond the
truck at issue, i.e., 2000 pages of material related to the 72” high rise cab, the cab restraint system and cab
structure, detailed specifications, and drawings, etc. Doc. 86 at 2.
.
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regarding the 72” high rise cab and the entire 9000i series of vehicle, to the extent it [Defendant]
has not already produced everything that is being requested”. Doc. 87 at 1. Regarding RFP No.
8, the Court found that the Defendant had sufficiently demonstrated that Navistar’s CAD and
FEA files are trade secret and that their disclosure might be harmful, but that Plaintiff had
established relevancy and necessity. Doc. 86 at 2. The Court further found that the Agreed
Protective Order offered appropriate protection to ensure the confidentiality of the materials. Id.
Accordingly, the Court ordered that “Defendant will produce the CAD and FEA files for the
9000i series of vehicles that pertain to cab structure and cab roof structure.” Doc. 87 at 2.
Defendant was ordered to produce the materials within 30 days. Id.
C.
Defendant’s Appeal to the District Judge
On April 6, 2020, Defendant filed its objection to the Court’s discovery order, and
requested District Judge Kenneth Gonzales to stay the order pending hearing and determination
of its objection. Doc. 93. Defendant attached to its objection the affidavits of Richard Mink and
Roy Zeitlow, individuals who are employed by Navistar and who appear to be expert witnesses
for Defendant.3 Doc. 93-1. On April 10, 2020, Judge Gonzales stayed Defendant’s time to
comply with the Order Regarding Plaintiffs Motion to Compel (Doc. 87) pending the Court’s
decision on the Objection. Doc. 94. On April 24, 2020, Plaintiff responded and attached an
affidavit by Toby Kim Parnell. Docs. 96, 96-1. On May 8, 2020, Defendant filed its reply, and
attached another affidavit by Mr. Mink, this one slightly amended to respond to the Parnell
affidavit, and affidavits by Ray Baggett and Richard Ho, employees of Navistar. Docs. 101,
3
Defendant previously attached the Mink Affidavit to its Response to Plaintiff’s Motion to Compel, Doc. 76,
which appears to be identical to the affidavit attached to its objection to the Court’s discovery order. Compare
Doc. 76-1 with Doc. Doc. 93-1. Similarly, Defendant also attached the Zeitlow Affidavit which was previously
submitted to the Court. Compare Docs. 76-2 with 93-2.
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101-1, 101-2, 101-3. Thus, before Judge Gonzales were a total of five affidavits, four of which
presented new evidence. These affidavits are summarized as follows:
• ZEITLOW AFFIDAVIT: Mr. Zeitlow is a Senior Product Integrity Engineer for
Navistar and states that he spent approximately 60 hours collecting documents in
response to Plaintiff’s request for production, and that it would take another 60 hours to
collect analogous documents on each 9000i series model equipped with one of four cab
styles that are different from the 72” high rise model. Doc. 93-2 at 1. Between 19992009, Navistar produced at least 17 different vehicle series, each having more than one
model and each model having up to six cab/cab roof combinations. Id. at 2.
Mr. Zeitlow states that the CAD and FEA files are extraordinarily sensitive propriety
information and the most valuable competitive data possessed by Navistar. Id. He
states that the CAD and FEA files have never been produced outside of Navistar. Id.
Mr. Zeitlow states that it would take thousands of hours to gather the CAD and FEA
files for all of the cab and cab-roof combinations manufactured between 1999-2009. Id.
at 2-3. Mr. Zeitlow attests that the release of Navistar’s proprietary information would
irreparably damage Navistar’s competitive advantage and property rights because it
could be used by Navistar competitors to develop tooling and manufacture competitive
products in a more cost effective manner, and could be used by counterfeiters to produce
“knock-offs” of replacement parts. Id. at 2.
• PARNELL AFFIDAVIT: Dr. Parnell, who holds a Ph.D. in mechanical engineering,
submitted a lengthy affidavit (18 pages, apart from his CV). Doc. 96-1. Dr. Parnell has
been retained by Plaintiff as an expert to identify and address any design deficiencies
involving the subject 2009 Navistar 9200i Hi-Rise vehicle. Id. at 7. Dr. Parnell states
that Navistar’s claim that the roof, seat, and restraint system drawings and data it has
produced are sufficient for evaluation by Plaintiff “is false and deceptive.” Id.
Dr. Parnell also states that Defendant’s production of two-dimensional PDFs with its
assertion that they provide all the information necessary for him to create threedimensional CAD models, while refusing to produce its own CAD models, is inherently
contradictory to Navistar’s trade secret concerns. Id. at 9-10. Dr. Parnell states that
complete models of the cab and vehicle frame associated with the subject vehicle are
essential for proper structural analysis and validation. Id. at 11. Dr. Parnell states that
complete CAD and FEA models will allow for validation of the as-built Navistar 9200i
vehicle in this accident and simulation of the accident consistent with any analysis
performed by Defendant. Id. at 12-13. Dr. Parnell asserts that Defendant should
produce all FMEA (Failure Modes and Effects Analysis) studies associated with the
9200i model vehicle. Id. at 15. Dr. Parnell also asserts that Defendant should produce
alternative designs, even those without shared or similar component parts, to allow
Plaintiff to evaluate the relative crashworthiness as compared to the subject Navistar
9200i. Id. at 16. Dr. Parnell states that creating three-dimensional CAD models from
two-dimensional PDFs is a very lengthy and time-consuming process, and that
production of the CAD and FEA models will streamline the litigation process. Id. at 10,
14. Dr. Parnell states that he is at a distinct disadvantage without the CAD and FEA
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models because Defendant and its technical staff have unlimited access to their entire
body of engineering which he does not. Id. at 18.
• MINK AFFIDAVIT (Amended): Mr. Mink, a Mechanical Engineer employed by
Navistar, is familiar with the cab/cab roof structures of the 9000i series and is familiar
with the discovery Navistar produced in response to Plaintiff’s RFPs. Doc. 101-1.
Mr. Mink states that Navistar provided Plaintiff with 355 pages of detailed engineering
drawings pertaining to the subject vehicle’s cab structure, cab roof structure, driver’s
seat and occupant restraints. Id. at 2. Mr. Mink disputes Dr. Parnell’s statement that the
drawings failed to provide applicable views. Id. Mr. Mink states that the produced
drawings include “a front view, a left side view, a top view, an isometric view, and
cross-sectional views at 6 different locations along the length of the A-Pillar.” Id. He
goes on to state that
[c]omplex curves are depicted to scale, and the views include explicit,
numerical dimensions between various points on the panel. The drawing
also has dimensional grids superimposed on the various views so that panel
as a whole and various features of the panel can be located in 3 dimensions
relative to the global cab structure. The drawing identifies the specific
material and the thickness of the material from which the panel is made.
Finally, the drawing identifies changes made to the panel since it was
originally designed.
Id. Mr. Mink also explained that Navistar is equally concerned about the proprietary
nature of its engineering drawings and various other documents it produced and did not
produce them until Plaintiff agreed to a protective order. Id. at 3. Mr. Mink stated,
however, that one key difference between the drawings and the CAD models is that
drawings cannot be readily entered into computer-controlled machine tools or 3D
printers to create counterfeit parts, whereas CAD models can. Id. While Navistar is not
concerned that Plaintiff will create counterfeit parts, it is concerned that models could be
stolen or otherwise inadvertently released or obtained. Id. Mr. Mink states that FEA
models are similarly sensitive in that the underlying CAD models can be extracted from
them. Id. Mr. Mink disputes Dr. Parnell’s suggestion that Navistar did not provide
Plaintiff with material specifications and states that Navistar produced five different
material specifications covering various steels, aluminum alloys and fiberglass from
which the subject cab structure and subject cab roof structure were made. Id. at 3.
Finally, Mr. Mink states that Navistar has already provided Plaintiff with the FEMA
studies referenced in Dr. Parnell’s affidavit. Id. at 4
• BAGGETT AFFIDAVIT: Mr. Baggett is Chief Engineer, Cab in White, for Defendant
Navistar. Doc. 101-2 at 1. Mr. Baggett has first-hand knowledge of the CAD and FEA
models maintained by Navistar and of the process Navistar uses to design its heavy
trucks. Id. at 2. Mr. Baggett states that the CAD and FEA files are generally stored and
guarded behind firewalls and passwords at Navistar headquarters, and that other parts
suppliers’ models are also guarded there. Id. at 7. Mr. Baggett states that very few
people have access to the CAD and FEA files, and that any engineering contractor or
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supplier who views these files must sign a non-disclosure and confidentiality order
under their contractual agreements before being permitted to do so. Id. at 8.
Mr. Baggett states that the CAD and FEA models are used to select suppliers, validate
components, purchase tooling, and guide the Navistar manufacturing facilities in
building Navistar’s products. Id. at 3. He states that the models contain installation
drawings and other documents related to the assembly of components in the Navistar
manufacturing facility. Id. Mr. Baggett states that if a competitor were to gain access to
this information it could develop tooling and manufacture Navistar-like vehicles and
could eliminate Navistar’s competitive advantage related to the unique and proprietary
aerodynamic design of its cabs. Id. Mr. Baggett states that the release of the CAD and
FEA models would allow competitors to gain insight into its design methodology,
strategy and development. Id. at 4. Finally, Mr. Baggett states that
[t]he vehicle key dimensions, measurements, and related material
specifications concerning the 9000i series cabs are all contained within the
hard copy design documents. This information is enough to perform any
modeling regarding the structural strength or crashworthiness of the 9000i
series cabs. Any additional information purportedly needed to otherwise
analyze the structural strength or crashworthiness of the 9000i series cabs
could be gained through an examination and testing of an exemplar cab
without the release of Navistar’s proprietary CAD and FEA models.
Id. at 7.
• HO AFFIDAVIT: Mr. Ho is the Information Security Director and Chief Information
Security Officer for Navistar. Doc. 101-3. Mr. Ho states that Navistar is very serious
about cybersecurity and data protection; that Navistar has implemented physical access
and systems access controls at each of its facilities; that highly privileged information
can only be viewed at Navistar sites; and that Navistar has achieved a very high security
rating, one of the highest in the industry. Id.
D.
Judge Gonzales’s Memorandum Opinion and Order
On June 20, 2020, District Judge Gonzales entered a Memorandum Opinion and Order
regarding Defendant’s Objection and Request to Stay. Doc. 110. Therein, Judge Gonzales
denied holding an evidentiary hearing and, having already stayed compliance with the Court’s
discovery order, declined to rule on the merits of Defendant’s Objection given the new evidence.
Id. Judge Gonzales observed that Rule 72(a) “does not authorize a district court to consider new
evidence when reviewing a magistrate’s decision on a pretrial non-dispositive order.” Fed. R.
Civ. P. 72(a); see Doc. 110, at 3, citing In the Matter of Search of Info. Associated with Email
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Addresses Stored at Premises Controlled by the Microsoft Corp., 212 F. Supp. 3d 1023, 1038 (D.
Kan. 2016) (other citations omitted). As such, Judge Gonzales remanded the matter to this Court
for further consideration in light of new evidence presented by the parties.
E.
July 23, 2020, Status Conference
On July 23, 2020, the Court held a status conference and discussed with the parties Judge
Gonzales’s Memorandum Opinion and Order. Doc. 111. Having heard from the parties, the
Court ordered that by no later than August 21, 2020, the parties could each depose one expert
witness, limited to four hours, to address any issues relevant and necessary to the Court’s
proceeding on the question of whether Defendant must produce the CAD files and FEA models,
including whether an additional protective order is necessary if Defendant were ordered to do so.
Id. The Court also ordered that by August 24, 2020, the parties could submit supplemental
briefing based on the expert witness depositions. Id. The Court scheduled a discovery hearing
on the matter for August 28, 2020. Id.
F.
August 24, 2020, Briefing
The parties separately filed briefs regarding whether Defendant must produce its CAD
files and FEA models. Docs. 114, 115.
Plaintiff submits that the Court properly granted her motion to compel, as Rule 26 of the
Federal Rules of Civil Procedure allows for discovery based on a broad definition of relevancy.
Doc. 114 at 3-4. Plaintiff asserts that the Defendant’s CAD and FEA data is relevant, as it will
allow Plaintiff to demonstrate that Defendant’s truck “created an unreasonable risk of injury, as
well as Defendant’s knowledge of the risk of its defective product.” Doc. 114 at 4. Plaintiff
claims that her deposition of Defendant’s expert witness shows that the information Defendant
seeks to shield is not as sensitive or so highly restricted as Defendant claims; indeed, the expert
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witness admits that as many as 220 Navistar employees could access the CAD and FEA data, not
only at the office but also from remote locations. Doc. 114, at 4-5. Plaintiff states that the
existing protective order provides adequate safeguards to protect Defendant’s proprietary
information and argues that the additional conditions suggested by Defendant are not necessary
and would impose undue burdens on Plaintiff. Doc. 114 at 9-10.
Defendant attacks Plaintiff’s assertion of necessity and relevance and argues that the
testimony of Plaintiff’s witness shows that the production by Defendant of its CAD and FEA
data is not necessary, as the witness stated that he could conduct his analysis without the data.
Doc. 115 at 3. Defendant submits that Plaintiff’s witness admitted that Navistar did not produce
CAD files and FEA models in the three cases involving Navistar on which the witness
previously worked, a fact that “devastates Plaintiff’s claim that these documents are necessary
and essential.” Doc. 115 at 10. Defendant also faults the witness for not being able to identify a
single case where a litigant produced CAD files and FEA models, Doc. 115 at 10-13, and states
that Plaintiff has not established that it would be unduly burdensome for her to create her own
CAD files and FEA models from the 2D drawings already produced in discovery. Doc. 115 at
13-18. Finally, Defendant claims that the existing protective order does not provide sufficient
protection for Defendant, and that if the Court orders Defendant to disclose CAD files and/or
FEA models, it should impose stronger protections over the use of this material. Doc. 115, at 1920.
G.
The August 28, 2020, Hearing on Remand
On August 28, 2020, this Court held a discovery hearing to address the issue of whether
Defendant must produce the CAD files and FEA models, including whether an additional
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protective order, as proposed by Defendant, is necessary if Defendant were ordered to do so.
Doc. 116.
Plaintiff argued that the Court should uphold its prior order in which it determined that
the CAD files and FEA models for the vehicle model series at issue in this matter are relevant
and should be produced, and that the confidentiality order in place is sufficient to protect the
confidential and proprietary nature of the information. Id. at 2. Plaintiff argued that the
discovery sought is relevant because the electronic files showing the design and the performance
of the truck cab at issue in this case, and similar cabs, go directly to Plaintiff’s burden of proof
for the jury, i.e., was this cab unreasonably dangerous and were there safer alternative designs
available that would have avoided Mr. Guinones’s death in the rollover accident. Id. Plaintiff
argued that although Defendant produced two-dimensional files of the subject (and related)
vehicles, that requires Plaintiff’s expert to create the three-dimensional CAD and FEA files that
Defendant already has in its possession. Id. Plaintiff further argued that Defendant had failed to
demonstrate how producing the three-dimensional CAD and FEA files in the first instance
presented a greater harm than producing the two-dimensional files from which three-dimensional
files can be created. Id. Plaintiff conceded that the information sought is trade secret
information and that its disclosure might be harmful to Defendant. Id. Plaintiff argued,
however, that it was up to the Court to balance Plaintiff’s need for the files for the full and fair
presentation of his case against Defendant’s claims for potential harm from disclosure. Id.
Plaintiff also conceded that while Dr. Parnell can give an opinion without the files, Dr. Parnell is
at a significant disadvantage if required to do so. Id. Finally, Mr. Kaufman argued that the
current protective order in place is sufficient and does not need to be more restrictive. Id.
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Defendant argued that it has never produced its CAD and FEA files in the course of
litigation, and that it is typical in these cases to produce two-dimensional alternative designs, as
opposed to the CAD and FEA files, which Defendant has done here. Id. at 3. Defendant argued
that the burden of converting two-dimensional drawings to three-dimensional drawings is
minimal and that “they do it all the time.” Id. Defendant argued that Dr. Parnell testified that the
files were not necessary for him to form an opinion, and that Dr. Parnell could not identify any
other case in which he provided expert testimony where the CAD files and FEA models had been
produced. Id. As to the protective order, Defendant argued that when it entered into the Agreed
Protective Order, it did not contemplate producing CAD files and FEA models because
Defendant has never done that before. Id. Thus, because the CAD files and FEA models are the
most valuable intellectual property Defendant has, if they were ordered to be produced,
Defendant wants a protective order that it uses in patent-related cases. Id.
The Court advised the parties that it would take their oral argument and all of the
materials submitted under advisement. Id. at 4.
RELEVANT LAW
A.
Reconsideration
While the Federal Rules of Civil Procedure do not specifically provide for motions for
reconsideration, Rule 54(b) provides that any order or decision “that adjudicates fewer than all
claims ... may be revised at any time before the entry of a judgment adjudicating” all claims.
Fed. R. Civ. P. 54(b). In this District, Rule 54(b) has been interpreted to provide the reviewing
court the discretion to “select the standard of review for a motion to reconsider an interlocutory
order.” Kruskal v. Martinez, 429 F. Supp. 3d 1012, 1024 (D.N.M. 2019). For its part, the Tenth
Circuit has found instructive the standard used to review a motion made under Rule 59(e). See
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Ankeney v. Zavaras, 524 Fed. Appx. 454, 458 (10th Cir. 2013) (unpublished). In the Rule 59(e)
context, there are three circumstances in which granting a motion to reconsider is appropriate;
first, where there is an intervening change in the controlling law; second, when there is new
evidence that was previously unavailable; and third, where there is a need to correct clear error
or prevent manifest injustice. Id. (citing Servants of the Paraclete v. Does, 204 F.3d 1005, 1012
(10th Cir. 2000)).
A motion to reconsider is also appropriate “where the court has misapprehended the
facts, a party's position, or the controlling law,” but such motions are “not appropriate to revisit
issues already addressed or advance arguments that could have been raised in a prior briefing.”
Servants of the Paraclete, 204 F.3d at 1012. “Absent extraordinary circumstances, ... the basis
for the second motion must not have been available at the time the first motion was filed.” Id.;
see also Matosantos Com. Corp. v. Applebee's Int'l, Inc., 245 F.3d 1203, 1209 n. 2 (10th Cir.
2001) (holding that a court, in reviewing a motion to reconsider, need not address new
arguments raised by the parties); United States v. Castillo-Garcia, 117 F.3d 1179, 1197 (10th
Cir. 1997) (emphasizing that “arguments raised for the first time in a motion for reconsideration
are not properly before the court and generally need not be addressed”).
B.
Discovery of Trade Secrets
“(T)here is no absolute privilege for trade secrets and similar confidential information.”
Centurion Indus., Inc. v. Warren Steurer & Assocs., 665 F.2d 323, 325 (10th Cir. 1981), quoting
Fed. Open Mkt. Comm. v. Merrill, 443 U.S. 340, 362 (1979). Under Fed. R. Civ. P. 26(c)(1)(G),
a court may, for good cause, issue a protective order (or permit a party to avail itself of an
already issued protective order) to require that “a trade secret or other confidential research,
development, or commercial information not be revealed or be revealed only in a specified way.”
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In re Cooper Tire & Rubber, Co., 568 F.3d 1180, 1188 (10th Cir. 2009). Under this Rule, a party
seeking that its information only be revealed in a certain way, such as limiting who can view or
access the materials, “must first establish that the information sought is a trade secret [or other
confidential research, development, or commercial information].” Id. at 1190; Fed. R. Civ. P.
26(c)(1)(G). Further, that party must additionally “demonstrate that its disclosure might be
harmful.” In re Cooper Tire, 568 F.3d at 1190 (quoting Centurion, 665 F.2d at 325). To
establish the requisite harm, the party seeking protection must make a “particular and specific
demonstration of fact, as distinguished from stereotyped and conclusory statements.” E.g.,
Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 245 (D. Kan. 2010), quoting Gulf Oil
Co. v. Bernard, 452 U.S. 89, 102 n.16 (1981).
Once the party seeking protection for its trade secrets has met its initial burden—to show
that the materials constitute trade secrets and disclosure of them might cause harm—the burden
then shifts to the party seeking disclosure to establish that such disclosure is “relevant and
necessary to the action.” Centurion, 665 F.2d at 325.
The need for the trade secrets should be balanced against the claim of harm
resulting from the disclosure. “It is within the sound discretion of the trial court
to decide whether trade secrets are relevant and whether the need outweighs the
harm of disclosure.” If the party seeking discovery cannot prove that the
information is relevant and necessary, then discovery should be denied.
However, if the party meets its burden, “the trade secrets should be disclosed,
unless they are privileged or the subpoenas are unreasonable, oppressive,
annoying, or embarrassing.”
In re Cooper Tire, 568 F.3d at 1190 (internal citations omitted) (quoting Centurion, 665 F.2d at
325, 326). And if the party seeking disclosure establishes relevance and need, the Court can
fashion reasonable protections to guard against unauthorized disclosure of trade secrets while
taking care to not improperly limit the other party’s use of that information in its case.
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Where the protection sought is only to prevent certain identified individuals from
viewing the materials, such as in-house counsel or the patent inventor, the court
must balance the risk of inadvertent disclosure of trade secrets to competitors
against the risk to the other party that protection of these trade secrets will
prejudice its ability to prosecute or defend the present action.
Layne Christensen, 271 F.R.D. at 249.
Finally, it is within the sound discretion of the trial court to decide whether trade secrets
are relevant and whether the need outweighs the harm of disclosure. Likewise, if the trade
secrets are deemed relevant and necessary, the appropriate safeguards that should attend their
disclosure by means of a protective order are also a matter within the trial court's discretion.
Centurion, 665 F.2d at 326 (citations omitted).
ANALYSIS
In the present case, the parties do not dispute that Navistar’s CAD files and FEA models
are trade secret and that their disclosure would be harmful to Defendant’s interest in the property.
Indeed, affidavit testimony supports that Navistar’s CAD files and FEA models contain
information that Navistar has spent many years and millions of dollars developing, and that if
this information were to fall into the wrong hands, Navistar could lose its competitive advantage
in the marketplace and be seriously harmed economically. Docs. 93-2, 101-1, 101-2, 101-3.
Mr. Zeitlow stated that the CAD files and FEA models are the most valuable competitive data
possessed by Navistar and have never been produced outside of Navistar. Doc. 93-2 at 2.
Mr. Mink expressed concern that Navistar’s trade secrets could be exploited by competitors to
produce counterfeit parts. Doc. 101-1 at 3. Mr. Baggett asserted that Navistar has invested
considerable resources into the CAD files and FEA models, that the release of those files and
models would give competitors the ability to steal market share and gain competitive advantage
unfairly, and that these models are zealously guarded. Doc. 101-2 at 4-5, 7. Moreover, for its
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part, nothing in the Parnell Affidavit serves to demonstrate that the material at issue is anything
other than a trade secret. Thus, the Court is convinced that the CAD files and FEA models
represent trade secrets within the meaning of Rule 26(c)(1)(G), and that the unchecked disclosure
of this information would be harmful to Navistar’s financial well-being and standing in the
marketplace.
Based on this finding, the burden then shifts to Plaintiff to show that the information
sought is relevant to the subject matter of the lawsuit and is necessary to prepare the case for
trial. American Standard Inc. v. Pfizer Inc., 828 F.2d 734, 740-41 (Fed. Cir. 1987); Centurion
Indus. Inc., 665 F.2d at 325. Plaintiff’s complaint, removed from state court, makes claims for
wrongful death and punitive damages based on alleged violations of recognized crashworthiness
principles by the Subject Vehicle manufactured and marketed by Defendant and being driven by
Mr. Guinones at the time of the roll-over accident. Plaintiff alleges strict products liability
against Defendant, stating that the “injuries complained of herein occurred because the vehicle in
question was not reasonably crashworthy and, thereby, created an unreasonable risk of injury and
harm.” Doc. 4 at 4. Plaintiff sets forth a number of conditions that she claims demonstrate that
the vehicle was defective. Id. at 4-5. Additionally, Plaintiff claims that Defendant was negligent
in its design and manufacture of the vehicle, in that Defendant “either used or knew about
advanced safety features used in Europe, Australia, Japan and other countries and chose not to
offer those safety features to American consumers.” Id. at 6. Plaintiff avers that Defendant has
exclusive possession of and controls technical materials and other documents regarding the
design, manufacture and testing of the Subject Vehicle, as well as materials related to
engineering analysis it performed. Id. at 7. Plaintiff alleges that Defendant breached its duties to
use ordinary care, to inspect, repair and replace, and was thereby negligent in a number of ways,
16
including allegedly using substandard materials during the manufacture of the vehicle, and by
allegedly failing to implement adequate quality control during the manufacture of the vehicle.
Id. at 8-9. Plaintiff, therefore, seeks Navistar’s CAD files and FEA models for the Subject
Vehicle, similar model vehicle, or any vehicle that incorporates a similar structure or restraint
system as the vehicle model in question, in order to prove Defendant’s negligence and that its
product was defective.
Having considered the additional and new evidence submitted by the parties, and acting
under its inherent authority to reconsider its previous rulings, the Court finds that while
information regarding the engineering, design, and testing documents for the Subject Vehicle is
relevant to the subject matter of this lawsuit, the Court is now persuaded that Plaintiff has failed
to demonstrate that Navistar’s CAD files and FEA models are necessary for developing her case.
Here, Defendant has produced engineering, design, and testing documents responsive to
Plaintiff’s requests, along with material specifications and two-dimensional engineering
drawings detailing the geometries and construction techniques of the components,
subassemblies, and assemblies that comprise the Subject Vehicle.4 Dc. 93-1 at 3. The Court,
therefore, is persuaded that Defendant has produced the substantial equivalent of the relevant
information Plaintiff seeks without having to reveal trade secret information. Further, affidavit
testimony supports that Plaintiff’s expert can use the two-dimensional drawings Navistar
produced to create its own CAD files and FEA models that Plaintiff argues are necessary for
4
Mr. Mink attested that material specifications, engineering drawings and physical testing documents produced are
not limited to only the Subject Vehicle, but that they “apply equally to any International 9000i Series truck or truck
tractor equipped with a 72-inch Hi-Rise sleeper cab of any model – 9200i, 9400i, 9900i or 9900ix – axle
configuration (4x2 or 6x4), or model year since the 9000i’s introduction in July 1999.” Doc. 93-1 at 3. Mr. Mink
further attested that the Subject Cab roof structure is unique to 9000i Series trucks and truck tractors when
equipped with a 72-inch Hi-Rise sleeper cab, and that the Subject Cab roof structure is not “utilized” on other
model vehicles. Id.
17
evaluating the structural integrity of the Subject Vehicle and determining whether it created an
unreasonable risk of injury. Doc. 93-1 at 2-3, Doc. 96-1 at 10, 101-2 at 7. Moreover, Plaintiff’s
expert witness, Dr. Parnell, testified that having Navistar’s CAD files and FEA models would
make his job easier and reduce the number of hours he would have to spend creating his own, but
that he can create his own and is able to render expert testimony without Navistar’s CAD files
and FEA models. Docs. 115-1 at 9, 23, 53. Indeed, Dr. Parnell testified that he has not had
CAD files or FEA models from a manufacturer in the majority of his crashworthiness vehicle
cases in which he has provided expert opinion testimony.5 Id. at 113-14. In sum, in light of the
new evidence, Plaintiff has failed to demonstrate that Navistar’s CAD files and FEA models are
necessary to her case.
IT IS THEREFORE ORDERED that Defendant’s objection to the Court’s Order to
produce the “CAD and FEA files for the 9000i series of vehicles that pertain to cab structure and
cab roof structure” is SUSTAINED;
IT IS FURTHER ORDERED that Plaintiff’s Motion to Compel (Doc. 75) as to Request
for Production No. 8 is DENIED.
________________________________
JOHN F. ROBBENHAAR
United States Magistrate Judge
5
Additionally, when asked, Dr. Parnell was not able to recall Navistar ever producing CAD files and FEA models
in other Navistar-related cases in which he had provided expert testimony. Doc. 115-1 at 94.
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