Hy-Ko Products Co., et al v. The Hillman Group, Inc.

Filing 18

ORDER granting in part and denying in part 1 Motion to Quash. Signed by USMJ William A. Webb on 10/08/2009. (Webb, William)

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IN THE UNITED STATES DISTRICT COURT F O R EASTERN DISTRICT OF NORTH CAROLINA W E S T E R N DIVISION 5:09-MC-00032 H y-K o Products Company, et al., P l a i n t if f s , v. ) ) ) ) ) ) ) ) ) ) ORDER T h e Hillman Group, Inc., D e f e n d a n t. _______________________________ T h is matter is before the court upon movant Kaba Ilco Corp's ("Kaba") Objection and M o tio n to Quash Subpoena [DE-1] issued by Plaintiffs Hy-Ko Products Company and A u rora Properties Holding Company, LLC ("Hy-Ko"). Hy-Ko has responded to Kaba's o b je c tio n and motion to quash [DE-7], and accordingly, the matter is now ripe for a d ju d i c a ti o n . S t a te m e n t of the Case K a b a , a North Carolina company, produces a wide range of key and lock technologies in c l u d in g key cutting machines, automotive key equipment, and control access solutions. K a b a also supplies key blanks to stores like True Value, Ace, and Do It Best. Kaba is not a party to the underlying action, which involves an alleged infringement of patent rights re la te d to key cutting technologies. T h e underlying action is being litigated in the Northern District of Ohio.1 The action in v o lv e s two patents owned by The Hillman Group ("Hillman"), U.S. Patent No. 7,114,894 (" th e `894 patent"), and U.S. Patent No. 6,064,747 ("the `747 patent"). Hillman, the d e f e n d a n t in the underlying action, is Hy-Ko's competitor. Hillman, at various times, has c laim e d that Hy-Ko has infringed both the `894 and `747 patents. Hy-Ko has sought a d e c la ra to ry judgment that the `894 and `747 patents are invalid and not infringed. Hy-Ko contends that Hillman supplied Kaba with detailed information regarding HyK o 's cutting machines in an attempt to encourage Kaba to file its own patent infringement c la im against Hy-Ko. Hy-Ko served Kaba with a subpoena on July 16, 2009 to produce a b r o a d range of documents. Kaba raised two objections to the subpoena pursuant to Rule 4 5 ( c ) (3 ) of the Federal Rules of Civil Procedure: (1) the subpoena would require the d is c lo s u re of privilege or other protected matter, and (2) the subpoena fails to allow a re a so n a b le time to comply and imposes an undue burden, particularly in light of the scope o f the requested production. Kaba has since produced responses to requests 1, 2, 4, 8, and 9, which directly relate to the underlying infringement suit. The remaining documents in dispute 3, 5, 6, 7, 10, and 1 1 are the subject of the instant motion. Hy-Ko has agreed to withdraw request number 3 if th e remaining documents 5, 6, 7, 10, and 11 are produced by Kaba. Nonetheless, Kaba has f ile d this motion to quash pursuant to Rule 45 of the Federal Rules of Civil Procedure. 1 Civil Action No. 08:08-CV-1961 2 D is c u s s io n Rule 26(b)(1) of the Federal Rules of Civil Procedure states in pertinent part that " [ p ]a rtie s may obtain discovery regarding any matter, not privileged, that is relevant to the c la im or defense of any party . . . [f]or good cause, the court may order discovery of any m a tte r relevant to the subject matter involved in the action." A person not a party to the a c tio n may be compelled to produce documents and things or submit to an inspection as p rov ided in Rule 45. See Fed. R. Civ. P. 34(c). T h e standard for relevance during the discovery phase is different than the standard e m p lo ye d at trial. In order to be discoverable, the information "need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible e v id e n c e ." Fed. R. Civ. P. 26(b)(1). During discovery, relevance is broadly construed "to e n c o m p a ss any matter that bears on, or that reasonably could lead to other matters that could b e a r on, any issue that is or may be in the case." Oppenheimer Fund. Inc. v. Sanders, 437 U .S . 340, 351 (1978). The burden of showing that the requested discovery is not relevant to th e issues in litigation rests on the party resisting discovery. See Spell v. McDaniel, 591 F. S u p p . 1090, 1114 (E.D.N.C. 1984). Moreover, broadly-worded relevancy objections and the re c itatio n of stock phrases such as "over-broad" and "burdensome" do nothing to explain in w h a t manner the discovery sought is objectionable. In the usual instance, objections to discovery which simply recite stock phrases are n o t colorable. Cf. Hickman v. Taylor, 329 U.S. 495, 507 (1947) (mutual knowledge of all 3 r e le v a n t facts is essential; thus, either party may compel the other to disgorge facts in his possession). Generally, the mere cry of burdensomeness or irrelevance without any statement in support of these objections is disfavored by the court. See, e.g., Leumi Financial C o rp o ra tio n v. Hartford Accident and Indemnity Company, 295 F. Supp. 539, 544 (S.D.N.Y. 1 9 6 9 ) (broad objection of burdensomeness not considered without indication why in te rr o g a to rie s are difficult to answer). The court notes that Kaba did not raise an objection on the grounds of relevance in its memoranda. Specifically, Kaba states "[b]ecause Kaba is not familiar with the issues in th e underlying suit, Kaba is not at this point in a position to address the question or [sic] w h e th e r or not the requests are relevant." [DE-2], p. 2. Nonetheless, the court finds that the re q u e s te d documents are relevant to the underlying action. Instead of asserting the issue of relevance, Kaba argues that the requests require Kaba to produce thousands of documents from its enterprise and that responding to the subpoena w o u ld require an enormous allocation of resources, could take several months, and involve se v e ra l hundred employees. Kaba quantifies that such productions would be impermissibly b ro a d and unduly burdensome. As discussed, assertions in this form are disfavored. K a b a also argues that the requests require Kaba to reveal pricing or business strategy, o rd e r documents, shipping documents, delivery data, and the opinions of Kaba's patent c o u n se l, which constitute as privileged or other protected matters. The normal manner of ra is in g a privilege is by objection to a particular request or inquiry and producing a privilege 4 lo g detailing documents, or portions thereof, claimed to be protected from disclosure in order to assert a privilege or other protected matter. Kaba has not done this. H y-K o , in its brief in opposition, asserts that the protective order in the underlying suit w o u ld allow Kaba to produce requested documents subject to an Attorneys' Eyes Only re stric tio n . Hy-Ko further asserts, pursuant to the protective order, that Hy-Ko would be re q u ire d to seek Kaba's permission or assistance from this court to use any of the requested d o c u m e n ts at the trial of the underlying suit. The court assumes, without deciding, that the p ro te c tiv e order in the underlying action adequately shields Kaba's interests or provides a p p ro p ria te remedies to allow Kaba to enforce the protective order. As several months have past since the issuance of the subpoena, the court need not d e c id e whether the subpoena failed to allow a reasonable time to comply. Since Kaba has made no showing on the issue of relevance and minor substantive s h o w in g on the issue of undue burden, and as Hy-Ko has agreed to withdraw request number 3 , the instant motion is granted in part and denied in part. Kaba shall not be required to p ro d u c e a response to request number 3; but, shall produce responses to document requests 5 , 6, 7, 10, and 11, along with an associated privilege log for documents withheld on the b a s is of a privilege. For clarity, Kaba is required to respond to the following requests: 5 . All Documents or Communications including internal memoranda, notes, e m a ils , transcripts of voicemails, records, phone logs, and any other writings re f errin g to or relating to Hy-Ko, its inventions, key-cutting machines, or key p ro d u c ts . 6. All Documents or Communications including internal memoranda, notes, 5 e m a ils , transcripts of voicemails, records, phone logs, and any other writings re f errin g to or relating to issues of competition between or among Kaba Ilco o r Hillman and Hy-Ko. 7. All Communications between you and any Third-Party relating or referring to Hy-Ko, or its intellectual property, inventions, key-cutting machines, key p ro d u c ts , or issues of competition between or among Kaba Ilco or Hillman and H y- K o . 10. All Documents referring or relating to, or constituting Communications reg ard in g , Hy-Ko's customer relationships, including but not limited Orchard S u p p ly, Walmart, and Home Depot. 1 1 . All Documents referring or relating to, or constituting, contracts or a g re e m e n ts between Kaba Ilco and Hillman relating to either or both c o m p a n ie s ' key or key-cutting business. C o n c lu s io n F o r the above stated reasons, IT IS HEREBY ORDERED that Kaba's Objection and M o t io n to Quash Subpoena is GRANTED IN PART and DENIED IN PART. IT IS FURTHER ORDERED that Kaba shall produce responses to document re q u e sts 5, 6, 7, 10, and 11, along with an associated privilege log for documents withheld o n the basis of a privilege, to Hy-Ko not later than Monday, November 8, 2009. DONE AND ORDERED in Chambers at Raleigh, North Carolina this 8th day of O c to b e r, 2009. 6

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