United States of America et al v. Symphony Diagnostic Services, Inc. et al

Filing 96

DISCOVERY DISPUTE ORDER: finding as moot 72 Order and 82 Motion for Order to Respond to Relator's Letter Brief; granting 84 Motion to Strike; denying 94 Motion to Strike. Signed by Magistrate Judge Mark R. Abel on 09/30/2013. (sr1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
United States ex rel. Kevin
McDonough,

:
:

Civil Action 2:08-cv-0114

:

Judge Marbley

:

Magistrate Judge Abel

Plaintiff
v.
Symphony Diagnostic Services and
Symphony Diagnostic Services No. 1,
d/b/a Mobilex U.S.A.,

:
:

Defendants
:

Discovery Dispute Order
My March 22, 2013 Discovery Dispute Conference Order established a schedule for
the parties to brief a dispute about whether relator Kevin P. McDonough has waived any
claims of privilege or confidentiality in electronic files now in the possession of defendant
Mobilex. This matter is before the Magistrate Judge on defendants’ April 17, 2013 motion
to deny relator’s motion for a protective order (doc. 77), relator’s April 17 and 24 briefs
and exhibits (docs. 79-81), defendants’ April 24 brief responding to relator’s April 17 brief
(doc. 82), relator’s May 8, 2013 supplemental affidavits (doc. 83), defendants’ May 16, 2013
motion to strike those affidavits (doc. 84), relator McDonough’s April 1, 2013 affidavit1

1

Although relator’s April 17 brief stated that McDonough’s affidavit was
attached as exhibit 1, no affidavit was attached. On September 23, 2013, I asked relator’s
counsel to file the affidavit. On that same day, the affidavit was filed (doc. 22), but it
was not signed by McDonough. After another telephone call, McDonogh’s signed April
1, 2013 affidavit was filed (doc. 93).

(docs. 92 and 93), and defendants’ September 25, 2013 motion to strike the affidavit (doc.
94).
Facts. From October 13 to 24, 2008 and January 8 to 21, 2009, plaintiff McDonough
worked as a consultant for Steven and Paolo Colon. McDonough used a thumb/flash
drive (USB drive) to back up the hard drive on his computer. Relator asserts that during a
mid-January 2009 visit with Steven Colon to a home health agency in Sun City/Tampa/
Bradenton, Florida, McDonough brought his thumb drive with Colon’s documents on
them. Kevin McDonough’s April 1, 2013 Affidavit, ¶¶ 2-5, Doc. 92, PageID 790. The men
were in two separate offices at the site. McDonough used Colon’s laptop and the thumb
drive to access documents related to Colon’s business. Colon went into another room, and,
upon information and belief, must have attached the thumb drive to the laptop, and hit
“autoplay.” Id., ¶¶ 6-7. When McDonough later used the laptop to review a document he
went into the laptop’s “recent documents” menu, and saw “Regina Poserina” on the recent
documents list. With further searches, he found the names of other of his documents and
clients on the laptop. Id., ¶ 8. McDonough and Colon discussed what had likely happened.
Colon agreed that files had been copied, and that he would delete all of the copied folders
off the laptop. Id., ¶ 9, PageID 790-91. Together, the two men deleted from the laptop the
files and file folders that had been copied from McDonough’s thumb drive to the laptop.
Id., ¶ 10, PageID 791. When he left for the day, Colon took the thumb drive with him. Id., ¶
11.
McDonough was staying with a friend, Robert Heiden. He asserts that while he was
driving to Heiden’s, he became concerned about someone being able to retrieve the
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“deleted” thumb drive documents from the laptop. McDonough spoke with Heiden,
relating the facts set out above. Heiden told McDonough that, in his opinion, the only way
to permanently delete this information from Mr. Colon’s laptop was to have a professional
IT person “scrub” or “wipe” the laptop hard drive. Id., ¶¶ 12-14; Robert Heiden’s March
28, 2013 Affidavit, Relator’s April 17, 2013 Brief, Exhibit 2, Doc. 79-2, PageID 690-91.
McDonough took no further action at that time to protect his electronic files from third
parties.
In August 2010, McDonough filed a False Claims Act lawsuit in United States
District Court for the Middle District of Florida at Tampa against Colon and his business,
GPSI. United States ex. rel. Kevin P. McDonough v. Colon, 8:10-cv-1889-T-23-EAJ. Apparently
on or about October 10, 2011, Colon’s attorney, Stephen Iglesias, provided McDonough’s
attorney, Jonathan Kroner, with a CD containing electronic files that came from McDonough’s thumb drive. Relator suggests that it appears Colon used some improper means to
retrieve the files McDonough asserts were copied to Colon’s laptop and deleted the same
day. On August 10, 2011, Kroner emailed Iglesias that he had received the CD, which
included 627 folders that contained 3,015 files. He said that “these documents seem to
have nothing to do with this case. Instead, they appear to be documents and files stolen by
Mr. Colon from a thumb drive owned by Mr. McDonough. “ He asked that Iglesias let him
know whether any of the files had anything to do with the lawsuit. Doc. 80, PageID 712-13.
On July 12, 2012, relator McDonough filed a motion to compel discovery. In the brief
supporting that motion, Kroner wrote: “While Relator worked for Defendants, Mr. Colon
stole information from Relator’s computer’s hard drive which contained privileged and
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confidential attorney-client information relating to the (then sealed) Symphony case.” A
footnote asserted that the production of the documents “can only be interpreted as an
implicit threat of disclosure . . . .” Relator’s April 17, 2013 Brief, Exh. 4, Doc. 79-3, PageID
697.
Colon’s recollection of how he came into possession of the electronically stored
documents is completely irreconcilable with McDonough’s. Colon is a former owner and
operator of a mobile x-ray company called Home Care X-Ray, Inc. He asserts that while
McDonough was working on the project, he told him that he needed access to the
company's computers in order to populate a spreadsheet with data. He maintained the
spreadsheet on a thumb drive. Based on McDonough's representation concerning the
spreadsheet, Colon authorized him to use computers at the company's office, including
the laptop computer which he used in the business. Colon later saw McDonough his
laptop and other computers at the company's office. McDonough told Colon that he used
the company's computers to work on the spreadsheet which he maintained on the thumb
drive. McDonough left the thumb drive in the Home Care X-Ray offrce overnight on at
least one occasion during his work there. Colon did not use the thumb drive while
McDonough was working at Home Care XRay. He never plugged the thumb drive into his
laptop or any other computer. McDonough never told him that files from the thumb drive
had been transferred to Colon’s laptop or any other computer. Moreover, he never asked
Colon to delete or help delete transferred files from his laptop or any other computer
Colon denies ever doing so. After McDonough stopped working on the project, Colon
discovered that files had been transferred to his laptop. He also found McDonough's
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thumb drive at the office. McDonough did not contact Colon to inquire about the
transferred files to his laptop or the abandoned thumb drive.
Defendants argue that McDonough waived any claim of privilege or confidentiality
he has in the documents by failing to maintain their confidentiality leaving the files on
Home Care XRay’s computer, leaving his thumb drive in its offices, and not seeking the
immediate return of them when Colon’s attorney produced them during the Florida
federal litigation.
Privileges can be waived by disclosure to third parties. Attorney-client
communications must be made in confidence and cannot be disclosed to third parties to be
protected from production. See, Reed v. Baxter, 134 F.3d 351, 355-56 (6th Cir. 1998); Guy v.
United Healthcare Corp., 154 F.R.D. 172, 177 (S.D. Ohio 1993)(King, Magistrate Judge).
When a party demonstrates “good cause,” Rule 26(c)(1), Fed. R. Civ. P., a court may
issue an order “requiring that a trade secret or other confidential [...] commercial
information not be revealed or be revealed only in a specified way.” Rule 26(c)(1)(G), Fed.
R. Civ. P. Where commercial information may be subject to protection under Fed. R. Civ.
Pro. 26(c), a court will look to determine if its disclosure will work “a clearly defined and
very serious injury”. United States v. Int’l Business Machines Corp., 67 F.R.D. 40, 46
(S.D.N.Y. 1975). Factors determining whether and to what extent business information
should be protected from disclosure include:
(1) the extent to which the information is known outside of his business; (2)
the extent to which it is known by employees and others involved in his
business; (3) the extent of measures taken by him to guard the secrecy of the
information; (4) the value of the information to him and to his competitors;
(5) the amount of effort or money expended by him in developing the
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information; (6) the ease or difficulty with which the information could be
properly acquired or duplicated by others.
Id. at 47.
Discussion. On the present record I cannot determine whether there has been a
waiver of any claim of privilege or protection McDonough may have for the documents.
The only case defendants cite supporting their waiver, Weatherly v. State Farm Fire & Cas.,
Insurance. Co., 2009 WL 1507353 (E.D. La. May 28, 2009), sheds little light on the question
before this court. In Weatherly, State Farm had produced documents in another litigation,
then sought to prevent the plaintiff in a subsequent case from obtaining those documents
from the third party possessing them. Here McDonough did not produce the documents.
His argument is that Colon stole the documents. That claim was made promptly after
Colon’s attorney produced the documents in the Florida litigation.
It is not possible on the present record to determine whose version of the events to
believe. That could only be done by taking the testimony of the affiants and making
credibility determinations.
On the other hand, it is entirely unclear whether there are any relevant documents
among McDonough’s thumb drive files.2 Nor has McDonough supported his broad
assertion of privilege and confidential business records protection with affidavit or other
evidence establishing each element of the claim or protection asserted.

2

Defendants point to a PowerPoint presentation that included information about
pricing of mobile x-ray services, but they also assert that McDonough made the
presentation to Colon and gave him a copy of it.
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Decision. In an attempt to resolve this dispute without further hearing, briefing and
expense, it is ORDERED that relator’s counsel review the thumb drive documents and
produce all relevant, non-privileged documents responsive to defendants’ document
requests.3 The privilege log must be supported by affidavits establishing each element of
the particular claim of privilege as to the specific document, documents, or categories of
documents for which that particular claim of privilege is asserted.
The Clerk of Court is DIRECTED to terminate Docs. 72 and 82 as mooted by this
Order. Defendants’ May 16, 2013 motion to strike (Docs. 84) is GRANTED. Relator should
have submitted this information with his initial brief. Defendants’ September 25, 2013
motion to strike (Doc. 94) is DENIED. Relator attempted to timely file the affidavit.
Defendants’ counsel had copies of the affidavit. Defendants suffered no prejudice or other
disadvantage from the untimely filing of the affidavit.

s/Mark R. Abel
United States Magistrate Judge

3

Even if stolen, these are documents within McDonough’s possession or under
his control, and his counsel have an obligation to search them and produce all relevant,
non-privileged documents.
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