Safety Today, Inc. v. Roy et al

Filing 184

OPINION AND ORDER: Safety Today shall provide supplemental response, in narrative form, w/in seven (7) business days answering the interrogatories served upon it by Defendants on December 23, 2013. Signed by Magistrate Judge Terence P Kemp on 2/11/2014. (kk2)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

Safety Today, Inc.,

:

Plaintiff,

:
:

Susan Roy, et al.,
Defendants.

JUDGE MICHAEL H. WATSON

:

v.

Case No. 2:12-cv-510
Magistrate Judge Kemp

:
OPINION AND ORDER

The nature and history of this case has been set forth at
length in other orders of the Court and need not be repeated
here.

It suffices to say, for purposes of this Opinion and

Order, that plaintiff Safety Today, which is the former employer
of defendants Susan Roy, Joanne Brady, and William C. Rankin,
claims that these individuals took Safety Today’s trade secrets
with them to a competitor, Safeware, and used them to Safety
Today’s disadvantage.
The case is in the later stages of discovery, and certain
depositions are set for later this month.

In preparation for

that event, Defendants served a set of interrogatories asking
Safety Today to identify, with specificity, the trade secrets it
claims to have been misappropriated and used.

Dissatisfied with

the responses they received, Defendants arranged for an informal
discovery conference with the Court in an effort to force Safety
Today to be more specific.

The Court, not having before it at

that time the interrogatories, the responses, or documents to
which Safety Today had referred in its answers, gave the parties
two options: to come to an agreement through which Safety Today

would provide more specific responses, or to brief the matter.
Having now received briefs, it is evident which choice was made.
For the following reasons, the Court will direct Safety Today to
supplement its interrogatory answers as requested by Defendants.
The Court begins with a short review of the interrogatories
in question.

Interrogatory One of the set served on December 23,

2013, asks Safety Today to identify “with precision and
specificity each alleged Safety Today trade secret” that
Defendants used or misappropriated.

The interrogatory

discouraged reference to “voluminous documents” and requested a
“specific description of each alleged trade secret ... on an
individual basis ....”

Other interrogatories called for Safety

Today to identify which person allegedly used or misappropriated
each of the trade secrets at issue, to describe the documents
containing evidence of that activity, to explain the efforts
which Safety Today had made to maintain the information in
confidence, and to list the customers or business it lost as a
result of the alleged misappropriation.
Safety Today’s answer to Interrogatory One begins with an
objection, followed by this response: “the answer to this
interrogatory may be determined by examining, auditing,
abstracting, or summarizing certain of Safety Today’s business
records, and the burden of deriving or ascertaining the answer
would be substantially the same for Safety Today and Safeware.”
It produced four folders of records as part of its answer, one
for each defendant, which contained the documents to which it had
made reference.

Although the documents total thousands of pages,

Safety Today argues in its memorandum that its trade secrets are
“easily identified’ within the documents.

It generally describes

the information as “pricing, cost, inventory, profit, sales, and
other proprietary information” and claims that by identifying all
of the documents that its ex-employees took with them and shared
-2-

with Safeware, it has fully responded to the interrogatories.
It also argues that to the extent Safeware’s counsel cannot
determine what portion of the documents contain trade secrets,
because the other defendants are the ones who misappropriated the
secrets and are familiar with the documents, they can provide
that explanation.

It also asserts that the trade secrets are

found in only 46 non-duplicate documents, and that Defendants are
simply (and improperly) attempting to shift the burden of
extracting the information from the documents to Safety Today.
Its responses to other interrogatories are similar; in no
instance did Safety Today provide any narrative answers.
The primary point made in the Defendants’ memorandum is that
responding to contention interrogatories simply by producing
documents is not an acceptable procedure.

According to

Defendants, documents do not contain contentions, but merely
information.

As a secondary argument, however, Defendants have

provided samples of some of the documents produced, and note that
given the large and sometimes seemingly random bits of
information found in these documents, it cannot be the case (as
Safety Today represented during the informal conference) that
every piece of information in each document is a trade secret,
nor do the documents speak for themselves as to what, exactly,
Safety Today is claiming.

Defendants cite numerous cases in

support of their position; Safety Today cites few cases other
than the ones relied on by Defendants, but argues that the case
law upon which Defendants rely supports only the proposition
that, in those cases, a Rule 33(d) response to contention
interrogatories was inadequate, but that it is an appropriate
response to contention interrogatories under the proper
circumstances.
The Court begins its discussion of the law with the case
cited by Safety Today, Field Turf USA, Inc. v. Sports Constr.
-3-

Group, LLC, 2007 WL 4412855 (N.D. Ohio Dec, 12, 2007)(Safety
Today provided a Lexis citation for this case, 2007 U.S. Dist.
LEXIS 91328, but this case actually appears at 2007 U.S. Dist.
LEXIS 91238).

According to Safety Today, the case stands for the

proposition that it is sometimes acceptable to respond to a
contention interrogatory by producing documents.

Safety Today

has quoted the opinion accurately, but the quoted language is
complete dictum.

The responding party in that case did not rely

on Rule 33(d) but provided narrative responses, prompting the
court to observe that “[w]hile a party may choose to respond to
an interrogatory by way of producing or identifying responsive
document, Fed.R.Civ.P. 33(d), such a response is not compelled by
the rules.”

Id. at *8.

Consequently, the court was not

presented with the situation which exists in this case, and, in
any event, it is not clear that Judge Gaughan had identified the
interrogatories as contention interrogatories.

Although a review

of the motion to compel, filed in Case No. 1:06-cv-02624-PAG as
Doc. 70, shows that one of the two interrogatories (Interrogatory
9) was a contention interrogatory, the other simply asked for
facts underlying the plaintiff’s claim, and the court’s decision
characterized both as “seeking the facts underlying plaintiffs'
infringement allegations.”

Id.

For these reasons, the Field

Turf decision provides no support for Safety Today’s position.
Defendants, in footnote 8 of their memorandum (Doc. 183),
cite four cases which, they say, hold that “using Rule 33(d) to
respond to contention interrogatories is prohibited.”

Id. at 5.

Safety Today is correct that none of these cases actually appears
to hold that a Rule 33(d) response to a contention interrogatory
is never acceptable, although several of the cases espouse a rule
that such a response is not well-suited to questions “which
require the exercise of particular judgment on the part of the
responding party.”

See United Oil Co. v. Parts Associates, Inc.,
-4-

227 F.R.D. 404, 419 (D. Md. 2005).

They also hold that, for that

type of question, one of the prerequisites for answering under
Rule 33(d) - that the burden of deriving the answers from the
documents is substantially the same for both parties - is not
usually satisfied, because it is substantially more burdensome
for a defendant to guess at what the plaintiff is contending than
to have the plaintiff explain it.

And one of them, U.S.S.E.C. v.

Elfindepan, S.A., 206 F.R.D. 574, 577 n.5 (M.D.N.C. 2002),
states, as an alternative holding, that “Rule 33(d) may not be
used as a substitute for answering such interrogatories. Only
plaintiff can identify its own contentions and the burden on
defendants to try and divine plaintiff's contentions from
documents obviously imposes a greatly unequal burden on
defendants.”
As a general rule, this Court finds that statement to be
logical and persuasive.

There may be some cases where the

precise contours of a party’s contentions can be found in that
party’s business records just as easily by the opposing party for example, where a party has done a detailed damage calculation
already and chooses to produce a document with the calculations
rather than making a narrative response.

The Court can even

envision such a scenario in a trade secret case, where, for
example, an entire drawing or chemical formula - like the formula
for Coca-Cola - is the trade secret, and the document containing
the formula fully answers the question of what information the
plaintiff claims is both kept secret and deserving of protection
(although it might not answer questions such as how the plaintiff
claims it was used or what business the plaintiff lost as a
result).

But such cases would appear to be rare; rather, the

typical case involving trade secret claims and former employees
is that some measure of the information those employees learned
while working for the plaintiff is regarded by their employer as
-5-

a trade secret, and that “secret” is usually a combination of
things like pricing, customer lists, customer purchasing needs or
habits, product specifications, and other information used in the
day-to-day business of selling products in a competitive market.
Only the employer will know what portion of that myriad of
information known to its employees can legitimately be claimed as
a trade secret, and no amount of record production - which, by
rule, is to be a production of the producing party’s business
records, but which, in this case, appears to consist of documents
which Defendants previously produced in discovery - can provide
the appropriate answer to the question.
What appears to have compounded the problem in this case is
that Safety Today has not, as yet, made any specific designation
of information it regards as its trade secrets.

Its assertion

that everything in the 3500 pages of documents it produced is a
trade secret is simply not borne out by the documents themselves,
or at least the portions which the Court has reviewed.

Rather,

that assertion appears to be another way in which Safety Today is
attempting to avoid answering the question of what information
taken by defendants and revealed to Safeware is actually
something for which Safety Today claims trade secret protection.
As Defendants point out, there are some jurisdictions in which,
either by statute or by court practice, discovery cannot begin in
a trade secret case until the plaintiff identifies the alleged
trade secrets with specificity.

See, e.g., Computer Economics,

Inc. v. Gartner Group, Inc., 50 F.Supp. 2d 980 (S.D. Cal. 1999).
The purpose of such rules is, among other things, to permit the
court to determine (if it is asked to do so) the proper scope of
discovery.

Generally, whenever a party asserting a trade secret

claim is asked to identify the information for which it seeks
protection, the “identification must be particular enough as to
separate the trade secret from matters of general knowledge in
-6-

the trade or of special knowledge of persons skilled in the
trade.”

Dow Chemical Canada Inc. v. HRD Corp., 909 F.Supp.2d

340, 346 (D. Del. 2012).

As another court has said, “specificity

is required before the court so that the defendant can defend
himself adequately against claims of trade secret
misappropriation, and can divine the line between secret and
non-secret information, and so that a jury can render a verdict
based on a discriminating analysis of the evidence of disclosure
and misappropriation.” Sit–Up Ltd. v. IAC/InterActiveCorp., 2008
WL 463884,*11 (S.D.N.Y. Feb. 20, 2008).

“The burden is upon the

plaintiff to specify those charges, not upon the defendant to
guess at what they are.”

Xerox Corp. v. International Business

Machines Corp., 64 F.R.D. 367, 371 (S.D.N.Y. 1974).
The Court’s review of Safety Today’s initial responses to
interrogatories, where it identified its trade secrets by broad
category, but which it contends are detailed enough to make the
more recent set of interrogatories largely superfluous, shows
that Safety Today has not followed this general rule.

A

reasonable person would, after reviewing both sets of responses,
still be unable to divine what parts of the business information
taken by the individual defendants fell within Safety Today’s
definition of its trade secrets, and would, as Defendants
contend, be handicapped in the ability to prepare a defense to
this case.

To this point, based on the record before the Court,

Safety Today “has been both too vague and too inclusive,
effectively asserting that all information in or about its
[business] is a trade secret,” see IDX Systems Corp. v. Epic
Systems Corp., 285 F.3d 581, 583 (7th Cir. 2002), a claim which
is “not plausible.”

Id.

It is not too much to ask a trade secret plaintiff to
explain exactly what information it contends is protected from
unwanted disclosure.

In some cases, if much information is
-7-

involved, that will require some effort, but that is a function
of the breadth of the plaintiff’s claims; the broader it seeks to
extend trade secret protection, the more information it may have
to disclose.

In any event, prior to trial, that type of

collation and identification of information will be necessary in
order for the jury to understand the claims and properly
interpret the evidence, and if a summary judgment motion
challenging the existence of trade secrets is filed, a plaintiff
has a similar burden of explaining its claims in a way that the
Court can compare them to the statutory requirements for
affording trade secret protection.

Given this framework, it is

somewhat difficult to understand Safety Today’s reluctance to
state clearly its legal position and to attempt to shift that
responsibility to the Defendants.
Much of this discussion has centered around those
interrogatories which ask for more elucidation of the trade
secret claim.

It applies equally, however, to the remaining

contention interrogatories.

The Court finds that Defendants have

met their burden of showing, initially, that referring them to
documents for the answers is inadequate, and that Safety Today
has not met its burden of demonstrating that it would be just as
easy (and as accurate) for Defendants to parse the documentary
evidence as it would be for Safety Today to do so.

This

certainly applies to the issue of damages as well; even though
Safety Today claims to have produced spreadsheets with damage
figures on them, they appear not to contain damage calculations
as such, but simply raw numbers which could be used in some way
to support a damage theory. Again, explaining how it has
calculated its monetary losses and providing backup documentation
for that calculation is a burden which the plaintiff ordinarily
bears, especially when that calculation appears to be dependent
on which customers or orders Safety Today claims to have lost as
-8-

a result of the Defendants’ alleged misconduct.
For all these reasons, the Court finds Safety Today’s
answers to the interrogatories in question to be inadequate.
Within seven business days of the date of this order, Safety
Today shall provide supplemental response, in narrative form,
answering the interrogatories served upon it by Defendants on
December 23, 2013.
Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
reconsideration by a District Judge.

28 U.S.C. §636(b)(1)(A),

Rule 72(a), Fed. R. Civ. P.; Eastern Division Order No. 91-3, pt.
I., F., 5.

The motion must specifically designate the order or

part in question and the basis for any objection.

Responses to

objections are due fourteen days after objections are filed and
replies by the objecting party are due seven days thereafter.
The District Judge, upon consideration of the motion, shall set
aside any part of this Order found to be clearly erroneous or
contrary to law.
This order is in full force and effect, notwithstanding the
filing of any objections, unless stayed by the Magistrate Judge
or District Judge.

S.D. Ohio L.R. 72.3.
/s/ Terence P. Kemp
United States Magistrate Judge

-9-