Momentive Specialty Chemicals, Inc. v. Alexander

Filing 32

ORDER granting in part and denying in part # 13 Motion to Compel signed by Magistrate Judge Terence P Kemp on 5/23/2013 (wh1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Momentive Specialty Chemicals, :
Inc.,
Plaintiff,

:

v.

:

Case No. 2:13-cv-275

:

JUDGE MICHAEL H. WATSON
Magistrate Judge Kemp

Ricky Alexander,
Defendant.

:
ORDER

This case is currently before the Court to decide defendant
Ricky Alexander’s motion to compel discovery (Doc. 13).
matter has been fully briefed.

The

This order constitutes the

Court’s ruling on the motion.
I.

Background

In another discovery order filed on May 16, 2013 (Doc. 10),
the Court set forth a brief background of this case.

The case

involves Momentive’s claim that defendant Ricky Alexander, who
used to work for Momentive, has gone to work for a competitor,
breached a non-compete agreement, and taken proprietary
information with him to use in competing against Momentive.
According to the complaint, Mr. Alexander worked for Momentive in
the area of selling “proppants,” which “are injected into deep,
underground wells to create a pathway for gas and oil.”
Complaint, Doc. 2, ¶6.

One of the disputes which has arisen is

whether Momentive is in the business of selling raw sand as a
proppant.

Mr. Alexander appears to contend that, at least while

he was at Momentive, the only sand Momentive sold as a proppant
was resin-coated sand (it also sold ceramic proppants), and that
Momentive should not be able to prevent him from working for a
company which serves the same market but sells raw sand rather

than coated sand.

He suggests that any company selling raw sand

is not a competitor of Momentive’s and that the non-compete
agreement he signed did not prevent him from working for such a
company.
In order to flesh out this defense, Mr. Alexander served
written discovery requests which asked for various documents and
other information pertaining to Momentive’s sale of raw sand.
Momentive responded to those requests by producing some of the
information, but it redacted some of the documents it produced
and designated others as “attorneys eyes only.”

Mr. Alexander

asks the Court to order Momentive to provide him with additional
information about its raw sand sales, to redesignate the
documents which it marked at “attorneys eyes only,” and to
produce unredacted versions of many documents.

For the following

reasons, the Court will grant the motion in part.
II.

Discussion

There are two main themes running through Momentive’s
response to the motion to compel: that some of the information
requested by Mr. Alexander is too competitively sensitive to
justify allowing anyone but outside counsel to see it, and that
other information he has asked for is simply irrelevant.

The

Court will organize its discussion around these two themes.
A.

Relevance

The information which Momentive believes to be irrelevant
includes (1) certain items redacted from its 2013 Business Plans;
(2) its 2012 Business Plans; (3) the identities of both its sales
people who sell raw sand and its raw sand suppliers; (4) the
sales price it charges for raw sand and to whom it has made such
sales; and (5) information about it inventory capacity at the
Longview, Texas transload facility.

The Court will address each

of these categories of information in turn.
First, Momentive has represented that none of the
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information redacted from the 2013 Business Plans deals with raw
sand.

Mr. Alexander does not actually dispute this, but asks the

Court to conduct an in camera review of an unredacted version of
the documents to confirm that representation.

In the absence of

any reason to suspect that Momentive is withholding relevant
information from the Plans, the Court declines to order an in
camera review.
Turning to the second issue, Momentive’s argument about the
2012 Business Plans is somewhat different.

It appears to admit

that the 2012 Plans address sales of raw sand.

However, it

contends that the 2012 Plans are now out of date and were out of
date when Mr. Alexander left Momentive in January, 2013, and that
it has already produced evidence of its raw sand sales from
November, 2011 forward.

It asserts that the Plans would add

nothing to that information.
Assuming that raw sand sales are either relevant or, at a
minimum, discoverable because information about such sales may
lead to the discovery of relevant evidence about one of Mr.
Alexander’s defenses (see Fed.R.Civ.P. 26(b)), the fact that
Momentive has produced other information about its 2012 raw sand
sales does not make information in that year’s Business Plans any
less relevant.

Further, Momentive, as the party resisting

production of relevant evidence on grounds that it is duplicative
of other information produced, has the burden of showing that the
discovery of the 2012 Plans would not just be cumulative or
duplicative, but unreasonably so, see Rule 26(b)(2)(C), and it
has not met that burden because it has not shown that the
information in the Plans and in the invoices would completely
overlap.
2000).

Cf. Alexander v. F.B.I., 194 F.R.D. 299, 302 (D.D.C.

Finally, any burden in producing the 2012 Plans would

appear to be minimal.

The Plans should therefore be produced,

although, as with the 2013 Plans, information that does not deal
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with raw sand sales may be redacted.
As to the third issue, relating to the identity of
Momentive’s sand suppliers and the names of its sand
salespersons, Momentive makes a similar argument.

Although it

phrases its argument in relevancy terms (“The identification of
salesmen who sold raw sand for Momentive is, quite simply,
irrelevant” and “the source of raw sand, and the supply contracts
for raw sand, are wholly irrelevant”)(Memorandum in Opposition,
Doc. 22, at 6), it supports those assertions not with any
argument about relevance, but by repeating its claim that it has
already produced both Business Plans and invoices showing that it
has been selling raw sand since 2011.

Mr. Alexander does not

necessarily dispute the fact that Momentive has sold some
quantity of raw sand, but he argues that it did not do so in the
same way as the company he worked for, and that its sales may
have been of contaminated sand and may have been to suppliers
rather than to end users of the product.

Certainly, knowing who

made the sand sales in question may allow Mr. Alexander to
explore these issues further, and the issues do relate to his
defense.
The same cannot be said for information about Momentive’s
suppliers, however.

Whether, and to whom, Momentive sold raw

sand may be pertinent to Mr. Alexander’s theory that Momentive is
not really in the raw sand business, but where it got its sand
from strikes the Court as immaterial.

Mr. Alexander’s reply

memorandum says only that he needs to know this information “to
see if the raw sand sales are the result of supply contract
obligations....”

(Reply Memorandum, Doc. 26, at 7).

He does not

explain how, if Momentive’s purchases of sand were tied to some
supply contract obligation, that might show that Momentive is not
really a raw sand seller.

The Court agrees with Momentive on

this point and will not order the production of supplier
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information.
Next, as to sales price and customer information, all of
which was redacted from the raw sand sales invoices which
Momentive produced, Mr. Alexander argues that both these pieces
of information “will show whether or not Momentive sold any raw
sand in the East Texas region” and if the sales were made to enduser type customers, as opposed to buyers of contaminated sand
who would re-sift the sand and then sell it to the same type of
customer Mr. Alexander is accused of servicing in violation of
the non-compete agreement.

Those appear to be relevant

considerations, especially in light of Mr. Alexander’s claim that
the former type of sand sale occurred while he was at Momentive.
Momentive’s also argues that this information, even if
relevant, is highly confidential if, in fact, its customers and
Mr. Alexander’s employer’s customers fall into the same category
of sand buyers.

However, there is a protective order in place,

and such information can be designated as attorneys eyes only in
order to reduce or eliminate the risk of unfair competition.

The

Court views this information as relevant and will order Momentive
to produce unredacted copies of its invoices, subject to its
ability to mark them as attorneys eyes only if it believes that
to be necessary and appropriate.
The last category of information which Momentive claims to
be irrelevant is the configuration or capacity of its Longview,
Texas “transload facility.”

As Mr. Alexander explains it, he

worked at that site and it is the site which serves the East
Texas region.

He believes that Momentive does not have

sufficient space to store any appreciable amount of raw sand at
that location, and that simple economics dictate that if it has
to bring the sand in from elsewhere, it cannot sell it
competitively in East Texas.

Consequently, he argues that this

information, if it confirms his understanding of the situation at
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Longview, would undercut Momentive’s claim that it is selling raw
sand to customers in East Texas for use as an oil and gas well
proppant.
Momentive makes only a brief argument in opposition.

It

states, in conclusory fashion, that “this information has no
bearing on the issue of violation of the non-compete clause” and
that “Momentive’s economic issues are not relevant in this case.”
They are, however, if they are reasonably related to the issue of
whether Momentive is really in the raw sand business in a way
that competes with Mr. Alexander’s employer, and Mr. Alexander
has presented a logical explanation about why this information
may shed light on that issue.

Given the current record, the

Court finds his argument more compelling, and it will direct
Momentive to produce this information.
B.

Designations under the Protective Order

The only documents that Mr. Alexander seeks to have
redesignated (from attorneys eyes only to confidential) are the
2013 Business Plans.

His sole basis for making this request is

that he “is the only person in his case who can interpret these
documents....”

(Motion to Compel, Doc. 13, at 8).

He also

points out that he has already seen these Plans in their
entirety, so that Momentive will not be harmed if he sees them
again.
In response, Momentive argues that Mr. Alexander’s statement
is simply not true.

It says that the information about raw sand

in these plans is straightforward and that anyone can understand
it.

Further, it expresses great reluctance to re-acquaint Mr.

Alexander with the content of its business plans, which it
regards as very competitively sensitive, now that he has gone to
work for a competitor.
Having not seen the Plans, the Court is at somewhat of a
disadvantage in choosing between the parties’ claims about the
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nature of the information about raw sand sales which is in the
Plans.

However, that type of information does not, on its face,

seem to be overly technical, and counsel have not submitted any
evidence that they are unable to interpret it.

Further, it is

typical that business plans containing competitively sensitive
information be restricted, at least in the first instance, to
attorneys and not be shared with parties who work for or might
share information with the producing party’s competitors.

See,

e.g. Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 246
(D. Kan. 2010)(attorneys eyes only designation “is usually
reserved for more sensitive information, such as trade secret
information, future product plans, competitive pricing, customer
lists, or competitive business financial information”).

If such

information is outdated, it may be deserving of lesser
protection, see JTS Choice Enterprises, Inc. v. E.I. Du Pont De
Nemours and Co., 2013 WL 791438 (D. Colo. March 4, 2013), but
that is clearly not the case with the 2013 Plans.

Further,

counsel may depose Momentive representatives on these Plans to
gain a better understanding of them, and they will be getting the
2012 Plan as well.

Unless, after all of this occurs, counsel can

make a good faith showing that they need Mr. Alexander in order
to understand the information in the 2013 Plans, the designation
which Momentive has made should remain intact.
III.

Order

For the reasons set forth above, Mr. Alexander’s motion to
compel discovery (Doc. 13) is granted in part and denied in part.
Given the fast track on which this case currently resides, the
information which Momentive is being ordered to produce shall be
produced within seven days of the date of this order.
IV.

Procedure on Motion for Reconsideration

Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
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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

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