Kimberly-Clark Worldwide Inc v. First Quality Products Inc et al
Filing
447
MEMORANDUM OPINION AND ORDER - For the foregoing reasons, the plaintiffss motion to compel (Doc. 386 ) will be granted, in part, and the defendants will be directed to comply with Interrogatory No.17 with respect to those product lines that K-C has specifically identified as infringing in this lawsuit. In all other respects the motion to compel will be denied. Signed by Magistrate Judge Martin C. Carlson on July 25, 2011. (kjn )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
KIMBERLY-CLARK WORLDWIDE, INC.,
:
:
Plaintiff,
:
:
v.
:
:
FIRST QUALITY BABY PRODUCTS, LLC, :
FIRST QUALITY PRODUCTS, INC.,
:
FIRST QUALITY RETAIL SERVICES, LLC, :
and FIRST QUALITY HYGIENIC, INC.,
:
:
Defendants.
:
:
:
FIRST QUALITY BABY PRODUCTS, LLC, :
FIRST QUALITY PRODUCTS, INC.,
:
FIRST QUALITY RETAIL SERVICES, LLC, :
and FIRST QUALITY HYGIENIC, INC.,
:
:
Counterclaim Plaintiffs,
:
:
v.
:
:
KIMBERLY-CLARK CORPORATION,
:
KIMBERLY-CLARK WORLDWIDE, INC., :
and KIMBERLEY-CLARK GLOBAL
:
SALES, LLC,
:
:
Counterclaim Defendants.
:
Civil No. 1:09-CV-1685
(Judge Caldwell)
(Mag. Judge Carlson)
MEMORANDUM OPINION AND ORDER
I.
Statement of Facts and of the Case
This case is a complex commercial patent and anti-trust lawsuit, which
involves issues of invention and incontinence. The parties in this litigation
manufacture, produce and market a wide array of adult incontinence products and
baby diapers. The litigants are now embroiled in a lawsuit examining issues relating
to the validity and alleged infringement of various competing patents for the
incontinence products which they manufacture and market. At the direction of the
district court, one discrete discovery aspect of this broader dispute was referred to the
undersigned for resolution.
This discrete issue relates to a motion to compel discovery filed by KimberlyClark Worldwide (hereafter K-C), (Doc. 386), which seeks to compel production of
the following detailed financial information from First Quality Baby Products
(hereafter First Quality) as set forth in plaintiffs’ Interrogatory No. 17, which states
in part as follows:
For each baby diaper and wearable incontinence product of First Quality
sold since March 12, 2003, separately identified by the product IP
Number, FQRKIP Number and/or 5-byte code, provide the following
information: the product code, the annual sales in dollars, the annual
sales in volume (number of products), the cost of manufacture, and the
amount of all other (including variable) costs associated with each such
product. Additionally, identify each individual furnishing information
used in the response to this Interrogatory, or knowledgeable about such
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information, and all documents consulted, used, or reviewed in
formulating the answer.
(Doc. 387-2)
Initially, noting that the interrogatory could be construed as requiring First
Quality to produce detailed financial data relating to more than 300 separate lines of
products it produced over an eight year period, many of which have not been alleged
to infringe upon any K-C patents, First Quality objected to this interrogatory on the
grounds that it was over-broad and unduly burdensome. (Doc. 392) In response, KC has now asserted: “that K-C is seeking summary information only for First
Quality’s potentially infringing protective underwear, sleep pants and baby diapers.”
(Doc. 396, p.2) With its request narrowed in this fashion, K-C seeks an order
directing compliance with this interrogatory. The parties have fully briefed this issue,
and it is now ripe for resolution. (Docs. 386, 387, 392, and 396)
For the reasons set forth below, the plaintiffs’ motion to compel will be
granted, in part, and the defendants will be directed to comply with Interrogatory No.
17 with respect to those product lines that K-C has specifically identified as
infringing in this lawsuit. In all other respects the motion to compel will be denied.
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II.
Discussion
Several basic guiding principles inform our resolution of the instant discovery
dispute. At the outset, Rule 37 of the Federal Rules of Civil Procedure governs
motions to compel discovery, and provides that:
(a) Motion for an Order Compelling Disclosure or Discovery
(1) In General. On notice to other parties and all affected persons, a
party may move for an order compelling disclosure or discovery. . . .
Fed. R. Civ. P. 37(a).
The scope of what type of discovery may be compelled under Rule 37 is
defined, in turn, by Rule 26(b)(1) of the Federal Rules of Civil Procedure, which
provides as follows:
(1) Scope in General. Unless otherwise limited by court order, the scope
of discovery is as follows: Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or defense –
including the existence, description, nature, custody, condition, and
location of any documents or other tangible things and the identity and
location of persons who know of any discoverable matter. For good
cause, the court may order discovery of any matter relevant to the
subject matter involved in the action. Relevant information need not be
admissible at trial if the discovery appears reasonably calculated to lead
to the discovery of admissible evidence. All discovery is subject to the
limitations imposed by Rule 26(b)(2)( C ).
Fed. R. Civ. P. 26(b)(1)
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Rulings regarding the proper scope of discovery, and the extent to which
discovery may be compelled, are matters consigned to the court’s discretion and
judgment. Thus, it has long been held that decisions regarding Rule 37 motions are
“committed to the sound discretion of the district court.” DiGregorio v. First
Rediscount Corp., 506 F.2d 781, 788 (3d Cir. 1974). Similarly, issues relating to the
scope of discovery permitted under Rule 26 also rest in the sound discretion of the
Court. Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987). Thus,
a court’s decisions regarding the conduct of discovery, and whether to compel
disclosure of certain information, will be disturbed only upon a showing of an abuse
of discretion. Marroquin-Manriquez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983).
This far-reaching discretion extends to rulings by United States Magistrate Judges on
discovery matters. In this regard:
District courts provide magistrate judges with particularly broad
discretion in resolving discovery disputes. See Farmers & Merchs. Nat'l
Bank v. San Clemente Fin. Group Sec., Inc., 174 F.R.D. 572, 585
(D.N.J.1997). When a magistrate judge's decision involves a
discretionary [discovery] matter . . . , “courts in this district have
determined that the clearly erroneous standard implicitly becomes an
abuse of discretion standard.” Saldi v. Paul Revere Life Ins. Co., 224
F.R.D. 169, 174 (E.D.Pa.2004) (citing Scott Paper Co. v. United States,
943 F.Supp. 501, 502 (E.D.Pa.1996)). Under that standard, a magistrate
judge's discovery ruling “is entitled to great deference and is reversible
only for abuse of discretion.” Kresefky v. Panasonic Commc'ns and Sys.
Co., 169 F.R.D. 54, 64 (D.N.J.1996); see also Hasbrouck v.
BankAmerica Hous. Servs., 190 F.R.D. 42, 44-45 (N.D.N.Y.1999)
(holding that discovery rulings are reviewed under abuse of discretion
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standard rather than de novo standard); EEOC v. Mr. Gold, Inc., 223
F.R.D. 100, 102 (E.D.N.Y.2004) (holding that a magistrate judge's
resolution of discovery disputes deserves substantial deference and
should be reversed only if there is an abuse of discretion).
Halsey v. Pfeiffer, No. 09-1138, 2010 WL 3735702, *1 (D.N.J. Sept. 17, 2010).
This discretion is guided, however, by certain basic principles. Thus, at the
outset, it is clear that Rule 26's broad definition of that which can be obtained through
discovery reaches only “nonprivileged matter that is relevant to any party’s claim or
defense.” Therefore, valid claims of relevance and privilege still cabin and restrict
the court’s discretion in ruling on discovery issues. Furthermore, the scope of
discovery permitted by Rule 26 embraces all “relevant information” a concept which
is defined in the following terms: “Relevant information need not be admissible at
trial if the discovery appears reasonably calculated to lead to the discovery of
admissible evidence.”
A party moving to compel discovery bears the initial burden of proving the
relevance of the requested information. Morrison v. Philadelphia Housing Auth., 203
F.R.D. 195, 196 (E.D.Pa. 2001). Once that initial burden is met, “the party resisting
the discovery has the burden to establish the lack of relevance by demonstrating that
the requested discovery (1) does not come within the broad scope of relevance as
defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevance that the
potential harm occasioned by discovery would outweigh the ordinary presumption in
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favor of broad disclosure.” In re Urethane Antitrust Litigation, 261 F.R.D. 570, 573
(D. Kan. 2009).
B.
Resolution of K-C’s Discovery Motion–First Quality Shall Comply
with Interrogatory No. 17 Only With Respect to those Product Lines
that K-C has Specifically Identified as Infringing in this Lawsuit.
These competing principles regarding assessing both the relevance and the
burdensome of discovery demands guide us in resolving the instant dispute. At the
outset, we find in the context of this patent lawsuit that some discovery by K-C
regarding financial data pertaining to certain allegedly infringing product lines
produced by First Quality is calculated to lead to the discovery of admissible
evidence, since this financial data would be relevant to issues of liability and damages
in this patent infringement and patient validity litigation. However, we also find that
the relevance of this information directly correlates to K-C’s claims of infringement
against First Quality. Therefore, we believe that wholesale requests for production of
financial information relating to product lines produced by First Quality that are not
alleged to be infringing would be overly-broad and unduly burdensome. Therefore,
in the exercise of our discretion, shaping the scope and extent of discovery in this
case, we conclude that K-C’s motion to compel a response to Interrogatory No. 17
should be granted only in part, and only with respect to those product lines of First
Quality which K-C specifically alleges are infringing. As to other of the more than
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300 product lines produced by First Quality, at present, we find that the balance of
relevance and burdensomeness weighs against any effort by K-C to compel
production of this financial information. Therefore, with this important limitation and
caveat, the motion to compel is granted, in part, solely with respect to those product
lines of First Quality which K-C specifically alleges are infringing.
III.
Conclusion
For the foregoing reasons, the plaintiffs’s motion to compel (Doc. 386) will be
granted, in part, and the defendants will be directed to comply with Interrogatory No.
17 with respect to those product lines that K-C has specifically identified as
infringing in this lawsuit. In all other respects the motion to compel will be denied.
So ordered this 25th day of July, 2011.
S/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
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