Hydro Engineering v. Petter Investments
Filing
203
MEMORANDUM DECISION and ORDERgranting in part and denying in part 120 Motion to Determine the Sufficiency of Petter Investment,m Inc.'s Responses to Requests for Admission. Signed by Magistrate Judge Evelyn J. Furse on 12/16/2013. (tls)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
HYDRO ENGINEERING, INC.,
Plaintiff,
v.
PETTER INVESTMENTS, INC., et al.,
MEMORANDUM DECISION AND
ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
DETERMINE THE SUFFICIENCY OF
PETTER INVESTMENT, INC.’S
RESPONSES TO REQUESTS FOR
ADMISSION (ECF NO. 120)
Defendants.
Case No. 2:11-cv-00139-RJS-EJF
District Judge Robert J. Shelby
Magistrate Judge Evelyn J. Furse
On May 17, 2013, Plaintiff Hydro Engineering, Inc. (“Hydro”) filed a Motion to
Determine the Sufficiency of Petter Investment, Inc.’s Responses to Requests for Admission.
(See ECF No. 120.) Hydro asks this Court 1 to deem its requests admitted or compel Petter
Investment, Inc. (“Petter”) to serve responses to Hydro’s First Requests for Admission Numbers
one through twenty-four. The Court has carefully read the Motion and Memoranda submitted for
and against Hydro’s Motion. 2 The Court ORDERS Petter to serve responses to Hydro’s requests
regarding confidentiality, but sustains Petter’s objection regarding the business records
exception, thus GRANTING IN PART and DENYING IN PART Hydro’s Motion.
1
Chief District Judge Ted Stewart referred this case to the undersigned Magistrate Judge
under 28 U.S.C. § 636(b)(1)(A) on May 30, 2012. (ECF No. 48.) On October 4, 2012, this case
was reassigned to District Judge Robert J. Shelby, with the undersigned remaining as the referred
Magistrate Judge. (ECF No. 90.)
2
The Court determined it can decide the Motion based on the briefing and does not need
oral argument. See DUCivR 7-1(f).
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BACKGROUND
Hydro’s Requests for Admission Numbers one through twenty-four (the “RFAs”) repeat
the same eight questions as to each of the three relevant litigations between Hydro and Petter:
this case and two earlier cases litigated in the Western District of Michigan. The RFAs fall
broadly into two categories. The first category seeks admissions related to the confidentiality of
the documents: (1) that the parties filed stipulated protective orders in the three cases; (2) all
three courts entered the stipulated protective orders; (3) that Matt Petter and Doug Petter agreed
to comply with the stipulated protective orders; (4) that the stipulated protective orders permit
“parties and third-parties to designate documents for production either ‘CONFIDENTIAL’ or
‘CONFIDENTIAL ATTORNEY’S EYES ONLY’”; and (5) that Petter designated documents as
confidential or confidential attorney’s eyes only. (See Br. Ex. A, RFAs 1–5, 9–13, and 17–21,
ECF No. 120-2.) The second category seeks admissions related to the admissibility of
documents produced in this case and the two Michigan cases: (1) that Petter kept and maintained
the documents in the ordinary course of business; (2) that Petter kept the documents under its
custody and control; and (3) that the documents are true and correct copies. (See Br. Ex. A,
RFAs 6–8, 14–16, and 22–24, ECF No. 120-2.) Petter objected to each of Hydro’s RFAs and
provided no responses.
DISCUSSION
Federal Rule of Civil Procedure 36(a)(6) allows a requesting party to move the court “to
determine the sufficiency of an answer or objection.” Fed. R. Civ. P. 36(a)(6). “Unless the court
finds an objection justified, it must order that an answer be served.” Id. The court may also
award expenses under Rule 37(a)(5). Id.
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A. Requests for Admission Nos. 1–5, 9–13, and 17–21
The first category of requests focuses on Petter’s treatment of documents in this case and
the two Michigan cases. Petter objected to these requests as irrelevant, among other objections. 3
Hydro argues these requests “are relevant and discoverable in light of Hydro’s claims for trade
secret misappropriation and how Petter itself has protected similar information.” (Pl.’s Br. 9,
ECF No. 120-1.) The Court agrees with Hydro.
Rule 26(b)(1), which applies to requests for admission under Rule 36(a)(1), creates a
broad scope of discovery. See Fed. R. Civ. P. 26(b)(1); see also Regan-Touhy v. Walgreen Co.,
526 F.3d 641, 649 (10th Cir. 2008) (“Under our rules, parties to civil litigation are given broad
discovery privileges.”). As part of Hydro’s misappropriation claim, Hydro must first prove “the
existence of a trade secret.” See Water & Energy Sys. Tech., Inc. v. Keil, 1999 UT 16, ¶ 9, 974
P.2d 821, 822. The Utah Uniform Trade Secrets Act defines “trade secret” as “information . . .
that: (a) derives independent economic value, actual or potential, from not being generally
known . . . ; and (b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.” Utah Code Ann. § 13-24-2(4). How competitors treat such information
has relevance to Hydro’s obligation to prove the existence of a trade secret; particularly the
second prong of the Utah Uniform Trade Secret Act’s definition of “trade secret,” which asks
whether the secret holder’s efforts to preserve the information’s secrecy were reasonable.
Accordingly, the Court finds Petter’s relevancy objections to these requests not
substantially justified and grants Hydro’s Motion as to these requests. The Court therefore
orders Petter to respond to the above-listed RFAs within fourteen days of this Order’s entry.
3
For example, Petter objected to a number of Hydro’s RFAs as vague and ambiguous.
(See e.g., Br. Ex. A, RFAs 4, 6, 12, ECF No. 120-2.) However, Petter’s Opposition only
discusses Petter’s relevance (RFAs 1–24) and unduly burdensome (RFAs 5–8, 13–16, and 21–24)
objections. (See Mem. Opp., ECF No. 125.)
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B. Requests for Admission Nos. 6–8, 14–16, and 22–24
The second category of requests apparently seeks to lay the groundwork for admission of
certain documents under the business records exception to the rule against hearsay. Petter
objected to these requests as irrelevant. Hydro argues these requests show how other parties in
the marketplace treat such information. As noted above, the Court agrees that how Petter treated
such information has some relevance to Hydro’s misappropriation claim but finds these requests
do not go to that purpose.
Petter also objected to these requests as unduly burdensome. Rule 36(a)(1) allows
requests for admission related to the authenticity of documents. But these requests put at issue
approximately 50,000 pages of documents without any reference to an intent to use them at trial.
Because these requests require Petter to examine such a vast universe of documents, the Court
finds them unduly burdensome. See In re Gulf Oil/Cities Serv. Tender Offer Litig., No. 82 Civ.
5253 (MBM), 87 Civ. 8982 (MBM), 1990 U.S. Dist. LEXIS 8649, at *2–3 (S.D.N.Y. July 16,
1990) (noting that while Rule 36(a) provides for authentication of documents, “it would be
unreasonable to require plaintiffs to expend time and effort to determine the authenticity of
documents not now intended to be used at trial”). Accordingly, the Court denies Hydro’s Motion
as to these requests. If Hydro wishes to revise the requests to apply only to documents it has a
good-faith belief it will likely offer as evidence at trial, it may do so within fourteen days.
C. Sanctions
Rule 36(a)(6) states that “Rule 37(a)(5) applies to an award of expenses.” Because this
Court grants Hydro’s Motion, albeit in part, Rule 37(a)(5) 4 directs this Court to award Hydro
4
Although Hydro cites Rule 37(c)(2), that Rule applies where “the requesting party later
proves a document to be genuine or the matter true.” Fed. R. Civ. P. 27(c)(2). As the advisory
committee’s note indicates, “Rule 37(c) is intended to provide posttrial relief in the form of a
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reasonable expenses, including attorney’s fees. The Court granted Hydro’s Motion as to
approximately half of the RFAs at issue and therefore awards Hydro half of its expenses incurred
in making this Motion. The Court directs Hydro to submit documentation supporting its
expenses.
CONCLUSION
For the reasons set forth above, the Court Orders as follows:
1) The Court GRANTS Hydro’s Motion as to Requests for Admission Nos. 1–5, 9–13, and
17–21;
2) The Court ORDERS Petter respond to Requests for Admission Nos. 1–5, 9–13, and 17–
21 within 14 days of this Order’s entry;
3) The Court DENIES Hydro’s Motion as to Requests for Admission Nos. 6–8, 14–16, and
22–24; and
4) The Court GRANTS Hydro’s request for expenses and awards Hydro half of its expenses
incurred in making this Motion. Hydro should submit documentation to support its
expenses.
Dated this 16th day of December, 2013.
BY THE COURT:
Evelyn J. Furse
United States Magistrate Judge
requirement that the party improperly refusing the admission pay the expenses of the other side
in making the necessary proof at trial.” Fed. R. Civ. P. 37 advisory committee’s note, 1970
Amendment.
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