BriovaRx, LLC v. Johnson, et al

Filing 91

MEMORANDUM OPINION AND ORDER granting Defendants' 83 MOTION for Leave to File Response to Plaintiff's Motion for Protective Order; granting in part and denying in part Defendants' 69 Motion for Protective Order and Plaintiff's 75 Motion to Compel Defendants' Discovery Responses; granting Defendants' 70 Motion to Compel Complete Discovery Responses; denying Plaintiff's 73 Motion for a Protective Order. Signed by Magistrate Judge Cheryl A. Eifert on 3/13/2014. (cc: attys) (mkw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
BRIOVARX, LLC, an Alabama Corporation,
Plaintiff,
v.

Case No.: 3:13-cv-12049

JENNIFER JOHNSON, an individual,
RICHARD A. JOHNSON, an individual,
Defendants.

MEMORANDUM OPINION AND ORDER
Pending before the Court are five motions related to discovery, including the
following:
1.

Defendants’ Motion for a Protective Order in Response to Plaintiff’s
Second Set of Discovery Requests, (ECF No. 69);

2.

Defendants’ Motion to Compel Complete Discovery Responses from
Plaintiff, (ECF No. 70);

3.

Plaintiff’s Motion for Protective Order, (ECF No. 73);

4.

Plaintiff’s Motion to Compel Defendants’ Discovery Responses, (ECF No.
75) and

5.

Defendants’ Motion for Leave to File Response to Plaintiff’s Motion for
Protective Order. (ECF No. 83).

The Court GRANTS Defendants’ Motion for Leave to File a Response, (ECF No.
83), and has considered that response with the other memoranda filed by the parties. In
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addition, on March 10, 2014, the undersigned conducted a hearing on the motions. For
the reasons that follow, the Court GRANTS, in part, and DENIES, in part, Defendants’
Motion for Protective Order and Plaintiff’s Motion to Compel Defendants’ Discovery
Responses, (ECF Nos. 69, 75); GRANTS Defendants’ Motion to Compel Complete
Discovery Responses, (ECF No. 70); and DENIES Plaintiff’s Motion for a Protective
Order. (ECF No. 73).
I.

Introduction
Plaintiff BriovaRx, LLC is a specialty pharmacy with locations in eleven states,

including West Virginia. According to Plaintiff, it employed Defendants as sales
representatives until March 2013, when they resigned their positions with the company.
Defendants subsequently opened a competing entity, allegedly using confidential
business forms and information belonging to BriovaRx. Accordingly, Plaintiff filed the
complaint herein, asserting claims of breach of contract, breach of the duty of loyalty,
tortious interference with a prospective business advantage, copyright infringement,
and unfair competition. Plaintiff seeks injunctive relief, money damages and attorneys’
fees and costs.
II.

Applicable Discovery Principles
Rule 26(b)(1) permits a party to obtain discovery regarding any nonprivileged

matter that is relevant to any party’s claims or defenses. “While the Federal Rules of
Civil Procedure do not define ‘relevant information,’ the Federal Rules of Evidence
define it as ‘evidence having any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less probable than it
would be without the evidence.’” Boykin Anchor Co., Inc. v. Wong, No. 5:10–CV–591–
FL, 2011 WL 5599283, * 2 (E.D.N.C. November 17, 2011), citing United Oil Co., v. Parts
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Assocs., Inc, 227 F.R.D. 404, 409 (D.Md. 2005). Nonetheless, admissibility under the
Federal Rules of Evidence is not the guideline for relevancy in the context of discovery.
Relevancy in discovery is broader in scope, because “[d]iscovery is of broader scope than
admissibility, and discovery may be had of inadmissible matters.” King v. Conde, 121
F.R.D. 180, 194 (E.D.N.Y. 1988); See also Carr v. Double T Diner, 272 F.R.D.431, 433
(D.Md.) (“The scope of relevancy under discovery rules is broad, such that relevancy
encompasses any matter that bears or may bear on any issue that is or may be in the
case”). For purposes of discovery, information is relevant, and thus discoverable, if it
‘“bears on, or ... reasonably could lead to other matter[s] that could bear on, any issue
that is or may be in the case. Although ‘the pleadings are the starting point from which
relevancy and discovery are determined ... [r]elevancy is not limited by the exact issues
identified in the pleadings, the merits of the case, or the admissibility of discovered
information.’ Rather, the general subject matter of the litigation governs the scope of
relevant information for discovery purposes. Therefore, courts broadly construe
relevancy in the context of discovery.” Kidwiler v. Progressive Paloverde Ins. Co., 192
F.R.D. 193, 199 (N.D.W.Va. 2000) (internal citations omitted).
Discovery that seeks relevant information may nevertheless be restricted or
prohibited if necessary to protect a person or party from annoyance, embarrassment,
oppression, or undue burden or expense. Fed. R. Civ. P. 26(c). Likewise, on motion or
sua sponte, the court may limit the frequency and extent of discovery when the “burden
or expense of the proposed discovery outweighs its likely benefit, considering the needs
of the case, the amount in controversy, the parties’ resources, the importance of the
issues at stake in the action, and the importance of the discovery in resolving the issues.”
Fed. R. Civ. P. 26(b)(2)(C)(iii). The party opposing discovery has the obligation to
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submit evidence supporting its claims that the requests are unduly burdensome,
oppressive, or improperly invasive. To prevail on the grounds of burdensomeness or
breadth, the objecting party must do more to carry its burden than make conclusory and
unsubstantiated arguments. Convertino v. United States Department of Justice, 565 F.
Supp.2d 10, 14 (D.D.C. 2008) (the court will only consider an unduly burdensome
objection when the objecting party demonstrates how discovery is overly broad,
burdensome, and oppressive by submitting affidavits or other evidence revealing the
nature of the burden); Cory v. Aztec Steel Building, Inc., 225 F.R.D. 667, 672 (D.Kan.
2005) (the party opposing discovery on the ground of burdensomeness must submit
detailed facts regarding the anticipated time and expense involved in responding to the
discovery which justifies the objection); Bank of Mongolia v. M & P Global Financial
Services, Inc., 258 F.R.D. 514, 519 (S.D. Fla.2009) (“A party objecting must explain the
specific and particular way in which a request is vague, overly broad, or unduly
burdensome. In addition, claims of undue burden should be supported by a statement
(generally an affidavit) with specific information demonstrating how the request is
overly burdensome”).
Federal Rule of Civil Procedure 26(c)(1)(G) also allows the court, for good cause,
to issue an order “requiring that a trade secret or other confidential research,
development, or commercial information not be revealed or be revealed only in a
specified way.” In order for the court to apply the rule, two criteria must exist. First, the
material sought to be protected must be “a trade secret or other confidential research,
development, or commercial information.” Second, there must be a “good cause” basis
for granting the restriction. The party seeking protection bears the burden of
establishing both the confidentiality of the material and the harm associated with its
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disclosure. Deford v. Schmid Prods. Co., 120 F.R.D. 648, 653 (D.Md. 1987) (citing
Cipollone v. Liggett Group, Inc., 785 F.2d. 1108, 1121 (3rd Cir. 1986)). Once these
elements are demonstrated, the burden shifts to the party seeking disclosure to show
that the material is relevant and necessary to its case. Empire of Carolina, Inc. v.
Mackle, 108 F.R.D. 323, 326 (D.C. Fla. 1985). The court “must balance the requesting
party’s need for information against the injury that might result if uncontrolled
disclosure is compelled.” Pansy v. Borough of Stroudsburg, 23 F.3d 772, 787 (3rd Cir.
1994) (quoting Arthur R. Miller, Confidentiality, Protective Orders, and Public Access
to the Courts, 105 Harv.L.Rev. 427, 432–33 (1991). Although the court exercises broad
discretion in deciding “when a protective order is appropriate and what degree of
protection is required, Furlow v. United States, 55 F.Supp.2d 360, 366 (D.Md.1999)
(quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36, 104 S.Ct. 2199, 81 L.Ed.2d 17
(1984)), protective orders “should be sparingly used and cautiously granted.” Baron Fin.
Corp. v. Natanzon, 240 F.R.D. 200, 202 (D.Md. 2006) (quoting Medlin v. Andrew, 113
F.R.D. 650, 653 (M.D.N.C. 1987)).
III.

Defendants’ Motion for Protective Order and Plaintiff’s Motion to
Compel
Shortly after serving the complaint, Plaintiff moved the Court for expedited

discovery; a request that was granted. Consequently, Plaintiff served discovery requests
on the Defendants, which were answered on August 19, 2013. Plaintiff was dissatisfied
with some of the answers, so on August 29, 2013, the parties discussed their differences.
Defendants made it clear that they did not intend to change or supplement their
answers. Despite having full knowledge of Defendants’ position, Plaintiff took no action
to compel supplemental discovery responses until December 9, 2013, more than two
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months after expiration of the time frame allowed for filing a motion to compel.
Therefore, Plaintiff’s motion was denied as untimely. However, noting that time still
remained under the Scheduling Order for serving written discovery, Plaintiff simply reserved Defendants with the original discovery requests. Defendants now object to this
strategy and seek a protective order. At the same time, Plaintiff moves to compel
answers to the second set of requests.
Although the second set of discovery served by Plaintiff is duplicative of its first
set, the undersigned finds that some flexibility is called for under the circumstances.
Plaintiff did not timely file its motion to compel; accordingly, its substantive arguments
were never addressed. For that reason, there may be relevant information in
Defendants’ possession that has not been shared with Plaintiff. Plaintiff served its
second set of discovery within the time frame permitted by the Scheduling Order, and
Defendants do not offer any specific evidence or information demonstrating that the
requests are overly burdensome or oppressive. To the contrary, Defendants indicate that
they will simply provide the same answers to the discovery requests. Thus, Plaintiff’s
diligence in re-serving the discovery may, at least in part, gain it a second chance at its
motion to compel. That result is not contrary to or inconsistent with the goals of the
federal discovery rules.
Therefore, the undersigned DENIES Defendants’ motion to the extent that it
applies to the requests for production of documents, and GRANTS Plaintiff’s motion to
compel its second set of requests for production of documents. Defendants shall have
through and including March 14, 2014 in which to respond to the document requests.
On the other hand, given Federal Rule of Civil Procedure 33(a), the outcome
must be different to the extent that the motion applies to the interrogatories
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propounded by Plaintiff. Under Federal Rule of Civil Procedure 33(a), parties are
limited to 25 interrogatories. Plaintiff filed 25 interrogatories in its first set;
consequently, the second set of interrogatories is not only duplicative, it exceeds the
limit permitted by the Federal Rule. The parties agreed to abide by the limitations
contained in the Federal Rules, and Plaintiff has not demonstrated good cause to deviate
from that agreement. Therefore, the undersigned GRANTS Defendants’ motion for
protective order to the extent that it applies to the interrogatories propounded by
Plaintiff, and DENIES Plaintiff’s motion to compel its second set of interrogatories.
IV.

Defendants’ Motion to Compel Complete Discovery Responses and
Plaintiff’s Motion for a Protective Order
Plaintiff withheld information in response to Defendants’ first set of

interrogatories and requests for production of documents on three broad grounds, all of
which Defendants found inappropriate. First, Plaintiff argued that a protective order,
which included an “attorney’s eyes only” provision, had to be entered before sensitive
business records would be produced. This argument also forms the basis of Plaintiff’s
Motion for a Protective Order. Second, Plaintiff took the position that it did not need to
produce documents already in the Defendants’ possession. Finally, Plaintiff raised
relevance and/or burdensomeness objections to several requests, or supplied only
generic, non-specific responses. Having reviewed the requests and the answers, the
undersigned agrees with Defendants that they are entitled to full and complete
responses to the interrogatories and requests for production of documents identified in
their motion to compel, with the exception that Plaintiff shall only be required to answer
the modified version of Interrogatory No. 16 agreed upon at the motions hearing.
Therefore, the Court GRANTS Defendants’ Motion to Compel, and ORDERS Plaintiff
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to provide full and complete answers to the designated discovery requests on or before
March 24, 2014. In addition, the Court DENIES Plaintiff’s Motion for a Protective
Order.
The primary reason given by Plaintiff for its hesitancy to fully answer Defendants’
discovery requests is the absence of a two-tiered protective order. Defendants agree that
a protective order should be entered in this case, but assert that the District’s standard
protective order is sufficient, arguing that Plaintiff has not shown good cause for a more
restrictive order. Two-tiered protective orders are commonly entered in cases involving
intellectual property, trade secrets, and unique technological information, affording
fuller protection to particularly sensitive information than is extended to ordinary
business information. Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 246-47 (D.
Kan. 2010). The more restrictive “attorney’s eyes only” tier is intended to prevent
adverse parties—generally business competitors—from accessing the other party’s
previously undisclosed, highly confidential documents, which if revealed, could place
that party at a competitive disadvantage in the market.
Plaintiff contends that such an order is necessary here in light of the type of
information to be produced, which includes patient names, prescriber information,
medication records, and pricing charts. In Plaintiff’s view, its sensitive business
information should not be shared with Defendants, who are direct competitors, unless
and until the information is used as evidence. In response, Defendants emphasize that
they have only requested copies of the documents that Plaintiff accuses them of taking.
As such, Plaintiff is asking the Court to enter an order that will prevent Defendants from
seeing documents they allegedly already have in their possession. Defendants also argue
that a two-tiered protective order will significantly interfere with their ability to defend
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themselves against Plaintiff’s accusations. If they cannot see the information they are
accused of taking from Plaintiff, they will be precluded from working effectively with
their counsel to refute Plaintiff’s allegations. Finally, Defendants point out that they are
currently unemployed and as a result are not in competition with Plaintiff.
The undersigned agrees with Defendants. The specific facts of this case do not
create the need for a two-tiered protective order. Plaintiff alleges that while in its
employ, Defendants collected, removed, and subsequently used confidential business
information and records that belonged to Plaintiff. Defendants have asked Plaintiff to
identify and produce the materials allegedly misappropriated by Defendants.
Consequently, all of the data at issue is either currently in Defendants’ possession or was
already well-known to them. Thus, “an attorney’s eyes only” provision would serve no
practical purpose in this case. Conversely, such a provision would create a substantial
impediment to Defendants’ ability to prepare their case. Accordingly, the Court finds
Plaintiff objections to discovery on this ground to be without merit and further finds no
good cause to enter a protective order more restrictive than the District’s standard
order.
Second, Plaintiff’s objection that responsive information is already in
Defendants’ possession is not a sufficient basis to avoid answering an otherwise valid
discovery request. Wooten v. Lincoln Nursing Ctr., No. 5:09–CV–097–DCK, 2011 WL
381608, at *7 (W.D.N.C. Feb. 2, 2011) (citing Alberts v. Wheeling Jesuit Univ., No.
5:09–CV–109, 2010 WL 1539852 at *2 (N.D.W.Va. April 19, 2010)); see also
Smithfield Business Park, LLC v. SLR Intern. Corp., No. 5:12–CV–00282–F,2013 WL
5705601,*5 (E.D.N.C., Oct. 18, 2013) (applying the rule to a request for production of
documents); Rogers v. Tri-State Materials Corp., 51 F.R.D. 234, 245 (N.D.W.Va.
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1970) (citing 2A Barron & Holtzoff, Federal Practice and Procedure, § 766, pages 299–
300 (1961)) (“The fact that the information sought is already known to the interrogator
is not a valid ground for objection to the interrogatories. Interrogatories are not
limited to facts which are exclusively or peculiarly within the knowledge of the
interrogated party.”). Therefore, the undersigned finds this objection likewise lacks
merit.
Finally, Plaintiff’s remaining objections related to document requests being
overly broad or unduly burdensome are overruled. In order to support such objections,
Plaintiff must do more to carry its burden than make conclusory and unsubstantiated
arguments. Convertino v. United States Department of Justice, 565 F. Supp.2d 10, 14
(D.D.C. 2008). Plaintiff supplies no specific data, affidavits, or evidence demonstrating
precisely how the discovery requests create an undue burden, or are overly broad. The
disputed requests generally pertain to a form purportedly created by one of the
Defendants when she worked for Plaintiff, which was copyrighted by Plaintiff after
Defendants left the company. Plaintiff sued Defendants for copyright infringement
over their subsequent use of the form. As a result, the development, formats, versions,
and copyrighting of the form are highly relevant to the claims and defenses in this case.
Accordingly, Plaintiff’s objections are groundless.
The Clerk is directed to provide a copy of this Order to counsel of record.
ENTERED: March 13, 2014

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