Opinion
Civil No. 02-4146 ADM/AJB
February 18, 2003
Michael W. Unger, Esq., and Peter Gray, Esq., Rider, Bennett, Egan Arundel, LLP, Minneapolis, MN, for Plaintiff.
Steve W. Gaskins, Esq., and Sonia Miller-Van Oort, Esq., Flynn, Gaskins Bennett, LLP, for Defendants.
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This matter is before the undersigned United States District Judge pursuant to Plaintiff's Leucadia Inc., dba Conwed Plastics ("Conwed"), Appeal [Doc. No. 10] from Magistrate Judge Arthur J. Boylan's Order of December 23, 2002 [Doc. No. 9]. The Order denied Conwed's Motion to Compel Defendants Intermas Nets USA, Inc. ("Intermas USA"), and William Murphy ("Murphy") (collectively, "Defendants") to respond to certain interrogatory and document requests that were found not relevant to trade secret claims and not otherwise discoverable. For the reasons set forth below, the Appeal is denied.
II. FACTS
Murphy worked for Conwed as a National Sales Manager until May 1, 2002. Following Murphy's termination from Conwed he began working for Intermas USA in late July, 2002. Conwed commenced this action on October 23, 2002. Conwed brought claims against the Defendants for: (1) misappropriation of trade secrets; (2) breach of contract; (3) tortious interference with contract; (4) tortious interference with prospective economic relations; and (5) unfair competition. At issue in this appeal is a dispute regarding the scope of discovery. Specifically, Conwed seeks responses to Murphy Interrogatory Nos. 2 and 3, Murphy Document Request Nos. 5 and 6, Intermas USA Interrogatory Nos. 3 and 4, and Intermas USA Document Request Nos. 5 and 6, all of which relate to customer identifications and sales information. Judge Boylan found that the discovery requests were not relevant to trade secret claims and not otherwise discoverable pursuant to Federal Rule Civil Procedure 26(b)(1).
Notably absent from the litigation is a claim for breach of a covenant not to compete. Murphy rejected additional compensation for signing such an agreement.
III. DISCUSSION
In ruling on an appeal from a non-dispositive matter decided by a magistrate judge, a district court must affirm an order by a magistrate judge unless it is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); D. Minn. LR 72.1(b)(2). This standard of review is extremely deferential. See Reko v. Creative Promotions, Inc., 70 F. Supp.2d 1005, 1007 (D.Minn. 1999); Banbury v. Omnitron Int'l, Inc., 818 F. Supp. 276, 279 (D.Minn. 1993). "A finding is `clearly erroneous' when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Chakales v. Comm'r of Internal Revenue, 79 F.3d 726, 728 (8th Cir. 1996) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).
Conwed asserts that Judge Boylan's Order is clearly erroneous and contrary to law since Murphy's customer contacts and sales information are essential elements of a trade secrets claim. Conwed argues that identifying the customers Murphy has contacted since working for Intermas USA is a necessary first step in showing actual misappropriation of trade secrets by the Defendants. Conwed further argues that to obtain injunctive relief under the Minnesota Trade Secrets Act it must "show that there is `a high degree of probability of inevitable disclosure.'" Pl.'s Mem. at 8 (citing IBM Corp. v. Seagate Tech., Inc., 941 F. Supp. 98, 100 (D.Minn. 1992) (citations omitted). Conwed asserts if Murphy attempts to sell certain Intermas USA products he will inevitably disclose trade secrets and confidential information learned while he was an employee of Conwed. Conwed therefore argues that to test its theory of inevitable disclosure they must know "what Intermas USA products Murphy is selling and to whom he is selling them." Pl.'s Mem. at 9.
Judge Boylan correctly determined that the discovery requests at issue are not relevant to trade secret claims and are not otherwise discoverable. Federal Rule of Civil Procedure 26 provides that "parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party." Fed.R.Civ.P. 26(b)(1). The Minnesota Uniform Trade Secrets Act ("MUTSA") defines a "trade secret" as follows:
"Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Minn. Stat. § 325C.01(5) (1986). The MUTSA protects trade secrets through an action for misappropriation, which includes the improper disclosure, acquisition, or use of such information. Id. § 325C.01(3); see also Lexis-Nexis v. Beer, 41 F. Supp.2d 950, 958 (1999).
The discovery requests in question ask for information that is not relevant under either Federal Rule of Civil Procedure 26(b)(1) or the MUTSA. Interrogatory No. 2 to Murphy provides an example of the information that Conwed seeks from the Defendants:
INTERROGATORY NO. 2: Identify each and every customer or prospective customer that, since May 1, 2002, you have directly or indirectly solicited, (whether in person, over the telephone, by written communication (including e-mail) or by any other means of communication) for the purchase of products manufactured and/or sold by Intermas S.A. or Intermas USA. With regard to each customer or prospective customer identified, state: (A) the date of the contact; (B) the location or the place or places of business (including street address(es)) of the customer or prospective customer; (C) the products or services sold and/or offered. Also, identify all individuals with knowledge of the solicitations and all documents relating to the solicitations.
Pl.'s Mem. at 4. The other interrogatory and document requests ask for similarly broad information from the Defendants regarding Murphy's sales activities. The discovery Conwed seeks covers information about products Intermas USA sells that do not compete with Conwed products, as well as information on competing Intermas USA products that do not involve trade secrets. See Minn. Stat. § 325C.01(5) (defining a trade secret as information that "derives independent economic value" from not being generally known to the public and is subject to "reasonable efforts" to maintain its secrecy). By requiring the Defendants to identify every customer that Murphy has contacted and every sale made since employed at Intermas USA, Conwed's discovery request seeks irrelevant information. While such discovery might well be probative of issues relating to a covenant not to compete claim, there is no such claim in the lawsuit.
Conwed's interrogatory and document requests are also not relevant to an inevitable disclosure claim. Regardless of whether or not the Court accepts the inevitable disclosure doctrine, Conwed's interrogatory and document requests are overly broad. To prove inevitable disclosure Conwed would have to establish that Murphy acquired certain information at Conwed that he cannot help but use in his position at Intermas USA. See IBM Corp., 941 F. Supp. at 100-101 (holding that company could not receive a preliminary injunction without showing that the information in question was a trade secret that the employee was likely to use). Requesting information on every sale that Murphy has made and every customer that he has contacted since he joined Intermas USA covers information that is irrelevant to proving such a claim.
Judge Boylan's decision was not clearly erroneous. Based on the existing facts and applicable law this Court is not left with "the definite and firm conviction that a mistake has been committed." Chakales, 79 F.3d at 728. The Order correctly determined that the documents and interrogatory responses Conwed requested are not relevant to trade secret claims in this case and not otherwise discoverable pursuant to Rule 26(b)(1). Conwed's Appeal to Judge Boylan's Order is denied, and the Order is affirmed in its entirety.
IV. ORDER
Based upon the foregoing, and all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that:
1. Conwed's Appeal [Doc. No. 10] is DENIED, and
2. Magistrate Judge Boylan's December 23, 2002 Order [Doc. No. 9] is AFFIRMED.