Slide Fire Solutions, LP, Plaintiff, v. Bump Fire Systems, LLC, Michael Smith, and Andres Herrada, Defendants No. 3:14-cv-3358-M Signed February 04, 2016 Horan, David L., United States Magistrate Judge ORDER ON PLAINTIFF'S MOTIONS TO COMPEL *1 Plaintiff Slide Fire Solutions, LP (“Plaintiff”) has filed a Motion to Compel Discovery and for Discovery Sanctions [Dkt. No. 79] (the “Motion to Compel”) and a Second Motion to Compel Discovery and for Discovery Sanctions [Dkt. No. 85] (the “Second Motion to Compel”), seeking to compel the production of certain documents and interrogatory answers from Defendant Bump Fire Systems, LLC (“Defendant” or “Bump Fire”). Specifically, Plaintiff's motions seek an order compelling Bump Fire to provide substantive and complete answers to Interrogatory Nos. 1, 2, 3, 16, 18, 19, and 25 and to provide substantive or more complete responses to Jurisdictional Request for Production Nos. 1, 2, 3, 5, 6, 9, 11, and 12 and Request for Production Nos. 8, 9, 11, 14, 15, 16, 17, 18, and 25. See Dkt. No. 80 at 1; Dkt. No. 86 at 1. United States District Judge Barbara M. G. Lynn referred the motions to compel to the undersigned United States magistrate judge for determination. See Dkt. Nos. 83 & 87. Defendant responded, see Dkt. Nos. 90, 94, & 95, and Plaintiff filed a reply in support of each motion, see Dkt. Nos. 96 & 97. The Court then heard oral argument on the Motion to Compel and Second Motion to Compel on February 3, 2016. See Dkt. No. 98. For the reasons and to the extent explained below, based on the parties' written briefing and submissions and the oral argument, the Court GRANTS in part Plaintiff's Motion to Compel [Dkt. No. 79] and Second Motion to Compel [Dkt. No. 85]. Legal Standards Federal Rule of Civil Procedure 37(a) governs motions to compel discovery responses. Rule 37(a)(3)(B) provides that a party seeking discovery may move for an order compelling production against another party when the latter has failed to produce documents requested under Federal Rule of Civil Procedure 34. See FED. R. CIV. P. 37(a)(3)(B)(iv). For purposes of Rule 37(a), “an evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer, or respond.” FED. R. CIV. P. 37(a)(4). And Federal Rule of Civil Procedure 26(e)(1) provides that “[a] party ... who has responded to an interrogatory, [or] request for production ... must supplement or correct its ... response: (A) in a timely manner if the party learns that in some material respect the ... response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing; or (B) as ordered by the court.” FED. R. CIV. P. 26(e)(1). Under Federal Rule of Civil Procedure 26(c), the Court “may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” FED. R. CIV. P. 26(c)(1). “[T]he burden is upon [the party seeking the protective order] to show the necessity of its issuance, which contemplates a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.” In re Terra Int'l, 134 F.3d 302, 306 (5th Cir. 1998) (citation omitted). A protective order is warranted in those instances in which the party seeking it demonstrates good cause and a specific need for protection. See Landry v. Air Line Pilots Ass'n, 901 F.2d 404, 435 (5th Cir. 1990). The Court has broad discretion in determining whether to grant a motion for a protective order. See Harris v. Amoco Prod. Co., 768 F.2d 669, 684 (5th Cir. 1985). “The trial court is in the best position to weigh fairly the competing needs and interests of parties affected by discovery.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). *2 The party resisting discovery must show specifically how each discovery request is not relevant or otherwise objectionable. See McLeod, Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1485 (5th Cir. 1990). And a party who has objected to a discovery request must, in response to a motion to compel, urge and argue in support of his objection to a request, and, if he does not, he waives the objection. See Sonnino v. Univ. of Kansas Hosp. Auth., 221 F.R.D. 661, 670-71 (D. Kan. 2004). A party resisting discovery must show how the requested discovery was overly broad, burdensome, or oppressive by submitting affidavits or offering evidence revealing the nature of the burden. See Merrill v. Waffle House, Inc., 227 F.R.D. 475, 477 (N.D. Tex. 2005); see also S.E.C. v. Brady, 238 F.R.D. 429, 437 (N.D. Tex. 2006) (“A party asserting undue burden typically must present an affidavit or other evidentiary proof of the time or expense involved in responding to the discovery request.”). Rule 26(c)(1)(G) authorizes protective orders, for good cause shown, “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including ... requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” FED. R. CIV. P. 26(c)(1)(G). But no absolute privilege for confidential information or trade secrets exists. SeeExxon Chem. Patents, Inc. v. Lubrizol Corp., 131 F.R.D. 668, 671 (S.D. Tex. 1990) (considering motion for protective order under Federal Rule of Civil Procedure 45). In the context of a request for a protective order, a party resisting discovery has the burden to establish that the information sought is a trade secret and that its disclosure might be harmful. See Exxon Chem. Patents, Inc., 131 F.R.D. at 671; Morton v. Cooper Tire & Rubber Co., 288 F.R.D. 126, 128 (N.D. Miss. 2012). “That showing requires specific demonstrations of fact, supported where possible by affidavits and concrete examples, rather than broad, conclusory allegations or potential harm.” Occidental Chem. Corp. v. La. Pub. Serv. Comm'n, Civ. A. Nos. 06-894-JJB-DLD & 06-903-JJB-DLD, 2008 WL 566833, at *2 (M.D. La. Feb. 29, 2008). Disclosure to a competitor is presumptively more harmful than disclosure to a noncompetitor. See Echostar Comm'n Corp. v. The News Corp. Ltd., 180 F.R.D. 391, 395 (D. Colo. 1998). If the moving party meets its burden of proof, the burden then shifts to the party seeking discovery to show that the requested information is relevant and necessary. See id.; Morton, 288 F.R.D. at 128-29. Federal Rules of Civil Procedure Rules 26(b) and 26(c) have been amended, effective December 1, 2015. Rule 26(b)(1) now provides that, “[u]nless 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 and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.” FED. R. CIV. P. 26(b)(1). And, as amended, Rule 26(c)(1) authorizes protective orders, for good cause shown, “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (A) forbidding the disclosure or discovery; (B) specifying terms, including time and place or allocation of expenses, for the disclosure or discovery; (C) prescribing a discovery method other than the one selected by the party seeking discovery; (D) forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters; (E) designating the persons who may be present while the discovery is conducted; (F) requiring that a deposition be sealed and opened only on court order; (G) requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way; and (H) requiring that the parties simultaneously file specified documents or information in sealed envelopes, to be opened as the court directs.” FED. R. CIV. P. 26(c)(1). *3 The amendments to Rule 26 govern in all proceedings in civil cases thereafter commenced and, insofar as just and practicable, in all proceedings then pending. The Court finds that applying the standards of Rules 26, as amended, to Plaintiff's motions to compel is both just and practicable, and the briefing does not reflect any contrary position by the parties. Further, for the reasons the Court has recently explained, the Court concludes that the amendments to Rule 26 do not alter the burdens imposed on the party resisting discovery discussed above. SeeCarr v. State Farm Mutual Automobile Insurance Company, ___ F.R.D. ____, No. 3:15-cv-1026-M, 2015 WL 8010920, at *3-*10 (N.D. Tex. Dec. 7, 2015). Rather, just as was the case before the December 1, 2015 amendments, under Rules 26(b)(1) and 26(b)(2)(C)(iii), a court can – and must – limit proposed discovery that it determines is not proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit – and the court must do so even in the absence of a motion. See Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 264 (5th Cir. 2011). But a party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fails the proportionality calculation mandated by Rule 26(b) by coming forward with specific information to address – insofar as that information is available to it – the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. The party seeking discovery, to prevail on a motion to compel or resist a motion for protective order, may well need to make its own showing of many or all of the proportionality factors, including the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, and the importance of the discovery in resolving the issues, in opposition to the resisting party's showing. And the party seeking discovery is required to comply with Rule 26(b)(1)'s proportionality limits on discovery requests; is subject to Rule 26(g)(1)'s requirement to certify “that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry: ... (B) with respect to a discovery request..., it is: (i) consistent with these rules and warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law, or for establishing new law; (ii) not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and (iii) neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action”; and faces Rule 26(g)(3) sanctions “[i]f a certification violates this rule without substantial justification.” FED. R. CIV. P. 26(g)(1)(B), 26(g)(3); see generally Heller v. City of Dallas, 303 F.R.D. 466, 475-77, 493-95 (N.D. Tex. 2014). But the amendments to Rule 26(b) and Rule 26(c)(1) do not alter the basic allocation of the burden on the party resisting discovery to – in order to prevail on a motion for protective order or successfully resist a motion to compel – specifically object and show that the requested discovery does not fall within Rule 26(b)(1)'s scope of relevance (as now amended) or that a discovery request would impose an undue burden or expense or is otherwise objectionable or properly subject to a protective order. See McLeod, 894 F.2d at 1485; Heller, 303 F.R.D. at 483-93. *4 Federal Rule of Civil Procedure 37(a)(5)(A) provides that, if a motion to compel is granted, or if the requested discovery is provided after the motion was filed, “the court must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees,” except that “the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(a)(5)(A). Rule 37(a)(5)(B)-(C) further provide in pertinent part that, “[i]f the motion is denied, the court ... must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both to pay the party ... who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees,” “[b]ut the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust,” and that, “[i]f the motion is granted in part and denied in part, the court may issue any protective order authorized under Rule 26(c) and may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.” FED. R. CIV. P. 37(a)(5)(B)-(C). Federal Rule of Civil Procedure 26(c)(3) provides that, in connection with a motion under Rule 26(c) for a protective order, Federal Rule of Civil Procedure “37(a)(5) applies to the award of expenses.” FED. R. CIV. P. 26(c)(3). And Federal Rule of Civil Procedure 37(c)(1) provides that, “[i]f a party fails to provide information ... as required by ... [Rule 26(e)], the party is not allowed to use that information ... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless,” and that, “[i]n addition to or instead of this sanction, the court, on motion and after giving an opportunity to be heard: (A) may order payment of the reasonable expenses, including attorney's fees, caused by the failure; (B) may inform the jury of the party's failure; and (C) may impose other appropriate sanctions, including any of the orders listed in Rule 37(b)(2)(A)(i)-(vi).” FED. R. CIV. P. 37(c)(1). Analysis I. Plaintiff's Motion to Compel A. Interrogatory No. 1 Plaintiff's Motion to Compel is granted in part as to this interrogatory. Defendant must supplement its answer to disclose the identities and addresses of every person who, or entity that, has purchased four or more Bump Fire gunstocks. In light of the nature of Plaintiff's claims in this case and the evidence that it seeks to support those claims, and considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including personal jurisdiction, the Court finds that this discovery is relevant to Plaintiff's claims and proportional to the needs of the case. The Court further finds that Defendant has not met its burden to show that this requested information is overbroad, is a trade secret that should be protected from discovery, or is information that should be protected from production to Plaintiff based on asserted fears of violence and therefore overrules Defendant's objections and denies its request for a protective order. The Court notes that the Protective Order [Dkt. No. 38] is in place to address confidential information. B. Interrogatory No. 2 *5 In its reply, Plaintiff reports that Defendant's supplemental production addressed Plaintiff's concerns with this interrogatory. C. Interrogatory No. 3 In its reply, Plaintiff reports that Defendant's supplemental production addressed Plaintiff's concerns with this interrogatory. D. Interrogatory No. 16 Plaintiff's Motion to Compel is granted as to this interrogatory. The Court finds that Defendant has not yet answered this proper contention interrogatory and, regardless of any petitions for reexamination, must do so now based on the responsive information reasonably available to it. E. Interrogatory Nos. 18 & 19 Plaintiff's Motion to Compel is granted as to these interrogatories. The Court finds that this is appropriate information to seek regarding the individual named defendants as to whom Plaintiff seeks to perform fairly routine due diligence and background investigation and as to whom Plaintiff was required to seek an order for substitute service. Any confidentiality concerns can be addressed by utilizing the mechanisms established by the Court's Protective Order [Dkt. No. 38]. Defendant have otherwise failed to meet its burden to show that the requested information is overbroad or sought for harassment or should be protected from production to Plaintiff based on asserted fears of violence. Defendant's objections are therefore overruled, and its request for a stay of its obligation to answer these interrogatories pending the individual defendants' motion to dismiss is denied where the Court finds there is not good cause to withhold this information at this point under all the circumstances presented in this case. F. Jurisdictional Request for Production No. 1 For the reasons explained above as to Interrogatory No. 1, Plaintiff's Motion to Compel is granted in part as to this request, and Defendant's request for a protective order is correspondingly denied. Defendant must supplement its document production to produce responsive documents and electronically stored information (“ESI”) as to the identities and addresses of every person who, or entity that, has purchased four or more Bump Fire gunstocks. G. Jurisdictional Request for Production No. 2 In its reply, Plaintiff reports that Defendant's supplemental production addressed Plaintiff's concerns with this request. H. Jurisdictional Request for Production No. 3 Defendant's counsel represented at oral argument that Defendant has no unproduced documents or ESI in its possession, custody, or control responsive to this request. I. Jurisdictional Request for Production Nos. 5 & 6 For the reasons explained above as to Interrogatory No. 1, Plaintiff's Motion to Compel is granted in part as to these requests, and Defendant's request for a protective order is correspondingly denied. Defendant must supplement its document production to produce responsive documents and ESI as to the identities and addresses of every person who, or entity that, has purchased four or more Bump Fire gunstocks. J. Jurisdictional Request for Production No. 9 Plaintiff's Motion to Compel is granted as to this request. Defendant must produce to Plaintiff the information, as discussed at oral argument, reflected in links shown on the single-page “audience overview” of Defendant's website activity from Google Analytics that Defendant has produced to Plaintiff. Considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including personal jurisdiction and Plaintiff's claims based on offers for sale, and where Defendant's sales are admittedly made online through its website, the Court finds that this discovery is relevant to Plaintiff's claims, including its damages analyses, and proportional to the needs of the case. K. Jurisdictional Request for Production No. 11 *6 Defendant's counsel represented at oral argument that Defendant has no unproduced documents or ESI in its possession, custody, or control responsive to this request. L. Jurisdictional Request for Production No. 12 Plaintiff's Motion to Compel is granted as to this request. Defendant must produce to Defendant information reflecting the account numbers of its accounts with banks and financial institutions used for Defendant's business purposes. Considering the importance of the issues at stake in the action, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including Plaintiff's asserted need to conduct third-party discovery as to damages, and where Defendant's counsel reported that Defendant's financial accounting is accomplished in part through its account statements from banks and financial institutions, the Court finds that this discovery is relevant to Plaintiff's claims, including its damages analyses, and proportional to the needs of the case. Again, any confidentiality concerns can be addressed by utilizing the mechanisms established by the Court's Protective Order [Dkt. No. 38]. M. Request for Production No. 8 Defendant's counsel represented at oral argument that Defendant has no unproduced documents or ESI in its possession, custody, or control responsive to this request. N. Request for Production No. 9 Defendant's counsel represented at oral argument that Defendant has no unproduced documents or ESI in its possession, custody, or control responsive to this request. O. Request for Production No. 11 Defendant's counsel represented at oral argument that Defendant has no unproduced documents or ESI in its possession, custody, or control responsive to this request. P. Request for Production Nos. 14-17 Plaintiff's Motion to Compel is granted as to these requests. Defendant must produce to Defendant copies of its statements for its accounts with banks and financial institutions used for Defendant's business purposes. Considering the importance of the issues at stake in the action, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including Plaintiff's damages analyses, and where Defendant's counsel reported that Defendant's financial accounting is accomplished in part through its bank statements, the Court finds that this discovery is relevant to Plaintiff's claims, including its damages analyses, and proportional to the needs of the case. Again, any confidentiality concerns can be addressed by utilizing the mechanisms established by the Court's Protective Order [Dkt. No. 38]. Q. Request for Production No. 18 Plaintiff's Motion to Compel is granted as to this request. Defendant must produce to Defendant unredacted copies of its annual federal and state tax returns – including any returns as to Florida sales tax – since 2013. Considering the importance of the issues at stake in the action, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including Plaintiff's damages analyses and asserted need to conduct third-party discovery, and where Defendant's counsel reported that Defendant's financial accounting is accomplished in part through its tax returns, the Court finds that this discovery is relevant to Plaintiff's claims, including its damages analyses, and proportional to the needs of the case. Again, any confidentiality concerns can be addressed by utilizing the mechanisms established by the Court's Protective Order [Dkt. No. 38]. R. Request for Production No. 25 *7 For the reasons explained above as to Interrogatory No. 1, Plaintiff's Motion to Compel is granted in part as to these requests, and Defendant's request for a protective order is correspondingly denied. Defendant must supplement its document production to produce responsive documents and ESI as to the identities and addresses of every person who, or entity that, has purchased four or more Bump Fire gunstocks. II. Plaintiff's Second Motion to Compel A. Interrogatory No. 25 Plaintiff's Second Motion to Compel is granted as to this interrogatory, and Defendant is ordered to fully answer this interrogatory. Considering the importance of the issues at stake in the action, the parties' relative access to relevant information, and the importance of the discovery in resolving the issues, including Plaintiff's asserted need to conduct third-party discovery, the Court finds that this discovery is relevant to Plaintiff's claims and proportional to the needs of the case. Again, any confidentiality concerns can be addressed by utilizing the mechanisms established by the Court's Protective Order [Dkt. No. 38]. The court finds that Defendant has otherwise failed to meet its burden to show that this requested information is overbroad, is a trade secret that should be protected from discovery, is sought for harassment or some other improper purpose, or is information that should be protected from production to Plaintiff based on asserted fears of violence and therefore overrules Defendant's objections and denies its request for a protective order. III. Requests for Expenses Plaintiff requests an award of its reasonable expenses, including attorneys' fees, under Rules 37(a)(5)(A) on its Motion to Compel and Second Motion to Compel. As noted above, Rule 37(a)(5)(A) provides that, if a motion to compel is granted, or if the requested discovery is provided after the motion was filed, “the court must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees,” except that “the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(a)(5)(A). And Rule 37(a)(5)(C) provides that, “[i]f the motion is granted in part and denied in part, the court may issue any protective order authorized under Rule 26(c) and may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.” FED. R. CIV. P. 37(a)(5)(C). The Court will grant Defendant until February 29, 2016 to file a response to this order to explain why the Court should not require Defendant Bump Fire Systems, LLC and/or its counsel to pay Plaintiff Slide Fire Solutions, LP, as required by Rule 37(a)(5), the expenses, including attorneys' fees, that Plaintiff incurred in making its motions to compel Defendant's responses to requests for production and answers to interrogatories. The Court finds that Plaintiff attempted in good faith to obtain the discovery at issue without court action before filing its motions to compel. In the response, Defendant should fully explain whether its nondisclosure, responses, or objections at issue were “substantially justified” or whether other circumstances make an award of expenses under Rule 37(a)(5) unjust. *8 Plaintiff may file a reply to this response by March 14, 2016. The Court defers ruling on any award of expenses under Rule 37(a)(5) pending this briefing. Conclusion The Court GRANTS in part Plaintiff's Motion to Compel [Dkt. No. 79] and Second Motion to Compel [Dkt. No. 85] for the reasons and to the extent explained above. Defendants Bump Fire Systems, LLC is ORDERED to produce the responsive documents or electronically stored information and serve the interrogatory answers as required and explained above by February 25, 2016. SO ORDERED.