Arconic, Inc. v. Universal Alloy Corp.
Arconic, Inc. v. Universal Alloy Corp.
2019 WL 12528945 (N.D. Ga. 2019)
March 4, 2019
Ross, Eleanor L., United States District Judge
Summary
The Court found that the complexity of the remaining matters and the undersigned's trial calendar and caseload warranted the appointment of a special master to address the ESI, which included technical engineering reports, depositions, and other documentary evidence. The special master will have the expertise and time to devote to these matters so that justice may be served.
Additional Decisions
ARCONIC, INC. (f/k/a ALCOA, INC.), Plaintiff/Counterdefendant,
v.
UNIVERSAL ALLOY CORPORATION, Defendant/Counterclaimant
v.
UNIVERSAL ALLOY CORPORATION, Defendant/Counterclaimant
1:15-CV-01466-ELR
United States District Court, N.D. Georgia, Atlanta Division
Signed March 04, 2019
Counsel
Bahrad A. Sokhansanj, McKool Smith Hennigan, PC, Caroline Walters, Jennifer P. Estremera, Kate Falkenstien, Leaf Williams, Pro Hac Vice, Sara M. Edelstein, Pro Hac Vice, Reichman Jorgensen LLP, Redwood Shores, CA, Christine E. Lehman, Pro Hac Vice, Reichman Jorgensen LLP, Washington, DC, James Allen Maines, Holland & Knight LLP, Mellori Evonn Lumpkin-Dawson, DOJ-USAO, Courtland Lewis Reichman, Sarah O. Jorgensen, Reichman Jorgensen LLP, Atlanta, GA, Joachim B. Steinberg, Browne George Ross O'Brien Annaguey & Ellis LLP, San Francisco, CA, Michael James Xavier Matulewicz-Crowley, Pro Hac Vice, Reichman Jorgensen, LLP, New York, NY, Andrew R. Stanton, Pro Hac Vice, James P. Angelo, Melissa J. Tea, Thomas E. Birsic, K & L Gates, LLP, Pittsburgh, PA, for Plaintiff/Coullterdefendant Arconic Inc.David Herzog, Hoover Hull Turner LLP, Katrina Gossett Kelly, Pro Hac Vice, Faegre Drinker Biddle & Reath LLP, Matthew Burkhart, Faegre Baker Daniels, LLP, Indianapolis, IN, Kerry L. Bundy, Randall E. Kahnke, Tyler Young, Kerry L. Bundy, Pro Hac Vice, Randall E. Kahnke, Pro Hac Vice, Faegre Baker Daniels LLP, Minneapolis, MN, Leslie A. Demers, Pro Hac Vice, Douglas R. Nemec, Pro Hac Vice, P. Anthony Sammi, Pro Hac Vice, Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY, Michael Joseph Sullivan, John Gregory Perry, Vonnetta Leatrice Benjamin, Womble Bond Dickinson (US) LLP, Atlanta, GA, for Defendant/Counterclaimant. Universal Alloy Corporation.
Ross, Eleanor L., United States District Judge
ORDER
*1 Presently before the Court are Defendant's objections to Magistrate Judge Vineyard's Order. [Doc. 468]. For the reasons stated herein, the Court overrules Defendant's objections.
I. Background
Plaintiff Arconic, Inc. (f/k/a Alcoa, Inc.) and Defendant Universal Alloy Corporation (“UAC”) are each involved in the manufacture of parts for the aerospace industry and compete for business from the Boeing Company. [Doc. 35 at 1]. In Plaintiff's Amended Complaint, Plaintiff alleges misappropriation of trade secrets pursuant to the Georgia Trade Secrets Act, O.C.G.A. § 10-1-760, et seq. against Defendant. Am. Compl. [Doc. 27]. Specifically, Plaintiff alleges the large press stretch form extrusion parts it manufactures for Boeing are trade secrets, which Defendant misappropriated when Defendant engaged former employees and consultants of Plaintiff. [Doc. 35 at 1]. Defendant filed an Amended Answer and Counterclaim on August 31, 2016. [Doc. 159]. Defendant's counterclaim alleges Plaintiff's suit is “sham litigation” and seeks redress pursuant to the Sherman Act, 15 U.S.C. § 2. [Id. at 25, 27].
At the end of the discovery period, several discovery disputes arose, which the undersigned referred to Magistrate Judge Vineyard for resolution [Doc. 354]. After a teleconference and extensive briefing by the parties, Magistrate Judge Vineyard (1) denied Defendant's motion to compel or for sanctions regarding Plaintiff's preparation of its Rule 30(b)(6) witness (hereinafter, “30(b)(6) Motion”) [Doc. 360]; (2) denied Defendant's motion to compel concerning Plaintiffs purported alteration of process target pages (hereinafter, “Target Pages Motion”) [Doc. 363]; and (3) granted Plaintiff's motion for relief from the Protective Order (hereinafter, “Protective Order Motion”) [Doc. 337]. [Doc. 461]. Subsequently, Defendant filed objections to all of Judge Vineyard's rulings, pursuant to Federal Rule of Civil Procedure 72 [Doc. 468], which Plaintiff opposes [Doc. 550].[1]
II. Discussion
a. Objections to Judge Vineyard's Order
i. Legal Standard
Pursuant to Federal Rule of Civil Procedure 72(a), a party may serve and file objections to a Magistrate Judge's non-dispositive order, and the district judge “must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” FED. R. CIV. P. 72(a). “Clear error is a highly deferential standard of review. As the Supreme Court has explained, 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.” Saunders v. Emory Healthcare, Inc., No. 1:07-cv-00282-WSD-GGV, 2008 WL 513340, at *3 (N.D. Ga. Feb. 22, 2008) (quoting Holton v. City of Thomasville Sc. Dist., 425 F.3d 1325, 1350 (11th Cir. 2005)). “An order is contrary to law when it fails to apply or misapplies relevant statutes, case law[,] or rules of procedure.” Pigott v. Sanibel Dev., LLC, No. 07-0083-WS-C, 2008 WL 2937804, at *5 (S.D. Ala. July 23, 2008) (internal quotations omitted). “The standard for overturning a Magistrate Judge's order is ‘a very difficult one to meet.’ ” Saunders, 2008 WL 513340, at *3 (quoting Thornton v. Mercantile Stores Co., 180 F.R.D. 437, 439 (M.D. Ala. 1998)). Where “the Magistrate Judge has had the opportunity to best observe the parties' actions in the litigation thus far and ... has maintained firm and vigilant control over the docket of the case, the court is loathe to second guess matters of discretion.” Edelen v. Campbell Soup Co., No. 1:08-cv-00299-JOF-LTW, 2009 WL 4798117, at *2 (N.D. Ga. Dec. 8, 2009).
*2 With this standard in mind, the Court turns to each motion and Defendant's objections thereto.
ii. Protective Order Motion
Plaintiff moved for relief from, or clarification of, the Consent Protective Order pursuant to Rule 26 because it “seeks leave to use documents and information obtained through discovery in this case in order to file a new lawsuit against [Defendant] alleging misappropriation of additional trade secrets” and maintained that the “information disclosed in this case is pertinent to the new suit and is not obtainable from other sources.” [Doc. 337 at 1]. After extensive review, Judge Vineyard determined that there was good cause to modify the Consent Protective Order to allow Plaintiff to use the documents as a basis for filing a second suit against Defendant, subject to the same provisions of confidentiality in this case under the terms of the Consent Protective Order. [Doc. 461 at 11].
Defendant objects to Judge Vineyard's ruling, arguing that Judge Vineyard applied the wrong legal standard by, according to Defendant, “looking only to whether the documents are relevant to another suit and whether the interests of justice will be served” instead of determining if good cause was shown. [Doc. 467 at 19] (internal quotations omitted). After review, the Court overrules Defendant's objection as Judge Vineyard, after providing an extensive legal standard, explicitly stated that “Arconic has shown good cause to modify the order ....” [Doc. 461 at 10-11]. Defendant also objects to Judge Vineyard's ruling by arguing that allowing Plaintiff to use the documents in a new suit is futile as the new suit would “violate the law against claim-splitting[.]” [Doc. 467 at 21]. However, this claim-splitting argument is the same argument Defendant presented to Judge Vineyard, and which Judge Vineyard explicitly contemplated. Specifically, Judge Vineyard determined that “[i]n every case UAC cites, a second lawsuit was filed and the claim-splitting defense was raised in that second lawsuit[,]” and thus, the Court need not consider the merits of the claim-splitting argument here. [Doc. 461 at 10]. The Court agrees and overrules Defendant's objection regarding claim-splitting.
Magistrate Judge Vineyard did not misapply the relevant law, nor is the Court “left with a definite and firm conviction that a mistake has been committed.” Saunders, 2008 WL 513340, at *3; Pigott, 2008 WL 2937804, at *5. Accordingly, the Court overrules Defendant's objections as to Plaintiff's Protective Order Motion.
iii. 30(b)(6) Motion
Judge Vineyard permitted Defendant to file a motion to compel asserting that Plaintiff “failed to prepare its corporate designee to testify regarding the company's factual contentions because some of that information might have come from counsel,” but that “a 30(b)(6) witness must be prepared to testify concerning all information known or reasonably available to the entity, from whatever source, including information obtained from an adversary.” [Doc. 360-1 at 2] (emphasis and citations omitted). After extensive review, Judge Vineyard denied Defendant's motion because (1) Defendant failed to follow this Court's Local Rules, despite previous warning, when filing the motion to compel; (2) Defendant cited no authority that specifically supported its contention that Plaintiff is required by Rule 30(b)(6) to present a witness who has reviewed documents produced by the opposing party and identify which of those documents it contends support its case, despite an objection based on attorney work product privilege; and (3) Defendant could not credibly claim that it will be surprised at trial as Plaintiff provided Defendant a “154-page list summarizing the trade secrets [Plaintiff] contends [Defendant] misappropriated, produced 2.5 million pages of documents responsive to [Defendant]'s discovery requests, provided a 30(b)(6) witness to testify as to those documents and [Plaintiff's information, and provided a lengthy expert report detailing the [Defendant] information showing theft of [Plaintiff]'s trade secrets.” [Doc. 461 at 22] (internal quotations omitted).
*3 Defendant objects to Magistrate Judge Vineyard's ruling, arguing that it was contrary to law because, inter alia, facts are not work product. However, Judge Vineyard contemplated this argument, among others, and determined that what Defendant was really requesting was for Plaintiff's 30(b)(6) witness to testify to Defendant's own documents. The Court agrees with Judge Vineyard and does not find that his ruling was contrary to law.
Additionally, Defendant objects to Magistrate Judge Vineyard's ruling, arguing that it was clearly erroneous as it places Defendant at risk of trial by ambush. However, as explained above, Judge Vineyard contemplated this argument and determined Defendant could not credibly make this claim because Plaintiff provided Defendant with extensive information during discovery regarding which trade secrets Plaintiff asserts were misappropriated. Furthermore, Judge Vineyard determined that forcing Plaintiff's 30(b)(6) witness to testify as to Defendant's documents was unnecessary because answers to Defendant's “critical questions” to avoid trial by ambush were not found in Defendant's documents, but in Plaintiff's documents, and could have been asked and answered at the 30(b)(6) deposition; however, Defendant had not identified any of those questions which were improperly objected to on the basis of work product doctrine. The Court agrees with Judge Vineyard and does not find that his ruling was clearly erroneous.
After reviewing all of Defendant's objections, Magistrate Judge Vineyard did not misapply the relevant law, nor is the Court “left with a definite and firm conviction that a mistake has been committed.” Saunders, 2008 WL 513340, at *3; Pigott, 2008 WL 2937804, at *5. Accordingly, the Court overrules Defendant's objections as to its 30(b)(6) Motion to Compel.
iv. Target Pages Motion
Defendants were permitted to file a motion to compel discovery on what “efforts Arconic took to protect its alleged[ ] trade secret material and when it took those efforts” because Defendant argues that Plaintiff, in preparation of filing the instant lawsuit, added “electronic and physical ‘confidential and proprietary’ stamps to Process Target Pages” and that it also moved the “documents from where they had been stored and accessible” to another electronic file that limited any access to the documents. [Doc. 363-1 at 4-6]. After extensive review, Judge Vineyard denied Defendant's motion to compel as Defendant (1) again failed to comply with this Court's Local Rules for properly filing a motion to compel and (2) Defendant's motion appeared to be nothing more than a “far-ranging fishing expedition in hopes that it might in the future find something to prove spoliation[.]” [Doc. 461 at 27].
Defendant objects to Judge Vineyard's ruling on numerous grounds but never points the Court to any ruling that was contrary to law or clearly erroneous. First, Defendant does not deny that it failed to comply with this Court's Local Rules in filing its motion to compel, which is a sufficient basis alone for denying Defendant's motion. Second, Defendant does not dispute that Plaintiff provided Defendant the stamped and unstamped versions of the Process Target Pages during discovery and admits that Plaintiff was entitled to update its business security procedures, thus, failing to prove spoliation. Third, Defendant argues that Judge Vineyard incorrectly determined that the documents were not “destroyed” when spoliation also includes “alteration.” The Court rejects this argument as Judge Vineyard specifically cited the correct spoliation standard. [See Doc. 461 at 26 n.15]. Lastly, Defendant argues that it is contrary to law for Judge Vineyard to accept Plaintiff's contention that document and network alteration in 2014 is irrelevant because Plaintiff has decided it will not rely on it, as a party's reasonable efforts to protect trade secrets is imperative to Plaintiff's claim. [Doc. 467 at 9 (citing Doc. 461 at 24)]. However, Judge Vineyard did not “accept” Plaintiffs contention; Judge Vineyard simply explained each party's arguments, followed by the relevant case law, and then, his ruling. Inclusion of a parties' argument in an order does not necessarily mean the Court accepts that argument, and certainly does not prevent the Court from being aware of the underlying claims. Thus, the Court overrules this objection.[2]
*4 After review of all of Defendant's objections, the Court finds that Defendant failed to meet its burden of showing that Magistrate Judge Vineyard's rulings were either clearly erroneous or contrary to law. Magistrate Judge Vineyard did not misapply the relevant law, nor is the Court “left with a definite and firm conviction that a mistake has been committed.” Saunders, 2008 WL 513340, at *3; Pigott, 2008 WL 2937804, at *5. Accordingly, the Court overrules Defendant's objections as to its Target Pages Motion to Compel.
b. Special Master
At this time, the remaining matters in this case include: (1) several motions to seal [Docs. 445, 449, 456, 466, 525, 530, 536, 542, 554, 560, 561, & 574]; (2) Defendant's motion for summary judgment [Doc. 446]; (3) Defendant's motion to file a corrected summary judgment brief [Doc. 454]; (4) Plaintiff's motion to exclude Defendant's defenses and evidence relating to Defendant's statute of limitations and reverse engineering arguments [Doc. 526]; and (5) briefing regarding Rule 37 fees and expenses related to Defendant's two denied motions to compel [Docs. 464, 547].
The Court has reviewed the remaining matters in this case and finds that the appointment of a special master is appropriate. Pursuant to Federal Rule of Civil Procedure 53(a), the Court may appoint a special master to hold trial proceedings, make or recommend findings of fact on issues to be decided without a jury if appointment is warranted by some exceptional condition, and address pretrial and posttrial matters that cannot be effectively and timely addressed by the undersigned.
At a minimum and by example only, there are over 550 docket entries in this case and the briefing for Defendant's pending motion for summary judgment is over 500 pages and includes thousands of pages of documentary evidence, including technical engineering reports and depositions. In light of the sheer magnitude of the remaining matters in this case, the complexity, and due to the undersigned's trial calendar and caseload, the Court finds that it cannot address these matters effectively and timely such that a special master is warranted. FED. R. CIV. P. 53(a)(1)(C). The Court believes a special master would have the expertise and time to devote to these matters so that justice may be served.
Pursuant to Rule 53(b), the Court gives notice to the parties that it intends to appoint a special master. The parties may suggest candidates for appointment as a special master who will regulate all proceedings.
III. Conclusion
Based on the foregoing, the Court GRANTS the Parties' Motions to Seal [Docs. 469, 551, 564, 578]; DENIES Defendant's Motion for Leave to File Short Reply in Support of its Objections to Magistrate Judge Vineyard's Order [Doc. 562]; OVERRULES Defendant's objections to Magistrate Judge Vineyard's Order [Doc. 467]; and AFFIRMS Judge Vineyard's Order [Doc. 461].
Additionally, if necessary, the Court DIRECTS the parties to submit objections to the Court's decision to appoint a special master within seven (7) days from the date of entry of this order. The Court further DIRECTS the parties, within fourteen (14) days from the date of entry of this order, either (A) to file on the docket a list of three (3) possible special masters from which the Court will choose a special master or (B) to file a joint notice indicating the special master agreed upon by both parties. After the parties' submissions, the Court will appoint a special master and issue an order setting forth the special master's duties. The Court DIRECTS the Clerk to submit this matter to the undersigned after fourteen (14) days.
*5 SO ORDERED, this 4th day of March, 2019.
Footnotes
For good cause shown, the Court grants the Parties' Motions to Seal [Docs. 469, 551, 564, 578] relevant to the Court's rulings below.
Relatedly, Defendant separately moved for the Court to allow a “short” reply to Defendant's objections to show how, in light of Defendant's motion for summary judgment, Plaintiff has purportedly changed its contention that the 2014 improvements are irrelevant. [Doc. 563]. Federal Rule of Civil Procedure 72 nor Local Rule 72 provide for reply briefs to responses to objections. Therefore, the Court denies Defendant's Motion for Leave to File Short Reply [Doc. 563].