*1 Pursuant to 28 U.S.C. § 636(b) and the district judge's Order of Referral, Doc. 62, the Court now considers Defendant's Motion for Protective Order and Motion to Quash Third Party Subpoena Served on Stratus Surfaces, LLC, Doc. 60. For the reasons that follow, Defendant's motion is GRANTED IN PART.

I. PROCEDURAL HISTORY

Plaintiff Architectural Granite & Marble, LLC, asserts in the operative complaint that it acquired Defendant Parminder Pental's business, Pental Granite and Marble, LLC, on February 28, 2017. Doc. 40 at 4. As part of the acquisition, Defendant accepted a job with Plaintiff to help integrate and grow the combined business. Doc. 40 at 1. Defendant also agreed that, for a period of four years starting on February 28, 2017, he would, inter alia, (1) keep confidential certain of Plaintiff's proprietary information such as trade secrets and financial and marketing strategies, (2) refrain from soliciting any of Plaintiff's employees for employment, and (3) not compete with Plaintiff (the “Purchase Agreement”). Doc. 40 at 1, 5-6.[1]

Plaintiff alleges that in December 2018, Defendant began emailing himself Plaintiff's confidential information, including its inventory, price lists, supplier contact information, and the like. Doc. 40 at 1-2, 9-10 (alleging that Defendant took “(1) records of Plaintiff's detailed inventory, by product and location, for every location for a two-year period; (2) price lists for all of Plaintiff's product offerings; (3) contact information for more than 220 of Plaintiff's international suppliers; and (4) key business correspondence and negotiations with Plaintiff's primary international supplier for its National distributor”). Defendant resigned his employment on February 8, 2019. Doc. 40 at 11.

Plaintiff avers that in August 2020, Defendant and another former employee of Plaintiff's formed Stratus Surfaces (“Stratus”), which directly competes with Plaintiff. Doc. 40 at 3. Plaintiff then brought this action against Defendant, alleging that he breached various provisions in the Purchase Agreement and Employment Agreement, including by violating his fiduciary duties and misappropriating trade secrets. Doc. 40 at 7, 9-14. Defendant counter-sued both Plaintiff and a parent entity, Select Interior Concepts, for retaliation in violation of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, and alternatively sued Plaintiff for breach of contract. Doc. 56 at 40-46. In the course of discovery, Plaintiff served a third-party document subpoena on Stratus pursuant to Rule 45 of the Federal Rules of Civil Procedure. Doc. 61 at 17. This motion followed.

II. APPLICABLE LAW

*2 The Federal Rules of Civil Procedure specify the scope of discovery in all civil cases. Unless otherwise limited by the court,

FED. R. CIV. P. 26(b)(1). More simply, under Rule 26(b)(1), discoverable matter must be relevant and proportional to the needs of the case. Samsung Elecs. Am., Inc. v. Yang Kun Chung, 321 F.R.D. 250, 279 (N.D. Tex. 2017). “To be relevant under Rule 26(b)(1), a document or information need not, by itself, prove or disprove a claim or defense or have strong probative force or value.” Id. at 280. Discovery is relevant if it “has any tendency to make a fact more or less probable than it would be without evidence” and the “fact is of consequence in determining the action.” FED. R. EVID. 401. The party opposing discovery bears the burden of showing how the discovery sought is not relevant or is otherwise objectionable. Mir v. L-3 Commc'ns Integrated Sys., L.P., 319 F.R.D. 220, 224 (N.D. Tex. 2016).

Rule 26 allows a party or nonparty from whom discovery is sought to move for a protective order if the movant has “in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action.” FED. R. CIV. P. 26(c)(1). Thereafter, the court “may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Id. “[T]he burden is upon the movant 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, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (citation omitted).

Rule 45(c) of the Federal Rules of Civil Procedure provides that a non-party subpoena “may command production of documents, electronically stored information, or tangible things at a place within 100 miles of where the person resides, is employed, or regularly transacts business in person.” FED. R. CIV. P. 45(c)(2)(A). Rule 45 also provides that, “[o]n timely motion, the court for the district where compliance is required must quash or modify a subpoena that ... requires a person to comply beyond the [100 mile] geographical limits specified in Rule 45(c).” FED. R. CIV. P. 45(d)(3)(A)(ii). A subpoena requiring a nonparty to produce documents at a place more than 100 miles away is invalid. See id.; see also U.S. Risk Ins. Grp., Inc. v. U.S. Risk Mgt., LLC, 3:11-CV-2843-M-BN, 2014 WL 4055372, at *1 (N.D. Tex. Aug. 15, 2014) (Horan, J.) (noting lack of evidence that nonparty regularly conducted business within 100 miles of the place of production).

*3 Generally, a party does not have standing to contest third-party subpoenas unless the party is “in possession of the materials” or has “alleged any personal right or privilege with respect to the materials subpoenaed.” Brown v. Braddick, 595 F.2d 961, 967 (5th Cir. 1979). Here, Defendant appears to fall within this exception given the nature of the discovery sought. See Sec. & Exch. Comm'n v. Reynolds, 3:08-CV-438-B, 2016 WL 9306255, at *2 (N.D. Tex. Apr. 29, 2016) (holding that party had standing due to the “sensitive financial information” Plaintiff sought) (Toliver, J.). Regardless, a party has standing to move for a protective order pursuant to Rule 26(c) to limit the scope of discovery even if the party does not have standing under Rule 45(d) to bring a motion to quash a third-party subpoena. Madison v. Courtney, 4:18-CV-00671-O, 2018 WL 10579557, at *2 (N.D. Tex. Aug. 17, 2018) (O'Connor, J.) (quoting Stancu v. Hyatt Corp./Hyatt Regency, Dallas, No. 3:17-CV-675-L-BN, 2017 WL 2984052, at *1 (N.D. Tex. July 13, 2017) (Horan, J.)).

III. ANALYSIS

A. 100-Mile Limitation on Subpoena Power

As an initial matter, Defendant contends that the subpoena should be quashed because it demands production of documents in Dallas, which is more than 185 miles from Stratus' office in Austin, Texas.[2] Doc. 61 at 2, 4; see also Doc. 61 at 17-22 (Rule 45 subpoena). Plaintiff asserts that this argument is baseless because “Stratus Surfaces is a Texas-based company, with its principal office in Austin Texas, and regularly conducts business well within the bounds of the 100 mile radius.” Doc. 63 at 6.

Defendant's point is well taken. As is plain on its face, Plaintiff's subpoena issued from this district and directs Stratus to produce documents here, but Stratus' Texas office is based in Austin, which is far more than 100 miles away. While Plaintiff seems to imply that Stratus conducts business in locations that are within 100 miles of Dallas, Plaintiff provides no evidence of this and the Court could find none. U.S. Risk Ins. Grp., Inc., 2014 WL 4055372, at *1. Moreover, Plaintiff's implication that the 100-mile limit does not matter because the discovery will be produced electronically is meritless as Rule 45 expressly incorporates electronic discovery in its geographic limitation. FED. R. CIV. P. 45(c)(2)(A). Accordingly, Plaintiff's subpoena is subject to being quashed on this basis. FED. R. CIV. P. 45(d)(3)(A)(ii). Nevertheless, given Stratus' locations in Austin and Oklahoma City, as well as in Seattle, it strikes the Court as more likely than not that Stratus does in fact conduct business within a 100-mile radius of Dallas. See also Doc. 63 at 7 (arguing that “Stratus Surfaces advertise online in the exact markets AGM primarily does business.”) (emphasis in original). The Court will thus continue to the merits of the motion.

B. Request Nos. 1, 3-8

In Request Nos. 1 and 3-8, Plaintiff seeks several categories of Stratus documents dating from February 28, 2017 to the present, to wit: (1) documents that refer to, discuss, or include Defendant; (2) Defendant's personnel file and documents related to his employment with Stratus; (3) all communications that reference or discuss Enigma Surfaces, with whom both parties conduct business; (4) communications with any current or former employees of Plaintiff and its affiliated entities; and (5) communications with Heath Gray—Plaintiff's former employee—who Stratus allegedly recruited. Doc. 61 at 7-10; Doc. 64-1 at 17-22.

*4 Defendant argues that these requests are overbroad and Plaintiff should only be permitted to obtain documents that (1) relate to Defendant and his involvement and employment with Stratus, and (2) are limited to the relevant time period, which he maintains ended on February 28, 2021, when his obligations under the Purchase Agreement expired. Doc. 61 at 7-10. Plaintiff responds that these requests should not be narrowed temporally or in scope to only Defendant's involvement with Stratus because documents dated after Defendant left his employ are relevant to its assertion that he misappropriated confidential information and used it for Stratus' benefit.[3] Doc. 63 at 9.

Upon consideration, the Court finds unpersuasive Defendant's argument that the cut-off date for the requested documents should be the day his contractual obligations expired. It is worth noting that Defendant was publicly named the President of Stratus only three days after the expiration of his non-compete obligation and, shortly thereafter, became co-CEO. Doc. 63 at 3. Plaintiff has reason to find the circumstances suspect. Moreover, misappropriation claims accrue when “the trade secret is actually used.” GE Betz, Inc. v. Moffitt-Johnston, 885 F.3d 318, 325-26 (5th Cir. 2018) (emphasis in original). Whether or when that has occurred is not known yet, so these topics are appropriate for discovery. Finally, misappropriation of a trade secret is a source of continuing damages if the act is repeated. See Gen. Univ. Sys., Inc. v. HAL, Inc., 500 F.3d 444, 452 (5th Cir. 2007) (quoting Daboub v. Gibbons, 42 F.3d 285, 291 (5th Cir. 1995) (holding that band's continued misappropriation of song, through record sales and live performances, demonstrated the “concept of continuing damages, rather than a continuing tort”)); see generally GE Betz, Inc., 885 F.3d at 323-28 (discussing evidence necessary to support summary judgment motion on claims of breach of a non-solicitation agreement, tortious interference with prospective business relationships, and misappropriation of trade secrets). For that reason, the time frame for discovery under Request Nos. 1 and 3-8 should not be limited as Defendant requests. The Court will, however, confine the scope of the discovery to events and interactions relating to or involving Defendant and/or his employment with Stratus.

C. Request Nos. 9-11

This set of requests originally sought (1) “all communications and documents related to the purchase of advertising space on the internet ...” and (2) “all documents related to Stratus Surface's internet ... and phone provider[s].” Doc. 63 at 6.

Defendant argues that these requests should be quashed in their entirety because (1) Plaintiff is on a fishing expedition to obtain competitive information about Stratus' proprietary business and marketing practices; and (2) the discovery sought is irrelevant to any claims or defenses in this case. Doc. 61 at 2, 6-8. Nevertheless, Defendant does not oppose producing documents related to his involvement in Stratus' advertising campaign up until February 28, 2021, when his noncompetition obligation expired, but he maintains discovery beyond that date is not relevant. Doc. 64 at 7.

*5 As an initial matter, Plaintiff notes that the parties have an agreed protective order in place, and Plaintiff will designate any responsive documents as “Attorneys' Eyes Only.” Doc. 63 at 6-8. This will adequately protect Defendant's and Stratus' interests. In terms of relevancy, Plaintiff states that shortly after Defendant left his position, Stratus (1) began advertising in the exact markets in which Plaintiff primarily does business; and (2) expressly branded itself as an “alternative” to Plaintiff. Doc. 63 at 7. Plaintiff asserts that the document requests properly seek information related to these advertisements and Defendant's involvement therein. Doc. 63 at 7. Further, Plaintiff maintains, the discovery will shed light on Plaintiff's contention that Defendant misappropriated its confidential information for Stratus' benefit, and it also bears on Plaintiff's potential damages calculation. Doc. 63 at 7-9. These arguments notwithstanding, Plaintiff has agreed to narrow its requests to more directly focus on Defendant's involvement in the specified matters. Doc. 63 at 8 n.1. As modified, the requests read as follows:

Upon consideration of the law, the parties' arguments, and the evidence, the Court agrees that the discovery request, as modified, seeks discovery that is relevant and proportional to the needs of the case for the reasons Plaintiff asserts. FED. R. CIV. P. 26(b)(1). Moreover, a cut-off date for the discovery is not warranted for the reasons discussed supra.

IV. CONCLUSION

For the foregoing reasons, Defendant's Motion for Protective Order and Motion to Quash Third Party Subpoena Served on Stratus Surfaces, LLC, Doc. 60, is GRANTED IN PART. Defendant's discovery responses are due within 21 days of the date of this order.

SO ORDERED on January 10, 2022.