Nvision Biomedical Techs., LLC v. Jalex Med., LLC
Nvision Biomedical Techs., LLC v. Jalex Med., LLC
2016 WL 8285637 (W.D. Tex. 2016)
February 1, 2016

Pitman, Robert,  United States District Judge

Failure to Produce
General Objections
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Summary
The Court overruled Jalex's objections to Nvision's discovery requests and ordered Jalex to produce documents related to work performed on behalf of clients other than Nvision. The Court found that limiting discovery to documents related to work performed on behalf of Nvision would prevent Nvision from investigating its claim for the misappropriation of intellectual property and that the existing Confidentiality and Protective Order was sufficient to protect sensitive or proprietary information.
Additional Decisions
NVISION BIOMEDICAL TECHNOLOGIES, LLC, Plaintiff,
v.
JALEX MEDICAL, LLC, Defendant
5:15–CV–284 RP
United States District Court, W.D. Texas, San Antonio Division
Signed February 01, 2016

Counsel

Derick J. Rodgers, Davis, Cedillo & Mendoza, Inc., San Antonio, TX, for Plaintiff.
Gerald L. Shiely, Vaughan E. Waters, Thornton, Biechlin, Segrato, Reynolds & Guerra, L.C., Jonathan D. Pauerstein, Stephen K. Lecholop, II, Rosenthal Pauerstein Sandoloski Agather LLP, San Antonio, TX, Chelsea R. Mikula, Robert J. Hanna, Tucker Ellis LLP, Cleveland, OH, for Defendant.
Pitman, Robert, United States District Judge

ORDER

*1 Before the Court are Defendant's Objections to and Appeal of Magistrate Judge's Ruling on Plaintiff's Motion to Overrule Objections and Compel Discovery Responses, filed January 6, 2016 (Dkt. 73) and Plaintiff's response thereto, filed January 11, 2016 (Dkt. 76). By way of its objections, Defendant requests review of Magistrate Judge Pamela Mathy's Amended Order, entered December 23, 2015 (Dkt. 62), granting in part Plaintiff's Motion to Overrule Objections and Compel Discovery Responses, filed November 30, 2015 (Dkt. 48). After a review of the entire file in this action as well as the relevant law, the Court concludes that Defendant's objections should be overruled and that Magistrate Judge Mathy's Amended Order should be affirmed.
I. Background
Plaintiff Nvision Biomedical Technologies, LLC (“Nvision”) is a medical device developer that contracted with Defendant Jalex Medical, LLC (“Jalex”) for consulting services between July 2013 and March 2015. (Am. Compl. ¶ 1, Dkt. 31.) On July 25, 2013, Nvision and Jalex entered into a Development Services Agreement (“the DSA”) which specifies the terms and conditions of the consulting relationship between the two companies. (Id. ¶¶ 5–6.) Nvision principally alleges that Jalex imposed surcharges on third-party invoices, thus charging Nvision more than the actual costs incurred by Jalex and, in doing so, violated the terms of the DSA. (Id. ¶¶ 10–17.) Nvision also alleges that Jalex improperly misappropriated and used Nvision's intellectual property in order to compete with Nvision (id. ¶¶ 20–22) and that the consulting services rendered by Jalex were materially deficient (id. ¶¶ 23–25). Jalex has filed a counterclaim against Nvision, asserting that Nvision has failed to pay its invoices in full and has violated the non-solicitation provisions of a separate agreement between them. (Counter cl. ¶¶ 8–30, 37–42, Dkt. 39.)
On November 30, 2015, Nvision filed its Motion to Overrule Objections and Compel Discovery Responses, through which it challenged Jalex's objections to certain interrogatories and requests for production. (Dkt. 48.) This Court referred Nvision's motion to United States Magistrate Judge Pamela Mathy. (Order, Dkt. 59.) After a hearing, Judge Mathy entered an order ruling on Jalex's various objections to Nvision's discovery requests. (Am. Order, Dkt. 62.)
Among the issues addressed in Judge Mathy's order were Jalex's objections to Requests for Production (“RFPs”) Nos. 18, 19, and 20. The information requested in these three RFPs is as follows:
RFP 18 All invoices, bills, statements, accounts, quotes, or charges that Jalex received from vendors, contractors, and manufacturers for products or services rendered to or on behalf of Jalex. (Def.’s First Supp. Resps. Pl.’s Req. Prod. 12, Dkt. 48–5.)
RFP 19 All delivery receipts, inventory counts, logs, or other records of the products delivered by vendors, contractors, and manufacturers to Jalex for services rendered to or on behalf of Jalex. (Id. at 13.)
RFP 20 All correspondence between Jalex and any vendors, contractors, and manufacturers which rendered services to or on behalf of Jalex, including any letters, faxes, and emails. (Id. at 14.)
*2 Jalex objected to these three RFPs on the basis that the requests are “vague and ambiguous” insofar that “it is unclear whether [they are] intended to relate specifically to work done by JALEX on behalf of Nvision only or more generally to JALEX's own product development business, which is wholly unrelated to its business relationship with Nvision.” (Id. at 12–14.) To the extent that the requests referred to work that was not performed on behalf of Nvision, Jalex objected that the requests sought information that is “irrelevant” and “may be subject to nondisclosure agreements with third parties who are not party to this lawsuit.” (Id.)
Judge Mathy overruled Jalex's objections. (Am. Order 30, Dkt. 62.) The relevant portion of her order is as follows:
With respect to RFPs 18, 19, and 20, Nvision's motion is GRANTED in part, Jalex's objections are overruled in part and Jalex must provide non-privileged responsive documents relating to Jalex's work for Nvision, and Jalex's services rendered to and on behalf of Nvision, and for Jalex's work relating to interbody fusion devices, cervical plates, pedicle screws, and structurally encoded implant devices (regardless of for whom the work is performed).
(Id.) Before the Court now is Jalex's objection to and appeal of the above portion of Judge Mathy's order. Specifically, Jalex objects to the final parenthetical and contends that it should not have to produce documents related to work performed on behalf of clients other than Nvision. (Obj. & Appeal ¶¶ 6, 8, Dkt. 73.)
II. Discussion
The Court now reviews Magistrate Judge Mathy's order requiring Jalex to produce the documents requested in RFPs 18, 19, and 20 “regardless of for whom the work [was] performed.” (Am. Order 30, Dkt. 62.) A magistrate judge's ruling on a non-dispositive motion may be set aside if it “is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). Accordingly, factual findings are reviewed under a clearly erroneous standard and legal conclusions are reviewed de novo. Moore v. Ford Motor Co., 755 F.3d 802, 806 (5th Cir. 2014).
Jalex objects to Judge Mathy's order on the basis that the work it has produced for clients other than Nvision “is the intellectual property, the confidential and proprietary information, and the trade secret information of such other clients and does not belong to either JALEX or NVISION.” (Obj. & Appeal ¶ 8, Dkt. 73.) In response, Nvision contends that “by ... restricting production to materials for work performed on behalf of Nvision, JALEX avoids disclosing competitive work that JALEX is doing in its own name and on behalf of its affiliated companies” and accordingly “conceal[s] JALEX's use of Nvision's intellectual property to benefit JALEX's affiliated companies and others.” (Resp. ¶ 2, Dkt. 76.) Moreover, Jalex asserts that “[s]ince JALEX's practice is to conceal the identity of the customer from the vendor, all communications between JALEX and the vendors must be reviewed to determine the extent of JALEX's misuse of the work product for Nvision against Nvision.” (Id. ¶ 3.)
The Court agrees with Plaintiff. In its Amended and Supplemented Complaint, Nvision alleges that Jalex has misappropriated Nvision's intellectual property for its own use. (Am. Compl. ¶¶ 20–22, Dkt. 31.) Specifically, Nvision contends that Jalex is attempting to transform from a medical device consulting company into a medical devices manufacturing company and purports that Jalex's employees were directed to pass off product designs developed for its clients as its own. (Id.) Limiting discovery to documents related to work performed on behalf of Nvision, would clearly prevent Nvision from investigating its claim for the misappropriation of intellectual property. Nvision cannot examine whether its intellectual property is being misappropriated without examining documents related to the products and projects where its intellectual property may be inappropriately put to use.
*3 The Court acknowledges that Judge Mathy's order may require Jalex to produce sensitive or proprietary information. However, the Court believes that the existing Confidentiality and Protective Order (Dkt. 34) is sufficient to satisfy Jalex's concern.
Accordingly, the Court agrees with Judge Mathy's conclusion that the Jalex's responses to RFPs 18, 19, and 20 should not be limited to documents related to work performed on behalf of Nvision. The Court, therefore, concludes that Defendant's objections to the Magistrate Judge's Amended Order should be overruled.
III. Conclusion
Defendant's Objections to and Appeal of Magistrate Judge's Ruling on Plaintiff's Motion to Overrule Objections and Compel Discovery Responses (Dkt. 73) are hereby OVERRULED. Magistrate Judge Mathy's Amended Order (Dkt. 62), insofar that it rules on Plaintiff's Motion to Overrule Objections and Compel Discovery Responses (Dkt. 48), with regard to Requests for Production Nos. 18, 19, and 20 is hereby AFFIRMED.