Advanced Cable Ties, Inc. v. Am. Elite Molding, LLC
Advanced Cable Ties, Inc. v. Am. Elite Molding, LLC
2019 WL 13280170 (N.D. Fla. 2019)
January 25, 2019
Frank, Michael J., United States Magistrate Judge
Summary
The court found that the Defendants had not established that every item on the Constant Contact List was a protected trade secret. The court ordered a protective order to ensure the protection of any privacy interest that may exist regarding the information from the Constant Contact List that will be disclosed to the Plaintiff. Additionally, the court ordered Ashley Brown and Brown Creative, LLC, to respond to Request 10 of the third-party subpoenas in accordance with the protective order.
Additional Decisions
ADVANCED CABLE TIES, INC, Plaintiff,
v.
AMERICAN ELITE MOLDING, LLC and ROBERT D. SIRES, Defendants
v.
AMERICAN ELITE MOLDING, LLC and ROBERT D. SIRES, Defendants
Case No. 3:18-cv-2035-MCR/MJF
United States District Court, N.D. Florida
Filed January 25, 2019
Counsel
Bridgitte Elizabeth Mott, Saul Ewing Arnstein LLP, Boston, MA, Joseph Dominic Lipchitz, Saul Ewing Arnstein & Lehr, Boston, MA, Charles Franklin Beall, Jr., Daniel Marvin Ewert, Moore Hill & Westmoreland PA, Pensacola, FL, for Plaintiff.James Robert Green, Jr, Pensacola, FL, Mary Grace Rahm, Destin, FL, Robert James Powell, Pensacola, FL, for Defendants.
Frank, Michael J., United States Magistrate Judge
ORDER
*1 This cause is before this court on the Defendants' “Emergency Motion to Quash or Modify the Third-Party Subpoenas to Ashley E. Brown and Brown Creative LLC and Memorandum in Support Thereof” (Doc. 19), and Plaintiff's response thereto. (Doc. 23). In addition, before this court are: (1) the Defendants' “Notice of Filing Declarations in Support of Defendants' Motion to Quash Third-Party Subpoenas” (Doc. 30); (2) Defendants' “Reply to Plaintiff's Opposition to Defendant's Emergency Motion to Quash or Modify the Third-Party Subpoenas to Ashley E. Brown and Brown Creative LLC” (Doc. 32); (3) Plaintiff's “Motion for Hearing and Opposition to the Recently Submitted Declarations of Robert Sires and Ashley Brown,” (Doc. 34); and (4) Defendants' “Response to Motion for Hearing and Opposition to Recently Submitted Declarations of Robert Sires and Ashley Brown.” (Doc. 40).
I. Procedural History
Plaintiff Advance Cable Ties, Inc., (“ACT”) filed this action seeking damages against Defendants—American Elite Molding, LLC, (“AEM”) and Robert Sires— for defamation. (Doc. 39 at ¶1). For their part, Defendants contend, among other things, that the statements at issue are subject to a qualified privilege. (Doc. 2 at 9).
The parties are competitors in the business of manufacturing cable ties,[1] and their relationship has been contentious. (Doc. 1 at ¶¶ 2, 17-19, 21). On September 1, 2016, Plaintiff filed its third lawsuit against the Defendants alleging that the Defendants had misled the public and consumers regarding the source of Plaintiff's cable ties. On April 20, 2018, after Defendants' motion to dismiss that lawsuit was unsuccessful, Defendants allegedly retaliated against the Plaintiff by filing a suit in a Florida state court. (id. at ¶ 25). Defendants voluntarily dismissed that Florida lawsuit before AEM's employees were deposed.
Plaintiff alleges that, on May 9, 2018, as part of Defendants' retaliatory scheme, Defendant Sires defamed the Plaintiff. Specifically, Sires spoke with the Northwest Florida Daily News regarding the litigation. (id. at ¶ 29). During the interview, Sires purportedly stated that Plaintiff hired illegal aliens, paid these aliens “under the table,” and alleged that Plaintiff contracted with “Twin City Temporaries, Inc.,” a company that allegedly imported foreign workers. Defendants also allegedly posted on AEM's Facebook page a link to the Northwest Florida Daily News article and repeated allegedly defamatory statements to two media outlets within the cable tie industry: Fastener News Industry, Inc., and GlobalFastenerNews.com. (id. at ¶¶ 32-33). In addition, Plaintiff alleges that the Defendants contacted Plaintiff's customers and suppliers and told them that the Plaintiff employed illegal aliens. (Doc. 1 at p.13 ¶ 34). Additionally, Defendants issued a media statement that reported these same allegedly defamatory statements. (id. at ¶ 35). As a result, Plaintiff sent Defendants a letter requesting that Defendants retract their statements. When the Defendants refused, Plaintiff initiated the present action.
*2 On November 20, 2018, Plaintiff served Defendants' counsel with notice of the third-party subpoenas for Ashley E. Brown and Brown Creative, LLC, which are responsible for AEM's marketing, including media development and customer outreach. The subpoenas sought production of the following:
Request 4: “All documents concerning, relating to, or constituting communications between Ashley Brown or Brown Creative and Robert Sires from January 1, 2017, to the present.” (Doc. 19-1 at 6, 11).
Request 5: “All documents concerning, relating to, or constituting communications between Ashley Brown or Brown Creative and American Elite Molding, LLC from January 1, 2017 to the present.” (Doc. 19-1 at 6, 11).
Request 8: “All documents concerning or relating to individuals or entities who were provided the Media Statement attached as Exhibit 1 by Ashely Brown, Brown Creative, American Elite Molding, LLC, or Sires.” (Doc. 19-1 at 6, 11).
Request 10: “All documents identifying the recipients of the Media Statement.” (Doc. 19-1 at 6, 11).
AEM filed an emergency motion to quash or, alternatively, to modify the third-party subpoenas with respect to these four requests. (Doc. 19). This court temporarily granted AEM's motion to quash to ensure that Plaintiff had an opportunity to respond. (Doc. 24).
II. Discussion
The Federal Rules of Civil Procedure “strongly favor full discovery whenever possible.” Farnsworth v. Proctor & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985). Rule 26 of the Federal Rules of Civil Procedure governs discovery in federal court. See Passmore v. Baylor Health Care Sys., 823 F.3d 292, 296 (5th Cir. 2016); In re Queens Univ. at Kingston, 820 F.3d 1287, 1294 (Fed. Cir. 2016). In general, the Federal Rules of Civil Procedure permit discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case ....” Fed. R. Civ. P. 26(b)(1). Relevant information may be discoverable even if it is not admissible at trial. See Fed. R. Civ. P. 26(b)(1); see Coughlin v. Lee, 946 F.2d 1152, 1159 (5th Cir. 1991) (“Discoverable information is not limited to admissible evidence.”). On the other hand, not all relevant evidence is discoverable. See Miscellaneous Docket Matter No. 1 v. Miscellaneous Docket Matter No. 2, 197 F.3d 922, 925 (8th Cir. 1999) (noting that “even if relevant, discovery is not permitted where no need is shown”).
Rule 45 of the Federal Rules of Civil Procedure specifically governs the use of subpoenas to elicit discoverable materials. Fed. R. Civ. P. 45; see ML Healthcare Servs., LLC v. Publix Super Markets, Inc., 881 F.3d 1293, 1306 (11th Cir. 2018). When a party or attorney issues a subpoena, they must take “reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d); see Whole Woman's Health v. Smith, 896 F.3d 362, 374 (5th Cir. 2018). On a timely motion, the court may quash or modify a subpoena that “requires disclosure of privileged or other protected matter, if no exception or waiver applies ....” Fed. R. Civ. P. 45(d)(3)(A).
Typically, the analysis required of a Rule 45(d)(3)(A) motion is comparable to the analysis required of a Rule 26(c) motion for a protective order. See Fed. R. Civ. P. 45(c) Advisory Committee's Note to 1991 amendment (stating that Rule 45(c)(3) “tracks the provisions of Rule 26(c)”); see also Fed. R. Civ. P. 45(d) Advisory Committee Note to 2013 amendment (stating that “[s]ubdivision (d) contains the provisions formerly in subdivision (c).”). Additionally, “the reach of a subpoena issued pursuant to Rule 45 is subject to the general relevancy standard applicable to discovery under Fed. R. Civ. P. 26(b)(1).” Ubiquiti Networks, Inc. v. Kozumi USA Corp., 295 F.R.D. 517, 521 (N.D. Fla. 2013) (quoting Syposs v. United States, 181 F.R.D. 224, 226 (W.D.N.Y. 1998)); see Heat & Control, Inc. v. Hester Indus., Inc., 785 F.2d 1017, 1023 (Fed. Cir. 1986) (noting that Rule 45 “must be read in light of Rule 26(b)”).
*3 To facilitate discovery while at the same time protecting information that should not be disseminated widely, Federal Rule of Civil Procedure 26(c) provides that a “party or any person from whom discovery is sought may move for a protective order.” Fed. R. Civ. P. 26(c). The burden of establishing good cause for a protective order rests on the movant. See Pearson v. Miller, 211 F.3d 57, 72 (3d Cir. 2000); In re Alexander Grant & Co. Litig., 820 F.2d 352, 356 (11th Cir. 1987); Gen. Dynamics Corp. v. Selb Mfg. Co., 481 F.2d 1204, 1212 (8th Cir. 1973). This burden requires a particular and specific demonstration of fact; conclusory statements are not sufficient. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003); Pearson, 211 F.3d at 72; United States v. Garrett, 571 F.2d 1323, 1326 n.3 (5th Cir. 1978).
The assessment of “undue burden” is committed to the discretion of the trial court. See In re Subpoena Issued to Dennis Friedman, 350 F.3d 65, 68-70 (2d Cir. 2003); Concord Boat Corp. v. Brunswick Corp., 169 F.R.D. 44, 49 (S.D.N.Y. 1996). Indeed, the Supreme Court has reminded judges that “district courts should not neglect their power to restrict discovery” under Rule 26(c) and “should not hesitate to exercise appropriate control over the discovery process.” Herbert v. Lando, 441 U.S. 153, 177, 99 S. Ct. 1635, 1649 (1979); see also Fed. R. Civ. P. 26 Advisory Committee's Note to 1970 amendment (“Rule 26(c) ... confers broad powers on the courts to regulate or prevent discovery even though the materials sought are within the scope of [discovery under Rule] 26(b), and these powers have always been freely exercised.”).
Courts must engage in case-specific balancing of factors such as relevance, the need of the party for the documents, the breadth of the document request, and the period covered by the request, against the burden imposed on the entity ordered to produce the information. In re: Modern Plastics Corp., 890 F.3d 244, 251 (6th Cir. 2018); Farnsworth v. Procter & Gamble Co., 758 F.2d 1545 (11th Cir. 1985); Cytodyne Techs., Inc. v. Biogenic Techs., Inc., 216 F.R.D. 533, 535 (M.D. Fla. 2003). The fact that discovery is demanded of an entity that is not a party to the litigation is also considered by courts when weighing the burdens imposed in providing requested discovery. In re: Modern Plastics Corp., 890 F.3d at 251; Am. Standard Inc. v. Pfizer Inc., 828 F.2d 734, 739 (Fed Cir. 1987); Cytodyne Techs., Inc., 216 F.R.D. at 535.
Rule 45 also provides additional protection for a person subject to a subpoena by mandating that a court quash or modify a subpoena that requires “disclosing a trade secret or other confidential research, development, or commercial information ....” Fed. R. Civ. P. 45(d)(3)(B); see ML Healthcare Servs., LLC, 881 F.3d at 1306 n.7 (noting that under Rule 45(d)(3) a district court may quash a subpoena that requires disclosure of a trade secret); United States SEC v. Hyatt, 621 F.3d 687, 693 (7th Cir. 2010) (observing that “Rule 45 also contains important provisions to protect the recipient of a subpoena from undue burden or expense, invasion of a privilege, or disclosure of protected material”). If the requesting party, however, “shows a substantial need for the testimony or material that cannot be otherwise met without undue hardship; and ensures that the subpoenaed person will be reasonably compensated,” the court may order production of the materials under specified conditions. Fed. R. Civ. P. 45(d)(3)(C); see Klay v. All Defendants, 425 F.3d 977, 983 (11th Cir. 2005) (noting that a “district court has a few options to address the effects of a subpoena that requires the disclosure of a trade secret or other confidential information”); Fadalla v. Life Auto. Prod. Inc., 258 F.R.D. 501, 507 (M.D. Fla. 2007).
A. Requests 4 and 5
*4 Defendants request that this court quash or modify Requests 4 and 5 because these requests allegedly seek irrelevant documents and are overly broad.
The party resisting discovery has the considerable burden of showing why discovery should not be permitted. Delaney v. Town of Abington, 890 F.3d 1, 12 (1st Cir. 2018); Republic of Ecuador v. Hinchee, 741 F.3d 1185, 1189 (11th Cir. 2013); Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975); Henderson v. Holiday CVS, LLC, 269 F.R.D. 682, 686 (S.D. Fla. 2010); Rossbach v. Rundle, 128 F. Supp.2d 1348, 1354 (S.D. Fla. 2000). The party resisting discovery must establish with specificity the way in which a request is unduly burdensome. See Vallejo v. Amgen, Inc., 903 F.3d 733, 743 (8th Cir. 2018); Panola Land Buyers Ass'n v. Shuman, 762 F.2d 1550, 1559 (11th Cir. 1985).
1. Temporal Breadth
In support of its motion, Defendants argue that the temporal breadth of the requests is excessive. Specifically, Defendants contends that the alleged defamation occurred in May 2018, but Requests 4 and 5 seek materials created more than a year before the alleged defamation. (Doc. 19 at p.3 ¶ 11). The Defendants argue that the Plaintiff's requests—which seek approximately two years of marketing efforts by AEM and Robert Sires—are excessive. (id. at p.4 ¶ 13).
The Defendants' argument overlooks the fact that—according to Plaintiff's complaint—Defendants devised their plan to defame the plaintiff as retaliation for the Massachusetts litigation and Defendants' failure “to defeat ACT's claim” with its motion to dismiss. (Doc. 1 at ¶ 24). Plaintiff filed the Massachusetts litigation on September 1, 2016. Defendants' motion to dismiss was denied on March 14, 2018. Thus, at the earliest, the relevant interval begins upon commencement of the Massachusetts litigation: September 1, 2016. Further, based on discovery already provided by the Defendants, Plaintiff alleges that as early as August 11, 2017, Defendants were brainstorming ways to exploit Plaintiff's weaknesses. (Doc. 23 at 12). Therefore, because Requests 4 and 5 seek only materials produced between January 1, 2017 and December 20, 2018, Defendants have not demonstrated that the temporal interval stated in Requests 4 and 5 is unreasonable.
2. Overinclusiveness
Defendants also argue that Requests 4 and 5 are overly broad and overly inclusive because they demand production of “all communications” between Ashley Brown and Brown Creative and the Defendants. Defendants argue that these requests require disclosure of documents that are irrelevant and unrelated to the alleged defamation.
Plaintiff contends that Requests 4 and 5 are permissible because these documents are highly relevant to establishing actual malice and the fact of publication. (Doc. 23 at 16). Specifically, Plaintiff argues that these requests will provide relevant information regarding the scope of the third-parties' services to the Defendants, financial compensation for those services, and other information concerning Defendants' plan to defame Plaintiff. (id.). Plaintiff's requests, however, are not as limited as Plaintiff contends. Indeed, as written, Plaintiff's requests sweep all document constituting communications between the third parties and Defendants, including documents that are personal in nature and unrelated to the claims and defenses in this suit.
*5 Further, because Ashley Brown and Brown Creative allegedly are responsible for all the Defendants' marketing—including media development and customer outreach—this court finds that, without placing a limitation on the documents sought, Requests 4 and 5 would also encompass communications concerning marketing and customer outreach ideas wholly unrelated to the alleged defamatory media blitz and the posting on Facebook. Thus, Plaintiff's requests are overly broad.
Generally, modification of a subpoena is preferable to quashing it outright. The litigant who issued the subpoena, however, should have the first opportunity to make the requisite amendments.[2] Requests 4 and 5, as written, are therefore quashed. If these requests are amended in a manner consistent with this order, Plaintiff may serve such amended Requests on Ashely Brown and Brown Creative, LLC, within FOURTEEN DAYS of the docketing of this order.
B. Requests 8 and 10
Defendants also request that this court quash or modify Requests 8 and 10 because these requests allegedly seek the production of documents that constitute or contain information which would reveal the Defendants' trade secrets. (Doc. 19 at ¶ 6). Specifically, Defendants assert that the media statement was sent to its customers and others who have business relationships with AEM (the “Constant Contact List”) as well as personal and media contacts. Defendants assert that the Constant Contact List is a protected trade secret under Florida law. (id. at ¶¶ 17-18). Plaintiff contends, however, that the Constant Contact List does not constitute a trade secret. (Doc. 23 at 17-19). Alternatively, Plaintiff argues that disclosure may be ordered, even if the Constant Contact List is a trade secret, pursuant to Rule 45 of the Federal Rules of Civil Procedure. (id. at 19).
To start, the court finds that Request 8, as written, is overly broad and seeks information that is irrelevant to the claims and defenses. This is particularly true insofar as the Plaintiff has not placed a temporal limitation on its request. The Plaintiff is not seeking merely information concerning the identity of the recipients of the media statement. Rather, Plaintiff requested “[a]ll documents concerning or relating to individuals or entities who were provided the Media Statement.” Ashley Brown and Brown Creative, LLC, have been employed by the Defendants for approximately five years and oversee the Defendants' marketing, including media development and customer outreach. In its motion for a hearing and in opposition to Defendants' affidavits, Plaintiff alleges that they have identified at least 30 of the Defendants' customers that presumably are on this customer list. (Doc. 34 at 14). Based on discovery already obtained by Defendants, there could be additional entities on this contact list. (Doc. 34-3 at 3). Thus, Plaintiff is asking third parties to search through five years of marketing campaign documents and customer outreach materials to find any documents relating to the entities that received the media statement. That is excessive. For this reason, the court will also quash Request 8.
As to Request 10, the party resisting discovery bears the burden to show that the documents sought are trade secrets. Hennegan Co. v. Arriola, 855 F. Supp.2d 1354, at 1360 (S.D. Fla. 2012) (“The party claiming trade secret protection has the burden to show the information qualifies as a trade secret.”); Kaiser Aluminum & Chem. Corp. v. Phosphate Eng'g & Constr. Co., Inc., 153 F.R.D. 685, 688 (M.D. Fla. 1994) (“[A] party must show that the information is confidential and that the disclosure would be harmful ....”); see Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279, 1298-1301 (11th Cir. 2018) (affirming district court's decision that party had not met its burden of showing that customer information constituted a trade secret). There is no absolute privilege for trade secrets, however. Fed. Open Market Comm. v. Merrill, 443 U.S. 340, 262, 99 S. Ct. 2800, 2813 (1979); Cmedia, LLC v. LifeKey Healthcare, LLC, 216 F.R.D. 387, 390 (N.D. Tex. 2003) (citing Exxon Chem. Patents, Inc. v. Lubrizol Corp., 131 F.R.D. 668, 671 (S.D. Tex. 1990)).
*6 Once the party resisting discovery meets its burden of establishing that the materials sought are trade secrets, the party seeking discovery must show “a substantial need for the testimony or material that cannot be otherwise met without undue hardship and assures that the person to whom the subpoena is addressed will be reasonably compensated.” Fed. R. Civ. P. 45(D); Klay, 425 F.3d at 983; Sams v. GA West Gate, LLC, 316 F.R.D. 693, 698 (N.D. Ga. 2016).
The court then balances the need for the trade secrets against the claim of injury resulting from disclosure and exercises its “sound discretion to decide whether trade secrets are relevant and whether the need outweighs the harm.” Centurion Indus., Inc. v. Warren Steurer & Assoc., 665 F.2d 323, 325 (10th Cir. 1981); R&D Bus. Sys., 152 F.R.D. at 197. “Even if the requested documents are relevant, discovery will not be permitted if the party seeking discovery fails to show need or if the potential harm caused by the production outweighs the benefit.” Cmedia, LLC, 216 F.R.D at 391 (citing Mannington Mills, Inc. v. Armstrong World Indus., Inc., 206 F.R.D. 525, 529 (D. Del. 2002)); Echostar Commc'n Corp. v. The News Corp. Ltd., 180 F.R.D. 391, 395 (D. Colo. 1998) (noting that courts assume that “disclosure to a competitor is more harmful than disclosure to a non-competitor”).
Florida law defines a trade secret as information that:
(1) Derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainably by proper means by, other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of efforts that are reasonable under the circumstance to maintain its secrecy.
Fla. Stat. § 688.002 (4); see Yellowfin Yachts, Inc., 898 F.3d at 1297; Am. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407, 1410 (11th Cir. 1998).[3] If the information is generally known or readily accessible to third parties, it is not protectable as a trade secret. Am Red Cross, 143 F.3d at 1410; see In re Maxxim Med. Grp., Inc., 434 B.R. 660, 691 (Bankr. M.D. Fla. 2010) (holding that disclosure of the “information to others who are under no obligation to protect the confidentiality of the information defeats any claim that the information is a trade secret”).
*7 Defendants have carried their burden of showing that the list is a distillation of a much larger list of potential customers, which required extensive efforts by Defendants' sale representatives and the expenditure of capital. (Docs. 30, 32); see Zodiac Records, Inc. v. Choice Envt'l Serv., 112 So.3d 587, 590 (Fla. 4th DCA 2014). Thus, the remaining issue is whether the Defendants maintained the confidentiality of the list.
The parties disagree as to whether the Defendants maintained the confidentiality of the Constant Contact List. Defendants submitted sworn affidavits from Ashely Brown and Robert Sires in support of their claim that the Constant Contact List is a confidential trade secret. (Doc. 30). These affidavits set forth the efforts that the Defendants and Ashley Brown took to keep the list confidential. Specifically, Ashley Brown stated that: (1) Defendants instructed her to “not divulge the information contained in the Constant Contact List to any third party without express authorization from AEM”; (2) the Constant Contact List is password protected; (3) she is the only employee of Brown Creative who knew the password to gain access to Defendants' Constant Contact List; (4) the Constant Contact List is not known by all AEM employees; and (5) she only discusses the Constant Contact List with select AEM employees. (Doc. 30-1 at ¶¶ 7-11). Additionally, Ashley Brown stated in her supplemental affidavit that she provided access only to AEM employee Lori Jimson. (Doc. 40-3 at ¶ 5). Ashley Brown also provided access to the Constant Contact account to Jason Burton (id.). Robert Sires and Ashley Brown both state that Jason Burton is employed at Cable Tie Express, which is a company owned by the Defendant Sires. (Docs. 40-2 at ¶ 9; 40-3 at ¶ 6). Robert Sires stated that the lists for Cable Tie Express and AEM are maintained on the same account, but that Jason Burton was granted access to the Constant Contact account only so that he could access the Cable Tie Express Constant Contact List. (Doc. 40-2 at ¶ 10).
Robert Sires also stated in his affidavit that Ms. Brown and all employees of AEM and Cable Tie Express were advised of the confidential nature of the information. Moreover, Robert Sires related that Ms. Brown was hired to maintain and safeguard the information contained with the Constant Contact List. (Doc. 30-2 at ¶ 8). The Constant Contact List is not accessible on AEM's computer systems and it is not generally known in the marketplace. (id. at ¶¶ 5, 8). He further stated that each employee that had access to the Constant Contact Account were informed of the restrictions on disseminating the information contained on the Constant Contact List without express prior permission.
Plaintiff, however, has submitted evidence suggesting that Defendants have published the relevant information in a manner that would waive any trade secret privilege. First, Plaintiff alleges that Defendants have already revealed several of their customers to the marketplace through the use of YouTube videos. Additionally, Plaintiff alleges that cable tie companies place their company's “mark” on each cable tie it produces. Thus, anyone can examine relevant cable ties and determine whether they were produced by AEM.
In American Red Cross, the Eleventh Circuit noted that the plaintiff appeared to have been “not particularly careful to protect the secrecy of the list of names” insofar as “some of the Red Cross's lists appear[ed] to have been posted on a computer bulletin board feely accessible to Red Cross's competitors,” and “many of Red Cross's donor groups ha[d] publicly declared their sponsorship.” Am. Red Cross, 143 F.3d at 1410-11. Additionally, the Eleventh Circuit has upheld denial of trade secret protection where “the photos in the record show that many [of the suppliers] prominently brand their products.” Yellowfin Yachts, 898 F.3d at 1298; see also Liberty Am. Ins. Group, Inc. v. WestPoint Underwriters, L.L.C., 199 F. Supp.2d 1271, 1287 (M.D. Fla. 2001) (holding that the use of information readily available to the public rules out trade secret protection because the trade secret “must consist of information that derives economic value from not being readily ascertainable by others”).
*8 Here, Plaintiff has shown that through various YouTube videos and interviews, AEM and Robert Sires has revealed to the public the names of approximately twenty of AEM's customers. (Doc. 34 at 8-12). Specifically, Robert Sires disclosed at least five customers in interviews. The videos also reveal the identity of other customers because, the ties and packaging labels shown in the videos include the names of the customers. These videos and interviews were and are readily accessible to the Defendants' direct competitors. Thus, Defendants have been “not particularly careful to protect the secrecy of the list of names.” See Am. Red Cross, 143 F.3d at 1410.
Additionally, at least two independent sales representatives have publicly disclosed on their websites that they have a business relationship with the Defendants. Other customers have also disclosed to the Plaintiff that they have a business relationship with the Defendants. In total, Plaintiff alleges that they have identified at least thirty of the Defendants' customers through the YouTube videos, interviews, and public disclosures. It appears, therefore, that some of the information on the Constant Contact List is readily available to the public and therefore not “secret.” To constitute a trade secret per se, the “subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business.” Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 475, 94 S. Ct. 1879, 1883 (1974). Once a client list is disclosed, even if inadvertently, the “information ceases to be a trade secret and will no longer be protected.” Defiance Button Mach. Co. v. C & C Metal Prods. Corp., 759 F.2d 1053, 1063 (2d Cir. 1985); See TNS Media Research, LLC v. Tivo Research & Analytics, Inc., 629 F. App'x 916, 932 (Fed. Cir. 2015) (holding that customer lists were not trade secrets when they were not kept secret); Nationwide Equip. Co. v. Allen, 3-05-cv-236, 2005 WL 1228360, *5 (M.D. Fla. May 24, 2005) (holding that the customer list was not a trade secret because—among other things—the company listed the identity of many of its customers on its website and the customers routinely shopped and bought from multiple sources).
In light of the record, this court finds that the Defendants have not established that every item on the Constant Contact List is a protected trade secret. Additionally, Plaintiff has shown a substantial need for the identity of the customers. Specifically, at trial, Plaintiff can overcome Defendants' claim of qualified privilege by showing that the Defendants published the statements to a wide audience or with malice. See Delmonico v. Traynor, 116 So.3d 1205, 1219 (Fla. 2013); Spears v. Albertson's, Inc., 848 So.2d 1176, 1179 (Fla. 1st DCA 2003) (“ ‘Qualified privilege’ is a defense and the burden of proving it rests with the defendant ... the existence of a ‘qualified’ privilege vanishes if the statement is made with malice or too wide an audience.”) (quoting Glyn v. City of Kissimmee, 383 So.2d 774, 775 (Fla. 5th DCA 1980)).
This court, however, notes that the parties are direct competitors in the cable tie industry. Furthermore, because neither party moved for this court to inspect a copy of the Constant Contact List, this court has not seen the Constant Contact List and does not know its exact contents. It is possible that some of the information on the Constant Contact List is truly a trade secret. Additionally, unfettered access to a list of the Defendants' customers, prospective customers, and business associates may provide Plaintiff an economic advantage in the marketplace. Accordingly, the third parties will be required to disclose only the names of the customers, prospective customers, and business associates found on its Constant Contact List, including the specific points of contact at these entities and their contact information, to the extent this information is found on the Constant Contact List. Any other information found on the Constant Contact List may be redacted. Also, this court finds that a protective order would be an appropriate mechanism to ensure the protection of any privacy interest that may exist regarding the information from the Constant Contact List that will be disclosed to the Plaintiff.
*9 Because the parties stated that they have already discussed a protective order, this court will require the parties to submit a joint proposed protective order that protects the information disclosed regarding the Constant Contact List. To achieve this end, within FOURTEEN DAYS of the docketing of this order, the attorneys for the parties must meet and confer, preferably in person, in a good-faith effort to resolve any dispute regarding the terms of a proposed protective order. The Plaintiff shall, within FOURTEEN DAYS of the docketing of this order: (a) file the joint proposed protective order; or (b) file a notice that the parties failed to reach an agreement and the points of contention. If the parties are unable to reach an agreement,[4] this court will issue a protective order crafted by this court. Ashley Brown and Brown Creative, LCC, will be required to respond to Request 10 of the third-party subpoenas in accordance with the protective order within FOURTEEN DAYS of the docketing of the protective order.
Accordingly, it is ORDERED:
1. Defendants' Emergency Motion to Quash (Doc. 19) is GRANTED IN PART and DENIED IN PART.
2. Defendants' motion to quash or modify Request 4 and Request 5 of the third-party subpoenas served upon Ashley Brown and Brown Creative, LLC, is GRANTED without prejudice to Plaintiff serving amended requests 4 and 5 on Ashley Brown and Brown Creative, LLC, within FOURTEEN DAYS of the docketing of this order.
3. Defendants' motion to quash Request 8 of the third-party subpoenas served upon Ashley Brown and Brown Creative, LLC, is GRANTED.
4. Defendants' motion to quash Request 10 of the third-party subpoenas served upon Ashley Brown and Brown Creative, LLC, is DENIED.
5. Within FOURTEEN DAYS of the docketing of this order, the Plaintiff shall file: (a) the joint proposed protective order; or (b) a notice that the parties failed to reach an agreement as to the contents of a protective order. Such notice shall inform this court of the points of contention.
6. Ashley Brown and Brown Creative, LLC, shall RESPOND to Request 10 of the Plaintiff's third-party subpoenas in accordance with this order and the protective order no later than FOURTEEN DAYS after the docketing of the protective order mentioned above.
SO ORDERED this 25th day of January 2019.
Footnotes
“Cable ties hold together items such as electric cables or wires, offering a range of applications from household to military uses.” Complaint ¶ 7.
Defendants moved to quash or modify the Requests. (Doc. 19). Their motion, however, did not suggest a specific modification. The Defendants were not required to submit a suggested modification, but it certainly would have been helpful and would have expedited consideration of this issue.
Because the Plaintiff's claim rests solely on diversity jurisdiction, the court followed Florida's Conflict of Law rules to decipher what substantive laws applied to the issues of defamation and privilege questions, such as the trade secret protection. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1022 (1941); Michel v. NYP Holdings, Inc., 816 F.3d 686, 694 (11th Cir. 2016). Florida has adopted the “significant relationships test,” of the Restatement (Second) of Conflict of Laws §§ 145-46 (1971). See Bishop v. Florida Specialty Paint Co., 389 So.2d 999, 1001 (Fla. 1980). Under this principle, the court must determine controversies in accord with the law of the jurisdiction with the most significant relationships to the occurrence and the parties under the principles stated.” Id. at 1001 (citing Restatement (Second) of Conflict of Laws § 145). In addition, this court took into account other factors, such as: (a) the place where the alleged injury occurred; (b) the place where the conduct causing the alleged injury occurred; (c) the domicile, residence nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.
In light of what this court could discern from the record and the parties' reliance on Florida law in their motions and responses, this court concluded that Florida substantive law applies as to whether the Constant Contact List is a trade secret. See Michel, 816 F.3d at 695 (holding New York law applied and basing its decision in part on the fact that the party cited New York law extensively in his briefs).
The parties should keep in mind that the discovery rules are designed to ensure that parties make a good faith effort to resolve their difference and thereby obviate the need for judicial intervention and the expenditure of judicial resources. See In re Stone, 986 F.2d 896, 904 (5th Cir. 1993) (noting that parties should not “waste value judicial resources unnecessarily”). “Discovery imposes burdens on the judicial system; scarce judicial resources must be diverted from other cases to resolve discovery disputes.” Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367-68 (11th Cir. 1997). Thus, discovery disputes are prime candidates for compromise solutions that do not entail court intervention.