Prysmian Cables & Sys. USA, LLC v. Szymanski
Prysmian Cables & Sys. USA, LLC v. Szymanski
2023 WL 11979387 (D.S.C. 2023)
December 12, 2023
Lydon, Sherri A., United States District Judge
Summary
Prysmian, a telecommunications company, objected to a motion to compel them to produce ESI related to a former employee's whistleblowing complaint against their CEO. The court denied the motion, stating that the information was not relevant to the case and was privileged. The court also denied a motion for leave to file a supplemental brief, as the testimony of the CEO did not provide any new evidence.
Additional Decisions
Prysmian Cables & Systems USA, LLC, Plaintiff,
v.
Stephen J. Szymanski and Sterlite Technologies, Inc., Defendants
v.
Stephen J. Szymanski and Sterlite Technologies, Inc., Defendants
C/A No. 3:21-cv-01641-SAL
United States District Court, D. South Carolina, Columbia Division, COLUMBIA DIVISION
Filed December 12, 2023
Counsel
Aaron Todd Brogdon, Pro Hac Vice, Frost Briown Todd, Columbus, OH, Deborah S. Adams, Pro Hac Vice, David A. Skidmore, Jr., Pro Hac Vice, Simon Yakov Svirnovskiy, Pro Hac Vice, Tessa Leigh Castner, Pro Hac Vice, Frost Brown Todd, Cincinnati, OH, Peter Matthew Cummins, Pro Hac Vice, Frost Brown Todd, Louisville, KY, Sara Sofia Svedberg, Susan Pedrick McWilliams, Nexsen Pruet Jacobs and Pollard, Columbia, SC, for Plaintiff.Eugene H. Matthews, Anthony E. Rebollo, Chandra Austin Stallworth, Richardson Plowden and Robinson, Columbia, SC, Lyndey Ritz Zwing Bryant, Adams and Reese, Columbia, SC, for Defendants.
Lydon, Sherri A., United States District Judge
ORDER
*1 This matter is before the court on defendants Stephen J. Szymanski and Sterlite Technologies, Inc.’s motion to compel discovery related to second discovery requests, ECF No. 103, and motion for leave to file a supplemental brief in support of the motion to compel, ECF No. 119. For the reasons below, the court denies both motions.
BACKGROUND
Stephen Szymanski began working for Prysmian in 2006, many moons before the parties’ relations spiraled into the contentious litigation currently before the court. [ECF No. 1 ¶ 14.]. Szymanski executed a confidentiality, non-competition, and non-solicitation agreement (“Agreement”) during his tenure at Prysmian. Id. ¶ 22. The Agreement identifies consideration “in the form of a pay raise from $60,000.00 to $100,000” as Szymanski's consideration for signing the Agreement. [ECF No. 1-1 ¶ 2(2).] Around August 21, 2021, Szymanski, by that time an executive at Prysmian and the Senior Vice President of its telecommunications business, “voluntarily resigned” his employment with Prysmian. [ECF No. 1 ¶¶ 15, 16, 32.] At some point after Szymanski resigned his employment with Prysmian, he began to work for Sterlite. Id. ¶ 33. According to Prysmian, Sterlite (and now Szymanski) directly competes with Prysmian. Id. ¶ 34.
Prysmian sued Szymanski and Sterlite less than a year after Szymanski left Prysmian, alleging Szymanski violated the Agreement by misappropriating Prysmian's confidential information and trade secrets and soliciting or working with Prysmian's customers, prospective customers, and employees on Sterlite's behalf. Id. ¶¶ 37–40. As to Sterlite, Prysmian alleges it is aware of the Agreement but nonetheless uses Prysmian's relationships, confidential information, and trade secrets to unfairly compete with Prysmian. Id. ¶¶ 43–46. Prysmian asserted a slew of claims against Szymanski and Sterlite arising out of these allegations. Id. ¶¶ 48–109. Szymanski and Sterlite asserted several affirmative defenses, including defenses based on the doctrine of unclean hands and Prysmian's alleged breach of the Agreement. [ECF No. 11 ¶¶ 3–4.]
After conducting discovery for a few months, Szymanski and Sterlite moved for a protective order, ECF No. 21, and Prysmian moved for entry of a preliminary injunction against Szymanski and Sterlite. [ECF No. 23.] Prysmian expanded on its understanding of the circumstances of Szymanski's departure in these early public filings and related briefs. Prysmian alleged that Szymanski “was secretly negotiating with Sterlite ... about working with [Sterlite] running their North American telecommunications business” while working for Prysmian. [ECF No. 23-8 at 6.]. In March 2020, Szymanski listed his home in Kentucky for sale. Id. at 6. He bought a house in South Carolina about a month later. Id. And Prysmian alleges Szymanski did all these things without telling anyone at Prysmian. Id. Prysmian elsewhere characterized Szymanski's departure as “abrupt.” [See ECF No. 59 at 2; ECF No. 77 at 2.]
Szymanski “vehemently den[ies]” any such characterization. [ECF No. 103 at 4, n.5.]. Instead, Szymanski alleges Prysmian mishandled a “serious whistleblower complaint” Szymanski made and that he “had no choice but to resign and seek employment elsewhere” because of Prysmian's actions. [ECF No. 103 at 4.] Specifically, Szymanski alleges he raised allegations of misconduct and fraud about Hakan Ozmen, Prysmian's then-North American CEO. Id. at 4–5. At the time, Prysmian had a Group Whistleblower Policy, and Szymanski “characterizes the allegations as a whistleblower complaint” under the policy. Id. at 4. That policy, according to Szymanski, required a whistleblowing committee to review any incident reports received and consider the findings of any investigation. Id. at 5. In 2021, Szymanski, when deposed, testified that he did not let Prysmian know he was communicating with Sterlite during the summer of 2020 because he “was still waiting to see what was happening ... with respect to ... the whistleblowing.” Id. at 5–6. But Ozmen stayed in his position of authority, and Szymanski “testified he felt he had no choice but to resign.”[1] Id. at 6.
*2 Prysmian concedes “Szymanski was interviewed by outside counsel years ago about internal accounting practices[.]” ECF No. 106 at 4. In previous briefing to the court, Prysmian acknowledged “[i]n the parties’ briefing ahead of the preliminary injunction hearing [in 2021]” Szymanski accused Ozmen of “engaging in financial manipulation” and “claimed he had reported this alleged manipulation in a so-called whistleblowing complaint.” [ECF No. 77 at 4–5.] Prysmian also conceded it “investigated these assertions in 2019,” though no civil, criminal, or governmental action was required. Id.
In any event, Szymanski and Sterlite served their second requests for production of documents (“Second RFPs”) and second interrogatories (“Second Interrogatories”) (together, the “Second Discovery Requests”) on Prysmian on September 23, 2022. [See ECF No. 103-2; ECF No. 103-3.] The Second RFPs set forth sixty-one separate requests for production of different categories of documents related to the purported whistleblowing allegations. [See ECF No. 103-3.] Prysmian served its responses to the Second RFPs on November 23, 2022, objecting to almost all requests on grounds of relevancy, disproportionality, over-breadth, and the self-critical analysis privilege. [See ECF No. 103-4.] Szymanski and Sterlite later narrowed the scope of the Second RFPs to and re-served them on Prysmian in December 2022. [ECF No. 103-1.] Prysmian made supplemental productions of documents over the next few months but maintained its original objections. [ECF No. 103 at 11.]
Szymanski and Sterlite moved the court for an order compelling Prysmian to fully respond to its Second RFPs and Interrogatories and to state its position on the record as to three issues: (1) whether Prysmian acknowledges Szymanski made a whistleblower complaint; (2) whether any investigation into Szymanski's allegations occurred, and (3) what conclusions, if any, were made following Prysmian's investigation. Id. at 23–24. Prysmian opposes Szymanski and Sterlite's motion, arguing the information Szymanski and Sterlite seeks is not relevant to any claim or defense and, even if it was, the information is privileged and thus not discoverable. [See ECF No. 106.] Szymanski and Sterlite filed a reply brief, ECF No. 108, in further support of their motion.
While this motion was pending, Prysmian deposed Paul Atkinson, Sterlite's CEO of its Optical Network Business, both individually and in his capacity as Sterlite's Rule 30(b)(6) corporate designee. [See ECF No. 119.] Atkinson testified as to his understanding of the circumstances of Szymanski's departure—specifically, that Szymanski was a whistleblower—based on information provided to him by Szymanski. [See generally ECF No. 119-1.] He also provided testimony concerning his knowledge of Ozmen. Id. Based on Atkinson's testimony, Szymanski and Sterlite moved for leave to file a supplemental brief in support of their motion. [ECF No. 119.] Prysmian opposes those efforts, arguing Atkinson's testimony simply states information he received from Szymanski and thus does not provide any “new” evidence that makes the whistleblowing discovery relevant. [See ECF No. 121.]
With both motions fully briefed, the matter is ripe for resolution.
LEGAL STANDARD
Litigants “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’ resource, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Rule 26(b)(1), FRCP. Rule 37(a), FRCP allows a party to move to compel any answer to a discovery request if a party fails to answer any Rule 33, FRCP interrogatories or produce documents requested under Rule 34, FRCP. Rule 37(a)(3)(B)(iii) and (v), FRCP.
*3 “The decision to grant or deny a motion to compel discovery rests within the sound discretion of the trial court.” Haynsworth v. S.C. Dept. of Mental Health, No. 2:16-cv-03623-CMC-MGB, 2017 WL 11707322, at *1 (D.S.C. May 26, 2017). Indeed, the Fourth Circuit “affords a district court substantial discretion in managing discovery and reviews the denial or granting of a motion to compel discovery for abuse of discretion.” Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995).
DISCUSSION
As noted above, Prysmian objects to Szymanski and Sterlite's Second Discovery Requests on both relevance and privilege grounds. Having carefully considered the parties’ arguments, the court concludes Szymanski and Sterlite's Second Discovery Requests seek information that is neither relevant nor proportional to the needs of the case.
Let's start with Prysmian's claims. As discussed above, Prysmian's claims arise out of Szymanski and Sterlite's alleged misappropriation of Prysmian's trade secrets and solicitation of Prysmian's customers and employees after he resigned from his employment with Prysmian. [See ECF No. 1.] Szymanski and Sterlite take issue with Prysmian's characterization of Szymanski's resignation. Specifically, they argue Prysmian placed the circumstances of Szymanski's departure at issue by characterizing it as “abrupt” and suggesting he was “ ‘plotting’ to harm [Prysmian].” [ECF No. 103 at 15.] So, Szymanski and Sterlite argue they are entitled to “present to the jury the full circumstances leading up to Szymanski's decision to resign.” [ECF No. 103.] But despite Prysmian's gratuitous description of their view of those circumstances, this case is not about why Szymanski resigned from Prysmian—it is about what he purportedly took when he left and whether he violated the Agreement. And Szymanski and Sterlite have not provided the court with any explanation as to how the reason for Szymanski's departure is relevant to Prysmian's claims. Put another way, the court simply cannot see how whether Szymanski was “forced out” (as he now claims) or whether he simply decided to resign from Prysmian for no reason at all has any impact on whether he misappropriated Prysmian's trade secrets or violated his Agreement with Prysmian. We thus conclude Szymanski and Sterlite's Second Discovery Requests are not relevant to any claim in the case.
Next, Szymanski and Sterlite's defenses. Szymanski and Sterlite argue the Second Discovery Requests are relevant to the extent they show Prysmian breached the Agreement with Szymanski first or otherwise have unclean hands. And Szymanski and Sterlite are correct, to an extent. In its order granting Prysmian's request for injunctive relief the court noted South Carolina law prevents “an employer who breaches his contract [from] later enforc[ing] against an ex-employee a restrictive covenant contained therein.” [ECF No. 52 at 18 (citing Associated Spring Corp. v. Roy F. Wilson & Avnet, Inc., 410 F. Supp. 967, 976 (D.S.C. 1976)).] But Szymanski and Sterlite do not argue at all how Prysmian breached the Agreement by purportedly failing to investigate a whistleblowing allegation. And the court rejected Szymanski and Sterlite's attempts to “go down the Hakan Ozmen road” at the hearing on Prysmian's motion.[2] [ECF No. 307, Hrg. Tr. 307:15–309:6.] We decline to go down that road now, particularly where Szymanski and Sterlite have not provided any reason that Prysmian's actions surrounding a purported whistleblower complaint can constitute breach of the Agreement.
*4 Szymanski and Sterlite's unclean hands defense fares no better. A party cannot recover in equity if that party has unclean hands. Anderson v. Buonforte, No. 2004-UP-270, 2004 WL 6251608, at *4 (S.C. Ct. App. Apr. 19, 2004). A party has unclean hands if it “behaves ‘unfairly in a matter that is the subject of the litigation to the prejudice of the defendant.’ ” Id. (citing Ingram v. Kasey's Assocs., 531 S.E.2d 287, 292 (2000)). But Szymanski and Sterlite do not suggest how Prysmian's supposed unclean hands as to the purported whistleblowing allegations relate to the Agreement at all or the subject matter of this trade secrets and non-compete case. Instead, they simply conclude Prysmian has unclean hands, and that its unclean hands “relates to the terms and conditions of Szymanski's employment, including his contractual agreements with [Prysmian].” [ECF No. 108 at 7.] For these reasons, we conclude the Second Discovery Requests do not seek relevant documents or information.
Finally, Szymanski and Sterlite's request to file a supplemental brief does not alter the court's decision. We agree that Atkinson's testimony does not constitute “new” evidence for Szymanski and Sterlite. Atkinson is a Sterlite employee, and his testimony is simply a recitation the circumstances of Szymanski's departure as told to him by Szymanski, who is now employed by Sterlite. [See generally ECF No. 119-2.] Moreover, Atkinson's testimony merely reiterates the whistleblowing allegations Szymanski and Sterlite have made in their briefs to the court. As discussed above, these allegations are not relevant.
Though the court concludes any purported whistleblowing complains or allegations made by Szymanski are not relevant to a claim or defense in this case, it understands Prysmian has, to an extent, described Szymanski as absconding from Prysmian “abruptly.” It also understands Szymanski's concern that Prysmian is not granted free reign to characterize him as something of a thief in the night. To that end, the court direct the parties to confer and stipulate to the reasons for Szymanski's departure from Prysmian. The parties should submit the stipulation before the close of discovery.
CONCLUSION
For the reasons above, the court DENIES Szymanski and Sterlite's motion to compel motion to compel discovery related to second discovery requests, ECF No. 103, and motion for leave to file a supplemental brief in support of the motion to compel, ECF No. 119.
IT IS SO ORDERED.