Midwest Motor Supply Co. v. Nietsch
Midwest Motor Supply Co. v. Nietsch
2024 WL 4988338 (S.D. Ohio 2024)
July 2, 2024
Watson, Michael H., United States District Judge
Summary
The Objectors objected to a discovery order that compelled them to respond to the plaintiff's outstanding discovery requests regarding Electronically Stored Information. The court found no error in the magistrate judge's order and overruled the Objectors' objection.
MIDWEST MOTOR SUPPLY CO., doing business as Kimball Midwest, Plaintiff,
v.
Rich NIETSCH, et al., Defendants
v.
Rich NIETSCH, et al., Defendants
Case No. 2:22-cv-4049
United States District Court, S.D. Ohio, Eastern Division, EASTERN DIVISION
Signed July 02, 2024
Counsel
Manuel Jose Asensio III, Mark C. Zronek, Mathew G. Drocton, Samuel E. Endicott, Baker & Hostetler LLP, Columbus, OH, for Plaintiff.Jacob S. Kinder, Vincent J. Tersigni, Jackson Lewis P.C., Cleveland, OH, Robert D. Shank, Jackson Lewis P.C., Cincinnati, OH, Douglas B. Schnee, Frantz Ward LLP, Cleveland, OH, for Defendants Rich Nietsch, Joe Carroll, Chad Davis, Daniel Hayes, Rick Kirkpatrick, Cliff Sachs, Bill Hoeftmann, Pamela Schrader, Sean Patrick.
Watson, Michael H., United States District Judge
OPINION AND ORDER
*1 Defendants and MRO Systems (“Objectors”) object to Magistrate Judge Vascura's discovery order that compelled them to respond to Plaintiff's outstanding discovery requests “for the period of each defendant's hire (or, in the case of Sean Patrick, his departure from Plaintiff) through the date the discovery requests and subpoena were served.” Order, ECF No. 65. Objectors argue the Order is contrary to law and clearly erroneous. See generally, Obj., ECF No. 67.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 72(a) governs the review of a magistrate judge's order which is not dispositive of a claim or defense. Rule 72(a) provides a district judge must consider timely objections to the magistrate judge's order and must “modify or set aside any portions of the magistrate judge's order found to be clearly erroneous or contrary to law.” Id. “The ‘clearly erroneous’ standard applies to the magistrate judge's factual findings and the ‘contrary to law’ standard applies to the legal conclusions.” Gibbs v. Hamilton Cty. Sheriff Dep't, et al., No. 1:21-CV-75, 2022 WL 42366, at *2 (S.D. Ohio Jan. 5, 2022) (citation omitted). “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.” Anderson v. Bessemer City, 470 U.S. 564, 573 (1985) (internal quotation marks and citations omitted); Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 541 (6th Cir. 2007) (citation omitted). Legal conclusions are contrary to law “if the magistrate has misinterpreted or misapplied applicable law.” Hood v. Midwest Sav. Bank, No. C2-97-218, 2001 WL 327723, at *2 (S.D. Ohio Mar. 22, 2001) (internal quotation marks and citations omitted).
II. ANALYSIS
Objectors contend that the magistrate judge construed Plaintiff's statutory and common-law trade secrets arguments in a manner that rendered meaningless the parties’ contractual two-year non-solicitation period. Obj. 1, ECF No. 67. As such, they contend the Order is contrary to law. Id. at 2. Additionally, Objectors state that the magistrate judge failed to consider certain factual circumstances, rendering the Order clearly erroneous. Id.
The objection proceeds thusly. Objectors begin by asserting the factual proposition that Plaintiff's breach of contract claims are indistinguishable from its misappropriation of trade secrets claims in that both are aimed at the same “bad actions” of Defendants and both seek the same damages. Id. at 5. From this factual contention, Objectors proceed to argue that, therefore, any discovery beyond the two-year contractual non-solicitation provision permits Plaintiff to improperly extend that provision by simply labelling untimely non-solicitation claims “misappropriation of trade secrets” claims. Id. at 6. Because it is neither relevant nor proportional to the breach-of-contract claims to permit discovery on similar but untimely claims, Objectors conclude, the Order is contrary to the law that requires discovery to be both relevant and proportional to the needs of the case. Id.
*2 The objection is not well taken. First, Objectors fail to show that the Order was clearly erroneous in any respect. Objectors may believe there is no difference between Defendants’ actions underlying the breach of contract and misappropriation of trade secrets claim, but the Court is not left with a definite and firm conviction that a mistake has been committed in concluding otherwise. Indeed, the Third Amended Complaint lists some trade secrets such as “price books, pricing strategies, sales catalogs,” marketing strategies, and prior customer purchases that Defendants allegedly improperly disclosed. E.g., Third Am. Compl. ¶¶ 16, 25, 27, 37, 49, 51, 61, 63, 73, 75, 85, 87, 97, 109, 111, 121. Although a person might misappropriate those trade secrets in the course of improperly soliciting clients, Objectors have failed to show that misappropriation of such trade secrets always involves improper solicitation of customers (or vice versa). Accordingly, the Court finds no error, let alone clear error, in concluding that the misappropriation of trade secrets claims against each Defendant reaches conduct distinct from the improper solicitation. Hodak v. Madison Capital Mgmt., LLC, No. 5:07-5-JMH, 2008 WL 2945920, at *2 (E.D. Ky. July 28, 2008) (“If there are two plausible views of the matter, then a decision cannot be ‘clearly erroneous.’ ”).
Without this factual foundation, the remainder of Objectors’ argument crumbles. Objectors fail to demonstrate it is either irrelevant or disproportionate to the needs of the case to permit Plaintiff to discover information concerning misappropriation of trade secrets during the period applicable to those claims.
As to relevance, it may be that Defendants continued to solicit Plaintiff's customers after the expiration of the contractual non-solicitation period. If so, Plaintiff may not be able to recover for the mere solicitation. But if Defendants misappropriated Plaintiff's trade secrets while soliciting, Plaintiff may recover for that misappropriation. Indeed, Objectors’ position would permit a former employee to misuse its former employer's trade secrets with impunity for all time after the expiration of a non-solicitation provision.
As to proportionality, beyond asserting that “Plaintiff's requests would require production of a significant portion of MRO's total corporate records,” Obj. 8, ECF No. 67, Objectors offer no quantification of how time-consuming or expensive it would be to produce the requested discovery. Thus, they have failed to demonstrate the discovery sought is disproportional to the needs of the case. Cf. Novus Grp., LLC v. Prudential Fin. Inc., No. 2:19-cv-208, 2022 WL 593559, at *5 (S.D. Ohio Feb. 28, 2022) (“If the movant makes this showing [of relevance], then the burden shifts to the non-movant to show that to produce the information would be unduly burdensome.”) (cleaned up); Safelite Grp., Inc. v. Lockridge, No. 2:21-cv-4558 2023 WL 752860, at *6 (S.D. Ohio Nov. 14, 2023) (“Mere statements that the discovery requests are burdensome ... are not adequate to meet this burden.” (citation omitted)).
Finally, in concluding the Order is neither clearly erroneous nor contrary to law, the Court notes that Objectors failed to cite to any on-point case law, instead vaguely relying on the discovery standard. This, in and of itself, is telling.
III. CONCLUSION
For the above reasons, Objectors’ objection is OVERRULED. The Clerk shall terminate ECF No. 67.
IT IS SO ORDERED.