Archive: July 2, 2008

1
Third Party Not Required to Produce Hard Drives to Plaintiff Competitor; Court Limits Subpoena and Allows Third Party to Conduct its Own Search
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Court Grants Plaintiff’s Motion for Discovery Sanctions, Enters $5,247,781 Default Judgment and Awards $645,760 in Attorneys’ Fees and Costs

Third Party Not Required to Produce Hard Drives to Plaintiff Competitor; Court Limits Subpoena and Allows Third Party to Conduct its Own Search

Daimler Truck N. Am. LLC v. Younessi, 2008 WL 2519845 (W.D. Wash. June 20, 2008)

In this case, Daimler sued its former employee in Oregon district court for breach of his duty of loyalty, his confidentiality contract, and his common law duty not to convert confidential and proprietary information, based upon the employee’s departure and subsequent employment by a competitor, Cascadia.  As part of that suit, Daimler served Cascadia with the third-party discovery requests at issue.  The parties resolved most of their disagreements, but were unable to resolve Daimler’s request to search Cascadia’s computers for communications between Younessi and Jim Hebe (a former CEO of Daimler who was subsequently employed by Cascadia) and between Hebe and other Daimler employees.  Cascadia moved to quash the subpoena and for a protective order because Daimler’s subpoena was both unduly burdensome and would require disclosing confidential trade secrets to a competitor.

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Court Grants Plaintiff’s Motion for Discovery Sanctions, Enters $5,247,781 Default Judgment and Awards $645,760 in Attorneys’ Fees and Costs

S. New England Tel. Co. v. Global NAPs, Inc., 251 F.R.D. 82 (D. Conn. 2008) (Second Amended Ruling)

In this case, plaintiff (“SNET”) alleged that Global NAPS, Inc. had misrouted long-distance traffic of certain circuits not designated for such traffic, thereby depriving SNET of applicable access charges, and that Global failed to pay SNET access charges specified in SNET’s federal tariff for special access circuits Global ordered from SNET’s tariff.  In May 2006, the court granted SNET’s Motion for a Prejudgment Remedy in the amount of $5.25 million.  At the same time, the court ordered Global to disclose assets sufficient to secure the prejudgment remedy within two weeks.  Global’s failure to comply with the court’s order evolved into a two-year discovery battle over Global’s financial records.

In December 2006, SNET filed an Amended Complaint, which added additional defendants affiliated with Global.  SNET’s Amended Complaint alleged that the defendants’ corporate structure was a "sham,” and sought to hold the defendants collectively liable for the underlying allegations set forth in SNET’s original Complaint against Global.

In this opinion, the court found that the defendants willfully violated the court’s discovery orders by failing to turn over their general ledgers and other business records, lied to the court about the inability to obtain documents from third parties, and destroyed and withheld documents that were within the scope of the discovery requests and the court’s discovery orders.  Among other things, defendants:

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