Cen Com, Inc. v. Numerex Corp., No. C17-0560 RSM (W.D. Wash. Apr. 11, 2018).
In this breach of contract and trade secret case, the plaintiff’s arguments ignored the current Federal Rules of Civil Procedure (FRPC), leading the court to reject its claims that specific search terms weren’t relevant and that third-party subpoenas were improper. It also denied the plaintiff’s motion for sanctions based on the defendants’ withholding of discovery during a motion for protective order.
The plaintiff, Cen Com, and the defendants (collectively “Numerex”) are all alarm-monitoring companies. The companies had worked together for several years before entering into an agreement with a new vendor. Cen Com claims that Numerex violated that agreement and tried to steal its trade secrets.
In the instant motion, Numerex moved to compel Cen Com to run specific electronic search terms. Those terms related to a 2012 consent decree Cen Com entered with the Washington State Attorney General’s Office to resolve a Consumer Protection Act claim. Cen Com refused to run the searches, arguing that the terms — “attorney w/2 general” and “consent w/2 decree” — were irrelevant. In doing so, Cen Com relied on the old standard under Federal Rule of Civil Procedure 26, arguing that the terms were “not reasonably calculated to lead to the discovery of admissible evidence.”
The court rejected this argument, finding that the search terms were relevant to Numerex’s counterclaim. The court further noted that Cen Com failed to assert that the terms were privileged or burdensome. Nor did Cen Com establish that the requested discovery would be disproportionate to the needs of the case as the current Rule 26 standard requires. Therefore, the court compelled Cen Com to run the requested search terms.
Additionally, Numerex moved to compel responses to subpoenas it issued to several of Cen Com’s employees, including the owner. Cen Com objected on the grounds that the subpoenas were “an improper attempt to obtain discovery from a party employee” and were “overbroad [and] unduly burdensome.” Additionally, it claimed that the costs of compliance outweighed any potential benefit, as any responsive documents would already be contained in Cen Com’s electronic systems.
The court was not persuaded. It noted that Numerex issued the subpoenas to the three individuals “in their personal capacities, as non-parties.” The court ruled that the subpoenas complied with Rule 45 and that they sought responsive documents from the individuals’ personal computers and phones that Numerex would not otherwise obtain. Nor did any of the individuals explain why those documents wouldn’t be relevant or why such a search would be unduly burdensome. The court compelled the three individuals to fully respond to Numerex’s subpoenas.
Finding “no reason not to grant” Numerex’s request for attorneys’ fees under Rule 37(a)(5)(A), the court also awarded those fees related to the motion to compel.
Finally, the court considered and denied Cen Com’s request for sanctions. Cen Com noted that Numerex withheld certain documents during the pendency of its earlier motion for a protective order. After the court denied the motion, Numerex produced the discovery. Cen Com argued that it was entitled to sanctions for the period of Numerex’s noncompliance with the stipulated discovery order.
This argument ignored Rule 37(d)(2), under which failures to comply are “not excused … unless the party failing to act has a pending motion for a protective order.” Accordingly, the court denied Cen Com’s motion for sanctions.
Takeaways on Stubborn Ediscovery Tactics
The court pummeled Cen Com for its misguided reliance on old standards and its incomplete understanding of current ediscovery rules. Before objecting to another party’s ediscovery requests, be sure your arguments have a solid foundation. Otherwise, you may find yourself paying for an unexpected ediscovery lesson from opposing counsel.