Bigfoot 4x4, Inc. v. The Individuals, Corp.s Liab. Cos.

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BIGFOOT 4x4, INC., Plaintiff, v. THE INDIVIDUALS, CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, and UNINCORPORATED ASSOCIATIONS IDENTIFIED ON SCHEDULE A HERETO, Defendants.

No. 1:22-cv-06758

United States District Court, N.D. Illinois, Eastern Division

November 18, 2024

MEMORANDUM OPINION AND ORDER

JEFFREY T. GILBERT, UNITED STATES MAGISTRATE JUDGE.

This matter is before the Court on Defendants Shenzhen Daeon Model Technology Co., Ltd., Shenzhen Aoxinfa Technology Co., Ltd. and Shenzhen Tianqinli Technology Co., Ltd. (collectively the “Daeon Defendants”) request that Plaintiff Bigfoot 4x4, Inc. (“Plaintiff”) produce an unredacted version of an agreement between Plaintiff and New Alchemy (the “Agreement”). The Court previously ordered Plaintiff to produce the Agreement and did not say it could be produced with redactions. [ECF No. 179]. After Plaintiff produced the redacted Agreement, the parties filed dueling Status Reports highlighting that dispute. [ECF Nos 196, 197]. The Court effectively treated the Daeon Defendants' Status Report [ECF No. 196] as a motion to compel and ordered the parties to brief the issue. [ECF No. 198]. For the reasons discussed below, the Daeon Defendants' request to compel production of the unredacted Agreement is granted.

Background

The Court incorporates by references its prior Order compelling Plaintiff to produce certain documents related to New Alchemy, a company that Plaintiff works with in its efforts to protect its trademarks. Memorandum Opinion and Order [ECF No. 179] (“MOO”). In that Order, the Court held “Plaintiff has failed to meet its burden to establish that the attorney client privilege or work product protection applies to all New Alchemy communications and documents” and ordered Plaintiff to produce “agreements between New Alchemy and Plaintiff, and communications between New Alchemy and Plaintiff such as weekly and monthly reports.” [Id.] Plaintiff produced its Agreement with New Alchemy but it redacted the financial terms. Status Report [ECF No. 196]. Nothing in the Court's order permitted Plaintiff to produce the document in redacted form.

The Daeon Defendants contend the financial terms of the Agreement are relevant to their abuse of process counterclaim because they “may shed light on whether there was some financial incentive for maximizing the volume of defendants at the cost of doing a proper pre-suit investigation.” Status Report [ECF No. 196] at 2-3. Plaintiff argues the Agreement “is a protected communication under the work product doctrine, is subject to attorney-client privilege and is considered a trade secret.” Plaintiff's Response to Defendants' Request to Produce Unredacted Agreement for Services [ECF No. 204] (“Response”) at 1. Plaintiff also contends the Agreement is “irrelevant to Defendants' claims of non-infringement and its baseless claim of abuse of process.” [ Id. ]

Analysis

1. Plaintiff Fails to Demonstrate the Financial Terms are Protected Work Product.

Plaintiff first argues the “payment terms”^[1]of its Agreement are protected work product. Response [ECF No. 204] at 4. Plaintiff says the Agreement was created for the purpose of litigation because New Alchemy is “the representative and investigator of Plaintiff s counsel” and “conducted searches for infringers of Plaintiff's trademarks and reported those findings to Plaintiff's counsel to enable Plaintiff to file suit.” [Id. ] at 5. Plaintiff also says it has filed 21 cases in this District using New Alchemy as its investigator. [Id. ] at 7.

Plaintiff fails to adequately support its assertion of work product protection for the financial terms of the Agreement. Plaintiff, and not Plaintiff's counsel, entered into the Agreement with New Alchemy. See Response [ECF No. 204] at 5 (describing the Agreement as “between [Plaintiff] and the representative and investigator of Plaintiff's counsel, New Alchemy”). Although Plaintiff says New Alchemy “conducted searches for infringers of Plaintiff's trademarks and reported those findings to Plaintiff's counsel to enable Plaintiff to file suit,” [ id. ] at 5, the Court previously found that Plaintiff's characterization of the relationship between New Alchemy and Plaintiff5 s counsel was not entirely consistent with the record before the Court on the prior motion to compel. MOO [ECF No. 179] at 14-15. Specifically, the extent to which Plaintiff's counsel relied on New Alchemy's investigations or how New Alchemy or Plaintiff s counsel made litigation decisions was unclear, including as to settlements with defendants that Plaintiff sued. [Id. ] The Court found “[b]ased on this record, the extent to which Plaintiff's counsel makes litigation decisions based on information provided by New Alchemy, as Plaintiff's conclusory argument goes, is far from clear.” [Id.] Plaintiff does not support its current description of New Alchemy as “the representative and investigator of Plaintiff5 s counsel” with any additional evidence that changes the Court's view. The Court is confident Plaintiff would have submitted such evidence if it exists, particularly in light of the Court's last order. [Id. ]

Moreover, even if the Court were to credit Plaintiff's claim that New Alchemy is Plaintiff's counsel's trademark investigator, Plaintiff does not present evidence or legal authority supporting its position that the redacted financial terms in the Agreement are protected work product. Under Rule 26(b)(3)(B), protected work product includes “mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative during the litigation.” Fed. R. Civ. Proc. 26(b)(3)(B). Plaintiff does not explain how these financial terms, which appear to address the payment or compensation due to New Alchemy for its services, constitute the “mental impressions, conclusions, opinions, or legal theories” of its attorneys. See Cnty. of Cook v. Wells Fargo & Co., 2021 WL 809730, at *1-2 (N.D. Ill. Mar. 3, 2021) (granting motion to compel agreements with consulting experts, noting the plaintiff “does not seek to discover ‘facts known or opinions held by' the two consulting experts . . .; rather, it seeks only to discover their consulting agreements with Wells Fargo.”) (internal citations omitted).

Accordingly, the Court finds the financial terms of the Agreement are not protected work product. It therefore was improper to redact for work product those terms from the Agreement Plaintiff produced to the Daeon Defendants.

2. Plaintiff Fails to Demonstrate the Financial Terms are Privileged Attorney Client Communications.

Plaintiff acknowledges that retainer agreements and fee arrangements are not typically considered attorney client privileged information. Response [ECF No. 204] at 7 (citing Stopka v. Am. Fam. Mut. Ins. Co., 816 F.Supp.2d 516, 532-33 (N.D. Ill. 2011); see also Stopka, 816 F.Supp.2d at 532-33 (describing “federal rules” regarding production of retention agreements as “[g]enerally, such agreements are not covered by the attorney-client privilege unless they disclose confidential communications between the parties who have executed the agreement.”). “Whatever line of analysis a court takes, . . . the focus must always remain on whether confidential legal advice is revealed in a document.” Smithkline Beecham Corp. v. Apotex Corp., 193 F.R.D. 530, 537 (N.D. Ill.), on reconsideration in part, 194 F.R.D. 624 (N.D. Ill. 2000). Although Plaintiff relies on Smithkline Beecham for the proposition that “if the retainer agreement contains legal advice or strategy, it can be held to include privileged information,” Plaintiff fails to explain why the financial terms of the Agreement constitute or contain legal advice or strategy. Response [ECF No. 204] at 7 (emphasis added).^[2]

Plaintiff also cites Lucas v. Gold Standard Baking, 2017 WL 3394726, at *3 (N.D. Ill. Aug. 8, 2017), but this case does not support its assertion of privilege over the financial terms of this Agreement. In Lucas, the court reviewed a retainer agreement in camera and concluded certain information as to the scope of representation and the agreement date were relevant and not privileged, but other information in the agreement was either privileged or not relevant. As relevant to the analysis here, the reason the court found parts of the agreement to be privileged in that case was “because it includes prosecution strategy not related to this case.” Id. Plaintiff, however, does not explain why the financial terms of this Agreement are analogous to the prosecution strategy information the court in Lucas found to be privileged.^[3]

For all these reasons, the Court finds Plaintiff has not shown the financial terms of the Agreement are an attorney client privileged communication.

3. Plaintiff Fails to Demonstrate the Financial Terms are Trade Secrets.

Plaintiff5 s argument that the financial terms constitute a trade secret also fails to carry the day. As an initial matter, trade secrets and other confidential information are not per se barred from disclosure in discovery. Rather, Rule 26(c)(1)(G) provides that a court may “for good cause” bar disclosure of a trade secret or other confidential information “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c)(1)(G). Plaintiff asserts the disclosure of this information would “put Plaintiff's counsel and [New Alchemy] at an economic disadvantage” and would “injure current and future business relationships with other clients,” but Plaintiff does not present any evidence in support of this claim. Even if true, Plaintiff's arguments might justify production of the Agreement subject to the confidentiality order previously entered in this case but not the wholesale...