Coda Dev. s.r.o., v. Goodyear Tire & Rubber Co.

CODA DEVELOPMENT, S.R.O., et al., PLAINTIFFS, v. GOODYEAR TIRE & RUBBER CO., et al., DEFENDANTS.

CASE NO. 5:15-cv-1572

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

February 4, 2021

JUDGE SARA LIOI

MEMORANDUM OPINION AND ORDER

Before the Court are Doc. Nos. 169 and 196—defendants' objections to and request for reconsideration of the Magistrate Judge's Orders resolving certain discovery disputes. (See Doc. Nos. 139, 160, 178 and 190.) Plaintiffs filed responses (Doc. Nos. 185 and 199) and defendants filed replies (Doc. Nos. 194 and 204).¹ Pursuant to 28 U.S.C. § 636(b)(1)(A) and Fed. R. Civ. P. 72(a), the Court has conducted its review and, for the reasons discussed herein, defendants' objections are overruled in part and sustained in part.

I. Standard of Review

When [as here] a magistrate judge determines a non-excepted, pending pretrial matter, the district court has the authority to "reconsider" the determination, but under a limited standard of review. 28 U.S.C. § 636(b)(1)(A). Under this standard, the magistrate judge's determination may be overturned by the district court only if it is "clearly erroneous or contrary to law." Id. Rule 72(a) of the Federal Rules of Civil Procedure implements Section 636(b)(1)(A).

Massey v. City of Ferndale, 7 F.3d 506, 509 (6th Cir. 1993).

"The 'clearly erroneous' standard of review is a limited one." Burghardt v. Ryan, No. 5:19-cv-325, 2020 WL 4350049, at *2 (N.D. Ohio July 29, 2020). "A court may not overturn a ruling just because, if it were the original fact-finder, it would have decided the evidence differently. If there are two plausible views of a matter, then a decision cannot be 'clearly erroneous.'" Id. (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573-74, 105 S. Ct. 1504, 84 L. Ed. 2d 518 (1985)). "In reviewing a magistrate judge's decision to determine whether it is 'contrary to law,' a district court is to apply the same standard the Sixth Circuit employs to review a district court's ruling on an evidentiary question, which is an 'abuse of discretion' standard." Champion Foodservice, LLC v. Vista Food Exch., Inc., No. 1:13-cv-1195, 2015 WL 7251307, at *1 (N.D. Ohio Nov. 16, 2015).

"Under this deferential standard, '[t]he party seeking to reverse a Magistrate Judge's ruling concerning discovery bears a heavy burden, in part, because the Magistrate Judge is afforded broad discretion in these matters.'" Burghardt, 2020 WL 4350049, at *2 (quoting Am. Rock Salt Co., LLC v. Norfolk S. Corp., 371 F. Supp. 2d 358, 360 (W.D.N.Y. 2005)).

II. Discussion

A. Background

In this lawsuit, plaintiffs Coda Development s.r.o., Coda Innovations s.r.o., and Frantisek Hrabal (collectively, "plaintiffs" or "Coda") claim that, during two conversations in 2009, Coda orally disclosed certain trade secrets to defendants The Goodyear Tire & Rubber Company, Robert Benedict, and Robert Losey (collectively, "defendants" or "Goodyear"), which Goodyear, in turn, subsequently disclosed in certain of Goodyear's patents, claiming Coda's trade secrets as Goodyear's own original ideas.

During the course of discovery, Coda has withheld as privileged or work-product-protected over 13,000 documents originating from the time before this lawsuit was filed in 2015, while producing around 38,000 documents. Goodyear asserts (and Coda does not deny) that, prior to this lawsuit, Coda was attempting to attract investors by, among other things, informing them of its plan to bring a patent infringement case against Goodyear. As part of this effort, Coda explained to potential investors its belief that its published patents and patent applications describe and claim features in Goodyear's AMT tire designs, and Coda disclosed its attorneys' advice on these subjects, never characterizing these features as trade secrets.

Goodyear claims it is entitled to discover the withheld documents because they "show that Coda previously admitted that its own patent filings and other publications disclose what it now claims were trade secrets." (Doc. No. 169 at 6470.)²

B. Goodyear's First and Second Notices of Discovery Dispute

Goodyear filed its First Notice of Discovery Dispute (Doc. No. 103 ["First Notice"]) on July 13, 2020, seeking production of (1) the legal opinion of Coda's patent lawyer, Harry Brown (the "Brown Opinion"³), and (2) thirty communications—withheld on privilege and work product grounds—between Coda and Alliacense, a well-known patent licensing firm described by Coda as a "potential investor." Coda withdrew its privilege claim over twenty-nine of the communications and the Alliacense Claim Chart I, and produced them on the condition that such production was "not construed as a broader waiver of privilege over any other documents." (Doc. No. 127 at 4473;see also Doc. No. 109, Minute Order, at 2926-27.) Coda maintained its privilege claim over the Brown Opinion.

On September 15, 2020, the Magistrate Judge resolved the portion of the First Notice relating to the Brown Opinion, ordering that it be produced, after concluding that Coda could not claim privilege over the opinion because Coda had shared the opinion with potential investor Dan Jackson. (Doc. No. 139 at 4674.) On September 28, 2020, the Magistrate Judge cursorily denied "[t]he remainder of Goodyear's [First] Notice of Discovery Dispute[.]" (Doc. No. 160 at 5520.)

On July 29, 2020, while its First Notice was still under advisement, Goodyear filed its Second Notice of Discovery Dispute (Doc. No. 110 ["Second Notice"]) challenging (1) Coda's attempts to claw back Coda-produced documents that Goodyear used as exhibits in the depositions of Coda's witnesses, and (2) Coda's "serious and systemic abuse of privilege and work-product protections." (Id. at 2928.) At the Magistrate Judge's direction, the Second Notice was subsequently supplemented. (Doc. No. 144.)

In Section II of the Second Notice, Goodyear challenged Coda's claw back of Daniel Jackson's November 2015 notes in two Excel spreadsheets (the "Jackson Excel Notes"), a January 2015 email from Jackson to Jan Martinek (the "Jackson Email"), a claim chart authored by plaintiff Frantisek Hrabal in September 2013 (the "FH Claim Chart"), the June 2016 MacMaster Presentation (the "MacMaster Presentation"), an August 2018 presentation given to Josef Broz (the "Broz Presentation"), a December 2014 email chain and attachment (the "Luptak Email"), portions of a December 2014 email chain between Hrabal and third-party Innovation Partners ("Equity Terms Email"), and portions of an October 2017 email chain between Hrabal and Coda's investors ("Valuation Email"). During a conference with the Magistrate Judge on September 3, 2020, Goodyear identified "a new discovery dispute regarding late produced pages from Mr.Jackson's personal notebooks." (Doc. No. 178 at 6583.) In Goodyear's subsequent supplement to the Second Notice, Goodyear sought production of those notebooks (the "Jackson Notebooks") (or, at least, an in camera inspection) and permission to re-depose Hrabal and Jackson. (Doc. No. 144 at 4735-36.)⁴

In Section III of the Second Notice, Goodyear argued that Coda had overbroadly and arbitrarily claimed attorney-client privilege and work-product protections. (Doc. No. 110 at 2936-37.) Goodyear claimed that Coda's recklessness in this regard operated as a waiver of these protections. (Id. at 2937.)

On October 21, 2020 and October 30, 2020, the Magistrate Judge issued two orders that resolved the remainder of Goodyear's Second Notice. In Doc. No. 178, the Magistrate Judge denied Goodyear's request for production of the Jackson Excel Notes, the FH Claim Chart, and the Jackson notebooks, but granted the request with respect to the Jackson Email; the magistrate Judge also denied the request to re-depose Hrabal and Jackson. In Doc. No. 190, the Magistrate Judge ruled that Coda did not waive privilege as to the FH Claim Chart by inadvertently disclosing it to Dr. Shirley Webster.

C. Goodyear's Objections Generally

With respect to its First Notice of Discovery Dispute, Goodyear claims that the Order of September 15, 2020 (Doc. No. 139) addressed only the Brown Opinion and failed to address other matters raised in the various briefs,⁵ in particular, Coda's refusal to produce other Alliacense-related documents and the scope of Coda's subject matter waiver as to the Brown Opinion and Alliacense-related documents. (Doc. No. 169 at 6471-72.)

Because Goodyear had raised in its First Notice reply brief a new dispute over the Alliacense Claim Chart II (see Doc. No. 131), the Magistrate Judge ordered separate briefing on that. On September 28, 2020, in the Minute Order now challenged by Goodyear, the Magistrate Judge succinctly, and without any analysis or citation to authority, ruled that "[t]he remainder of Goodyear's Notice of Discovery Dispute at [Doc.] No. 103 and 131 is DENIED." (See Doc. No. 160.)

With respect to this First Notice, Goodyear now objects to the Magistrate Judge's denial of its motion to compel production of (1) the Alliacense Claim Chart II, (2) other communications and documents shared with Alliacense, and (3) documents having the same subject matter as the intentionally-waived Brown Opinion or Alliacense documents. (Doc. No. 169 at 6473.)

In opposition, Coda first argues that Goodyear's challenge, except as to the Alliacense Claim Chart II, is untimely because the Magistrate Judge's decision as to the other matters was issued on September 15, 2020. The Court rejects Coda's argument. Goodyear was entitled to wait until there was a final and complete resolution of its First Notice, which did not occur until September 28, 2020.

With respect to its Second Notice of Discovery Dispute, Goodyear objects to the Magistrate Judge's denial of its motion to compel production or to have some form of in camera review of (1) the 5,500 documents on Coda's privilege logs for which no attorney is associated, (2) several hundred communications and documents described as being...