loparex response to emergency motion

- 1 -

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

IN RE SUBPOENA TO BRIGGS AND MORGAN, P.A. Loparex LLC,

Plaintiff,

v.

MPI Release, LLC, Gerald Kerber, and Stephan Odders,

Defendants.

Court File No. 10-MC-2 (MJD/SRN)

LOPAREX’S MEMORANDUM IN OPPOSITION TO MPI’S

EMERGENCY MOTION TO ENFORCE SUBPOENA

INTRODUCTION

More circus. That’s what MPI’s “Emergency” Motion to Enforce Subpoena is.

There is no emergency. And MPI’s only reason for serving the subpoena is because it

failed to comply with the Southern District of Indiana Court’s scheduling order in the

Indiana case and properly obtain its discovery in that litigation.

Loparex, LLC (“Loparex”) and MPI Release Technologies, LLC, Gerald Kerber,

and Stephan Odders (collectively, “MPI”) are currently parties to litigation in the

Southern District of Indiana, Loparex, LLC vs. MPI Release, LLC, et al., Case No. 1:09-

cv-1411 (“the Indiana case”). MPI served a third-party subpoena on the Minneapolis law

firm Briggs & Morgan, requesting a disc of over 11,000 pages of electronic documents

produced by Loparex in Hanson v. Loparex Inc. et al., Case No. 09-cv-1070 (D. Minn.)

(“the Minnesota case”), a case before this Court to which MPI is not a party. Of the

11,000 pages of documents produced by Loparex in the Hanson case, Loparex has

Case 0:10-mc-00002-MJD-SRN Document 12 Filed 01/15/10 of 22

- 2 -

already produced over 8,000 of those pages to MPI in the Indiana case. The remaining

documents on the disc have not been produced by Loparex because they are not relevant

to the Indiana case and contain highly confidential information, such as trade secrets,

customer lists, financial information and sales reports.

MPI argues for emergency relief before this Court as if it has no other remedy.

What MPI fails to disclose is that the Indiana court issued a scheduling order governing

all discovery matters pertaining to the preliminary injunction hearing. The Indiana

court’s orders prohibited broad discovery and required all motions to compel to be

brought on or before December 16, 2009. Indeed, MPI requested additional time to file

motions to compel, and the court set December 30, 2009 as the final deadline for disputes

relating to injunction discovery.

MPI brought no motion to compel. Having failed to respect the Indiana court’s

scheduling order for injunction discovery, MPI now attempts to do an end-run around its

own court and places the burden on this Court to hear this improper “emergency” motion.

Loparex respectfully requests this Court deny the emergency motion to enforce

subpoena brought by the MPI defendants for the following reasons: (1) the subpoena and

emergency motion filed in this Court are an improper attempt by MPI to circumvent and

abuse the proper discovery process in the Indiana case; (2) the Protective Order in the

Minnesota case prohibits enforcement of this subpoena; (3) the subpoena must be

quashed under Federal Rule of Civil Procedure 45; and (4) the subpoena requests

information that is not relevant.


- 3 -

FACTUAL BACKGROUND There are two separate cases implicated by this emergency motion to enforce. The

first is Hanson v. Loparex Inc., Case No. 09-cv-1070-MJD-SRN (D. Minn.) (the

“Minnesota case”). In that case, Loparex is the defendant and counterclaimaint. (Defs.’

Ex. 1). Jon Hanson, the plaintiff, is represented by Briggs & Morgan. (Streater Decl. ¶¶

2-3). Hanson is a former employee of Loparex who was given an offer of employment

with Mondi Akrosil, LLC (“Mondi”), a competitor of Loparex, after his employment

with Loparex terminated. (Defs.’ Ex. 5 ¶ 25). The crux of the Minnesota litigation is a

non-compete agreement between Loparex and Hanson. (Defs.’ Ex. 1, pg. 8 ¶ 15).

Although at one point Mondi was a third-party defendant in this suit, Mondi is no longer

a part of the Minnesota litigation.1 (Zamzow Decl. Ex. C). In the Hanson case, this

Court issued a Protective Order under which 11,536 pages of documents were produced

on a disc by Loparex to Hanson. (Zamzow Decl. ¶ 2, 3). All of these documents were

labeled “Confidential” or “Confidential—Attorneys Eyes Only.” (Id.)

A separate action exists in the Southern District of Indiana, Loparex LLC v. MPI

Release, LLC, Case No. 09-cv-1411-SEB-JMS (S.D. Ind.) (the “Indiana case”). In the

Indiana case, Loparex is the plaintiff and MPI Release, Steve Odders and Gerald Kerber

are the defendants. (Defs.’ Ex. 2). Odders and Kerber are former employees of Loparex

who now work for Loparex’s competitor, MPI Release. (Defs.’ Ex. 4, pg. 2 ¶¶ 3–5).

1 MPI incorrectly identifies Mondi as a party to the Minnesota case, and refers to Loparex as a “third party plaintiff.” (Defs.’ Br. at 2). Those statements are incorrect as Mondi has been dismissed from the suit. (See Zamzow Decl. Ex. C).


- 4 -

Loparex’s claims in the Indiana case are based on the defendants’ misappropriation of

trade secrets. (See Defs.’ Ex. 4, pgs. 9–13).

MPI attempts to lump these separate cases together by describing them

collectively: “Loparex alleges that all three individuals are misappropriating confidential

information and/or trade secrets for the benefits of their new employers.” (Defs.’ Br. at

3). This is a mischaracterization. The Minnesota case is against a former employee over

a violation of his non-compete agreement. The plaintiff, Hanson, is not currently

employed by a Loparex competitor. (See Defs.’ Ex. 5). In contrast, the Indiana case is

against two former employees and their new employer, MPI—who is one of Loparex’s

direct competitors—over misappropriation of trade secrets. (See Defs.’ Ex. 4). Although

MPI characterizes these two cases as involving the same issues and claims, they are two

distinct cases in which Loparex has different interests.

In the Indiana case, Loparex is seeking a preliminary injunction. (Defs.’ Ex. 11).

A hearing is scheduled for January 25, 2010. (Id.) The Indiana Court issued an order

requiring Loparex and MPI “to cooperate in arranging… expedited discovery regarding

plaintiff’s motion for preliminary injunction.” (Zamzow Decl. Ex. D) (emphasis added).

In their joint discovery report to the court, the parties agreed “to file any motions to

compel… on or before December 16, 2009.” (Zamzow Decl. Ex. E, pg. 3). Written

discovery was over by Dec. 15, 2009. (Pautsch Decl. ¶ 8). At the deposition of Mr. James

Miksta on January 6, 2010, Defendants’ attorney “opined that the deadline for even

‘supplementing’ discovery had passed.” (Pautsch Decl. ¶ 9).


- 5 -

Throughout injunction discovery, the parties agreed to keep discovery focused,

and were indeed directed by Judge Hamilton of the Southern District of Indiana to do so.

(Pautsch Decl. ¶ 2; Zamzow Decl. Ex. F). Despite the narrow focus, Loparex still

produced to MPI over 8,000 pages of documents. (Zamzow Decl. ¶ 4). These

documents came directly from the 11,000 page production that was contained on the disc

Loparex produced in the Minnesota case. (Id.). Loparex produced an additional 400–500

pages of documents relating to Kerber, Odders, and MPI that were not contained on the

disc produced in the Minnesota case. (Id.).

On January 6, 2009, after the time for discovery and motions in the Indiana case

closed, MPI served a subpoena on Briggs & Morgan—counsel for Hanson—demanding

all 11,000 pages produced by Loparex in the Minnesota case. (Streater Decl. Ex. B).

Briggs & Morgan made a written objection to the subpoena, and Loparex filed a motion

to quash under Federal Rule of Civil Procedure 45(c). (Streater Decl. Ex. F; Zamzow

Decl. Ex. B). Now, with the January 25, 2010, hearing for the preliminary injunction

imminent, but injunction discovery closed in Indiana, MPI filed this “emergency” motion

here.


- 6 -

ARGUMENT

I. MPI’S MOTION TO ENFORCE SUBPOENA IS NOTHING MORE THAN AN ATTEMPT TO END-RUN AROUND THE COURT-ORDERED INJUNCTION DISCOVERY IN THE INDIANA CASE.

A. MPI Should Have Availed Itself of the Court-Ordered Procedures in

the Southern District of Indiana, But Failed to Do So.

This Court should deny MPI’s motion to enforce because the subpoena and motion

are an attempt to circumvent the proper—and court-ordered—discovery process in the

Indiana case. All of the documents MPI seeks from Briggs & Morgan are documents

Loparex also possesses. MPI has already requested those documents from Loparex in the

Indiana case. In response, Loparex produced to MPI 8,000 pages of the 11,000 pages

produced to Hanson in the Minnesota case. Loparex handed over all documents on that

disc referring to MPI, Odders, and Kerber, plus more. The additional 3,000 pages

produced to Hanson have not been turned over to MPI because they contain highly

sensitive, confidential or privileged information that is not relevant to the Indiana case.

To the extent MPI believed Loparex had not produced all relevant, non-privileged

documents, they were required to bring a motion to compel in Indiana. In any event, the

reality is, there are no missing documents. MPI is seeing boogeymen.

Not only is MPI attempting to circumvent the deadlines imposed by the Indiana

court, but they are also seeking to exceed the restrictions the court has placed on the

scope of discovery. The Indiana court ordered multiple times during the discovery

process that discovery between Loparex and MPI be “focused.” In complete

contradiction of that order, MPI served a subpoena on Briggs & Morgan—in a different


- 7 -

court—seeking “all documents produced on any electronic storage medium… by

Loparex… in the case entitled Hanson v. Loparex Inc. et al.” In other words, MPI wants

11,000 pages of documents produced in a completely separate case, 8,000 pages of which

have already been produced. This is not a “focused” discovery request.

Several federal district courts have addressed this very issue. In Audiotext

Communications Network, Inc., v. US Telecom, Inc., 1994 WL 96666 (S.D.N.Y.), the

facts were strikingly similar to this case. The plaintiff served a subpoena on a non-party

law firm to obtain documents produced by the defendant in another litigation.

AudioText, 1994 WL 96666 at *1. The Audiotext litigation was pending in the Southern

District of Florida, and the documents the plaintiff sought were produced in litigation in

the District of Kansas. Id. The defendant moved to quash the third party subpoena,

because some of the documents sought were covered by a Protective Order in the Kansas

litigation. Id. The court quashed the subpoena because the “plaintiff could have sought

such documents by notice to defendant in the district where this litigation is pending and

which is familiar with the underlying issues.” Id. The court further stated that the goal of

“just, speedy and inexpensive” discovery disputes can “more easily be achieved if issues

are presented when possible in the first instance to a court familiar with them, rather than

to a court that has no knowledge of the underlying litigation and must undergo time-

consuming acculturation simply to decide a discovery dispute in a case with which that

court will have nothing further to do.” Id.

In another case, Schaaf v. Smithkline Beecham Corp., the plaintiff sued her

employer in a federal district court in the Northern District of Georgia, alleging


- 8 -

discrimination. 233 F.R.D. 451, 452 (E.D.N.C. 2005). The Plaintiff issued two

subpoenas in the federal district court of the Eastern District of North Carolina, seeking

“to compel production of documents from two third parties who are not litigants in the

underlying suit.” Id. Plaintiff’s subpoena cast a wide net, asking the non-parties (who

were employees of the defendant) for every document in their possession relating to their

employer within the last ten years—many documents of which had no connection

whatsoever to her case. Id. at 455. The court quashed the subpoena not only because it

was facially overboard, but because “plaintiff should seek relevant, responsive…

documents from [the defendant] via the discovery process in the Northern District of

Georgia, and not by issuing third-party subpoenas for [the defendant’s] documents to

the [defendant’s] employees who happen to live and work in [this district].” Id.

(emphasis added). The court expressed concern over this tactic being employed in other

cases as well, noting that “if the district court where the litigation is pending issued a

scheduling order with specific limits on discovery (e.g., a limitation on the number of

requests for production of documents), such a practice invites a party to seek to evade the

requirements of such a scheduling order.” Id. at 455–56.

This Court should not enable MPI’s abuse of the discovery orders issued by the

Indiana Court by allowing enforcement of the third party subpoena. Rather, this court

should deny MPI’s motion to enforce and require MPI to seek relief before the Indiana

court, the district in which that litigation is being pursued. MPI’s failure to have done so

speaks volumes.


- 9 -

II. THE COURT SHOULD ENFORCE THE PROTECTIVE ORDER IN HANSON V. LOPAREX, LLC, WHICH PROHIBITS BRIGGS & MORGAN FROM COMPLYING WITH THE SUBPOENA.

A. The Protective Order in the Minnesota Case Prohibits Briggs &

Morgan from Providing the Documents to MPI. Briggs & Morgan cannot comply with MPI’s third-party subpoena without

violating this Court’s Protective Order in the Hanson v. Loparex litigation. (Doc. No. 69,

filed September 4, 2009.) The documents requested by MPI’s subpoena are all subject to

this Protective Order because they are all designated either CONFIDENTIAL or

CONFIDENTIAL – ATTORNEYS’ EYES ONLY. As such, they cannot be produced by

Briggs & Morgan without violating this Court’s Order.

The Protective Order issued by this Court in the Minnesota case provides in

relevant part:

3. Access to materials designated “CONFIDENTIAL – ATTORNEYS’ EYES ONLY” and to any portion of any transcript, brief, affidavit, memorandum or other paper that contains, reveals or refers to materials so designated is limited to outside trial counsel of record in this action, the employees of said counsel of record actually assisting such counsel in preparation of this case, and experts retained to assist counsel in this case and who are not employed by or in any manner affiliated with either party. … Access to material designated “CONFIDENTIAL” may be disclosed on the basis of need-to-know for the purpose of this litigation only to the parties, to officers, directors, employees and counsel (and their office staff) of the parties, and, subject to paragraph 4 hereof, to experts retained to assist counsel in this case and who are not employed by or in any matter affiliated with either party…

(Defs.’ Ex. 12 ¶ 3) (emphasis added). The Protective Order further requires that “any and

all confidential materials produced, served or otherwise made available by one party to

another during the course of this action… shall be used only for the preparation and


- 10 -

presentation of this action and for no other purpose whatsoever.” (Id. ¶ 6) (emphasis

added). There is absolutely no exception for compliance with a subpoena issued in other

litigation. Furthermore, the Minnesota Protective Order provides that it “shall remain in

effect after the final determination of this action,” demonstrating the parties’ desire to

keep the produced documents protected from other litigation—regardless of whether such

information is relevant to another case. (Id. ¶ 17) (emphasis added).

Contrary to the assertions in MPI’s brief and Streater’s declaration, even Streater

himself acknowledged, in a written objection to MPI, that the Minnesota Protective Order

precludes him from complying with the subpoena. (Streater Decl. Ex. F). Streater’s

declaration, cited by MPI in their brief, claims that he “informed counsel for Loparex and

counsel for MPI that Briggs & Morgan objected to producing the requested documents”

based on a “threat” he received from “Loparex’s counsel to move for sanctions” against

him or his client.2 (Streater Decl. ¶ 8). That is not the story he tells, however, in his

formal written objection to MPI. (Streater Ex. F). In his written objection, Streater says:

“Jon Hanson objects to the Subpoena… on the grounds the subpoena seeks documents

protected from disclosure by a Protective Order, dated September 3, 2009, entered in

the case of Hanson v. Loparex.” (Id.) (emphasis added). This statement is consistent with

the one he gave to counsel for Loparex via email earlier that day: “…this is not Jon

2 The “threat” Streater refers to is a communication from Loparex’s counsel in which they remind Streater of his obligations under the Protective Order and that his compliance with the subpoena would violate a Court’s order. Furthermore, Loparex’s counsel’s email was provided in response to a communication from Streater in which he asked Loparex’s local counsel if they had any objection. (Zamzow Decl. Ex. A).


- 11 -

Hanson’s fight, and I therefore intend to provide Mr. Tyler with a written objection to the

subpoena today, under Rule 45(c), on the ground that the subpoena seeks documents

subject to the protective order in our case.” (Streater Decl. Ex. E) (emphasis added).

In neither the email nor the written objection does Streater say what he is now alleging—

that he only objected to the subpoena under “threats” from Loparex. (See Streater Decl.

Exs. E, F). The email and written letter make clear the basis for Briggs & Morgan’s

objection to the subpoena—the Protective Order in the Minnesota case.3

B. Loparex Objects to Production of the Documents Regardless of Whether MPI Agrees to Be Bound By the Indiana or Minnesota Protective Orders.

In its motion to enforce subpoena, MPI argues that because Loparex agreed to a

Protective Order in the Indiana case, it should have no objection to Briggs & Morgan’s

production of the Hanson documents. (Defs.’ Br. at 8) (“Loparex’s counsel… agreed to

the terms of the Indiana Protective Order, and therefore can have no legitimate objection

to Briggs & Morgan’ production of the documents.”) MPI’s position is without merit.

The Protective Order in the Indiana litigation does not address Loparex’s concern at all.

3 Although Streater acknowledged that Briggs & Morgan was bound by the Protective Order, he also violated the Protective Order by disclosing confidential information to MPI. (Defs.’ Bf. at 6; Streater Decl. ¶¶ 5, 7). In his declaration to this Court, he states: “Loparex produced to Briggs & Morgan a disc containing electronically stored documents, including documents referring or relating to Steve Odders and Gerald Kerber.” (Streater Decl. ¶ 5). The Minnesota Protective Order provides that the confidential information on the discs may be disclosed on the basis of “need-to-know” for the purpose of the Hanson litigation, only to the parties, officers, directors, employees and counsel of the parties. (Defs.’ Ex. 12 ¶ 3). Although Loparex does not allege that Streater disclosed actual documents to MPI, he violated the Protective Order by revealing the contents of the Protected discs to MPI, who is not a party to the Hanson litigation.


- 12 -

MPI’s sweeping subpoena requests “all documents produced on any electronic storage

medium… by Loparex… in the case entitled Hanson v. Loparex Inc. et al.” (Streater

Decl. Ex. B.) (emphasis added). The expansive scope of this subpoena includes highly

confidential information that Loparex does not want its direct competitors—such as

MPI—to have access to, including financial statements, trade secrets, customer

information, and sales reports. Loparex’s objection has nothing to do with “mistrust” of

the Indiana Protective Order as MPI alleges. (Defs.’ Br. at 9). Rather, Loparex’s

objection involves its concern over highly sensitive and confidential information being

shared with its competitor, MPI. This is precisely why the information was produced

subject to the Minnesota Protective Order.

Likewise, the fact that the documents were “already produced” for one case

(Hanson) does not preclude Loparex from objecting to production in a second, unrelated

case. (See Defs.’ Br. at 1). In Hanson, Loparex disclosed this highly confidential

information (subject to a Protective Order) in litigation over a non-compete agreement

with a former employee, which poses a significantly different risk than that in the Indiana

case, where Loparex’s adversary is its direct competitor and the litigation involves

allegations of misappropriation of trade secrets. Allowing a former employee—who is

not currently working for a Loparex competitor—to view financial and sales data,

customer lists, and other sensitive documents related to his employment, is much

different than sharing that information with Loparex’s direct competitor. The potential

damage from an inappropriate disclosure of these highly sensitive documents—whether

inadvertent or not—is much greater in the MPI litigation than in the Hanson litigation.


- 13 -

C. This Court Should Enforce the Protective Order Over the Subpoena.

Essentially, MPI argues that Loparex’s Protective Order argument fails because

Loparex should be satisfied with turning over the documents to MPI subject to either the

Indiana or Minnesota Protective Order. But, MPI’s brief fails to articulate a legal basis

for their assertion that this Court’s Protective Order is not binding in light of their

subpoena. MPI assumes the subpoena overrides the Protective Order, but cites no case

law to support their position. Indeed, the opposite is true.

Where a subpoena conflicts with a Protective Order, as in the present situation, the

Protective Order overrides the subpoena. “A protective order issued by a state or federal

court, which on its face survives the underlying litigation, continues to have full force and

effect on the parties subject to it even after the final resolution of the underlying case, and

the issuing court retains jurisdiction and authority to modify it.” See Michael K.

Steenson et al., 27 Minn. Prac., Products Liability Law, Protective Orders § 10.15 (2009).

In Tubar v. Clift, the Federal District Court in the Western District of Washington

quashed a third-party subpoena that requested personnel records subject to a state-court

protective order. 2006 WL 521683 at *4 (W.D. Wash. March 2, 2006). The Protective

Order forbade the third-party from disclosing documents “without leave of [the] Court, to

any person other than an agent of the attorney.” Id. The court held that the third-party to

whom the subpoena was issued “should not be ordered to violate” a state-court protective

order. Id.

Some courts automatically quash a subpoena that demands documents covered by

a protective order, while others consider four factors. The four factors are: (1) the nature


- 14 -

of the protective order; (2) the identity of the party from whom discovery is sought; (3)

whether the case in which the original protective order was issued is still pending; and (4)

whether it is possible to incorporate terms in its own order which will further the

protections originally ordered by the court. See Tucker v. Ohtsu Tire & Rubber Co., Ltd.,

191 F.R.D. 495 (D. Md. 2000); Donovan v. Lewnowski, 221 F.R.D. 587 (S.D. Fla. 2004).

In Donovan, a federal court quashed a subpoena when one party attempted to subpoena

documents subject to a Protective Order issued by a state court. 221 F.R.D. at 587. The

court held that the Protective Order overrides the subpoena in that case because of the

“deliberative nature” of the protective order and the fact that the state court action was

still pending. Id. at 591. With regard to the second factor, the court should be more

inclined to uphold the Protective Order over the subpoena if the party from whom

discovery is sought is not the source of the confidential documents. Tucker, 191 F.R.D.

at 501.

The factors weigh in favor of Loparex in the present motion. The party from

whom discovery is sought is a third-party—Briggs & Morgan—not the source of the

confidential documents (Loparex). As for the third factor, the Minnesota case where the

protective order originated is still pending, which weighs heavily in Loparex’s favor.

Finally, for the reasons mentioned above, there are no terms this Court could impose on

production which would adequately address Loparex’s concerns about turning over

highly confidential information to a main competitor. Thus, the Protective Order should

prevail over the subpoena.


- 15 -

Finally, even the Protective Order in the Indiana case—drafted by counsel for

MPI—acknowledges that a subpoena in other litigation does not automatically override

the Protective Order. (See Streater Decl. Ex. C). The Indiana Protective Order provides:

In the event either of the parties (a) is subpoenaed in another action, (b) is served with a demand in another action to which it is a party, or (c) is served with any other legal process by a person not a party to this litigation, and is requested to produce or otherwise disclose information that was designated as Confidential Information or Attorneys’ Eyes Only Information in this Action, the party subpoenaed or served as referred to in this paragraph shall object to production of the Confidential Information or Attorneys’ Eyes Only Information.

(Id. ¶ 20) (emphasis added). In light of counsel for MPI’s recognition that a party bound

by a Protective Order cannot comply with a subpoena requesting protected documents,

their assertion that “Loparex’s protective order objection… has no merit” is

disingenuous. (See Defs.’ Br. at 8).

III. THE COURT SHOULD DENY THIS MOTION BECAUSE THE SUBPOENA MUST BE QUASHED UNDER FRCP 45.

A. The Court Must Quash the Subpoena Pursuant to Rule 45. Plaintiff Loparex has filed a motion to quash the subpoena served on Briggs &

Morgan with this Court. (Zamzow Decl. Ex. B). This Court should not grant MPI’s

motion to enforce, because doing so denies Loparex’s Motion to Quash, which must be

granted.

Under the Federal Rules of Civil Procedure (FRCP), the court must quash or

modify a subpoena that “requires disclosure of privileged or other protected matter, if no

exception or waiver applies.” FED. R. CIV. P. 45(c)(3)(A). The information sought by

MPI falls under this rule because it is protected by this Court’s Order (the Minnesota


- 16 -

Protective Order). However, if this Court finds that the documents sought by MPI in this

motion do not fall within 45(c)(3)(A)’s definition of “privileged or other protected

matter,” Loparex urges this court to quash the subpoena under Rule 45(c)(3)(B). Rule

45(c)(3)(B) states that the court may quash or modify a subpoena if it “requires

disclosure of a trade secret or other confidential research, development, or commercial

information” and the party seeking the information has not shown “a substantial need for

the… material that cannot be otherwise met without undue hardship.” FED. R. CIV. P.

45(c)(3)(B). The information sought by MPI is highly confidential, including documents

pertaining to trade secrets, sales and financial data, and customer identities. Thus, it also

falls under the protection of 45(c)(3)(B). MPI has not shown a substantial need for the

documents, or that it could not obtain them through other means without undue hardship,

because the documents are in Loparex’s (the plaintiff’s) possession. Simply, MPI must

ask Loparex for them through the proper discovery process in the Indiana case.

B. MPI Failed to Give Prior Notice of Subpoena to Loparex, as required by Federal Rule of Civil Procedure 45.

In addition to the requirements of Rule 45(c), the MPI defendants failed to give

adequate notice to Loparex under Rule 45(b)(1), which states: “[i]f the subpoena

commands the production of documents, electronically stored information, or tangible

things… before trial, then before it is served, a notice must be served on each party.”

FED. R. CIV. P. (45)(b)(1). The Advisory Committee Notes clarify that notice must be

given prior to issuing the subpoena—not prior to the return date on the subpoena.

“Courts… have tended to converge on an interpretation that requires notice to the parties


- 17 -

before the subpoena is served on the person commanded to produce or permit inspection.

That interpretation is adopted in amended 45(b)(1) to give clear notice of general present

practice.” FED. R. CIV. P. 45 advisory committee’s note (2000 amendments). The

purpose of prior notice is to “afford other parties an opportunity to object to the

production or inspection, or to serve a demand for additional documents or things.” FED.

R. CIV. P. 45 advisory committee’s note (1991 amendments).

MPI served the subpoena on Briggs & Morgan on January 6, 2010, and requested

production by January 11, 2010. (Streater Decl. Ex. A). Counsel for Loparex was copied

on the email, but MPI did not serve notice on Loparex prior to serving the subpoena, as

required by Federal Rule of Civil Procedure 45(b)(1).

MPI’s failure to give notice could have had a devastating impact on Loparex, had

Briggs & Morgan turned over the subpoenaed information before Loparex had a chance

to file a motion to quash or object. This technical violation again demonstrates MPI’s

efforts to circumvent the proper discovery procedure.

IV. LOPAREX HAS ALREADY PRODUCED ALL RELEVANT DOCUMENTS FROM THE MINNESOTA CASE TO MPI.

A. The Documents Sought by MPI are Not Relevant to the Indiana Case.

This motion should be denied because Loparex has already produced all relevant

documents sought by MPI’s subpoena. Loparex has already produced over 8,000 pages

of the 11,000 pages of documents on the disc sought by MPI’s subpoena on Briggs &

Morgan, along with an additional 400-500 pages not on the disc. During discovery in the

Indiana case, counsel for Loparex searched the disc for all documents relating to MPI,


- 18 -

Kerber, and Odders, and then produced all of the non-privileged documents to MPI.

(Pautsch Decl. ¶ 10). Local counsel for Loparex, Fredrikson & Byron, also searched the

disc and found 4,568 pages of documents with the words “Kerber,” and “Odders” in

them, and only two documents (616 pages) with the word “MPI”—less than the total

number of pages produced by Loparex from the disc. (Zamzow Decl. ¶ 3). Local

counsel at Fredrikson & Byron then confirmed with Loparex’s Indiana counsel that all of

the 4,568 hits they found were produced with the 8,000 pages Loparex handed over to

MPI. (Id.) They confirmed that “each and every document resulting from these searches

(of the Minnesota case production) was produced to MPI as part of Loparex’s production

in that case.” (Id.)

Thus, MPI’s allegation that “Loparex’s production of responsive documents to the

requests in the Indiana Action yielded a grand total of five (5) pages of responsive

documents” is entirely inaccurate. (See Defs.’ Br. at 10). Loparex has produced

everything from the disc that pertains to the MPI defendants. (Pautsch Decl. ¶ 11). The

rest of the information on the disc is simply not relevant to the Indiana case, and is highly

confidential or privileged information. (Id. ¶ 12).

MPI’s brief contains several references to specific documents they believe they

should have received during discovery in the Indiana case. They claim they are “justified

in believing that Loparex has not, in fact, produced all responsive documents despite its

representations.” (Defs.’ Br. at 10). First, MPI alleges that they should have received

email messages relating to Mr. Odders between the time he was terminated in September

2008 and October 2009, one year later. (Id.). Odders’ email account was closed the day


- 19 -

he left, thus there are no other emails to or from his account. All other emails relating to

Odders are protected by the attorney-client privilege. Those email messages are

indicated on the Privilege Log submitted by Loparex to MPI during discovery. (Pautsch

Decl. ¶ 11). MPI was also told that those communications were privileged in Loparex’s

responses and objections to MPI’s request for production of documents. (Defs.’ Ex. 14,

pg. 3). MPI requested that Loparex “[p]roduce all Documents and Communications

relating to or referring to Mr. Odders since his departure from Loparex.” (Id.) Loparex

responded that “it is producing all non-privileged correspondence and documents that can

be located after an extensive and reasonable search for same. These are marked as Bates

Nos. LOP-004350—LOP 004376. A Supplemental Privilege Log is filed herewith.”

(Id.) The Privilege Log confirms what was stated in Loparex’s Response to MPI’s

document request. (Pautsch Decl. ¶ 11). MPI cannot obtain these privileged documents

through a third-party subpoena.

The only specific document MPI points to that it believes it should have received

through production of the Hanson documents is a letter from Loparex’s counsel to

Odders on March 23, 2009. (Defs.’ Br. at 10). A copy of that letter was not turned over

by Loparex because it was a letter to Odders, the defendant, and was in his custody and

control. (Zamzow Decl. ¶ 5). Even more absurd, however, is that MPI points to this

letter as justification for obtaining the rest of the documents produced in the Minnesota

case, even though the letter is not even on the disc. (Id.) Counsel for Loparex has

personally searched the disc produced in the Minnesota case and it does not contain the

letter MPI indentifies as “missing.” (Id.)


- 20 -

MPI simply cannot believe that the disc produced in the Minnesota case does not

have additional discoverable information about Kerbers, Odders and MPI. But, what

MPI fails to recognize is that the disc was prepared and produced solely for discovery in

the Hanson litigation, not the MPI litigation. This explains why MPI’s name appears in

only two documents on the disc.4 (Zamzow Decl. ¶ 3). MPI’s request for the entire disc

so it can “evaluate the accuracy of Loparex’s representation that it has produced all

documents” in shocking. (See Defs.’ Br. at 11). A party to a lawsuit does not get

unfettered access to the other party’s confidential documents just to “make sure” their

opponent is being 100% forthcoming. If that were the case, then every party could

proclaim doubts about their opposition’s truthfulness and thus gain access to their

opponent’s most confidential documents. This Court should not allow MPI—a direct

competitor of Loparex—to go on a fishing expedition into some of Loparex’s most

secretive and confidential information.

MPI’s position in regard to this subpoena (demanding all 11,000 pages of

documents produced in the Hanson litigation) contrasts sharply with the position they

took in regard to production of their own hard drive less than a month ago. (See Zamzow

Decl. Ex. F) (stating that MPI objected “to the production of their hard drives,” preferring

instead that Loparex identify “specific categories of documents or fewer and more

specific search terms.” (Id.) (emphasis added).

4 It is actually one document and the second MPI hit is an exact replica of that document. This document has already been produced by Loparex.


- 21 -

B. Even If the Documents Were Relevant, Confidentiality Prevails Over Relevancy

The remaining 3,000 pages of documents that have not been produced by Loparex

are subject to the Minnesota Protective Order. Thus, even if the remaining documents

from the Minnesota case were relevant to the Indiana case (which they are not), relevancy

does not trump a court order requiring that those documents remain confidential. If

indeed the information sought includes trade secrets and confidential information, the

“burden shifts to the party seeking discovery to establish that the disclosure of trade

secrets is relevant and necessary to the action.” Eureka Water Co. v. Nestle Waters North

America, Inc., 2009 WL 3415336 at *2 (W.D. Okla. 2009). Even if the party establishes

relevancy, that does not automatically make the information discoverable. Rather, the

district court “must balance the need for the trade secrets against the claim of injury

resulting from disclosure.” Id. (citing Centurion Indus., Inc. v. Warren Steuer and

Assocs., 665 F.2d 323, 325-26 (10th Cir. 1981). In balancing relevancy against the need

for confidentiality, the court should consider “dangers of abuse, good faith, adequacy of

protective measures, and the availability of other means of proof.” Id. (citing Centurion

Indus., Inc., 665 F.2d at 326).

In this case, MPI has not carried its burden in demonstrating the relevancy of the

documents they are seeking. Further, the dangers here are significant, and there are no

protective measures that will adequately protect Loparex’s interest. Loparex’s ability to

keep its customer, financial, and sales information confidential from its competitors is

makes the company so competitive in its industry. Thus, even if MPI could point to a


- 22 -

sliver of relevancy (which it cannot), the balance would heavily weight in Loparex’s

favor, and this Court should deny MPI’s motion.

CONCLUSION

For the foregoing reasons, Loparex respectfully request that the Court deny this

emergency motion to enforce subpoena.

Respectfully submitted, Dated: January 15, 2010 s/ Krista A.P. Hatcher

Joseph M. Sokolowski (#0178366) Lindsay J. Zamzow (#0314705) Krista A.P. Hatcher (#0387825) FREDRIKSON & BYRON, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402-1425 Telephone: (612) 492-7000 Facsimile: (612) 492-7077

Charles W. Pautsch, Admitted Pro Hac Vice

Lisa Baiocchi, Admitted Pro Hac Vice CONSTANGY, BROOKS & SMITH, LLP 330 E. Kilbourn Ave., Suite 827 Milwaukee, WI 53202 Telephone: (414) 875-3022 Facsimile: (414) 224-7579 ATTORNEYS FOR PLAINTIFF LOPAREX, LLC

4678004_1.DOC
