United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
COLLINS UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on several motions regarding
discovery disputes between Plaintiff Zimmer, Inc.
(“Zimmer”), Defendants Beamalloy Reconstructive
Medical Products, LLC, and Beamalloy Technologies, LLC
(together “Beamalloy”), and third-party
intervenor Howmedica Osteonics Corp., a subsidiary of Stryker
Corporation (“Howmedica”). As discussed below,
the Court will GRANT IN PART Zimmer's motion to compel
(DE 61) and GRANT Zimmer's motion to extend the deadline
to complete discovery (DE 64). The Court will also GRANT IN
PART Howmedica's motion to intervene (DE
and order the parties to submit an amended proposed
amended complaint, Zimmer alleges that Beamalloy breached the
“License and Supply Agreement, ” whereby
Beamalloy granted Zimmer licenses to “research,
develop, make, have made, promote, use, market, sell, offer
for sale, distribute, import/export and otherwise
commercialize” certain Beamalloy products, which were
created using a titanium nitrite process to coat the physical
surfaces of the products. (DE 5 ¶ 9). This process is
known as “ion beam enhanced deposition” or
“IBED.” (DE 5 ¶ 9). Zimmer alleges that
before it could “launch” any device that had been
coated using IBED, Beamalloy had to satisfy certain
commercialization or validation milestones. (DE 5 ¶ 10).
Zimmer claims that Beamalloy never satisfied these milestones
and other provisions of the License and Supply Agreement,
despite Zimmer paying for experts, analysis, and investing
time and resources assisting Beamalloy. (DE 5 ¶¶
also leased certain equipment to Beamalloy to be used in the
IBED process, and Beamalloy agreed to make payments for this
equipment pursuant to two other contracts, the “Lease
Agreement” and the “Security Agreement.”
(DE 5 ¶¶ 20-24). Zimmer claims that Beamalloy
breached these agreements as well. (DE 5 ¶¶ 20-24).
Zimmer is suing Beamalloy for breaching the agreements, a
declaratory judgment (declaring that Zimmer has no further
obligation to Beamalloy under the agreements), and replevin.
(DE 5 ¶¶ 25-44).
White (“White”) is Beamalloy's current Chief
Executive Officer. Bruce Lazear (“Lazear”) is a
“lead investor” of Beamalloy and owns the
consulting firm Lazear Capital. In Beamalloy's responses
to Zimmer's requests for responses to interrogatories,
Beamalloy identified White and Lazear as individuals with
knowledge relevant to this case. (DE 62-2).
30, 2017, Zimmer informed Beamalloy of alleged deficiencies
in its responses to discovery requests related to White,
Lazear, and the testing of products coated using the IBED
process. (DE 62-4 at 2, 3). Over a year later, on July 12,
2018, Zimmer had not heard back from Beamalloy and raised
these issues again. (DE 62-4 at 8).
12, 2018, Zimmer emailed Beamalloy to resolve the issue. (DE
62-4 at 8-10). On July 19, 2018, Beamalloy responded that it
had produced all “responsive non-privileged documents
between Steve White, Lazear, Bob Borel [Beamalloy's
president and former CEO], and Beamalloy that [were] in
Beamalloy's possession, custody, and control.” (DE
62-5; see also DE 62-7; DE 62-8; DE 62-9).
August 12, 2018, two days before Borel's deposition,
Zimmer emailed Beamalloy regarding a sizeable gap in the
bates numbers of a recent Beamalloy production of documents.
(DE 62-11). Beamalloy could not explain the gap. (DE 62-11).
August 14, 2018, during Borel's deposition, Beamalloy
learned and relayed to Zimmer that the gap in bates numbers
was due to Beamalloy's failure to produce two full
productions of documents (one production contained 1, 088
documents, and the other contained 1, 575 documents). (DE
62-12). Zimmer was supposed to receive both productions a
year earlier. (DE 62-12). Also, during Borel's
deposition, Beamalloy's counsel instructed Borel not to
answer questions about Beamalloy's use, testing, and
discussions with third parties related to the IBED process or
equipment. (DE 62-12). Beamalloy's outside counsel
claimed that such information was protected under a
“proprietary privilege.” (DE 62-12). The parties
agreed to continue Borel's and other depositions and
extend the discovery deadlines. (DE 62-12).
receiving and reviewing Beamalloy's two belated
productions, Zimmer continued to allege that Beamalloy had
not satisfied its discovery obligations. (DE 62-13).
a status conference with the Court on August 21, 2018,
Beamalloy revealed that it had not collected documents from
Lazear's business email account-that is, his Lazear
Capital email account-or from White's personal
“America Online” or “AOL” email
account. (DE 60; see also DE 62-14). Beamalloy had
produced documents showing that both men used these email
accounts to conduct business relevant to the parties'
claims. (See DE 62-14 at 3; DE 63). However,
Beamalloy objected to collecting or producing documents from
either email account. (DE 62-14 at 4; DE 62-15). Beamalloy
also defended its instruction for Borel to not answer certain
questions at deposition, claiming that the questions sought
information that was “proprietary” and
“privileged.” (See DE 60; DE 62-15 at
August 30, 2018, Beamalloy produced its first privilege log
to Zimmer. (DE 82 at 3; DE 82-1). Beamalloy withheld 35
documents from production based on a claim of
“proprietary privilege.” (DE 82-1). Zimmer
responded that Beamalloy must produce the 35 documents
because no proprietary privilege exists. (DE 62-16). Zimmer
also maintained that it was entitled to discovery of
Beamalloy's research and tests of products using the IBED
process and Lazear's and White's email accounts. (DE
September 18, 2018, Zimmer filed the instant motion to
compel. (DE 61). In the motion, Zimmer seeks to compel the
production of: (1) relevant documents contained in
White's AOL account and Lazear's business account
(“Email Discovery”); (2) documents (and responses
to questions at deposition) regarding Beamalloy's use of
IBED related technology, testing and research IBED coated
products, or interactions with other manufacturers regarding
the IBED process (“Equipment/IBED Discovery”);
and (3) the 35 documents Beamalloy withheld on the basis of a
“proprietary privilege” (“Privilege Log
November 2, 2018, Howmedica filed an emergency motion seeking
to intervene in this matter. (DE 73). Howmedica seeks to
protect sensitive business information it revealed to or
discussed with Beamalloy, which will be produced should the
Court grant Zimmer's motion to compel. (DE 73). To do so,
Howmedica moves for an amended protective order that
restricts or prohibits Zimmer's access to Howmedica's
sensitive business information.
and Beamalloy filed responses to Howmedica's motion (DE
82; DE 84), and Howmedica filed a reply (DE 88). Beamalloy
responded to Zimmer's arguments (two days before a
hearing on Zimmer's motion to compel and Howmedica's
motion to intervene) by changing its privilege claim over the
35 documents in its privilege log from
“propriety” to “work product.” (DE
84-3; compare DE 82-2, with DE
November 16, 2018, the Court heard oral argument on
Zimmer's motion to compel and Howmedica's motion to
intervene. (DE 92). Zimmer made an oral motion for Beamalloy
to submit the 35 documents in its privilege log for an in
camera review. Howmedica and Zimmer agreed that
Zimmer's motion to compel would result in the production
of documents containing Howmedica's sensitive business
information and that the Court should enter an amended
protective order. However, Zimmer and Howmedica disagreed as
to the nature of the protection that the order should afford.
At the conclusion of the hearing, for the reasons stated on
the record, the Court stayed all discovery deadlines until
the resolution of Zimmer's motion to compel and ordered
Beamalloy to submit the 35 purportedly privileged documents
for an in camera review by the Court to determine
whether they were actually protected. (DE 93).
November 30, 2018, Beamalloy submitted 22 documents for an
in camera review. (DE 94-DE 115). Beamalloy did not
submit 13 of the documents it was ordered to because, prior
to its in camera submissions, Beamalloy determined
that 13 of the 35 documents were “benign”-that
is, not privileged-and turned them over to Zimmer. (DE 93).
Zimmer responded to Beamalloy's in camera
submission by requesting that the Court order Beamalloy to
pay the attorney's fees and costs that Zimmer incurred in
litigating the production of the 13 “benign”
documents. (DE 116; DE 117; DE 121).
Court reviewed Beamalloy's privilege log and the
documents submitted in camera, but on the record
provided, the Court could not determine whether the documents
were privileged. (DE 122). So, on January 15, 2019, the Court
advised Beamalloy that its privilege log fell short of
establishing that the 22 documents were privileged. (DE 122).
The Court then ordered Beamalloy to submit affidavits,
declarations, deposition transcripts, or other evidence
supporting its claim of work product protection for each of
the 22 documents. (DE 122).
January 29, 2019, pursuant to the Court's Order of
January 15, 2019, Beamalloy submitted the affidavit of its
in-house counsel, Attorney Sherri Lazear, along with 19
exhibits attesting to the privileged nature of the 22
documents. (DE 123; DE 126).
MOTION TO COMPEL
Federal Rule of Civil Procedure 26(b)(1):
Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount
in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of
the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely
may file a motion to compel under Rule 37 when the responding
party is evasive or provides incomplete disclosures or
answers. Fed.R.Civ.P. 37(a)(1).
in a motion to compel, the moving party bears the burden of
proving that the discovery it is seeking is relevant to the
case. See United States v. Lake Cty. Bd. of
Comm'rs, No. 2:04 CV 415, 2006 WL 978882, at *1
(N.D. Ind. Apr. 7, 2006) (citations omitted). Relevance for
purposes of discovery is construed broadly as “any
matter that bears on, or that reasonably could lead to other
matters that could bear on, any issue that is or may be in
the case.” Chavez v. Daimler Chrysler Corp.,
206 F.R.D. 615, 619 (S.D. Ind. 2002). Moreover there
“is a strong public policy in favor of disclosure of
relevant materials, . . . .” Patterson v. Avery
Dennison Corp., 281 F.3d 676, 681 (7th Cir. 2002)
(citing Fed.R.Civ.P. 26(b)(2)). “The party opposing
discovery has the burden of proving that the requested
discovery should be disallowed.” Bd. of Trs. of the
Univ. of Illinois v. Micron Tech., Inc., No.
211CV02288SLDJEH, 2016 WL 4132182, at *3 (C.D. Ill. Aug. 3,
2016) (collecting cases).
ruling on a motion to compel, the Court weighs the relevance
of the discovery subject to the motion and whether ordering
production would cause undue burden to the opposing party.
See, e.g., Nucap Indus. Inc. v. Robert Bosch
LLC, No. 15 CV 2207, 2017 WL 6059770, at *2 (N.D.
Ill.Dec. 7, 2017) (citing Patterson, 281 F.3d at
681); Berning v. UAW Local 2009, 242 F.R.D. 510, 514
(N.D. Ind. 2007).
asserts that the content of White's and Lazear's
email accounts is discoverable the following reasons: (1)
Beamalloy identified White and Lazear as persons with
relevant information in its discovery responses and
designated them as Rule 30(b)(6) witnesses; (2) Beamalloy has
not searched the email accounts using a TAR
protocol; and (3) Beamalloy has produced documents
and emails indicating that White and Lazear used their
personal email accounts to conduct business on issues
relevant to this lawsuit.
responds that it has already produced all relevant emails in
the two email accounts or that Zimmer already has the emails
(because the emails requested involve communications with
Zimmer). Additionally, Beamalloy has stated that White and
Lazear searched their email accounts and provided Beamalloy
with any relevant documents they found. Beamalloy claims that
it would suffer undue burden in collecting and producing any
additional emails. According to Beamalloy, White's AOL
account contains approximately 60, 000 emails and
Lazear's business account contains approximately 80, 000
emails. Beamalloy claims that to produce these emails it
would have to go through and read each one for privilege and
arguments are persuasive. First, Beamalloy appears to argue
that in a dispute between corporations, the contents of a
witness's personal or non-corporate email account are not
discoverable solely because a party-corporation does not own
the email account's domain. Beamalloy does not support
this argument with any authority. In stark contrast, case law
appears to support Zimmer's position: If Lazear's and
White's email accounts contain information that is
relevant or likely to lead to relevant information, then
Zimmer is entitled to the Email Discovery. See Co. v.
Glob. Bio-Fuels Tech., LLC, No.
112CV1292DNHDJS, 2016 WL 6605070, at *4 (N.D.N.Y. May 20,
2016) (“The Court agrees with Plaintiff's position
in this regard and directs that Defendant Behnke assist the
Plaintiff's expert to review the status of the disputed
email accounts, and to gain access to those accounts if that
is possible.”); BCS Int'l, Inc. v.
Heiting, No. 09-C-1003, 2011 WL 13216979, at *5 (E.D.
Wis. Mar. 24, 2011) (authorizing access to a defendant's
non-corporate, web-based email accounts because there was
evidence establishing that such discovery was likely to
contain or lead to the discovery of relevant evidence).
Evidence of record indicates that the email accounts contain
relevant discovery. (See, e.g., DE 63; DE 114).
Beamalloy fails to provide any evidence that Lazear and White
went through their respective email accounts and turned over
every relevant email. The Court requires more than
Beamalloy's “bald assertion” that it
fulfilled its discovery obligations. King v.
McCarty, No. 11-CV-1126, 2012 WL 12929749, at *3 (C.D.
Ill. May 1, 2012) (“Defendants offer nothing except the
bald assertion that they did produce this list to contradict
this document.”). In any event, Beamalloy has not
explained why it relied on Lazear and White to cull documents
from their email accounts instead of using a TAR protocol.
Beamalloy has not demonstrated that it will suffer an undue
burden in producing the Email Discovery. Beamalloy has not
estimated the expenses or resources to request and produce
the Email Discovery, but merely states, without any
evidentiary support, that the two accounts contain a combined
140, 000 emails. See, e.g., id. And while
Beamalloy's counsel represents that counsel must read
every email for relevance and privilege, the Court is
confident that counsel can avoid such a task by using a TAR
protocol of the type litigated by the parties in December
2017. (See generally DE 47; DE 48). Beamalloy has
failed to show that the cost of producing the Email Discovery
outweighs its relevance. See, e.g., Bd. of Trs.
of the Univ. of Illinois, 2016 WL 4132182, at *3
asserts that the Equipment/IBED Discovery (both documents and
the responses to questions at deposition) concerns events
that took place after October 4, 2016 (the day the parties
terminated the agreements at issue in this case), and
therefore, it is irrelevant. Beamalloy also argues that the
Equipment/IBED Discovery is irrelevant to the parties'
claims and defense; rather, it relates to potential
violations of the parties' confidentiality agreement,
codified in Article 9 of the License and Supply Agreement
(Zimmer has not asserted a claim for breach of the
responds that it is entitled to the Equipment/IBED Discovery
because it relates to Beamalloy's efforts to:
(a) mitigate its damages,
(b) sell, describe, and/or explain its IBED coating to other
(c) discuss its work with Zimmer with other orthopedic-device