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Kalencom Corp. v. Shulman

United States District Court, E.D. Louisiana

April 17, 2018


         SECTION: “A” (1)




         Before the Court is the Motion to Compel filed by plaintiff Kalencom Corporation (“Kalencom”). (Rec. Doc. 37). For the following reasons, the Motion is DENIED.


         Kalencom manufacturers diaper bags, handbags, jewelry boxes and packaging, and infant products. Defendant Anne Marie Montagne Shulman (“Shulman”) was employed for Kalencom for approximately two years starting in 1995, and thereafter she served as an independent contractor for Kalencom through various entities she owned or operated until February 17, 2016. Kalencom alleges that Shulman now serves as President and owner of Montagne Custom Packaging. Kalencom filed this lawsuit in Louisiana state court alleging that Shulman has taken its confidential and proprietary information and is using it for her own benefit, including by acquiring Kalencom's former customer The Neiman Marcus Group (“Neiman”). Kalencom asserts claims for unfair trade practices, tortious interference with a business relationship, violation of trade secrets law, breach of fiduciary duty, and seeks injunctive relief and damages.

         Shulman filed a motion to dismiss, and the District Judge denied the motion except as to Kalencom's tortious interference with a business relationship claims, which were dismissed without prejudice. In her answer, Shulman alleges that she was not subject to any confidentiality, non-disclosure, non-compete, or non-solicitation agreement. Shulman alleges that Kalencom's allegations are an attempt to prevent her from competing against it. Shulman alleges that Kalencom has unlawfully withheld payment to Mari Designs, LLC, a company through which Shulman provided services to Kalencom as an independent contractor. She alleges that Kalencom has made false and defamatory statements about her both in this lawsuit and to her former, current, or prospective customers and suppliers. Shulman filed Counterclaims for unfair trade practices, tortious interference with contract, and defamation. Kalencom filed a motion to dismiss the Counterclaims, which was granted in part. Shulman's defamation and tortious interference with contract claims were dismissed without prejudice.

         Discovery Issue

          The dispute before the Court at this time concerns discovery requests propounded by Kalencom on November 17, 2017. Kalencom categorizes the bulk of its requests into two groups, the “Neiman Requests” seeking information regarding Shulman's interactions with Neiman, including the names of her contacts with Neiman, her communications with Neiman, products sold to Neiman, and manufacturers discussed with Neiman, along with related communications. A second category is “Client Requests, ” seeking information regarding Shulman's interactions with clients and potential clients since she left Kalencom, including identification of all clients and potential clients she has worked with since February 2016, identification of Kalencom customers that she has obtained orders from for a company other than Kalencom since February 2016, and all communications with clients that were at one time Kalencom clients or Kalencom potential clients since February 2016. A third group of interrogatories and document requests concern information related to Shulman's time working with Kalencom, including identification and production of information she had access to while working for Kalencom for 20 years, communications with clients and potential clients while she was working for Kalencom, and a description of all training she received while working for Kalencom. A last group of requests concerns her employers and job duties since leaving Kalencom and associated documents.

         Shulman responds that the Neiman Requests and Client Requests must be limited in scope to the allegedly misappropriated trade secrets and confidential information, which Kalencom must be required to identify. Shulman further argues that Kalencom should be required to show at least some evidence of misappropriation before it is allowed to “pillage through Shulman's business communications and strategies with her new employer.” With regards to the discovery requests related to her employment with Kalencom, she argues that the requests are overbroad because they apply to her more than 20 years of working with Kalencom, some extend to communications that are not related to Kalencom, and she adds that she returned 30 cartons of documents to Kalencom when their relationship ended and did not keep copies of any of that information. As to the requests related to her employers and job duties since leaving Kalencom, Shulman insists no documents related to her interrogatory responses exist.

         Law and Analysis

         1. Scope of Discovery

         The Federal Rules of Civil Procedure provide that “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.” Fed. R. Civ. Proc. 26(b)(1). Of note, with the 2015 amendment to Rule 26, it is now clear that “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Id. In assessing proportionality of discovery, the following should be considered: “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 benefit.” Id. The advisory committee comments to the 2015 amendment to Rule 26 make clear that the parties and the court have a collective responsibility to ensure that discovery is proportional. The party claiming it would suffer an undue burden or expense is typically in the best position to explain why, while the party claiming the information sought is important to resolve the issues in the case should be able “to explain the ways in which the underlying information bears on the issues as that party understands them.” Id. advisory committee comments to 2015 amendment. “The court's responsibility, using all the information provided by the parties, is to consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery.” Id.

         2. Discovery in a ...

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