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In re Ridgeway

United States District Court, E.D. Louisiana

August 28, 2019

IN RE CHRISTOPHER MARTIN RIDGEWAY
v.
STRYKER CORPORATION AND HOWMEDICA OSTEONICS CORPORATION

         SECTION: “B” (4)

          OPINION

         Before the Court are appellant Christopher Martin Ridgeway's notice of appeal (Rec. Doc. 1), appellees Stryker Corporation and Howmedica Ostenics Corp.'s response (Rec. Doc. 14), and appellant's reply (Rec. Doc. 15). For reasons's assigned below, IT IS ORDERED that the opinion of the Bankruptcy Court is AFFIRMED.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Appellees are in the business of developing, manufacturing, and selling medical technology. See Rec. Doc. 14 at 2. Between October 2001 and September 2013, appellant worked for appellees as a sales representative and district sales manager. Id.

         On September 30, 2013, appellees sued appellant in the Western District of Michigan for breach of fiduciary duty, breach of contract that included a non-competition agreement, and misappropriating trade secrets. See Rec. Doc. 1-2 at 3. Appellees alleged appellant was in breach of an employee confidentiality and intellectual property agreement, two other unspecified contracts, and a non-compete agreement. Id. Appellees further alleged appellant willfully and maliciously misappropriated information compromising trade secrets under the Michigan Uniform Trade Secrets Act (“MUTSA”).

         Two months later, appellant and Stone Surgical LLC[1] (“Stone”) sued appellees in the Eastern District of Louisiana. Id. Appellant and Stone alleged appellees interfered with appellant's distribution deals. Id. Appellant and Stone further alleged that the non-compete agreement attached to appellees amended complaint was fraudulent. Id. The two cases were then consolidated for trial in the Western District of Michigan. Id.[2]

         During pre-trial, appellant was sanctioned twice for discovery violations. Id. First, in April 2015, appellant was sanctioned for failing to properly respond to discovery requests. Id. Then, on February 2, 2016, appellant was sanctioned again pursuant to appellees' filing a rule to show cause. Id. Pursuant to the rule to show cause, a forensic review of appellant's electronic devices and e-mail accounts revealed over 188, 000 missing documents. Id. at 3-4. In response, the court ordered appellant to pay the reasonable expenses associated with the rule to show cause.[3] Id. The court further restricted appellant's response to appellees' fee petition to challenging the reasonableness of the specific fees and costs sought. Id.

         Between February 16, 2016 and February 29 2016, the Western District of Michigan conducted a jury trial. See Rec. Doc. 14 at 8. On February 29, 2016, a jury found that appellant willfully and wantonly breach his fiduciary duty to appellees; was liable for breach of contract and for breaching his non-compete agreement; and willfully and maliciously misappropriated trade secrets in violation of MUTSA. Id. The jury also tendered a verdict against appellant and Stone on all their claims and counterclaims, including the contentions about a non-compete agreement. Id.

         On March 9, 2016, the court rendered judgment against appellant for $745, 195 and dismissed appellant and Stone's claims. See Rec. Doc. 1-2 at 4. Both appellant and Stone unsuccessfully appealed the court's judgment. Id.

         Following trial, on March 23, 2016, appellant filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of Louisiana. See Rec. Doc. 14 at 9. The automatic stay imposed by the filing of the bankruptcy case prevented appellees from filing and pursuing a post-judgment motion for attorneys' fees. Id. at 9. On September 22, 2016, appellees sought relief from the automatic stay to liquidate its claims for attorneys' fees, costs, and interest. Id. In response, appellant opposed relief. Id.

         On November 29, 2016, the Bankruptcy Court denied the motion and opted to liquidate the claims itself. See Rec. Doc. 1-2 at 6. To begin the process, the court directed appellant to object to appellees' proofs of claim by December 9, 2016. Id. In objecting, appellant took a broad brush approach and explicitly claimed the right to supplement his objection. Id. On December 9, 2016, appellees filed its response to the objection. See Rec. Doc. 14 at 12.

         Subsequently, the case was assigned to the United States Bankruptcy Court for the Eastern District of Louisiana. Id. at 6. During an April 7, 2017, telephone status conference, appellant was denied an oral motion to file an entirely new objection to appellees' proof of claim. Id. Instead, the Bankruptcy Court ordered appellant to supplement his objection no later than May 15, 2017. Id. On May 15, 2017, appellant timely filed his supplemental objections. Id. at 7. However, in violation of the order, appellant failed to identify entries he objected to under the common core theory. Id. The supplement also included entirely new objections not raised in appellant's initial objections. Id. In response, appellees filed a response to appellant's supplement and a motion to strike the supplemental objection for failure to comply. Id. On July 5, 2017, the Bankruptcy Court granted appellees' motion to strike in part. Id. Specifically, the Bankruptcy Court stuck appellant's objections under the common core doctrine except to the extent they were specifically identified. Id.

         On August 14, 2017, appellant filed a motion to reconsider and a notice of appeal. Id. On September 8, 2017, the Bankruptcy Court denied the motion to reconsider. See Rec. Doc. 14 at 16. On November 20, 2017, the Bankruptcy Court denied the notice of appeal. Id. at 14. After the Bankruptcy Court denied appellant's motions, appellant filed a second notice of appeal. See Rec. Doc. 1-2 at 8. The second notice of appeal was denied and deemed interlocutory. Id.

         On May 18, 2016, appellant successfully sought relief from the automatic stay to pursue his appeal of the Western District of Michigan's judgment. See Rec. Doc. 14 at 16. Thereafter, appellant filed a notice of appeal of the judgment with the Sixth Circuit. Id. at 17. On May 24, 2017, the Sixth Circuit affirmed the judgment. Id. On July 12, 2017, the Sixth Circuit denied appellant and Stone's request for rehearing en banc. See id. On October 17, 2017, appellant and Stone filed a petition for writ of certiorari. Id. On October 17, 2017, the United State Supreme Court denied certiorari. Id.

         On September 1, 2017, the Bankruptcy Court conducted an evidentiary hearing. Id. at 18. During the evidentiary hearing, both parties introduced volumes of evidence and extensive testimony. See Rec. Doc. 1-2 at 8. On July 27, 2018, the Bankruptcy Court entered a memorandum opinion and order allowing appellees to recover a ...


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