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1221122 Ontario Limited, D/B/A v. Tcp Water Solutions

June 23, 2011

1221122 ONTARIO LIMITED, D/B/A
KEYTECH WATER MANAGEMENT, PLAINTIFF,
v.
TCP WATER SOLUTIONS, INC.,
WAYNE BEATH, AND GARY PETERS, DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

Plaintiff, Keytech Water Management ("Keytech" or "Plaintiff"), has brought an action against Defendants, TCP Water Solutions, Inc. ("TCP") and Wayne Beath ("Beath") for violation of the Illinois Trade Secrets Act, tortious interference with contract, tortious interference with prospective business advantage, and tortious interference with contract as to Keytech's customers. (R. 1.) It has also brought a breach-of-contract claim against Beath. (Id.) Specifically, Keytech alleges that TCP and Beath ("Defendants") "have acquired confidential and trade secret information of Keytech from former Keytech agents," "tortiously interfered with the Agent Agreements between Keytech and these individuals, and [have] used the ill-gotten information to wrongfully solicit and divert the business of several Keytech customers to TCP." (R. 59 at 1.)

Keytech has filed a motion to compel discovery responses from Defendants pursuant to Rule 37, to which Defendants object. (R. 47.) Keytech argues that TCP and Beath waived their objections by failing to respond to Keytech's discovery requests by the relevant deadline. (R. 48 t 4.) Keytech further argues that, even if it finds no waiver, the Court should still compel Defendants to produce documents responsive to Keytech's requests because, first, the sought information is relevant and, second, the agreed protective order takes care of any privacy concerns regarding confidential business information. (R. 59at 3.)

For the reasons explained below, the Court grants Plaintiff's motion to compel.

BACKGROUND

On August 5, 2010, Keytech filed a complaint alleging that Beath and his company, TCP, had violated the Illinois Trade Secrets Act, and had tortiously interfered with both contract and prospective business advantage with respect to Keytech's customers. (R. 1.) The complaint also alleged that Beath had breached his contract with Plaintiff. (Id.) Specifically, Keytech alleges that Defendants "have acquired confidential and trade secret information of Keytech from former Keytech agents," have "tortiously interfered with the Agent Agreements between Keytech and these individuals, and [have] used the ill-gotten information to wrongfully solicit and divert the business of several Keytech customers to TCP." (R. 59 at 1.)

Keytech subsequently served discovery requests on Defendants, and the parties agreed on a December 31, 2010 response deadline. (R. 48 at 2; R. 56 at 3.) On January 12, 2011, not having received the discovery responses, Keytech requested that Defendants provide the same by January 17, 2011, "to avoid [its] having to file a motion to compel." (R. 48-5 at 2.) Defendants replied the next day, stating that they expected to respond to the discovery requests by January 20, 2011. (R. 48 at 2; R. 56 at 3.) They failed to do so by January 20, which led Keytech to send yet another letter seeking responses to its discovery requests by January 31, "or [it] will be forced to file a motion to compel with the court and will seek [its] fees for doing so." (R. 48-7 at 2.) The same day, Defendants responded that "[y]ou will have our discovery responses tomorrow. Please hold off filing the motion to compel." (R. 48-8 at 2.) Defendants did not produce their responses the following day, but did so on February 3, 2011. (R. 48-9; R. 48-10; R. 48-11; R. 48-12.)

On May 16, 2011, Keytech filed its motion to compel Defendants to respond to Interrogatory to TCP Nos. 5, 7, 12, and13; to Interrogatory to Beath Nos. 5, 9, 14, and 15; to Request for Production to TCP Nos. 5, 6, 7, 13, 14, and 15; and to Request for Production to Beath Nos. 4, 7, 8, 9, 12, and 13 on May 16, 2011. (R. 47 at 2.)*fn1 Defendants object to each of these requests. (R. 56.)

Interrogatory to TCP Nos. 12 and 13, Interrogatory to Beath Nos. 14 and 15, Request for Production to TCP Nos. 5, 6, 13, and 14, and Request for Production to Beath Nos. 7, 8, 12, and 13 request documents regarding communications, contracts, and payments between former Keytech agents and TCP and/or Beath. (R. 48-1; R. 48-2, R. 48-3, R. 48-4.) Defendants object to these requests on the basis that such information is "confidential" and includes trade secrets.

(R. 48-9 at 4; R. 48-10 at 4; R. 48-11 at 3, 5; R. 48-12 at 2-4; R. 56.) Defendants also claim that the information that Keytech requests regarding TCP's sales and finances since April 2007 in Interrogatory to TCP No. 7, Interrogatory to Beath No. 9, Request for Production to TCP No. 7 and 16, and Request for Production to Beath No. 9 is confidential. (R. 48-9 at 2; R. 48-10 at 3;

R. 48-11 at 2-3, 5; R. 48-12 at 3.) Interrogatory to TCP No. 5 and Interrogatory to Beath No. 5 request information regarding TCP's contact with Keytech's customers, which Defendants again claim is confidential. (R. 48-9 at 3; R. 48-10 at 2.) Finally, Beath objects to Request for Production to Beath No. 4, claiming that the request is "overbroad, unduly burdensome and harassing." (R. 48-12 at 2.)

LEGAL STANDARD

The federal discovery rules are liberal in order to assist in the preparation for trial and settlement of litigated disputes. See Bond v. Utreras, 585 F.3d 1061, 1075 (7th Cir. 2009); see also Kodish v. Oakbrook Terrace Fire Prot. Dist., 235 F.R.D. 447, 450 (N.D. Ill. 2006) ("the scope of discovery should be broad in order to aid in the search for truth"). Pursuant to Federal Rule of Civil Procedure 26(b)(1), "[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense.... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). "The burden rests upon the objecting party to show why a particular discovery request is improper." Kodish, 235 F.R.D. at 450. In the context of motions to compel, the Seventh Circuit instructs that a "district court may grant or deny the motion in whole or in part, and similar to ruling on a request for a protective order under Rule 26(c), the district court may fashion a ruling appropriate ...


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