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Ronin Capital, LLC v. Mayorga

United States District Court, N.D. Illinois, Eastern Division

December 21, 2016


          Charles P. Kocoras Judge


          SIDNEY I. SCHENKIER United States Magistrate Judge

         Before us is a motion filed by plaintiff Ronin Capital, LLC ("Ronin"), requesting that we compel former Ronin employees Cesar Mayorga ("Mr. Mayorga") and Melissa Woodle ("Ms. Woodle") (collectively, "defendants") to produce certain documents and sit for depositions related to Ronin's claim that defendants unlawfully accessed Ronin's computer system and took confidential Ronin information, in violation of the Computer Fraud and Abuse Act ("CFAA") 18 U.S.C. 11030 et. seq., and defendants' employment agreements and Ms. Woodle's release agreement (doc. #51: Motion to Compel). For the following reasons, we deny plaintiffs motion.


         The following facts are taken from the amended verified complaint; we set them forth as background and make no determination as to their truth or falsity, other than with regard to our description of orders entered by the district court (doc. #18: Amended Verified Complaint).[1] Mr. Mayorga and Ms. Woodle are former employees of Ronin; Mr. Mayorga most recently worked as a Senior Systems Architect and Ms. Woodle was administrative assistant to Ronin's CEO (Amended Complaint at ¶¶ 3, 4). Ms. Woodle was terminated for alleged theft in November 2015, and Mr. Mayorga resigned two months later, in January 2016 (Id.). On June 29, 2016, during a routine audit of its computer network and systems, Ronin discovered that, after his resignation, Mr. Mayorga had been repeatedly - and wrongfully - accessing Ronin's computer network by way of a "back door" he set up while still a Ronin employee (Amended Complaint at ¶ 5). This "back door" allowed Mr. Mayorga to improperly view and retrieve a number of different types of Ronin's confidential, valuable and proprietary information, including, among other things, trading algorithms, trading positions, a corporate credit card number, employee personnel files, and tax records (Id.).

         On June 30, 2016, the day after making this discovery, Ronin filed an ex parte verified complaint in federal court against Mr. Mayorga (doc. # 1: Verified Complaint; doc # 5: Rule 65(b)(1)(B) Certification); Ronin successfully moved ex parte for a temporary restraining order and a seizure order enjoining Mr. Mayorga or anyone else from using or disclosing Ronin's confidential information ("TRO & Seizure Order") (doc. # 7: order on motion for temporary restraining order). On July 1, 2016, pursuant to the TRO & Seizure Order, U.S. Marshals entered Mr. Mayorga's home and seized computer equipment belonging to him and his current employer (doc. # 10: Plaintiffs status report to court). Ronin alleges that its preliminary investigation of this equipment indicated that Mr. Mayorga downloaded a large amount of Ronin's confidential information, and that Mr. Mayorga and Ms. Woodle conspired to and actually did work together to unlawfully access, obtain, and delete confidential Ronin information (Amended Complaint at ¶8).[2]

         On July 12, 2016, Ronin filed an amended verified complaint, adding Ms. Woodle as a defendant (doc. # 18). On July 14, 2016, the district court entered a second Temporary Restraining Order and order for Expedited Discovery ("2nd TRO") which required defendants, among other things, to surrender any other computers, cellular phones, data storage devices and other mobile devices not previously seized by the Marshals (including passwords for locked devices), and also to return and not use any and all confidential information belonging to Ronin, its employees, or others, including materials uploaded to cloud storage accounts such as Dropbox (doc. # 28). On July 28, 2016, the district court entered an agreed order instituting a preliminary injunction enjoining defendants from accessing, using or disclosing information from Ronin's computer networks, employees' cell phones or other email accounts, or the cell phone and email accounts of Ms. Sternstein and Ms. Roti (doc, # 34: Preliminary Injunction at ¶¶ 1, 2). The preliminary injunction also required defendants to return any other confidential Ronin information in their possession, to allow plaintiffs to purge defendants' seized equipment of any Ronin information, and - without waiving defendants' Fifth Amendment privilege - to require defendants to identify anyone with whom defendants shared confidential Ronin information (Id., at ¶ 4).


         The pending motion stems from defendants' refusal to respond to certain of plaintiffs discovery requests and requests to depose Mr. Mayorga and Ms. Woodle, on the ground that responding or being deposed would violate defendants' Fifth Amendment privilege against self-incrimination. In addition to the depositions of the two plaintiffs, Ronin requests three categories of documents that relate to several interrogatories that it served. Specifically, Ronin seeks (1) all documents and communications related to the unauthorized access methods described in defendants' answer to Interrogatory No. 1, which asked Mr. Mayorga to describe all methods through which he was able to access Ronin's computer network after leaving employment at Ronin; (2) all misappropriated information described in defendants' answer to Interrogatory No. 2, which asked defendants to identify all information belonging to Ronin that defendants obtained without authorization - whether before or after their employment with Ronin terminated; and (3) all documents and communications related to the misappropriated information described in defendants' answer to Interrogatory No. 2. While Ronin does not seek to compel answers to the interrogatories, its motion does seek to compel production of the requested categories of documents.

         In support of that request, Ronin explains that it has already forensically imaged defendants' electronic devices but was unable to access their personal email accounts on iPhones and iPads because of additional security features that require cooperation from defendants or a court order. Moreover, Ronin asserts that information responsive to its document requests likely exists in defendants' email accounts, because it has obtained text messages between Mr. Mayorga and Ms. Woodle that suggest the two defendants discussed and exchanged by email confidential Ronin information and communications about that information and efforts to obtain it (Pl. Mem. in Support of Mot. to Compel at 2-3).[3]

         In response, defendants make two arguments: (1) the motion to compel production of additional misappropriated documents is moot, because defendants have already turned over all confidential Ronin information; and (2) requiring defendants to produce any other documents would violate their Fifth Amendment privilege against self-incrimination (doc. # 55: Defendants' Response to Mot. to Compel at 2, 4).[4] In aid of their mootness argument, defendants state that, after Ronin asked for the emails referenced in the text messages between Mr. Mayorga and Ms. Woodle, defendants searched for, but could not find, the emails or the alleged attachments to them. Defendants contend that they searched all emails exchanged between Mr. Mayorga and Ms. Woodle during the relevant time period and produced the only two emails they found which refer to "Ronin, " neither of which were the ones suggested by the text messages (Defendants' Resp. to Mot. to Compel at 3). In reply, plaintiff contends that merely searching for emails referencing the word "Ronin" is not sufficient, and asks the Court to order that defendants turn over all emails that contain any words from a list of search terms upon which the parties agree (doc. # 56: PI. Reply in Support of Mot. to Compel at 6).

         With respect to plaintiffs request to depose the two defendants, both defendants indicated that they will respond to each and every question posed to them with a refusal to answer on the ground that a response could violate their Fifth Amendment privilege against self-incrimination. As a result, defendants propose that Ronin serve them with written deposition questions pursuant to Fed.R.Civ.P. 31, to which they may answer (or plead their Fifth Amendment privilege) in writing (Def. Resp. to Mot. to Compel at 15). Ronin argues there are matters relevant to liability and damages it could properly pursue that would not implicate the Fifth Amendment privilege (PI. Reply at 9). For its part, defendants propose that the parties meet and confer about the amount of damages plaintiff seeks for defendants' alleged actions. Defendants state that they would agree to entry of a final injunction and thus, if agreement is reached on the issue of damages, the case can be resolved and taking any depositions will be unnecessary (Id.).


         The Fifth Amendment protects a person from being "compelled in any criminal case to be a witness against himself." U.S. Const, amend. V. The protection extends to communications made in civil cases such as this, where the allegations implicate possible future prosecution for violations of criminal law. Kastigar v. United Suites,406 U.S. 441, 454 (1972) (emphasizing the importance of protection against future prosecution based on information obtained from currently compelled testimony); National Acceptance Co. of America v. Bathalter, 705 F.2d 924, 926-27 (7th Cir. 1983).[5] But a compelled communication is only protected if it is "testimonial, " and thus a witness may be required to produce documents containing incriminating assertions or facts if the creation of such documents was not compelled within the meaning of the privilege. U.S. v. Hubbell, 530 U.S. 27, 34-36 (2000). An exception to that principle applies if the ...

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