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Motorola Solutions, Inc. v. Hytera Communications Corp.

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

May 17, 2018

MOTOROLA SOLUTIONS, INC. Plaintiff,
v.
HYTERA COMMUNICATIONS CORP, et al, Defendants.

          MEMORANDUM OPINION AND ORDER

          JEFFREY COLE, UNITED STATES MAGISTRATE JUDGE

         “Wisdom too often never comes, and so one ought not to reject it merely because it comes late.” Henslee v. Union Planters Nat. Bank & Trust Co., 335 U.S. 595, 600 (1949) (Frankfurter, J., dissenting)

         Early on in this case, Hytera filed a motion to dismiss Motorola's Complaint, arguing that Motorola failed to file within the applicable limitations period. Indeed, it would seem that Motorola waited almost ten years after its intellectual property was allegedly taken to initiate suit. On September 7, 2017, after the parties had briefed the motion to dismiss, Judge Der-Yeghiayan (shortly before his retirement) wrote that “Motorola's claims appear to be untimely based upon the representations made by [Hytera].” However, he determined it was best to convert Hytera's motion to dismiss to a motion for summary judgment in order to resolve the statute of limitations issue based on evidence rather than allegations and representations. [Dkt. #58, at 2].

         Notably, the court allowed the parties until October 6, 2017, to conduct discovery on the statute of limitations issue and stayed all other discovery. [Dkt. #58]. We say “notably” because, nearly eight months ago, the judge allowed the parties one month in which to take discovery on a very limited topic. While the inquiry should have been uncomplicated, it has become a long, drawn out, pitched battle - one, in a rhetorical sense, to rival the Punic Wars - albeit without the elephants and the Alps and the sheer drama.

         On September 20, 2017, Motorola filed a motion to compel, seeking a broad range of documents and arguing they were relevant to the issue of Hytera concealing the theft of Motorola's trade secrets. There were three categories of documents going back nine years: Hytera's internal documents explaining how they developed their radio products; documents covering Hytera's use, receipt, and consideration of Motorola's trade secrets and products; and documents covering any investigation by Hytera into its possession of Motorola trade secrets. [Dkt. #81, at 13-15]. Hytera protested that such discovery went beyond the statute of limitations issue. [Dkt. #81, at 12]. Judge Der-Yeghiayan, while reiterating that discovery on issues beyond the statute of limitations was stayed [Dkt. #81, at 10-11], expressed concern that Hytera's motion for summary judgment could “basically eliminate [Motorola's] complaint” and allowed the broad discovery over Hytera's objections. [Dkt. #81, at 13]. Hytera said it would need until December 1, 2017, to make such an expansive production, and Judge Der-Yeghiayan set that as the new statute of limitations discovery deadline. [Dkt. #81, at 15].

         After that, the parties exchanged motions to compel repeatedly. [Dkt. ## 67, 84, 110, 119, 121, 140, 173]. Deadlines were extended, from one month to several. [Dkt. #91]. Thousands of pages of memoranda and exhibits were filed.[1] And, again, this was all over the supposedly limited discovery on a limited topic that ought to have taken little time and effort. The very nature of what occurred tends to sustain the all too prevalent observation that discovery has become more important than the actual case. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 595, n.13 (2007); A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1013 (4th Cir. 1986).

         The upshot of all this is Motorola's March 1, 2018 motion to compel was filed five months into this “limited” discovery process and one month after the final, extended deadline for this “limited” discovery had passed. [Dkt. #91]. Among other things, Motorola now asks to conduct a forensic examination of the computers of “key Hytera witnesses who have been involved in the use of Motorola's confidential information and any relevant Hytera servers . . . on which Hytera has stored Motorola documents, ” all of which are located in China. [Dkt. # 175, at 5]. But even that is not the end. Indeed, Motorola says it wants to “begin with forensic inspection of the computers of the following Hytera employees: G.S. Kok, Y.T. Kok, Samuel Chia, Jue Liang, Roger Zhang, Phaik Ee Ooi, Yu Kok Hoong.” [Dkt. #175, at 5 n.2 (emphasis added)]. The word “begin” is italicized for obvious reasons. We are now over eight months into this statute of limitations discovery with no end in sight. In fact, Motorola wants to “begin” forensic inspection one month after the deadline for statute of limitations discovery has passed. One is reminded of Churchill's famous quip: “Now this is not the end. It is not even the beginning of the end.”

         Over the course of two lengthy hearings on March 21 and April 4, 2018, I tentatively concluded that forensic examination of Hytera's computers would be appropriate, but only if the parties could arrive at a suitable protocol that would not, among other things, run afoul of Chinese law. As we discuss, infra at 5, that was a mistake. But the law frowns on relying on a blunder to gain an opportunistic advantage. Cf. Architectural Metal Systems, Inc. v. Consolidated Systems, Inc., 58 F.3d 1227, 1231 (7th Cir.1995); Market Street Associates; Packer Trading Co. v. CFTC, 972 F.2d 144, 150 (7th Cir 1992); Centex Construction v. James, 374 F.2d 921, 923 (8th Cir.1967).[2]

         In any event, I was told that examination of the computer could be accomplished without running afoul of Chinese Law, by resort to the Hague Convention procedures. Motorola, however, maintained that this would take up too much time - a remarkable protest considering the already unnecessarily prolonged history of the discovery that was supposed to be limited to the timeliness of the Motorola Complaint. What impressed me initially at the March 21 hearing were Motorola's discussion of two emails that Hytera had long produced to Motorola, that seemed to indicate that Hytera thought certain software should be rewritten to make it look different from Motorola software. That initially appeared relevant to fraudulent concealment as such a tack would seem make it more difficult for Motorola to discover that the formerly-Motorola-now-Hytera employees had somehow misappropriated trade secrets. [Dkt. #209, at 20-25, 49, 53-54].

         But at some point between March 21 and April 4, as counsel for Hytera put it at the April 4 hearing, those emails became a “crowbar to get everything” [Dkt. #210, at 45], and we went from discovery relevant to the equitable tolling of the statute of limitations, which remains the scope of discovery allowable at this point, to looking for anything, as I unfortunately and incorrectly put it at the April 4 hearing, “of value or relevance to this case.” [Dkt. #210, at 46].

         And, as the April 4th hearing progressed, that is clearly where things went, with the limitations of discovery to the statute of limitations issue being put out of view and replaced by what was relevant to the alleged theft of Hytera's “confidential information” and generally those who may have been recipients of it. [Dkt. #210, at 54]. Under that expanded view, discovery would then encompass any file that implicated any Hytera/Motorola confidential information or showed use of the Motorola code or information by Hytera related to this case. [Dkt. #210, at 58-60, 64]. Evidence that Hytera was using Motorola code or information might be relevant to Motorola's case-in-chief but, but the issue at hand was equitable tolling of the statute of limitations. And, the material sought by Motorola was not relevant to the narrow issue of whether Motorola knew or should have known enough to have filed its Complaint earlier. See generally 4 Wright, Miller, Steinman, Federal Practice and Procedure, Section 1056 at 257, et. seq. (2015)

         Toward the end of the hearing, in response to counsel for Hytera stating that he “accept[ed] that [he] lost the argument, ” I pointed out that I could change my mind and that “reconsideration is a valuable tool.” [Dkt. #210, at 72]. As indeed it is. See White v. Wheeler, U.S., 136 S.Ct. 456, 462 (2015); Terry v. Spencer, F.3d (7th Cir. 2018); Zoretic v. Darge, 832 F.3d 639 (7th Cir. 2016); Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir.1990); BP Amoco Chemical v. Flint Hills Resources LLC, 2007 WL 1232085 (N.D.Ill. 2007)(Moran, J.).

         And so, after reviewing the transcripts of the hearings and Motorola's arguments in its two briefs in support of how the materials on these computers that Motorola wanted to inspect are relevant, I have concluded that my tentative inclination to allow discovery in China was in error. “Being manned by humans, the courts are not perfect and are bound to make some errors.” Illinois v. Allen, 397 U.S. 337, 346-347 (1970). Accord In re City of Milwaukee, 788 F.3d 717, 722 (7th Cir. 2015); Mukhtar v. California State University, Hayward 319 F.3d 1073, 1076 (9th Cir.2003); Fujisawa Pharmaceutical Co., Ltd. v. Kapoor, 115 F.3d 1332 (1997). But the law frowns on relying on a blunder to gain an opportunistic advantage. Cf. Architectural Metal Systems, Inc. v. Consolidated Systems, Inc., 58 F.3d 1227, 1231 (7th Cir.1995); Market Street Associates; Packer Trading Co. v. CFTC, 972 F.2d 144, 150 (7th Cir 1992); Centex Construction v. James, 374 F.2d 921, 923 (8th Cir.1967).

         The scope of discovery that I was initially inclined to allow was, in the context of the present inquiry that had been narrowed by the district court to the limitations issue, overbroad. What is being sought goes beyond the issue of equitable tolling. In the end, Motorola's counsel and I were talking about relevance to allegations in Motorola's complaint. [Dkt. #210, at 92-95]. And so, well beyond the statute of limitations, by the ...


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