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SPS Technologies, LLC v. The Boeing Co.

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

June 7, 2019

SPS TECHNOLOGIES, LLC d/b/a PB FASTENERS, Petitioner,
v.
THE BOEING COMPANY, Respondent.

          MEMORANDUM OPINION AND ORDER

          SUNIL R. HARJANI UNITED STATES MAGISTRATE JUDGE

         Petitioner SPS Technologies, LLC d/b/a PB Fasteners (“PB Fasteners”) moves to enforce a subpoena directed to The Boeing Company, a non-party in a trade secrets case being litigated in the United States District Court for the Central District of California. After PB Fasteners' motion was fully briefed, the Court heard oral argument on May 28, 2019. For the reasons explained below, Petitioner's Motion to Enforce Subpoena for the Production of Documents Issued to The Boeing Company [1] is granted in part and denied in part. The Boeing Company shall comply with this Opinion by June 18, 2019. A status hearing is set for June 20, 2019 at 9:15 a.m.

         BACKGROUND

         PB Fasteners is a designer and manufacturer of high-strength aerospace fasteners “with more than fifty years of experience in the industry.” (Doc. 1-1 at 71, First Am. Cmplt. ¶ 1). PB Fasteners' website says that it “is best known for [its] developed Taper-Lok® and SLEEVbolt® fastening systems, which are used to enhance structural performance and manage electromagnetic effects in composite and multi-metal structure.” https://www.pccfasteners.com/companies/pcc-fasteners/pb-fasteners.html. PB Fasteners alleges that its “tapered bolt and sleeve are made and assembled with confidential and proprietary specifications, dimensions, and processes, which are essential to the proper manufacture and functioning of the SLEEVbolt®” and were developed through many years of research and testing. (First Am. Cmplt. ¶¶ 5, 6). PB Fasteners claims that these “specifications, dimensions, and processes are not generally known or readily ascertainable.” Id. ¶ 6. PB Fasteners also alleges that it has made extensive efforts to maintain the secrecy of its SLEEVbolt® information. Id.

         The primary consumer of the SLEEVbolt® system is The Boeing Company, which has been a customer of PB Fasteners for more than forty years. (First Am. Cmplt. ¶ 7). Boeing and PB Fasteners have a contract for the production of SLEEVbolts® for use in Boeing's composite 787 aircraft as well as short-term purchase orders for the production of SLEEVbolts® for Boeing's composite 777X aircraft. Id. The contract for the 787 aircraft requires Boeing to purchase 90% of the SLEEVbolt® requirements for its 787 aircraft from PB Fasteners through December 31, 2021. Id. ¶¶ 7, 44. As part of their contractual and ongoing business relationship, PB Fasteners gave Boeing access to its propriety SLEEVbolt® information, which Boeing needed to properly inspect and approve the SLEEVbolts® and integrate them into its aircraft assembly process. Id. ¶ 7. PB Fasteners alleges that it “communicated all proprietary information to Boeing with the explicit condition that the information would remain confidential.” Id.

         The underlying case in the Central District of California arises in part from the alleged trade secret misappropriation of PB Fasteners' SLEEVbolt® system by Briles Aerospace, Inc., Michael Briles, and Robert Briles (collectively the “Briles Defendants”). PB Fasteners and Briles Aerospace are competitors in the aerospace fastener market. (First Am. Cmplt. ¶ 97). In May 2011, Michael Briles was the Director of Sales and Marketing at PB Fasteners. Id. ¶¶ 8, 59. Thereafter, after leaving PB Fasteners, Michael Briles founded Briles Aerospace, Inc. in May 2012. Id. ¶ 8. Briles Aerospace initially provided standard products and services for the aerospace industry. Id. Robert Briles is the uncle of Michael Briles. Id. ¶ 18. Before May 2011, Robert Briles was the President of PB Fasteners. Id. ¶¶ 18, 54.

         PB Fasteners alleges that in 2016, Briles Aerospace “launched a campaign to misappropriate the SLEEVbolt® system and attempt to manufacture and sell it.” (First Am. Cmplt. ¶ 18). As part of this alleged campaign, Briles Aerospace recruited nine current and former PB Fasteners employees with “detailed knowledge of PB Fasteners' proprietary information.” Id. ¶¶ 9, 71. PB Fasteners also alleges that Michael Briles and Robert Briles shared PB Fasteners' confidential and proprietary information with Briles Aerospace. Id. ¶¶ 57, 67. In addition, PB Fasteners claims that Briles Aerospace worked with Boeing to obtain the necessary qualifications to produce the SLEEVbolt® by gaining access to PB Fasteners' proprietary information through documents, in-person meetings, and telephone calls with Boeing representatives. Id. ¶¶ 10, 78. PB Fasteners believes that Briles Aerospace worked with and encouraged Boeing to issue a new Request for Proposal (“RFP”) in September 2018 for a SLEEVbolt® with a minor machined “notch” on the head of the tapered bolt. Id. ¶¶ 11, 79-80. Briles Aerospace provided a proposal in response to the RFP and began limited SLEEVbolt® deliveries to Boeing in late 2018. Id. ¶¶ 13, 93. PB Fasteners maintains that the “shape of the head of the protruding bolt is irrelevant to the actual functioning of the SLEEVbolt® because it plays no role in the sleeve expansion” and the “notched” SLEEVbolt® “is essentially the same as the SLEEVbolt® that does not contain the notch.” Id. ¶¶ 81, 82.

         In connection with the RFP, Boeing disclosed to PB Fasteners that it had qualified another manufacturer, Lisi Aerospace Canada, to provide tapered sleeve bolts. (First Am. Cmplt. ¶ 12). Litigation between PB Fasteners and Lisi Aerospace is currently ongoing in Montreal Superior Court. (Doc. 1, at 3 n.2). PB Fasteners claims that Boeing similarly facilitated Lisi Aerospace's misappropriation of PB Fasteners' trade secrets. PB Fasteners contends that neither Briles Aerospace or Lisi Aerospace “could have obtained the necessary qualifications without misappropriating PB Fasteners' proprietary information.” (First Am. Cmplt. ¶ 12).

         On November 9, 2018, PB Fasteners filed a complaint against Briles Aerospace in the United States District Court for the Central District of California. PB Fasteners later filed its First Amended Complaint adding Michael Briles and Robert Briles as defendants. PB Fasteners' First Amended Complaint contains ten causes of action: violation of Defend Trade Secrets Act, 18 U.S.C. §1836 et seq. (First Cause of Action against Briles Aerospace); violation of California Uniform Trade Secrets Act, Cal. Civ. Code § 3426 et seq. (Second Cause of Action against Briles Aerospace); violation of Lanham Act, 15 U.S.C. § 1051 et seq. (Third Cause of Action against Briles Aerospace); violation of California False Advertising Law, Cal. Civ. Code § 17500 (Fourth Cause of Action against Briles Aerospace); violation of California Unfair Competition Law (false advertising), Cal. Civ. Code § 17200 (Fifth Cause of Action against Briles Aerospace); intentional interference with contractual relations (Sixth Cause of Action against Briles Aerospace); violation of California Unfair Competition Law (interference), Cal. Civ. Code § 17200 (Seventh Cause of Action Against Briles Aerospace); intentional interference with prospective business relations (Eighth Cause of Action against Briles Aerospace); breach of contract (Ninth and Tenth Causes of Action against Michael Briles and Robert Briles). (First Am. Cmplt. ¶¶ 110-189).

         Boeing is not a party to the action in the Central District of California. On March 7, 2019, PB Fasteners served Boeing with a subpoena to produce documents in connection with the underlying litigation. Boeing objected to the subpoena on various grounds, including relevancy, burdensomeness, and proportionality, on March 19, 2019. After negotiations, PB Fasteners substantially narrowed the number of custodians and date ranges it proposed to be searched. BP Fasteners and Boeing agreed on seven Boeing custodians whose documents would be searched, six of twelve search terms, and a date range of January 1, 2016 through March 29, 2019. (Doc. 15 at 4; doc. 19 at 1). Boeing's proposal hit on approximately 20, 000 documents, while PB Fasteners' proposal hit on approximately 40, 000 documents. (Doc. 15 at 4). Boeing states that its proposal to review 20, 000 documents will cost approximately $70, 000 and PB Fasteners' additional search terms would impose nearly $70, 000 in extra costs on Boeing. Id. at 9. Fact discovery closes on June 28, 2019 in the underlying lawsuit, and the case is set for trial on October 11, 2019. Against this factual backdrop, the Court considers PB Fasteners' motion to enforce its subpoena.

         DISCUSSION

         Rule 45 of the Federal Rules of Civil Procedure governs subpoenas directed to non-parties. Rule 45(d)(2)(B)(i) provides that a party serving a subpoena may move for an order compelling production in “the court for the district where compliance is required.” Fed.R.Civ.P. 45(d)(2)(B)(i). As for relevance, “[t]he scope of material obtainable by a Rule 45 subpoena is as broad as permitted under the discovery rules.” Williams v. Blagojevich, 2008 WL 68680, at *3 (N.D. Ill. Jan. 2, 2008); see also Advisory Committee Notes regarding 1991 Amendments to Rule 45(a)(2) (stating a “non-party witness is subject to the same scope of discovery under this rule as that person would be as a party to whom a request is addressed pursuant to Rule 34.”). Rule 26(b)(1) allows “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.P. 26(b)(1). The factors relevant to the proportionality inquiry are “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.

         A party issuing a subpoena must “take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed.R.Civ.P. 45(d)(1). Moreover, “[w]hen a third-party is ordered to produce documents pursuant to a subpoena, ‘the presumption is that the responding party must bear the expense of complying with discovery requests,' including requests for electronic data.” United States v. Cardinal Growth, L.P., 2015 WL 850230, at *2 (N.D. Ill. Feb. 23, 2015) (citation omitted). However, an order requiring compliance “must protect a person who is neither a party nor a party's officer from significant expense resulting from compliance.” Fed.R.Civ.P. 45(d)(2)(B)(ii).

         At the outset, the Court notes that PB Fasteners' motion seeks to enforce the subpoena in full, and in this respect, Boeing requests denial of the motion. Boeing's Response also clarifies, however, that it remains willing to review and produce documents based on its proposed search terms. (Doc. 15 at 2). Thus far, Boeing has not produced any documents in response to the subpoena. At oral argument, PB Fasteners essentially limited its motion to the concessions it offered during the meet and confer process by presenting and relying upon a demonstrative exhibit summarizing the agreements and disputed areas between PB Fasteners and ...


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