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In re Dealer Management Systems Antitrust Litigation

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

December 3, 2019



          Jeffrey T. Gilbert, Unites States Magistrate Judge

         This matter is before the Court on Dealership Class Plaintiffs/Counter-Defendants' Motion to Compel Responses to Interrogatories [ECF No. 740], For the reasons discussed in this Order, the Motion is denied, though in two instances without prejudice, as more fully explained in the Statement below.

         I. Background

         The Motion now before the Court involves Dealership Class Plaintiffs/Counter-Defendants' written discovery served on Defendant/Counter-Plaintiff CDK after CDK filed its counterclaims along with its answer to Dealership Class Plaintiffs' Consolidated Class Action Complaint on February 22, 2019. [ECF No. 523]. As originally filed, CDK's counterclaims asserted causes of action for alleged common law breach of contract, violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 ("CFAA"), and violation of the Digital Millennium Copyright Act, 17 U.S.C. § 1201 ("DMCA"). At their core, CDK's counterclaims allege that Dealership Class Plaintiffs/Counter-Defendants impermissibly handed out their login credentials for CDK's Dealer Management System ("DMS"), directly or indirectly, to third-party data extractors to enable those entities to access the CDK DMS. Dealership Class Plaintiffs/Counter-Defendants contest CDK's counterclaims. They say CDK's contracts with dealerships specifically provide that dealerships may allow their employees and agents to access the CDK DMS. On September 3, 2019, the Court dismissed CDK's counterclaim under the CFAA without prejudice, but its other counterclaims were allowed to proceed. See [ECF 749], at 24.

         Dealership Class Plaintiffs/Counter-Defendants served interrogatories on March 8, 2019, two weeks after CDK served its counterclaims. On April 1, 2019, CDK filed a Motion for Protective Order, arguing that the interrogatories were untimely, irrelevant, and unduly burdensome. See [ECF No. 600]. Dealership Class Plaintiffs/Counter-Defendants opposed that motion. On June 10, 2019, the Court denied CDK's motion and ordered CDK to respond to the interrogatories. See [ECF No. 717]. On July 3, 2019, CDK served its objections and answers to the interrogatories and refused to answer Interrogatories Nos. 4, 7, 10, 16, 17 and 18. On July 17, 2019, the parties participated in a telephonic meet-and-confer conference in an attempt to resolve their disputes over CDK's responses. On July 26, 2019, CDK's counsel sent a response letter in which CDK reiterated its refusal to respond to Interrogatories Nos. 4, 7, 10, 16, 17 and 18 and to supplement its response to Interrogatory No. 11. These interrogatories are the subject of this Motion.

         II. Legal Standard

         Federal Rule of Civil Procedure 26 allows the discovery of 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). When determining the scope of discovery, Rule 26(b)(1) requires consideration of "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. "The federal discovery rules are to be construed broadly and liberally." Farris v. Kohlrus, 2019 WL 351876, at *3 (CD. Ill. Jan. 29, 2019) (citing Herbert v. Lando, 441 U.S. 153, 177 (1979)). "The party opposing discovery bears the burden of showing why discovery should be disallowed." In re Peregrine Financial Group Consumer Litigation, 2015 WL 1344466, at *1 (N.D. Ill. March 20, 2015); see also Nammari v. Town of Winfield, 2010 WL 1286733, at *2 (N.D. Ill. March 29, 2010) ("The objecting party must show with specificity that the request is improper.") (citation omitted). "Courts have repeatedly warned litigants who oppose discovery that their 'burden cannot be met by a reflexive invocation of the same baseless, often abused litany that the requested discovery is ., . overly broad, unduly burdensome or that it is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence.'" In re Peregrine, 2015 WL 1344466, at *3 (citation omitted).

         This Court has broad discretion when resolving discovery disputes. See James v. Hyatt Regency Chicago, 707 F.3d 775, 784 (7th Cir. 2013); Cent. States, Se. & Sw. Areas Pension Fundv. Waste Mgmt. of Mich. Inc., 674 F.3d 630, 636 (7th Cir. 2012).

         III. Analysis

         A. Interrogatories Nos. 4, 7, and 10

         Interrogatories Nos. 4, 7, and 10 each seek information about CDK's conduct in accessing non-CDK DMSs that Dealership Class Plaintiffs/Counter-Defendants allege is conduct that is similar to what CDK alleges Dealership Class Plaintiffs/Counter-Defendants were doing.[1] These interrogatories ask CDK to identify every time from 2011 to the present that CDK, including two of its former subsidiaries-DMI and IntegraLink, attempted to, or did, hostilely access non-CDK DMSs to extract data. CDK contends these interrogatories largely are aimed at DMI and IntegraLink's accessing the Reynolds DMS. Reynolds is CDK's co-defendant in this case. CDK does not dispute that until 2015, DMI and IntegraLink accessed the Reynolds DMS via hostile integration. See, e.g., CDK's Mem. in Support of Mot. to Dismiss Dealers' Consolidated Compl. [ECF No. 265], at 5.

         The Court is skeptical that the number of times ("all instances") that DMI and IntegraLink or CDK hostilely accessed the Reynolds DMS or other DMSs is directly relevant to CDKs counterclaims or any possible defenses to them, or proportional to the needs of this case. It is not clear to the Court, for example, how DMI's and IntegraLink's purported conduct vis-avis the Reynolds DMS or CDK's conduct relating to other non-CDK DMSs would inform the Dealership Class Plaintiffs/Counter-Defendants understanding about any provision in the CDK DMS contract governing third-party access to the CDK DMS. What DMI and IntegraLink purportedly did to access the Reynolds DMS also would not establish whether Dealership Class Plaintiffs/Counter-Defendants believed they were authorized by CDK to provide login credentials to third parties to allow those parties to access the CDK DMS.

         Dealership Class Plaintiffs/Counter-Defendants say the information they seek is relevant to CDK's ability to meet the public interest component of its request for injunctive relief and to a potential unclean hands defense to CDK's counterclaims. If CDK succeeds on its counterclaims, however, it is hard to see how the public interest would be served by allowing Dealership Class Plaintiffs/Counter-Defendants to continue to do what they are doing because CDK or two of its former subsidiaries engaged in similar but not identical conduct years ago. But Dealership Class Plaintiffs/Counter-Defendants respond that some states recently have enacted statutes that prohibit providers like CDK from interfering with dealers' efforts to grant DMS access to third parties so evidence of CDK's past conduct could figure somehow in the balancing analysis embedded in its request for injunctive relief. Perhaps. In addition, while it is difficult to see how an unclean hands defense would apply in the context of claims for breach of contract and statutory violations, or how such a defense could be made out based upon CDK's subsidiaries' actions against third parties other than Dealership Class Plaintiffs/Counter-Defendants, it may not be impossible under the facts and law discussed in the parties' motion papers.

         It appears that if the information Dealership Class Plaintiffs/Counter-Defendants seek from CDK in Interrogatories 4, 7, and 10 is relevant to a claim or defense in this case, though, it is only marginally relevant at best. Assuming the interrogatories seek information that has some marginal relevance, that relevance is outweighed by the burden imposed on CDK to respond to them. The interrogatories seek the identification of "all instances" over a period of almost nine years. The ...

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