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Purolite Corp. v. AVANTech, Inc.

United States District Court, D. South Carolina, Columbia Division

June 29, 2017

Purolite Corporation, Petitioner,
AVANtech, Inc., Respondent, No. 3


         Petitioner, Purolite Corporation (“Purolite”), commenced this action by applying and petitioning this court for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding against Respondent Avantech, Inc. (“Avantech”). (ECF No. 1.) Specifically, Purolite seeks to discover information concerning claims in a Japanese lawsuit against Hitachi-GE Nuclear Energy, Ltd. (“HGNE”) in which Purolite asserts that HGNE improperly solicited work from Avantech and misappropriated Purolite's confidential, proprietary, and trade secret information in breach of certain agreements and in violation of Japanese law. Purolite AG v. Hitachi-GE Nuclear Energy, Ltd., Case No. Heisei 26th Year (Wa) No. 29490, Tokyo District Court, Civil Division, Section 46-D.

         This matter is before the court on Purolite's Motion to Compel Supplemental Discovery Pursuant to Court Order. (ECF No. 7.) Specifically, Purolite requests that Avantech (1) bring its production current by searching for and producing responsive documents, if any, obtained or created from the date of its last production through the present time; (2) cure the several, material deficiencies identified by Purolite in its prior letters; and (3) commence electronic discovery by using Purolite's list of search terms to conduct an electronic search of its computer system and servers in order to generate a hit report from which the parties could negotiate the scope of follow up discovery as a prerequisite to meet and confer. (ECF No. 7.) For the reasons that follow, the Court DENIES Purolite's Motion to Compel.


         Purolite is a U.S. corporation headquartered in Pennsylvania and is currently engaged in litigation against the Japanese company HGNE pending before a foreign tribunal in Tokyo, Japan. (ECF Nos. 1-1, 1-2.) Purolite claims that HGNE is “illegally and improperly utilizing Purolite's confidential, proprietary and trade secret processes and information in connection with HGNE's on-going, extensive decontamination and remediation work” at the site of the damaged Fukushima[1] Daiichi Nuclear Power Station. (ECF No. 1-3.) As a part of this litigation, Purolite sought discovery from Avantech, a South Carolina corporation and HGNE's principal supplier, under 28 U.S.C. § 1782 asserting that Avantech has information relevant to the Japanese litigation. (Id.) This court granted Purolite's § 1782 Petition on April 4, 2016, allowing Purolite to proceed with discovery requests against Avantech. (ECF No. 5.)

         On April 5, 2016, Purolite served both a Rule 45 Subpoena for the Production of Documents and a Rule 30(b)(6) Deposition Subpoena on Avantech. (ECF Nos. 7-2, 7-3.) Shortly thereafter Avantech produced 20, 000 documents to Purolite. On June 10, 2016, Purolite sent Avantech a letter detailing seven categories in which it asked for further production. (ECF No. 11-5.) Moreover, Purolite requested in its June 10, 2016 Letter that Avantech run six specific search terms which led to the production of an additional 2, 000 documents. (ECF No. 11-4.) On July 21, 2016, Avantech decided to retain counsel and shortly thereafter, counsel objected to Purolite's subpoenas on July 29, 2016 (Id.) On August 31, 2016, Purolite filed suit against Avantech, Hitachi America, Ltd. and two of Avantech's corporate officers in the United States District Court for the Southern District of New York alleging the same claims that gave rise to the Japanese litigation. (ECF No. 11.) On January 6, 2017, the Southern District of New York granted a stay in the suit pending a resolution in the Japanese litigation. On January 31, 2017, Purolite sent Avantech a letter reiterating most of the June 10, 2016 Letter and asking Avantech to run fourteen more search terms. (ECF No. 7-5.) On February 16, 2017, Avantech responded to Purolite's January 31, 2017 Letter and asserted that it had complied with the subpoena and would not voluntarily produce additional documents but offered to continue to confer as to any specific issues. (ECF No. 11-4.) The next day, February 17, 2017, Purolite filed the instant Motion to Compel. (Id.)


         A. Discovery Generally

         The amended Fed.R.Civ.P. 26 provides that “[p]arties may obtain 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 scope of discovery permitted by Rule 26 is designed to provide a party with information reasonably necessary to afford a fair opportunity to develop its case. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Murray Sheet Metal Co., Inc., 967 F.2d 980, 983 (4th Cir. 1992). Nevertheless, discovery is not limitless, and the court has the discretion to protect a party from “oppression” or “undue burden or expense.” Fed.R.Civ.P. 26(c).

         B. Motions to Compel

         “If a party fails to make a disclosure” required by Fed.R.Civ.P. 26, “any other party may move to compel disclosure and for appropriate sanction” after it has “in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.” Fed.R.Civ.P. 37(a). Specifically, a party “may move for an order compelling an answer, designation, production, or inspection.” Fed.R.Civ.P. 37(a)(3)(B). Broad discretion is afforded a district court's decision to grant or deny a motion to compel. See, e.g., Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995) (“This Court affords a district court substantial discretion in managing discovery and reviews the denial or granting of a motion to compel discovery for abuse of discretion” (internal citation omitted.); Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988); LaRouche v. Nat'l Broad. Co., 780 F.2d 1134, 1139 (4th Cir. 1986) (“A motion to compel discovery is addressed to the sound discretion of the district court.”). In applying Rule 26's broad discovery, a party objecting to discovery must first show that the information sought is not relevant before showing that it is not proportional to the needs of the case. Polycarpe v. Seterus, Inc., No. 6:16-cv-1606-Orl-37TBS, 2017 U.S. Dist. LEXIS 77808, at *9 (M.D. Fla. May 23, 2017) (“proportionality requires counsel and the court to consider whether relevant information is discoverable in view of the needs of the case.”) Additionally, the party resisting a discovery request bears the burden of persuading the court that the requested information is outside the scope of discovery. See Volumetrics Med. Imaging, LLC v. Toshiba Am. Med. Sys., 2011 U.S. Dist. LEXIS 65422, at *20-21(M.D.N.C 2011) (collecting cases in the Fourth Circuit).

         III. ANALYSIS

         A. The Parties' Arguments

         1. Purolite's Position

         In its Motion to Compel (ECF No. 7) and Memorandum in Further Support of Motion to Compel Discovery (ECF No. 16), Purolite argues (1) that Avantech failed to comply with the court ordered discovery, (2) Avantech's objections to discovery are wrong, untimely, and moot, (3) Avantech has a continuing obligation to supplement discovery, (4) its request for ...

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