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Hartsock v. Dunlop

Supreme Court of South Carolina

April 25, 2018

Theodore G. Hartsock, Jr., as Personal Representative of the Estate of Sarah Mills Hartsock (Estate of Sarah Mills Hartsock), Plaintiff-Respondent,
v.
Goodyear Dunlop Tires North America Ltd., a foreign corporation; Goodyear Tire & Rubber Company, a foreign corporation, Defendants-Appellants. Appellate Case No. 2016-002398

          Heard September 28, 2017

          ON CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

          Wallace K. Lightsey, of Greenville, M. Gary Toole, of McDonald, Toole & Wiggins, of Orlando, Fl., pro hac vice, E. Duncan Getchell, Jr. and Michael H. Brady, both of McGuire Woods LLP, both of Richmond, Va., pro hac vice, for Defendants-Appellants.

          Mark C. Tanenbaum of Mark C. Tanenbaum, P.A., of Mt. Pleasant; and Mia Lauren Maness, of Charleston, both for Plaintiff-Respondent.

          Debora B. Alsup, of Thompson & Knight LLP, of Austin, Tx., pro hac vice, for Amicus Curiae the Rubber Manufacturers Association.

          Frank L. Epps and Hannah Rogers Metcalfe, both of Greenville, for Amicus Curiae the South Carolina Association for Justice.

          KITTREDGE JUSTICE.

         This Court accepted the following certified question from the United States Court of Appeals for the Fourth Circuit:

         Does South Carolina recognize an evidentiary privilege for trade secrets?

         Answer: South Carolina does recognize an evidentiary privilege for trade secrets, but it is a qualified privilege.

         I.

         In its Order of Certification, the Fourth Circuit summarized the relevant facts and procedural history as follows:

In July 2010, Sarah Mills Hartsock was killed in an automobile crash on Interstate 26 in Calhoun County, South Carolina. Her personal representative, Theodore G. Hartsock, Jr., brings this survival and wrongful death action asserting claims under South Carolina law for negligence, strict liability, and breach of warranty. Mr. Hartsock alleges that the vehicle in which Mrs. Hartsock was riding was struck head-on by another vehicle. That vehicle had crossed the median after suffering a blowout of an allegedly defective tire that Goodyear Dunlop Tires North America Ltd. and Goodyear Tire & Rubber Company [collectively "Goodyear"] designed, manufactured, and marketed. Federal subject-matter jurisdiction exists under 28 U.S.C. § 1332 based upon complete diversity of citizenship between the parties and damages alleged to be greater than $75, 000.
During pretrial discovery a dispute arose between the parties over certain Goodyear material relating to the design and chemical composition of the allegedly defective tire. Goodyear objected to producing this material, asserting that it constitutes trade secrets. The district court eventually found, and Mr. Hartsock does not dispute, that the material does, in fact, constitute trade secrets. However, the court ordered Goodyear to produce the material subject to a confidentiality order. In doing so, the court applied federal discovery standards, rejecting Goodyear's contention that South Carolina trade secret law applies.
Goodyear thereafter moved for reconsideration, reiterating its argument that South Carolina law applies. The district court denied the motion but certified its order for interlocutory review pursuant to 28 U.S.C. § 1292(b). The court also stayed the proceedings pending Goodyear's anticipated appeal. After Goodyear appealed, a panel of [the Fourth Circuit] agreed to permit the appeal. The parties filed briefs, and [the Fourth Circuit] heard oral arguments in October 2016.

Hartsock v. Goodyear Dunlop Tires N. Am. Ltd., 672 Fed.Appx. 223, 224-25 (4th Cir. 2016) (footnotes omitted).

         II.

         We answer the certified question by analyzing how privileges are recognized in South Carolina and evaluating the South Carolina Trade Secrets Act (hereinafter "Trade Secrets Act"), SC Code Ann. §§ 39-8-10 to -130 (Supp. 2017).

         A.

         An evidentiary privilege is "[a] privilege that allows a specified person to refuse to provide evidence or to protect the evidence from being used or disclosed in a proceeding." Evidentiary Privilege, Black's Law Dictionary (10th ed. 2014). The principle underlying recognition of a privilege is simple: although the public "has a right to every man's evidence, " an exception may be justified "by a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth." Jaffee v. Redmond, 518 U.S. 1, 9 (1996) (citations omitted). "[A]n asserted privilege must also 'serv[e] public ends.'" Id. at 11 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).[1] In addition, "[i]t is well recognized that a privilege may be created by statute" as deemed ...


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