United States District Court, D. South Carolina, Charleston Division
C. NORTON UNITED STATES DISTRICT JUDGE
following matter is before the court on plaintiffs IHS Global
Limited and IHS Global, Inc's (collectively,
“plaintiffs”) motion to compel, ECF No. 117. For
the reasons set forth below, the court grants the motion.
case arises out of a variety of disputes between two
competing companies. Plaintiffs own and operate a database
called Global Trade Atlas (“GTA”). GTA provides
comprehensive merchandise trade statistics, including monthly
import and export data for more than 95 countries and annual
import and export data for more than 180 countries. Defendant
C. Donald Brasher, Jr. (“Brasher”) and his
brother created GTA through their company, Global Trade
Information Services, Inc. (“GTIS”). On August 1,
2014, plaintiffs acquired GTIS, including GTA, through a
Stock Purchase Agreement (“SPA”). Under the SPA,
Brasher and his affiliates were prohibited from using any
confidential or proprietary information related to GTIS,
including GTA, for three years-until August 1, 2017- and
“until such information can no longer be reasonably
considered to be a Trade Secret.” ECF No. 25 ¶ 22.
The SPA defines “Trade Secret” as
“confidential and proprietary information, including
trade secrets, know-how, processes, schematics, business
methods, formulae, drawings, prototypes, models, designs,
databases, customer lists and supplier lists.”
selling GTIS to plaintiffs, Brasher worked as a consultant
for plaintiffs. Pursuant to this arrangement, Brasher entered
into a consulting agreement (“Consulting
Agreement”) where he promised not to use
plaintiffs' confidential and proprietary information.
Plaintiffs allege that while working both for GTIS and for
plaintiffs, Brasher had “extensive access to and
knowledge of GTIS's and now [plaintiffs'] trade
secrets.” Id. ¶ 36. Plaintiffs also
allege that Brasher had access to this information on his
laptop, which he used during his time at GTIS and retained
after his consulting period ended in May 2015.
allege that soon after Brasher stopped working as a
consultant for plaintiffs, he began to work on the Trade Data
Monitor Product (“TDM Product”), a “copycat
version” of the GTA product. Id. ¶ 45.
Plaintiffs allege that defendant Trade Data Monitor LLC
(“TDM”) was formed by Brasher on May 2, 2016 as
ANH Enterprises LLC, although today it is known as TDM.
Plaintiffs then allege that in November and December 2016,
TDM filed trademarks for “TRADE DATA MONITOR” and
“TDM, ” both of which are described as providing
search engines for global import and export data. According
to the amended complaint, Brasher and TDM began contacting
suppliers around mid-2016 to obtain data for the TDM Product
and began to develop the TDM Product around October 2016.
Then, plaintiffs allege, Brasher launched the TDM Product
around August 1, 2017, the day after Brasher's
non-competition agreement expired.
allege that defendants used plaintiffs' product,
supplier, and customer trade secrets to create the TDM
Product. In addition, plaintiffs allege that defendants have
been using plaintiffs' confidential customer information,
including contact information, pricing arrangements, and
subscription preferences, to create business for TDM. In
particular, plaintiffs allege that defendants used
plaintiffs' trade secrets about when plaintiffs'
customers' subscriptions to GTA were up for renewal in
order to strategically and timely solicit plaintiffs'
filed this case on April 16, 2018. The operative complaint is
plaintiffs' amended complaint, which alleges various
breaches of contracts between the parties, a violation of The
Defend Trade Secrets Act, a violation of the Uniform Trade
Secrets Act of Colorado and South Carolina, and several tort
claims. On November 27, 2019, plaintiffs filed a motion to
compel the forensic inspection of Brasher's laptop. ECF
No. 117. Defendants responded to the motion on December 11,
2019, ECF No. 126, and plaintiffs filed a reply on December
17, 2019, ECF No. 127. The court held a hearing on the motion
on December 19, 2019.
discovery is governed by Rule 26 of the Federal Rules of
Civil Procedure. Parties are permitted to “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). In
determining proportionality, a court should consider
“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. When a
party fails to respond to a discovery request or responds in
an incomplete manner, the party seeking discovery may file a
motion to compel discovery responses. Fed.R.Civ.P.
37(a)(3)(B); Fed.R.Civ.P. 37(a)(4).
ask the court to compel a forensic inspection of
Brasher's laptop. Brasher used his laptop while working
for both plaintiffs and TDM, and plaintiffs allege that
Brasher misused plaintiffs' proprietary information that
he accessed on his laptop. During the course of discovery,
Brasher has produced documents from his laptop, some of which
include information about plaintiffs' customer history
and contact information. The parties disagree about whether
this information is properly classified as “trade
secrets, ” but plaintiffs contend that the information
produced includes their proprietary information and trade
secrets. Now plaintiffs want to conduct a forensic inspection
of the laptop to see what documents are and previously were
on the laptop as well as how and when Brasher and others
accessed, modified, copied, or used those documents.
Plaintiffs argue that this request will impose a minimal
burden on defendants because defendants have already made a
forensically sound image of the laptop, and that defendants
can just allow plaintiffs' forensic imager to inspect and
make a copy of the forensic image.
Defendants respond by arguing that the
request is overbroad and seeks irrelevant and potentially
privileged material. Defendants argue that plaintiffs have
failed to set forth sufficient reasoning for the
extraordinary request of a forensic image. They explain that
they have already produced the responsive and nonprivileged
documents from Brasher's laptop, and that absent any
claim of wrongdoing, a forensic image of the laptop is not
warranted. Defendants also argue that plaintiffs' request
is untimely because defendants have always been clear that
they only intended to produce responsive documents from the
laptop and yet plaintiffs are just now requesting a forensic
inspection after discovery has been ongoing for over a year.
court addresses defendants' timeliness argument first.
Pursuant to Local Rule 37, motions to compel discovery must
be filed within 21 days after receipt of the discovery
responses to which the party challenges. Local Civ. Rule
37.01 (D.S.C.). Defendants responded to plaintiffs'
request for a forensic inspection on November 22, 2019.
Plaintiffs filed their motion to compel five days later.
Therefore, plaintiffs' motion is timely, and the court
can consider it. To the extent that defendants argue that the
motion is untimely because plaintiffs waited over a year into
discovery to request a forensic inspection, that argument is
unconvincing. Discovery is still ...